HomeMy WebLinkAboutExhibit 4Exhibit "C"
Preliminary Official Statement—fp4,6
-TO b G Ci rii pie fed, -1o,e eips,
MIAMI/4230862. 31
PRELIMINARY OFFICIAL STATEMENT DATED , 2008
NEW ISSUE — BOOK -ENTRY ONLY
BMO Draft #10
11/30/08
Standard and Poor's: "[Al"
Moody's: "[A3l"
(See "Ratings" herein)
In the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, under existing law, interest on the Series
2009 Bonds is not excluded from gross income for federal income tax purposes and the Series 2009 Bonds and the income
thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198,
Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended.
For a more complete discussion of the tax aspects, see "TAX MATTERS" herein.
$40,000,000*
THE CITY OF MIAMI, FLORIDA
NON -AD VALOREM REFUNDING REVENUE BONDS
TAXABLE PENSION SERIES 2009
Dated: Date of Delivery Due: December 1, as shown on the inside cover
The Non -Ad Valorem Refunding Revenue Bonds, Taxable Pension Series 2009 (the "Series 2009
Bonds") are being issued by The City of Miami, Florida (the "City") pursuant to the Constitution and laws of
the State of Florida, including Chapter 166, Florida Statutes, Chapter 159, Part VII, Florida Statutes, the
Charter of the City, and other applicable provisions of law (the "Act") and pursuant to Resolution No.08-
adopted on December 11, 2008 (the "Resolution"). Capitalized terms not defined herein shall have the
meanings ascribed thereto in 'the Resolution. U.S. Bank National Association, Miami, Florida shall serve as
Paying Agent and Bond Registrar for the Series 2009 Bonds.
The Series 2009 Bonds are being issued to provide funds, together with other available moneys, to (i)
refund all of the outstanding Non -Ad Valorem Variable Rate Refunding Revenue Bonds, Taxable Pension
Series 2006 (the "Series 2006 Bonds"), (ii) pay the Swap Termination Payment (as described herein), and (iii)
pay the costs of issuance of the Series 2009 Bonds. See "PLAN OF FINANCE" herein.
The Series 2009 Bonds are being issued by the City as fully registered bonds. Interest on the Series
2009 Bonds will be payable semi-annually on June 1 and December 1, commencing June 1, 2009. The Series
2009 Bonds initially will be registered in the name of Cede & Co., as nominee of The Depository Trust
Company, New York, New York ("DTC"). Individual purchases will be made in book -entry form only
through Participants (defined herein) in principal denominations of $5,000 each or any integral multiple
thereof. Purchasers of the Series 2009 Bonds (the "Beneficial Owners") will not receive physical delivery of
certificates. Transfers of ownership interests in the Series 2009 Bonds will be effected by the DTC book -entry
system as described herein. As long as Cede & Co. is the registered owner as nominee of DTC, principal and
interest payments will be made directly to such registered owner which will in turn remit such payments to
the Participants (as defined herein) for subsequent disbursement to the Beneficial Owners.
The Series 2009 Bonds are redeemable prior to their stated maturities as described herein.
Payment of the principal of, premium, if any, and interest on the Series 2009 Bonds shall be secured
by a lien upon and pledge of the Pledged Funds, which consist of revenues of the City derived from any
source other than ad valorem taxation on real and personal property, which'are legally available to make the
debt service payments required under the Resolution (the "Non -Ad Valorem Revenues") deposited in the
Funds and Accounts established under the Resolution. The City has covenanted to budget and appropriate,
by amendment if necessary, and to deposit into the Sinking Fund Non -Ad Valorem Revenues of the City
lawfully available in an amount which is equal to the Annual Debt Service Requirement with respect to all
Outstanding Series 2009 Bonds in each applicable Fiscal Year. The Series 2009 Bonds do not constitute a
general indebtedness of the City within the meaning of any constitutional or statutory provision or limitation
and the City is not obligated to levy any ad valorem taxes for the payment thereof, as described herein.
Neither the full faith and credit nor the taxing power of the City, the State of Florida or any political
subdivision or agency thereof is pledged to the payment of the principal of, premium, if any, and interest on
the Series 2009 Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS"
herein.
This cover page contains certain information for quick reference only. It is not intended to be a
summary of the issue. Investors must read the entire Official Statement to obtain information needed for the
making of an informed investment decision.
The Series 2009 Bonds are offered when, as, and if issued and received by the Underwriters, subject to the opinion
on certain legal matters relating to their issuance by Squire, Sanders & Dempsey L.L.P., Miami, Florida, Bond Counsel.
Certain legal matters will be passed upon for the City by Julie O. Bru, Esq., City Attorney, and by Bryant Miller Olive
P.A., Miami, Florida, Disclosure Counsel to the City. Certain legal matters will be passed upon for the Underwriters by
their counsel, Moskowitz, Mandell, Salim & Simowitz, P.A., Fort Lauderdale, Florida. First Southwest Company,
Aventura, Florida is serving as Financial Advisor to the City. It is expected that the Series 2009 Bonds in definitive
form will be available for delivery to the Underwriters in New York, New York at the facilities of DTC on or about
January , 2009.
J.P. MORGAN MERRILL LYNCH & CO.
SUNTRUST ROBINSON HUMPHREY RAYMOND JAMES & ASSOCIATES, INC.
BANC OF AMERICA SECURITIES LLC
Dated: January , 2009
*Preliminary, subject to change.
SERIES 2009 BONDS
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS,
PRICES AND INTIAL CUSIP NUMBERS
Maturity Principal
(December 1) Amount
Interest Rate
Initial CUSIP
Yield Price Number
THE CITY OF MIAMI, FLORIDA
MAYOR
Manuel A. Diaz
CITY COMMISSIONERS
Joe M. Sanchez, Chairman
Michelle Spence -Jones, Vice Chair
Angel Gonzalez
Tomas P. Regalado
Marc D. Sarnoff
CITY MANAGER
Pedro G. Hernandez
CHIEF FINANCIAL OFFICER
Larry Spring
FINANCE DIRECTOR
Diana M. Gomez
CITY ATTORNEY
Julie O. Bru, Esq.
BOND COUNSEL
Squire, Sanders & Dempsey L.L.P.
Miami, Florida
DISCLOSURE COUNSEL
Bryant Miller Olive P.A.
Miami, Florida
FINANCIAL ADVISOR
First Southwest Company
Aventura, Florida
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 2009 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 or the Underwriters. 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 2009
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, DTC and other sources that are
believed to be reliable. The Underwriters listed on the cover page hereof have reviewed the information in
this Preliminary 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 Preliminary 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 2009 BONDS, THE UNDERWRITERS
MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE
OF SUCH SERIES 2009 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 2009 Bonds are qualified in their
entirety by reference to the form thereof included in the aforesaid documents and agreements.
NO REGISTRATION STATEMENT RELATING TO THE SERIES 2009 BONDS HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR WITH ANY STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. 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 2009 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.
RED HERRING LANGUAGE:
This Preliminary Official Statement and the information contained herein are subject to
completion or amendment. The Series 2009 Bonds may not be sold, nor may any offer to buy be accepted
prior to the time the Official Statement is delivered in final form. Under no circumstances shall this
Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the Series 2009 Bonds in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration, qualification or exemption under the securities laws of any such
jurisdiction.
TABLE OF CONTENTS
Pa e
IN PRODUCTION 1
PURPOSE OF THE ISSUE 2
PLAN OF FINANCE 2
ESTIMATED SOURCES AND USES OF FUNDS 4
DESCRIPTION OF THE SERIES 2009 BONDS 5
General 5
Optional Redemption 5
Mandatory Sinking Fund Redemption 5
Defeasance 6
Book -Entry Only System 7
Registration, Transfer and Exchange 9
Replacement of Bonds Mutilated, Destroyed, Stolen or Lost 9
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS 10
Genera I 10
Description of Non -Ad Valorem Funds 12
Special Investment Considerations 20
Additional Debt Payable from Non -Ad Valorem Revenues 21
Claims 21
Pledge of Non -Ad Valorem Revenues 21
MANAGEMENT DISCUSSION OF BUDGET AND FINANCES 21
PROPERTY TAX REFORM 21
DEBT SERVICE SCHEDULE 24
THE CITY OF MIAMI 25
Background 25
City Government 25
Adoption of Investment Policy and Debt Management Policy 26
Capital Improvement Plan 27
Fiscal and Accounting Procedures 27
General Fund 28
Indebtedness of the City 30
LEGAL MATTERS 31
LITIGATION 31
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS 32
TAX MATTERS 32
General 32
RATINGS 32
FINANCIAL ADVISOR 32
AUDITED FINANCIAL STATEMENTS 33
CONTINUING DISCLOSURE 33
UNDERWRITING 34
CONTINGENT FEES 34
ENFORCEABILITY OF REMEDIES 34
ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT 34
FORWARD -LOOKING STATEMENTS
MISCELLANEOUS
AUTHORIZATION OF OFFICIAL STATEMENT
APPENDICES
APPENDIX A:
APPENDIX B:
APPENDIX C:
APPENDIX D:
APPENDIX E:
35
35
36
GENERAL INFORMATION REGARDING THE CITY OF MIAMI
FORM OF RESOLUTION
GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIAMI
FOR FISCAL YEAR ENDED SEPTEMBER 30, 2007
FORM OF BOND COUNSEL OPINION
FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT
ii
OFFICIAL STATEMENT
relating to
$40,000,000*
THE CITY OF MIAMI, FLORIDA
NON -AD VALOREM REFUNDING REVENUE BONDS
TAXABLE PENSION SERIES 2009
INTRODUCTION
The purpose of this Official Statement, including the cover page, inside cover, and appendices, is to
set forth information concerning The City of Miami, Florida (the "City") and The City of Miami, Florida Non -
Ad Valorem Refunding Revenue Bonds, Taxable Pension Series 2009 (the "Series 2009 Bonds"), in connection
with the sale of the Series 2009 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" attached hereto.
The Series 2009 Bonds are being issued pursuant to Chapter 166, Florida Statutes, as amended, Part
VII of Chapter 159, Florida Statutes, as amended, Article VIII, Section 2 of the Constitution of the State of
Florida, the Charter of the City, and other applicable provisions of law (the "Act") and pursuant to Resolution
No. 08-_ adopted on December 11, 2008 (the "Resolution") authorizing the issuance of an aggregate
principal amount of Series 2009 Bonds, in an amount not to exceed forty million dollars($40,000,000).
The Series 2009 Bonds are being issued to provide funds, together with other available moneys, to (i)
refund all of the outstanding City of Miami, Florida Non -Ad Valorem Refunding Revenue Bonds, Taxable
Pension Series 2006, (the "Series 2006 Bonds"), (ii) pay the Swap Termination Payment (as described below)
and (iii) pay the costs of issuance of the Series 2009 Bonds. See "PURPOSE OF THE ISSUE" and "PLAN OF
FINANCE" herein.
Payment of the principal of, premium, if any, and interest on the Series 2009 Bonds shall be secured
by a lien upon and pledge of the Pledged Funds, which consist of revenues of the City derived from any
source other than ad valorem taxation on real and personal property, which are legally available to make the
debt service payments required under the Resolution (the "Non -Ad Valorem Revenues") deposited in the
Funds and Accounts established under the Resolution. The City has covenanted to budget and appropriate,
by amendment if necessary, and to deposit into the Sinking Fund Non -Ad Valorem Revenues of the City
lawfully available in an amount which is equal to the Annual Debt Service Requirement with respect to all
Outstanding Series 2009 Bonds in each applicable Fiscal Year. The Series 2009 Bonds do not constitute a
general indebtedness of the City within the meaning of any constitutional or statutory provision or limitation
and the City is not obligated to levy any ad valorem taxes for the payment thereof, 'as described herein.
Neither the full faith and credit nor the taxing power of the City, the State of Florida or any political
subdivision or agency thereof is pledged to the payment of the principal of, premium, if any, and interest on
the Series 2009 Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS"
herein.
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The City's covenant to budget and appropriate Non -Ad Valorem Revenues does not constitute a lien,
either legal or equitable, on any of the City's legally available Non -Ad Valorem Revenues. The amount of
legally available Non -Ad Valorem Revenues available to make payments on the Series 2009 Bonds may be
effectively limited by the requirement for a balanced budget, funding requirements for essential
governmental services of the City, and the inability of the City to expend legally available Non -Ad Valorem
Revenues not appropriated or in excess of funds actually available after the use of such funds to satisfy
obligations having an express lien or pledge on such funds. Furthermore, except as provided in the
Resolution (and described herein under the caption "SECURITY AND SOURCES OF PAYMENT FOR THE
SERIES 2009 BONDS — Additional Debt Payable From Non -Ad Valorem Revenues") the City is not restricted
in its ability (i) to pledge such legally available Non -Ad Valorem Revenues for other purposes or to issue
additional debt specifically secured by such revenues or by a covenant similar to that securing the Series 2009
Bonds or (ii) to reduce or discontinue services that generate Non -Ad Valorem Revenues.
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. A copy of the Resolution is attached hereto
as "APPENDIX B - FORM OF RESOLUTION."
All documents of the City referred to herein may be obtained from Diana M. Gomez, CPA, Finance
Director, 444 S.W. 2nd Avenue, 6th Floor, Miami, Florida 33130, Telephone (305) 416-1324.
PURPOSE OF THE ISSUE
The Series 2009 Bonds are being issued to provide funds, together with other available moneys, to (i)
refund all of the outstanding Series 2006 Bonds, (ii) pay the Swap Termination Payment (as described below)
and (iii) pay the costs of issuance of the Series 2009 Bonds. See "PLAN OF FINANCE" below.
PLAN OF FINANCE
The Series 2009 Bonds are being issued to refund all of the Series 2006 Bonds outstanding in the
aggregate principal amount of $29,010,000 and maturing on December 1, 2025. The City has previously
caused to be delivered a conditional notice of redemption with respect to the Series 2006 Bonds. The Series
2006 Bonds are scheduled to be redeemed on January J 2009 (the "Series 2006 Redemption Date").
Concurrently with the delivery of the Series 2009 Bonds, approximately $ of the proceeds
of the Series 2009 Bonds shall be used to redeem all of the outstanding Series 2006 Bonds. The Series 2006
Bonds will be paid on the Series 2006 Redemption Date and the Master Indenture dated as of December 1,
1995 between the City and U.S. Bank National Association (as successor to First Union National Bank of
Florida), as Trustee, and the supplemental indenture authorizing the Series 2006 Bonds, shall terminate, be
released and satisfied and become null and void as to the Series 2006 Bonds.
On November 15, 2004, the City entered into a swaption with Morgan Stanley Capital Services Inc.
("Morgan Stanley") as a means to lock in the rate associated with the issuance of the Series 2006 Bonds. The
'City sold to Morgan Stanley the right to enter into an interest rate swap agreement in exchange for annual
payments from December 1, 2005 through December 1, 2025. Morgan Stanley has exercised its option to enter
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into the swap agreement (the "Swap"), so that the Swap became effective on December 1, 2006. Under the
Swap, the City paid a fixed rate of 6.43% and received a floating rate based on the one -month Libor plus
$250,000 annually. The City has exercised its right to optionally terminate the Swap, causing the City to owe
a payment upon termination of the Swap, as calculated in accordance with the Swap (the "Swap Termination
Payment"). The Swap Termination Payment in the aggregate amount of $ will be paid by the City
to Morgan Stanley from the proceeds of the Series 2009 Bonds. See "ESTIMATED SOURCES AND USES OF
FUNDS" herein.
[Remainder of page intentionally left blank]
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ESTIMATED SOURCES AND USES OF FUNDS
The table below summarizes the estimated sources and uses of funds to be derived from the sale of
the Series 2009 Bonds and other available moneys:
SOURCES:
Principal Amount of Series 2009 Bonds $
[Plus/Minus Original Issue Premium/Discount]
Other available moneys of the City
TOTAL SOURCES
USES:
Deposit to Redemption Account for Series 2006 Bonds $
Swap Termination Payment to Morgan Stanley
Deposit to Costs of Issuance Account (1)
10
TOTAL USES $
Includes underwriters' discount, financial advisory and legal fees and expenses, and miscellaneous costs of issuance.
[Remainder of page intentionally left blank.]
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DESCRIPTION OF THE SERIES 2009 BONDS
General
The Series 2009 Bonds will be issued as fully registered bonds without coupons in principal
denominations of $5,000 each or any integral multiples thereof through the book -entry only system. The
Series 2009 Bonds shall be numbered consecutively from one (1) upward preceded by the letter "R." Interest
on the Series 2009 Bonds will be payable semi-annually on June 1 and December 1 of each year, commencing
June 1, 2009.
The Series 2009 Bonds, when issued, will be registered in the name of Cede & Co., as nominee for
DTC (as defined herein). Payment of the principal of, redemption premium, if any, and interest on the Series
2009 Bonds will be made directly to DTC or its nominee, Cede & Co., by U.S. Bank National Association,
Miami, Florida, as the Paying Agent and Bond Registrar for the Series 2009 Bonds.
Optional Redemption
The Series 2009 Bonds are subject to optional redemption and payment at any time, at the option of
the City, as a whole or in part at a redemption price equal to the greater of (i) 100% of the principal amount
thereof or (ii) the Discounted Value (as defined in the Resolution) thereof, together, in either case, with
accrued interest to the redemption date. The City may select amounts and maturities or portions of
maturities of Series 2009 Bonds for optional redemption at the City's sole discretion, except that any
redemption of Term Bonds will reduce pro rata any remaining sinking fund redemption amounts of the Term
Bonds remaining outstanding. All calculations and determinations referred to in this section with respect to
Discounted Value, except as provided in the preceding sentence, will be made by a financial advisor selected
by the City.
Mandatory Sinking Fund Redemption
The Series 2009 Bonds maturing on December 1, shall be subject to mandatory sinking fund
redemption by the City on each December 1 of the years specified below, in the amounts of the Amortization
Requirement set forth below at a redemption price of 100% of the principal amount thereof.
s•
Year
*Maturity
Amortization
Requirement
Year
Amortization
Requirement
However, the principal amount of the Series 2009 Bonds required to be redeemed on each such
sinking fund redemption date shall be reduced by the principal amount of the Series 2009 Bonds specified by
the City at least 45 days prior to the redemption date that have been either (i) purchased by or on behalf of the
City and delivered to the Bond Registrar for cancellation, or (ii) redeemed other than through the operation of
the provisions of this paragraph, and that have not been previously made the basis for a reduction of the
principal amount of the Series 2009 Bonds to be redeemed on a sinking fund redemption date.
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Notice of Redemption. Notice of redemption is to be given by deposit in the U.S. mails of a copy of a
redemption notice postage prepaid, at least thirty (30) days before the redemption date to all registered owners of the
Series 2009 Bonds or portions of the Series 2009 Bonds to be redeemed at their addresses as they appear on the
registration books to be maintained in accordance with the provisions of the Resolution. Failure to mail any such notice
to a registered owner of a Series 2009 Bond, or any defect therein, shall not affect the validity of the proceedings for
redemption of any Series 2009 Bond or portion thereof with respect to which no such failure or defect has occurred.
So long as all Series 2009 Bonds are held under a book -entry system by the Securities Depository,
notices of redemption shall be sent only to the Securities Depository or its nominee. Selection of book -entry
interests in the Series 2009 Bonds called, and notice of the call to the owners of those interests called, is the
responsibility of the Securities Depository (or any successor securities depository) pursuant to its rules and
procedures, and of its participants and indirect participants. Any failure of the Securities Depository (or any
successor securities depository) to advise any participant, or of any participant or any indirect participant to
notify the owner of a book -entry interest, of any such notice and its content or effect shall not affect the
validity of any proceedings for the redemption of any Series 2009 Bonds.
Such notice shall set forth the date fixed for redemption, the rate of interest borne by each Series 2009
Bond being redeemed, the name and address of the Bond Registrar and Paying Agent, the redemption price
to be paid and, if less than all of the Series 2009 Bonds then Outstanding shall be called for redemption, the
distinctive numbers and letters, including CUSIP numbers, if any, of such Series 2009 Bonds to be redeemed
and, in the case of Series 2009 Bonds to be redeemed in part only, the portion of the principal amount thereof
to be redeemed. If any Series 2009 Bond is to be redeemed in part only, the notice of redemption which
relates to such Series 2009 Bond shall also state that on or after the redemption date, upon surrender of such
Series 2009 Bond, a new Series 2009 Bond or Series 2009 Bonds in a principal amount equal to the
unredeemed portion of such Series 2009 Bond will be issued.
If applicable, in the case of optional redemption only, such notice may be given as a conditional
notice of redemption, in which case such notice shall state the condition and provide that if such condition is
not met on or prior to such redemption date, no such redemption shall occur.
Defeasance
If, at any time after the date of issuance of the Series 2009 Bonds:
(a) all Series 2009 Bonds secured under the Resolution or any maturity thereof shall have become
due and payable in accordance with their terms or otherwise as provided in the Resolution, or shall have been
duly called for redemption (if applicable), or the City gives the Paying Agent irrevocable instructions
directing the payment of the principal of, redemption premium, if any, and interest on such Series 2009 Bonds
at maturity or at any earlier redemption date scheduled by the City, or any combination thereof;
(b) the full amount of the principal, redemption premium, if any, and the interest so due and
payable upon all of such Series 2009 Bonds then outstanding or any portion of such Series 2009 Bonds, at
maturity or upon redemption (if applicable), shall be paid, or sufficient moneys shall be held by an escrow
agent who shall be an Authorized Depository or any Paying Agent (other than the City) in irrevocable trust
for the benefit of such Bondholders (whether or not in any accounts created under the Resolution) which,
when invested in Government Obligations maturing not later than the maturity or redemption (if applicable)
dates of such principal, redemption premium, if any, and interest, will, together with the income realized on
such investments, be sufficient to pay all such principal, redemption premium, if any, and interest on said
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Series 2009 Bonds at the maturity thereof or the date upon which such Series 2009 Bonds are to be called for
redemption (if applicable) prior to maturity; and
(c) provision shall also be made for paying all other sums payable under the Resolution by the
City allocable to such Series 2009 Bonds,
then and in that case the right, title and interest of such Bondholders under the Resolution shall thereupon
cease, determine and become void; otherwise, the Resolution shall be, continue and remain in full force and
effect.
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
NEITHER THE CITY NOR THE UNDERWRITERS TAKE ANY RESPONSIBILITY FOR THE ACCURACY OR
COMPLETENESS THEREOF.
The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for
the Series 2009 Bonds. The Series 2009 Bonds will be issued as fully -registered securities 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 certificate will be issued for each maturity of the Series 2009
Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, the world's largest securities 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 3.5 million issues of
U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instruments from over 100
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 is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated
subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities
brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has
Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the
Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and
www.dtc.org.
Purchases of Series 2009 Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Series 2009 Bonds on DTC's records. The ownership interest
of each actual purchaser of each Series 2009 Bond ("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
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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 2009
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 Serie's 2009 Bonds, except in the event that use of the book -entry system for the Series 2009 Bonds
is discontinued.
To facilitate subsequent transfers, all Series 2009 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 2009 Bonds with DTC and their registration in the
name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Series 2009 Bonds; DTC's records reflect only the identity of
the Direct Participants to whose accounts such Series 2009 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 2009 Bonds may wish to take certain steps to augment the transmission to
them of notices of significant events with respect to the Series 2009 Bonds, such as redemptions and proposed
amendments to the Series 2009 Bond documents. For example, Beneficial Owners of Series 2009 Bonds may
wish to ascertain that the nominee holding the Series 2009 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 2009 Bonds 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 the
Series 2009 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures.
Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Series 2009 Bonds are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Principal, premium, if any, and interest payments on the Series 2009 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 on the 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 Series 2009 Bonds held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, the Paying Agent or the City, subject
to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal,
premium, if any, and interest 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
8
payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the Series 2009
Bonds at any time by giving reasonable notice to the City. Under such circumstances, in the event that a
successor securities depository is not obtained, Series 2009 Bond certificates are required to be printed and
delivered.
The City may decide to discontinue use of the system of book -entry only transfers through DTC (or a
successor securities depository). In that event, Series 2009 Bond certificates will be printed and delivered to
DTC. Thereafter, Series 2009 Bond certificates may be transferred and exchanged as described in the
Indenture. See "-Registration, Transfer and Exchange" herein.
THE CITY AND THE PAYING AGENT WILL HAVE NO RESPONSIBILITY OR OBLIGATION TO
THE BENEFICIAL OWNERS, DTC PARTICIPANTS OR THE PERSONS FOR WHOM DTC PARTICIPANTS
ACT AS NOMINEES WITH RESPECT TO THE SERIES 2009 BONDS, FOR THE ACCURACY OF RECORDS
OF DTC, CEDE & CO. OR ANY DTC PARTICIPANT WITH RESPECT TO THE SERIES 2009 BONDS OR
THE PROVIDING OF NOTICE OR PAYMENT OF PRINCIPAL, OR INTEREST, OR ANY PREMIUM ON
THE SERIES 2009 BONDS, TO DTC PARTICIPANTS OR BENEFICIAL OWNERS, OR THE SELECTION OF
SERIES 2009 BONDS FOR REDEMPTION.
Registration, Transfer and Exchange
The registration of any Series 2009 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 written instructions as to
the details of the transfer of such Series 2009 Bond, along with the social security number or federal employer
identification number of such transferee. In all cases of a transfer of a Series 2009 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 2009 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 2009 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 2009 Bond shall be delivered.
The City, the Bond Registrar, and the Paying Agent may treat the registered owner of any Series 2009
Bond as the absolute owner of such Series 2009 Bond for the purpose of receiving payment of the principal
thereof and the interest and redemption premium, if any, thereon. Series 2009 Bonds may be exchanged at
the office of the Bond Registrar for a like aggregate principal amount of Series 2009 Bonds, or other
authorized denominations of the same series and maturity.
Replacement of Bonds Mutilated, Destroyed, Stolen or Lost
If any Series 2009 Bond is mutilated, destroyed, stolen or lost, the City or its agent may, in its
discretion (i) deliver a duplicate replacement Series 2009 Bond, or (ii) pay a Series 2009 Bond that has
matured or is about to mature or has been called for redemption. A mutilated Series 2009 Bond shall be
9
surrendered to and cancelled by the Bond Registrar. The Bondholder must furnish the City or its agent proof
of ownership of any destroyed, stolen or lost Series 2009 Bond; post satisfactory indemnity; comply with any
reasonable conditions the City or its agent may prescribe; and pay the reasonable expenses of the City or its
agents.
Any such duplicate Series 2009 Bond shall constitute an original contractual obligation on the part of
the City whether or not the destroyed, stolen or lost Series 2009 Bond be at any time found by anyone, and
such duplicate Series 2009 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 2009
Bond so mutilated, destroyed, stolen or lost.
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS
General
The payment of the principal of, redemption premium, if any, and interest on the Series 2009 Bonds
shall be secured by a lien upon and pledge of Pledged Funds, which consist of a]] moneys, securities,
instruments and income received from the investment of moneys, including legally available Non -Ad
Valorem Revenues deposited and held in the Funds and Accounts established under the Resolution
(collectively, the "Pledged Funds"). "Non -Ad Valorem Revenues" are defined in the Resolution to mean all
revenues of the City derived from any source other than ad valorem taxation on real or personal property,
which are legally available to make the payments required under the Resolution.
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, Non -Ad Valorem
Revenues of the City lawfully available in an amount which is equal to the Annual Debt Service Requirement
with respect to all Series 2009 Bonds outstanding under the Resolution for the applicable Fiscal Year, plus an
amount sufficient to satisfy the other payment obligations' of the City under the Resolution for the applicable
Fiscal Year. 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 created and established 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. 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, as provided for in the Resolution. The City may not expend moneys not appropriated or in excess
of its current budgeted revenues. The obligation of the City to budget, appropriate and make payments
under the Resolution from its legally available Non -Ad Valorem Revenues is subject to the availability of
legally available Non -Ad Valorem Revenues after satisfying funding requirements for obligations having an
express lien on or pledge of such revenues and after satisfying funding requirements for essential
governmental services of the City. However, the covenant to budget and appropriate in its general annual
budget for the purposes and in the manner provided in the Resolution shall have the effect of making
available in the manner described in the Resolution Non -Ad Valorem Revenues and placing on the City a
positive duty to budget and appropriate, by amendment, if necessary, amounts sufficient to meet its
10
obligations under the Resolution; subject, however, in all respects to the restrictions of Section 166.241,
Florida Statutes, which provides, in part, that the governing body of each municipality make appropriations
for each Fiscal Year which, in any one year, shall not exceed the amount to be received from taxation or other
revenue sources; and subject further, to the payment of services and programs which are for essential public
purposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated
by applicable law. Notwithstanding the foregoing, the City does not covenant to maintain any services or
programs now provided or maintained by the City which generate Non -Ad Valorem Revenues.
The Resolution established a Sinking Fund, and within the Sinking Fund, three separate accounts
therein designated as the Interest Account, the Principal Account and the Bond Amortization Account.
Non Ad -Valorem Revenues appropriated in each Fiscal Year for the payment of the principal of,
redemption premium, if any, and interest on the Series 2009 Bonds, shall be applied in the following manner:
1. To the full extent necessary, for deposit into the Interest Account in the Sinking Fund, on the
fifth (5th) day preceding each Interest Payment Date, such sums as shall be sufficient to pay the interest
becoming due on the Series 2009 Bonds on each such Interest Payment Date; provided, however, that such
deposits for interest shall not be required to be made into the Interest Account to the extent that money on
deposit therein is sufficient for such purpose.
The City shall, on each Interest Payment Date, transfer to the Paying Agent moneys in an amount
equal to the interest due on such Interest Payment Date or shall, prior to such Interest Payment Date, advise
the Paying Agent of the amount of any deficiency in the amount so to be transferred.
2. (a) To the full extent necessary, for deposit in the Principal Account in the Sinking Fund,
on the fifth (5th) day preceding each principal maturity date, the principal amount of Serial Bonds which will
mature and become due on such maturity dates; provided, however, that such deposits for principal shall not
be required to be made into the Principal Account to the extent that money on deposit therein is sufficient for
such purpose.
The City shall, on each principal payment date, transfer to the Paying Agent moneys in an amount
equal. to the principal due on such principal payment date or shall, prior to such principal payment date,
advise the Paying Agent of the amount of any deficiency in the amount so to be transferred.
(b) To the full extent necessary, for deposit into the Bond Amortization Account in the
Sinking Fund, on the fifth (5th) day preceding each redemption or maturity date, the Amortization
Requirements as may be necessary for the payment of the Term Bonds payable from the Bond Amortization
Account on such redemption or maturity dates.
The moneys in the Bond Amortization Account shall be used solely for the purchase or redemption of
the Term Bonds payable therefrom. The City may at any time purchase any of said Term Bonds at prices not
greater than the then redemption price of said Term Bonds. If the Term Bonds are not then redeemable, the
City may purchase said Term Bonds at prices not greater than the redemption price of such Term Bonds on
the next ensuing redemption date. The City is mandatorily obligated to use any moneys in the Bond
Amortization Account for the redemption prior to maturity of such Term Bonds in such manner and at such
times as the same are subject to mandatory redemption. If, by the application of moneys in the Bond
Amortization Account, the City shall purchase or call for redemption in any year Term Bonds in excess of the
Amortization Requirements for such year, such excess of Term Bonds so purchased or redeemed shall be
11
credited in such manner and at such times as the Director of Finance of the City shall determine over the
remaining payment dates.
The City shall, on each redemption or maturity date, transfer to the Paying Agent moneys in an
amount equal to the payments due on the Term Bonds on such redemption or maturity date or shall, prior to
such redemption or maturity date, advise the Paying Agent of the amount of any deficiency in the amount so
to be transferred.
The Series 2009 Bonds shall not be deemed to constitute general obligations or a pledge of the faith
and credit of the City, the State or any political subdivision thereof within the meaning of any constitutional,
legislative or charter provision or limitation, but are payable solely from and secured by a lien upon and a
pledge of the Pledged Funds, 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, the State, or any other political subdivision thereof or taxation in any form on any real or
personal property to pay the Series 2009 Bonds or the interest thereon, nor shall any Bondholder be entitled to
payment of such principal of, redemption premium, if any, and interest from any other funds of the City
other than the Pledged Funds, all in the manner and to the extent provided in the Resolution. The Series 2009
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 Funds, all in the manner and to the extent provided in the Resolution.
Enforcement of the City's obligation to budget and appropriate legally available Non -Ad Valorem
Funds shall be through appropriate judicial proceedings. The City has issued and may issue other bonds or
debt obligations secured by a similar covenant. See "—The City of Miami, Florida Schedule of Principal and
Interest for Non -Ad Valorem Revenue Bonds and Loans" below. In addition, various contracts of the City
which do not constitute debt may be secured in a similar manner.
The City has not covenanted to maintain any programs or other activities which generate Non -Ad
'Valorem Revenues. Furthermore, the obligation of the City to budget and appropriate Non -Ad Valorem
Revenues is subject to a variety of factors, including the payment of essential governmental services of the
City and the obligation of the City to have a balanced budget. For a description of additional limitations see
"Special Investment Considerations" herein.
Description of Non -Ad Valorem Funds
The following describes the sources of the City's Non -Ad Valorem Revenues:
Franchise Fees
Franchise fees are levied annually on utility companies by the City in return for granting a privilege
sanctioning a monopoly or permitting the use of public property. Such fees are currently levied against
Florida Power and Light Co. Additionally, the City has granted non-exclusive commercial solid waste
franchises and levies certain fees thereunder against commercial solid waste service providers.
Public Service Tax
The Public Service 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
12
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 in the State 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.
Pursuant to the Constitution of the State, Florida Statutes and a resolution of the City, the City levies
a Public Service 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, 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, 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 recognized church.
The Public Service Tax must be collected by the seller from purchasers at the time of sale and remitted
to the City. Such tax will appear on a periodic bill rendered to consumers for electricity, metered and bottled
gas, water service and fuel oil. A failure by a consumer to pay that portion of the bill attributable to the Public
Service. Tax may result in a suspension of the service involved in the same fashion as the failure to pay that
portion of the bill attributable to the particular utility service.
Local Communications Services Tax
The Communications Services Tax Simplification Act, enacted by Chapter 2000-260, Laws of Florida,
as amended by Chapter 2001-140, Laws of Florida, and now codified in part as Chapter 202, Florida Statutes
(the "Communications Services Tax Act") established, effective October 1, 2001, a communications services
tax on the sale of 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 Statutes, Section 202.19, as
amended, provides that counties and municipalities may levy, by ordinance, 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 Communications Services Tax pursuant to ordinance No. 12078 enacted on June 14, 2001.
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;
13
(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; or
(h) Internet access service, electronic mail service, electronic bulletin board service, or similar
on-line services.
Any sale of communications services charged to a service address in the City is subject to the City's
local communications services tax at a rate of 5.62%. The Communications Services Tax Act further provides
that, to the extent that a provider of communications services is required to pay to a local taxing jurisdiction 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 amount of
such credit shall be deducted from the amount that the local taxing jurisdiction is entitled to receive.
The Local Communications Services Tax must be collected by the provider from purchasers and
remitted to the Florida Department of Revenue ("DOR"). The proceeds of said Local Communications
Services Tax less the DOR's cost of administration is deposited in the Local Communications Services Tax
clearing trust fund and distributed monthly to the appropriate jurisdictions.
Licenses and Permits
These are revenues derived from the issuance of local licenses and permits, including professional
and occupational licenses required for the privilege of engaging in certain trades, occupations and other
activities.
Intergovernmental
This category includes federal, state and other local units grants, and revenues shared by the state and
other local units. The largest component is the half -cent sales tax.
Half Cent Sales Tax. The State levies and collects a sales tax on, among other things, the sales price of
each item or article of tangible personal property sold at retail in the State, subject to certain exceptions and
dealer allowances. In 1982, the Florida legislature created the Local Government Half -Cent Sales Tax
Program (the "Local Government Half -Cent Sales Tax Program") which distributes a portion of the sales tax
revenue and money from the State's General Revenue Fund to counties and municipalities that meet strict
eligibility requirements. In 1982, when the Local Government Half -Cent Sales Tax Program was created, the
general rate of sales tax in the State was increased from 4% to 5%, and one-half of the fifth cent was devoted
to the Local Government Half -Cent Sales Tax Program, thus giving rise to the name "Half -Cent Sales Tax."
Although the amount of sales tax revenue deposited into the Local Government Half -Cent Sales Tax Program
14
is no longer one-half of the fifth cent of every dollar of the sales price of an item subject to sales tax, the name
"Half -Cent Sales Tax" has continued to be utilized.
Section 212.20, Florida Statutes, provides for the distribution of sales tax revenues collected by the
State and further provides for the distribution of a portion of sales tax revenues to the Local Government
Half -Cent Sales Tax Clearing Trust Fund (the "Trust Fund"), after providing for transfers to the Genera] Fund
and the Ecosystem Management and Restoration Trust Fund. The entire sales tax remitted to the State by each
sales tax dealer located within a particular county (the "Local Government Half -Cent Sales Tax Revenues") is
deposited in the Trust Fund and earmarked for distribution to the governing body of such county and each
participating municipality within that county pursuant to a distribution formula.
The percentage of Local Government Half -Cent Sales Tax Revenues deposited in the Trust Fund is
8.804%. The general rate of sales tax in the State is currently 6.00%. After taking into account the distributions
to the General Fund (historically 5% of taxes collected) and the Ecosystem Management and Restoration Trust
Fund (.2% of the taxes collected), for every dollar of taxable sales price of an item, approximately 0.501 cents
is deposited into the Trust Fund.
As of October 1, 2001, the Trust Fund began receiving a portion of certain taxes imposed by the State
on the sales of communication services (the "CST Revenues") pursuant to Chapter 202, Florida Statutes.
Accordingly, moneys distributed from the Trust Fund now consist of funds derived from both general sales
tax proceeds and CST Revenues required to be deposited into the Trust Fund.
The Half -Cent Sales Tax collected within a county and distributed to local government units is
distributed among the county and the municipalities therein in accordance with the following formula:
County Share
(percentage of total Half -Cent =
Sales Tax receipts)
Municipality Share
(percentage of total Half -Cent =
Sales Tax receipts)
unincorporated + 2/3 incorporated
area population area population
total county + 2/3 incorporated
population area population
municipality 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 Half -Cent Sales Tax
received by Miami -Dade County and the City would be reduced.
The Half -Cent Sales Tax is distributed from the Trust Fund on a monthly basis to participating units
of local government in accordance with Part VI, Chapter 218, Florida Statutes (the "Sales Tax Act"). The Sales
Tax Act permits the City to pledge its share of the Half -Cent Sales Tax for the payment of principal of and
interest on any capital project.
15
To be eligible to participate in the Half -Cent Sales Tax, the counties and municipalities must comply
with certain requirements set forth in the 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 Sales Tax Act does not impose any limitation upon the number of years during which
the City can receive distribution of the Half -Cent Sales Tax from the Trust Fund, there may be future
amendments to the Sales Tax Act. 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 DOR.
State Revenue Sharing. A portion of the taxes levied and collected by the State of Florida is shared
with local governments under the provisions of Chapter 218, Part II, Florida Statutes. The amount deposited
by DOR into the State Revenue Sharing Trust Fund for Municipalities is 1.3409% of available sales and use tax
collections after certain required distributions,12.5% of the Florida alternative fuel user decal fee collections,
and the net collections from the one -cent municipal fuel tax.
To be eligible for State Revenue Sharing funds, a local government must be audited, with certain
exceptions; must have filed its annual financial report with the Florida Department of Financial Services; must
certify certain requirements pertaining to the employment and compensation of law enforcement officers and
the employment of firefighters; must levy an ad valorem tax of at least 3 mills or collected equivalent
alternative revenues from a combination of the following sources available to municipalities: a remittance
from the county pursuant to Section 125.01(6)(a), Florida Statutes, occupational license taxes, utility taxes,
and ad valorem taxes. Eligibility is retained if the local government has met eligibility requirements for the
previous three years, even if the local government reduces its millage or utility taxes because of the receipt of
the Half -Cent Sales Tax.
The amount of the State Revenue Sharing Trust Fund for Municipalities distributed to any one
municipality is the average of three factors: an adjusted population factor; a sales tax collection factor, which
is the proportion of the local municipality's ordinary sales tax collected within the municipality to the total
sales tax collected within all eligible municipalities in the State; and a relative revenue -raising ability factor,
which measures the municipality's ability to raise revenue relative to other qualifying municipalities in the
State.
Each municipality is entitled to receive a minimum amount of State Revenue Sharing funds known as
the "guaranteed entitlement" as defined in Section 218.21(6), Florida Statutes.
To be eligible to participate in State Revenue Sharing in future years, the City must comply with
certain eligibility and reporting requirements, otherwise, the City will not be entitled to distributions for a
period of time.
Fines and Forfeitures. These are revenues derived from fines and forfeitures imposed by local courts.
Charges for Services
Charges for various services provided by the City to residents, property owners, and grants received
from other governments, including the following:
16
(a) General Government: all money resulting from charges for current services; i.e., photographs,
reports and ordinances;
(b) Public Safety: fees for police services, fire protection services and emergency services;
(c) Physical Environment: charges include cemetery fees;
(d) Building and Zoning Inspections: fees for inspections such as plumbing, electrical, elevator and
mechanical inspections;
(e) Marina Fees: all fees associated with operations of the various City marinas;
(f) Recreational and Special Events: fees for parks and recreation activities and events; and
(g) Other: fees for services not specifically mentioned above, i.e., engineering services, public
hearing fees.
Other Revenue and Financing Sources
This category includes a variety of revenues and transfers from other funds, including the interest
earnings on invested funds.
17
The following table represents the City's audited determination of legally available Non -Ad Valorem
Revenues for the Fiscal Years Ended September 30, 2003 through September 30, 2007 and the City's unaudited
determination of legally available Non -Ad Valorem Revenues for Fiscal Year Ended September 30, 2008.
Revenues:
Franchise and Utility Taxes
Licenses and Permits:
Business Licenses and Permits
Construction Permits
Intergovernmental:
State and Revenue Sharing
Half -Cent Sales Tax
Pine and Forfeitures
Other •
'l'otal Intergovernmental
Charges for Services:
Engineering Servicesw
Public Safety
Recreation
Other
Total Charges for Services
interest Income
Other ,
Component Units Operating:
Transfers In
Transfers In from other Funds
Total Sources of Legally Available
Non -Ad Valorem Funds
THE CITY OF MIAMI, FLORIDA
LEGALLY AVAILABLE NON -AD VALOREM REVENUES
YEAR ENDED SEPTEMBER 30th
2003 2004
$31,556,3870)
$ 6,925,360
14,544,613
$21,469,973
$ 9,217,247
21,213,998
5,049,412
13,640,279
$49,120,936
$45,392,136
11,366,612
581,244
28,842,835
$86,182,827
$7,280,372
$3,688,147
$ 1,708,642
$49,574,235
2005 2006 2007
$34,988,629 $35,918,724 $41,342,214 $42,257,282
$ 6,975,040 $ 7,817,841 $ 7,078,534 $7,064,358
16,036,648 19,576,586(2) 21,390,059 25,766,010
$23,011,688 $27,394,427 $28,468,593 $32,830,368
$10,418,123
21,819,892
4,732,357
17,022,799(3)
$53,993,171
$46,495,695
9,947,278
572,253
30,575,808
$87,591,034
$5,438,411
$5,828,412
$13,002,038 $13,044,234
22,802,208 25,800,341
4,980,002 5,175,457
13,986,248 3,341,711
$54,770,496 $47,361,743
$50,264,889
10,429,442
451,451
30,833,674
$91,979,456
$44,917,693
11,025,330
662,557
35,375, 016
$91,980,596
$13,073,886
25,505,412
5,283,695
15,517,110
$59,380,103
$46,587,956
22, 952, 364
3,488,492
4,145, 343
$ 77,174,155
$4,404,529 $11,144,320 $16,248,307
$3,949,489 $16,643,409 $4,950,826
$ 1,982,616 $ 1,887,466 $ 2,000,000 $61,411,040
$47,417,878 $41,596,608 $50,097,226 -
$250,581,519 $260,251,789 $261,901,195 $289,038,101 $294,252,081
Source: City of Miami Finance Department
f" Prior to 2003, the City recorded storm water utility revenues and optional gas tax in the Special Revenue Fund.
lliis increase was due to growth in the City and in new development.
i3) This increase was due to hurricane grants from FEMA.
This increase is due to amounts reclassified from "Other" to "Engineering."
Unaudited.
2008tci
18
Non -Ad Valorem Fun
Available to Pay
Service
Debt Service')(-)
Coverage31
200`%, Debt Service
Coverage)
12)
2003
ds
Debt $250,581,519
$ 21,807,281
11.49x
$ 43,614,562
5.75x
THE CITY OF MIAMI, FLORIDA
HISTORICAL ANTI -DILUTION TEST
YEAR ENDED SEPTEMBER 30TH
2004
$260,251,789.
$ 21,725,438
11.98x
$ 43,450,876
5.99x
2005
$261,901,194
$ 21,046,555
12.44x
$ 42,093,110
6.22x
2006 2007
$289,038,101 $294,252,081
$ 21,583,712 $ 25,142,742
13.39x 11.70x
$ 43,167,424 $ 50,285,484
6.70x 5.85x
Figures for Fiscal Years Ended September 30,2003 through September 30, 2007 are audited. Figures for
Fiscal Year Ended September 30, 2008 are unaudited. Debt service is based on the maximum estimated
annual loan payments on 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.
Variable Interest Rate Debt on the Sunshine Loans is calculated at 12% which is the maximum rate
Pursuant to the covenants of loan agreements securing the debt of Sunshine State Governmental Financing
Commission.
I7,
t,) Coverage based on 200% debt service.
Special Investment Considerations
Coverage based on 100% debt service.
As described above, the City's covenant to budget and appropriate Non -Ad Valorem Revenues does
not constitute a lien, either legal or equitable, on any of the City's revenues. The amount of such revenues
available to make payments on the Series 2009 Bonds may be effectively limited by the requirement for a
balanced budget, funding requirements for essential governmental services of the City, and the inability of
the City to expend revenues not appropriated or in excess of funds actually available after the use of such
funds to satisfy obligations having an express lien or pledge on such funds. Furthermore, except as provided
in the Resolution (and described herein under the caption "SECURITY AND SOURCES OF PAYMENT FOR
THE SERIES 2009 BONDS — Additional Debt Payable From Non -Ad Valorem Revenues"), the City is not
restricted in its ability (i) to pledge such revenues for other purposes or to issue additional debt specifically
secured by such revenues or by a covenant similar to that securing the Series 2009 Bonds or (ii) to reduce or
discontinue services that generate Non -Ad Valorem Revenues.
All of these factors may limit the availability of Non -Ad Valorem Revenues to pay a portion of the
debt service on the Series 2009 Bonds. In addition, there can be no certainty as to the outcome of any judicial
proceedings to enforce the City's obligation to appropriate such funds.
20
2008
Additional Debt Payable from Non -Ad Valorem Revenues
Pursuant to the Resolution, the City may incur additional debt that is payable from all or a portion of
the legally available Non -Ad Valorem Revenues only if the total amount of legally available Non -Ad Valorem
Revenues for the most recent Fiscal Year for which audited financial statements are available was 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.
Claims
The Series 2009 Bonds and any other Debt payable from legally available Non -Ad Valorem Revenues,
regardless of the time or times of their issuance shall have an equal claim for payment therefrom without
preference of the Series 2009 Bonds or any other Debt, except to the extent that Non -Ad Valorem Revenues
have been pledged to the payment of any other indebtedness of the City; provided, however, that any Debt
will not be secured by or have any lien on any money or investments held in the Funds and Accounts created
.and established under the Resolution.
Pledge of Non -Ad Valorem Revenues
No specific source of Non -Ad Valorem Revenues (which includes Public Service Tax revenues,
franchise revenues, occupational license tax revenues, the guaranteed entitlement portion of the State
Revenue Sharing funds and fines and forfeitures) are pledged to the payment of the Series 2009 Bonds.
Certain sources of Non -Ad Valorem Revenues are pledged for the payment of other indebtedness of the City
as shown herein. Future issues of other indebtedness of the City may be secured by a pledge of Non -Ad
Valorem Revenues as described above.
MANAGEMENT DISCUSSION OF BUDGET AND FINANCES
[To come]
PROPERTY TAX REFORM
During a special legislative session that ended on June 14, 2007, the Florida Legislature adopted
Chapter 2007-321, Laws of Florida, ("Chapter 2007-321"), a property tax plan, which appears to have a
significant impact on the amount and rate of ad valorem taxes levied by local governments. Among other
things, Chapter 2007-321 statutorily requires each county, municipality, and special district to roll back their
millage rates for Fiscal Year 2007-2008 to a level that, with certain adjustments and exceptions, will generate
the same level of ad valorem tax revenue as in Fiscal Year 2006-2007. Depending upon the relative growth of
each local government's own ad valorem tax revenues from Fiscal Years 2001 to 2006, such rolled back
millage rates will be determined after first reducing Fiscal Year 2006-2007 ad valorem tax revenues by zero to
nine percent or to the non -voted millage rate levied in Fiscal Year 2006-2007 if such increase is approved by
two-thirds vote or unanimous vote, respectively of the governing body of the local government. The City fell
under the 0% ad valorem tax revenue reduction category, as a result of the City falling within the city under
special finance concern exemption. As a result, the City's millage rate was reduced from 7.8775 mills in Fiscal
Year 2006-07 to7.2999 mills in Fiscal Year 2007-08. Subsequent to the adoption of the Fiscal Year 2007-08
21
millage and budget, the State Legislature held a special session in October 2007, where a bill was passed
which resulted in the City being removed from the city under special financial concern exemption and now
being in the 9% ad valorem tax revenue reduction category for Fiscal Year 2008-09.
Chapter 2007-321 also limits how much the aggregate amount of ad valorem tax revenues may
increase in future Fiscal Years (except those levied by school districts) based upon the growth in a
jurisdiction's population, as measured by new construction, and the statewide growth in per capita personal
income. Notwithstanding the foregoing, the governing body of a county, municipality, or special district may
levy a millage rate in excess of the then applicable rolled back millage rate upon a supermajority or
unanimous vote of such governing body depending on the level of the proposed increase. Several local
governments have elected to levy a millage rate in excess of their rolled back millage rate for Fiscal Year 2008-
09. The rolled back millage rate may also be exceeded based on an affirmative vote of the voters in such
jurisdiction. Furthermore, Chapter 2007-321 provides that in the event a county or municipality fails to
comply with certain requirements of the legislation, such county or municipality will forfeit its distribution of
the half -cent sales tax state revenue sharing for the 12-months following the determination of non-
compliance. It is estimated that Chapter 2007-321, will reduce property taxes statewide by approximately
$15.6 billion over five years.
In addition, on October 29, 2007, the Florida Legislature adopted a tax reform package that includes
Senate Joint Resolution 2D, Senate Bill 4D (an implementing bill) and Senate Bill 6D (a special election bill).
Joint Resolution 2D set forth several proposed constitutional amendments which required approval by
Florida voters. On January 29, 2008, the constitutional amendments proposed by Joint Resolution 2D were
approved, with the affirmative vote of 64% of the voters. Such approval enacted the following ad valorem tax
reforms: (1) an exemption of an additional $25,000 of the assessed value of homestead property (to be applied
on the assessed value between $50,000 and $75,000); provided however, this reform does not apply to school
boards; (2) a cap of 10 percent on yearly assessment increases on non -homestead residential and commercial
property; provided however, this reform does not apply to school boards; (3) portability of the three percent
cap on homestead residential property, up to $500,000, when relocating to a new home in the State; and (4) a
$25,000 exemption from the tangible personal property tax. The 10 percent cap will affect assessments
beginning on January 1, 2009. All other reforms took effect retroactive to January 1, 2008.
While the constitutional amendments passed on January 29, 2008 did not impact the City's Fiscal Year
2007-08 budget, they will have an impact on the approach the City takes to formulate its budget for Fiscal
Year 2008-09 and beyond. The impact of Save Our Homes portability, as well as previously mentioned
exemptions, is estimated to reduce the City's overall taxable value by $1.19 billion. [The City has
to mitigate the impact of the constitutional amendments on the Fiscal Year 2008-09 budget.
For more information see "MANAGEMENT DISCUSSION AND ANALYSIS" herein.)
Although, no further action is required on the part of the Florida Legislature to implement these
amendments, a lawsuit challenging the constitutionality of at least part of the amendments was filed prior to
the January 2008 referendum approval by the voters. In Bruner v. Hartsfield, filed in the Circuit Court in and
for Leon County, Florida in November 2007, new Florida homestead owners (having paid ad valorem taxes
for the past four years) filed a class action lawsuit challenging the constitutionality of the Save Our Homes
assessment cap and the portability provision in Joint Resolution 2D. The lawsuit alleges that Save Our Homes
constitutes an unlawful residency requirement for tax benefits on substantially similar property, in violation
of the Florida Constitution's Equal Protection provisions and the Privileges and Immunities Clause of the
Fourteenth Amendment to the United States Constitution. The lawsuit argues that the portability provision
simply extends the unconstitutionality of the tax shelters granted to long-term homeowners by Save Our
22
Homes. The lawsuit requests a declaration of the unconstitutionality of both provisions and injunctive action
preventing continued application of those provisions. On October 27, 2008, the Circuit Court dismissed the
complaint with prejudice. However, the plaintiffs have filed an appeal. At the present time, it is impossible
to predict the likelihood of the plaintiffs' success in the appeal or the impact, if any, of this lawsuit on the
City's finances.
On October 18, 2007, the same Circuit Court in and for Leon County, Florida, in Lanning v. Filcher, a
case filed by out-of-state residents challenging the constitutionality of the Save Our Homes assessment cap,
rejected the plaintiffs arguments that the Save Our Homes assessment cap violates either the Commerce
Clause or the Privileges and Immunities Clause of the United States Constitution or the Equal Protection
Clause of either the United States or Florida Constitutions and dismissed the plaintiffs' allegations with
prejudice. The Lanning court noted that its decision was limited to the plaintiffs' complaints regarding the
Save Our Homes assessment cap. Lanning v. Filcher is currently on appeal. One or more similar lawsuits
have been filed against other defendants in the State of Florida. The allegations and relief requested by the
plaintiffs in each of these cases are very similar, except that the portability provision was not challenged in
Lanning v. Filcher, since that case was filed prior to the approval of Joint Resolution 2D, which implemented
portability. As noted above, the Court rejected such arguments in Lanning v. Filcher with similarly situated
plaintiffs. At the present time, it is impossible to predict the likelihood of the plaintiffs' success in any of
these lawsuits or, if successful, the impact of these lawsuits on the City's finances.
In addition to the legislative activity described above, the constitutionally mandated Florida Taxation
and Budget Reform Commission (required to be convened every 20 years) (the "Commission") completed its
meetings on April 25, 2008 and as a result several constitutional amendments were placed on the November
4, 2008 general election ballot. Three of such amendments were approved by the voters of Florida which will,
among other things, do the following: (a) allow the Legislature, by general law, to exempt from the assessed
value of residential homes, the value of improvements made to protect property from wind damage and
installation of new renewable energy source devices; (b) cause specified working waterfront properties to be
assessed based on current use rather than highest and best use; and (c) beginning in 2010,.provide a property
tax exemption for (i) real property that is perpetually used for conservation, and (ii) land not perpetually
encumbered, which would require the Legislature to provide for the classification and assessment of land use
for conservation purposes solely on the basis of character or use.
[The City has not yet completed an analysis of the impact of these proposals on the level of ad
valorem taxes that the City will collect. At this time, the extent to which these amendments may affect the
ad valorem tax collections of the City in future years is not currently known, but it may be substantial.]
23
DEBT SERVICE SCHEDULE
The following table sets forth the debt service for each Fiscal Year for the Series 2009 Bonds and the
City's outstanding non -ad valorem Debt, all as of the date of delivery of the Series 2009 Bonds.
Series 2009 Bonds
Outstanding
Non -Ad Total Debt
Fiscal Year Principal Interest Total Valorem Debt Service
24
THE CITY OF MIAMI
Background
Now 112 years old, the City is part of the nation's seventh 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 of approximately 386,882 residents, 58.2% 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 35 municipalities
that makeup Miami -Dade County and is the county seat. For additional information concerning the City, see
"APPENDIX A - GENERAL INFORMATION REGARDING THE CITY OF MIAMI."
City Government
Since 1997, the City has been governed by a form of government known as the "Mayor -Commissioner
plan." The City Commission is the legislative body of the City. There are five Commissioners elected every
four years 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 City Commission, however, the City
Commission can override such veto with a 4/5 vote. The Mayor appoints the City Manager who functions as
chief administrative officer.
The Mayor of the City is presently Manuel A. Diaz whose term expires November 2009.
The current members of the City Commission and expiration of their current terms of office are:
Commission Members
Joe M. Sanchez, Chairman
Michelle Spence -Jones, Vice Chair
Angel Gonzalez
Tomas P. Regalado
Marc D. Sarnoff
Date Term Expires
November 2009
November 2009
November 2011
November 2011
November 2011
The City Manager, Pedro G. Hernandez, 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 City Commission and the Mayor. Mr. Hernandez has been
City Manager since July 2006. He is responsible for an organization that has more than 3,954 employees and
administers a budget of more than $508 million. Prior to his current position, he served as Deputy.County
Manager of Miami -Dade County and was charged with the oversight of the Departments of Aviation, Police,
Corrections, Juvenile Services, Fire Rescue, Emergency Management, Homeland Security and the Office of the
Medical Examiner. He also served as liaison to the Ethics Commission, Clerk of Courts, International Trade
Consortium and the planning committee for the Super Bowl. He holds a Bachelor of Science Degree in Civil
Engineering from the University of Miami and is a registered Professional Engineer in the State of Florida.
The City's Chief Financial Officer is Larry Spring. His primary responsibilities include the oversight
of the budget development process as well as developing and maintaining the performance indicator systems
whereby department performance can be monitored and provide for budget accountability. He was
appointed the interim Chief Financial Officer in July 2006 and appointed the Chief Financial Officer in
February 2007. He served as Assistant City Manager for Strategic Planning, Budgeting and Performance
from February 2003 to February 2007. Prior to that, Mr. Spring spent the bulk of his career in the commercial
25
banking industry primarily in the areas of accounting and treasury management. His last position prior to
joining the City was as Vice President and Controller of TOTALBANK in Miami. He holds a Bachelor of
Science degree in Accounting from the A.B. Freeman School of Business at Tulane University and is a member
of the Government Finance Officers Association.
The City's Finance Director is Diana M. Gomez. She reports to the Chief Financial Officer. She is
responsible for managing and investing public funds, accounts payable, general ledger, grants monitoring,
payroll, treasury management and preparation of routine accounting reports as well as the City's annual
financial statement. Ms. Gomez was appointed as the Finance Director on February 11, 2006. Ms. Gomez had
been Assistant Director of Finance/Comptroller since her employment with the City on August 27, 2001.
Prior to joining the City, Ms. Gomez was a Supervising Senior Auditor/C.P.A. for five years with KPMG LLP,
one of the "big four" accounting firms. Ms. Gomez received a Bachelor of Arts in Psychology from Rutgers
College, NJ, and a Masters in Business Administration in Professional Accounting from the University of
Baltimore, MD. She is a Certified Public Accountant in the State of Maryland.
Adoption of Investment Policy and Debt Management Policy
The City adopted a detailed written investment policy on May 10, 2001, that applies to all cash and
investments 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 program is the safety of the principal of those funds within
the portfolios. Investment transactions shall seek to keep capital losses at a minimum, whether they are from
securities defaults or erosion of market value. To attain this objective, diversification is required in order that
potential losses on individual securities do not exceed the income generated from the remainder of the
portfolio. The portfolios are required to be managed in such a manner that funds are available to meet
reasonably anticipated cash flow requirements in an orderly manner. 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. The City's investment policy may be modified from time to time by
the City Commission.
Subject to the exceptions in the City's investment policy, the City may invest in the following types of
securities: (a) The Florida Local Government Surplus Funds Trust Fund, (b) United States Government
Securities, (c) United States Government Agencies, (d) Federal Instrumentalities, (e) Interest Bearing Time
Deposit or Savings Accounts, (f) Repurchase Agreements, (g) Commercial Paper, (h) Corporate Notes, (i)
Bankers' Acceptances, (j) State and/or Local Government Taxable and/or Tax -Exempt Debt, (k) Registered
Investment Companies (Money Market Mutual Funds) and (I) Intergovernmental Investment Pool. Also, the
.City may invest in investment products that include the use of derivatives.
As of August 31, 2008, approximately 72% of the City's investment portfolio was invested in United
States Treasury Obligations and obligations of agencies of the United States Government and approximately
26
28% of the City's investment portfolio was invested in commercial paper. All are rated in the highest rating
category for each of the rating agencies.
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
has approved the Series 2009 Bonds and their negotiated sale to the Underwriters.
The following policies concerning the issuance and management of debt were established in the Debt
Management Policy: (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.
Capital Improvement Plan
The City's Fiscal Year 2006-2007 five year Capital Improvement Plan (the "Capital Plan"), covering
the period from October 1, 2007 through September 30, 2012, earmarked funding estimated at $800.5 million
for 490 projects throughout the City. Streets and sidewalks projects account for the largest portion of the
total Capital Plan funding at $256.2 million or 32%. Parks and recreation projects are the second largest,
accounting for $162.1 million, or 20.2%, and public facilities projects are the third largest, accounting for
$108.3 million, or 13.5%, of the total Capital Plan. [Update to reflect Fiscal Year 2008-2009.]
Bonds issued by the City represent the largest share of funding for the Capital Plan, accounting for
45.5% of the total. Capital project revenues (impact fees, storm water utilities, optional gas tax, etc.) account
for 30.5%, funding derived from Miami -Dade County accounts for 14.9% and the remaining 9.1% of funding
is from federal, State and other private donations.
Fiscal and Accounting Procedures
The accounts of the City are organized on the basis of funds or account groups, each of which is
considered a separate accounting entity in accordance with generally accepted accounting principles, as
defined by the Governmental Accounting Standards Board ("GASB"). The operation of each fund is
accounted for in a separate, self -balancing set of accounts which comprise its assets and other debits,
liabilities, fund equities and other credits, revenues and expenditures. Individual funds that have similar
characteristics are combined into fund types.
For 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.
27
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. Operations are removed from the General Fund only when they can be
operated as true enterprise operations.
[Remainder of page intentionally left blank]
28
The following chart shows audited information regarding the General Fund for the Fiscal Years
Ended September 30, 2003 through September 30, 2007 and unaudited information for the Fiscal Year ended
September 30, 2008.
Summary Schedule of Revenues, Expenditures and Net Changes in Fund Balance
for the General Fund
Revenues
Property Taxes
Franchise Fees/Other Taxes
Licenses and permits
Fines and forfeitures
Intergovernmental
Charges for services
interest
Other
Total Revenues
Fiscal Year Ended September 30th
2003 2005 2006 2007
$139,604,223 $159,391,679 $178,979,987 $214,329,257 $258,756,957
31,556,387 34,988,629 35,918,724 41,342,214 42,257,282
21,469,973 23,011,688 27,394,427 28,468,593 32,830,368
5,049,412 4,732,357 4,980,002 5,175,457 5,283,695
44,071,524 49,260,814 49,790,494 53,266,529 54,096,408
86,182,827 87,591,034 91,979,456 91,980,596 77,174,155
7,280,372 5,438,411 4,404,529 11,144,320 16,248,307
3,688,147 5,828,412 3,949,489 5,563,166 3,448,782
200801
$338,902,865 $370,243,024 $397,397,108 $451,270,132 $490,095,954
Expenditures
General government 70,335,134 64,208,736 36,419,744 38,809,265 61,208,626
Planning & development 8,483,782 10,722,800 9,136,666 9,440,759 10,814,727
Community development - -
Community redevelopment areas - - -
Public works 50,591,533 56,926,608 48,251,766 50,573,908 56,376,608
Public safety 198,541,341 243,181,936 181,871,226 187,938,096 249,794,879
Public facilities 5,173,926 5,911,254 6,597,590 7,355,457 7,419,797
Parks and recreation 12,594,690 14,763,846 14,621,171 15,111,916 20,201,873
Risk management 29,162,254 25,546,486 18,115,929
Pensions'', 73,862,309 78,864,757 70,708,285
Organizational Support/Group Benefitst0 - 23,917,033 25,161,646 35,122,459
Non -departmental", - 12,926,933 13,204,324 0
Debt Service:
Principal - - - -
Interest and Other Charges - -
Capital Outlay -
Total Expenditures $345,720,406 $395,715,180 $436,766,692 $452,006,614 $529,763,183
Excess (Deficiency) of Revenues
Over (Under) Expenditures (6,817,541) (25,472,156) (39,369,584) (736,482) (39,667,229)
Other financing sources and (uses):
Operating transfers in 51,282,877 49,400,444 43,484,074 52,097,226 61,411,040
Operating transfers out (44,130,853) (32,142,211) (23,862,197) (42,209,286) (49,052,224)
Refunding Bonds issued -
Proceeds from sale of property 1,502,044
Payments to Refunded Bond Escrow
Agent
Bonds Issued
Loan
Capital Leases - 3,204,349
Sale of Capital Assets
Total other financing sources(uses) 7,152,024 20,462,582 19,621,877 9,887,940 13,860,860 •
Net Change in Fund Balance
Source: The City of Miami, Florida
$ 334,483 $(5,009,574) $ (19,747,707) $9,151,458 ($25,806,369)
(1) The City, in the 2005 Fiscal Year, revised the reporting for these functions in the governmental funds. Previously,
these amounts were included in other functions.
(2) Unaudited.
29
Indebtedness of the City
Pursuant to the Debt Management Policy, the City's debt issuance is subject to the following
constraints: (i) the Net Debt Per Capita and the Net Debt to Taxable Assessed Value percentages, which shall
be determined by the finance committee by bench marking the City to current industry standards, and (ii) the
maximum maturity shall be the earlier of (a) the estimated useful life of the capital improvements being
financed or (b) thirty years or (c) in the event debt was issued to refinance outstanding debt obligations the
final maturity of the debt obligations being refinanced, unless a longer term is recommended by the finance
committee.
Pension Fund. The City's employees participate in two separate, single employer defined benefit
contributory pension plans under the administration and management of separate Boards of Trustees: The
City of Miami Fire Fighters' and Police Officers' Retirement Trust ("FIPO") and the City of Miami General
Employees and Sanitation Employees' Retirement Trust ("GESE"). The plans cover substantially all City
employees who contribute a percentage of their base salary or wage on a bi-weekly basis.
The City's elected officials participate in a single employer defined benefit non-contributory pension
plan under the administration and management of a separate Board of Trustees, the City of Miami Elected
Officers' Retirement Trust ("EORT"). This plan covers all elected officials with 7 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 anon -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 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's net pension obligation for each of the FIPO, the GESE Retirement Trust, the GESE Staff
Trust and the EORT is $0. The annual pension costs have been fully contributed by the City for the Fiscal
Years ended September 30, 2005, 2006 and 2007. [UPDATE]
Additionally, the City has established a qualified governmental excess benefit plan to continue to
cover the difference between the allowable pension to be paid and the amount of the defined benefits, so the
benefits for eligible members are not diminished by the changes in the Internal Revenue Code (the GESE
Excess Plan"). Plan members are not required to contribute to the GESE Excess Plan. The payment of the
City's contribution of the excess retirement benefit is funded from the City's General Fund and paid annually
at the same time as the City's annual contribution to normal pension costs. The City's net pension obligation
for the GESE Excess Plan as of September 30, 2007 was $3,877,208 and the annual pension costs have been
fully contributed by the City for the Fiscal Years ended September 30, 2005, 2006 and 2007. [UPDATE]
30
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 as of September 30, 2007 is $76,471,796 of which
$6,845,793 is the current portion. Such amount only includes the primary government employees and does
not include employees of component units. Every three years the maximum number of hours which can be
carried forward is renegotiated with FIPO and GESE. [UPDATE]
Other Postemployment Benefits. In accordance with Section 112.0801, the City provides medical
coverage and life insurance benefits to its retirees. Although not required by law, the City pays a portion of
such cost of participation for its retirees. As with all governmental entities providing similar plans, the City
will be required to comply with the Governmental Accounting Standard's Board Statement No. 45 —
Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions ("GASB
45") no later than its Fiscal Year ending September 30, 2008. The City has historically accounted for its other
post employment benefit ("OPEB") contributions on a pay as you go basis. GASB 45 applies accounting
methodology similar to that used for pension liabilities to OPEB and attempts to more fully reveal the costs of
employment by requiring governmental units to include future OPEB costs in their financial statements.
While GASB 45 requires recognition and disclosure of the unfunded OPEB liability, there is no requirement
that the liability of such plan be funded.
The City has retained an actuary to review its OPEB liabilities. Although the City has not received a
final actuarial report, the City estimates that for all covered employees and retirees (except police officers)
and police officers (including retirees) that its liability for the year ended September 30, 2008 will be
$27,192,738 and $21,668,339, respectively, based on GASB 45 methodology.
LEGAL MATTERS
Certain legal matters incident to the validity of the Series 2009 Bonds are subject to the approval of
Squire, Sanders & Dempsey L.L.P., Bond Counsel, Miami, Florida whose approving opinion in the form
attached hereto as "APPENDIX D - FORM OF BOND COUNSEL OPINION" will be furnished without charge
to the purchasers of the Series 2009 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 Julie O. Bru, Esq., City Attorney, and by
Bryant Miller Olive P.A., Miami, Florida, Disclosure Counsel to the City.
Certain legal matters will be passed upon for the Underwriters by Moskowitz, Mandell, Salim &
Simowitz, P.A., Fort Lauderdale, Florida.
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 2009 Bonds, or any
proceedings or transactions relating to their issuance, sale, execution, or delivery, or the adoption of the
Resolution, or the levy of the ad valorem taxes. Neither the creation, organization or existence, nor the title of
the present members of the City Commission or other officers of the City is being contested.
[Update/Confirm]
31
DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS
Rule 69W-400.003, Rules of Government Securities, promulgated by the Office of Financial
Regulation of the Financial Services Commission, under Section 517.051(1), Florida Statutes ("Rule 69W-
400.003"), requires the City to disclose each and every default as to the payment of principal and interest with
respect to obligations issued by the City after December 31, 1975. Rule 69W-400.003 further provides,
however, that if the City in good faith believes that such disclosures would not be considered material by a
reasonable investor, such disclosures may be omitted. The City has not defaulted on the payment of principal
or interest with respect to obligations issued by the City after December 31, 1975.
TAX MATTERS
General
In the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, under existing law interest on
the Series 2009 Bonds is not excluded from gross income for federal income tax purposes under Section 103 of
the Internal Revenue Code of 1986, as amended (the "Code"), and the Series 2009 Bonds and the income
thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by
Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220,
Florida Statutes, as amended. Bond Counsel will express no opinion as to any other tax consequences
regarding the Series 2009 Bonds.
NO ATTEMPT HAS BEEN MADE TO COMPLY WITH CERTAIN REQUIREMENTS RELATING TO
THE EXCLUSION FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES OF INTEREST ON
THE SERIES 2009 BONDS. NO OPINION IS RENDERED WITH RESPECT TO THE EXCLUSION OF
INTEREST ON THE SERIES 2009 BONDS FROM GROSS INCOME FOR FEDERAL INCOME TAX
PURPOSES OR AS TO ANY FEDERAL TAX CONSEQUENCES OF OWNERSHIP OF THE SERIES 2009
BONDS. EACH PURCHASER SHOULD CONSULT ITS OWN TAX ADVISOR TO DETERMINE THE
FEDERAL TAX CONSEQUENCES OF OWNING THE SERIES 2009 BONDS.
RATINGS
Moody's Investor's Service and Standard & Poor's Ratings Service have assigned underlying ratings
of "(A3]" and "IA]," respectively, to the Series 2009 Bonds.
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 affect on the market price of the Series 2009 Bonds.
FINANCIAL ADVISOR
The City has retained First Southwest Company, Aventura, Florida, as Financial Advisor in
connection with the City's financing plans and with respect to the authorization and issuance of the Series
2009 Bonds. The Financial Advisor is not obligated to undertake and has not undertaken to independently
verify or to assume responsibility for the accuracy, completeness or fairness of the information contained in
this Official Statement. The Financial Advisor did not participate in the underwriting of the Series 2009
Bonds.
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AUDITED FINANCIAL STATEMENTS
The Comprehensive Annual Financial Report of the City for the Fiscal Year ended September 30, 2007
(the "Audited Financial Statements"), and report thereon of McGladrey & Pullen LLP, as independent
certified public accountants, are attached hereto as "APPENDIX C - COMPREHENSIVE ANNUAL
FINANCIAL REPORT OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2007" as a
part of this Official Statement. McGladrey & Pullen LLP has not participated in the preparation or review of
this Official Statement. The Audited Financial Statements are attached hereto as a matter of public record.
Such statements speak only as of September 30, 2007.
CONTINUING DISCLOSURE
The City has covenanted for the benefit of the Series 2009 Bondholders to provide certain financial
information and operating data relating to the City and the Series 2009 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 obligation undertaken is an obligation to provide only limited information at limited times and
may not include all information necessary to value the Series 2009 Bonds.
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 City's continuing disclosure undertaking are described
in "APPENDIX E - 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
2009 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 2009 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 undertaken
certain continuing disclosure obligations in prior continuing disclosure certificates in connection with its
outstanding debt and its outstanding Parking System Revenue Bonds, Series 1998 (the "Parking System
Bonds") to provide certain financial and operating information and notices to each NRMSIR and SID, if and
when one is established, and others. In 2003, the City's annual report for certain outstanding obligations was
filed a few days past the required filing date, and in the years 2001 through 2004, the City did not timely file
certain information relating to its Parking System Bonds. Upon recognizing the omission of certain
information related to the Parking System Bonds, the City promptly filed all required information, together
with a notice of late filing, with each NRMSIR. The City has determined that its non-compliance was the
result of inadvertence and not due to any conscious disregard for its duties and responsibilities. In addition,
due to a change in auditors and financial management system (which was changed to an Enterprise Resource
Planning System), the City did not timely file its 2007 annual report. Such report has been filed, and as of the
date hereof, the City is in compliance with all of its continuing disclosure obligations, in all material respects,
and has implemented procedures to assure future compliance with all of its continuing disclosure obligations.
33
UNDERWRITING
The Series 2009 Bonds are being purchased by J.P. Morgan Securities Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, SunTrust Robinson Humphrey, Inc., Raymond James & Associates, Inc. and
Banc of America Securities LLC (collectively, the "Underwriters") at an aggregate purchase price of
$ (the par amount of the Series 2009 Bonds, less Underwriters' discount of $
[plus/less] net original issue premium/discount). 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 2009 Bonds if any Series 2009 Bonds are
purchased. The Series 2009 Bonds may be offered and sold to certain dealers (including dealers depositing
such Series 2009 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.
J.P. Morgan Securities Inc., one of the underwriters of the Series 2009 Bonds, has entered into an
agreement (the "Distribution Agreement") with UBS Financial Services Inc. for the retail distribution of
certain municipal securities offerings at the original issue prices. Pursuant to the Distribution Agreement, J.P.
Morgan Securities Inc. will share a portion of its underwriting compensation with respect to the Series 2009
Bonds with UBS Financial Services Inc.
CONTINGENT FEES
The City has retained Bond Counsel, the Financial Advisor and Disclosure Counsel with respect to
the authorization, sale, execution and delivery of the Series 2009 Bonds. Payment of the fees of such
professionals and an underwriting discount to the Underwriters, including the fees of Underwriters' counsel,
are each contingent upon the issuance of the Series 2009 Bonds.
ENFORCEABILITY OF REMEDIES
The remedies available to the owners of the Series 2009 Bonds upon an event of default under the
Resolution 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 and the Series 2009 Bonds may not be
readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery
of the Series 2009 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.
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 2009 Bonds, the security
for the payment of the Series 2009 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
34
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. 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 2009
Bonds.
35
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 2009 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 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 2009 Bonds, contains an untrue statement of a material fact or omits to state a
material fact which should be included therein for the purposes for which the Official Statement is intended
to be used, or which is necessary to make the statements contained therein, in the light of the circumstances
under which they were made, not misleading.
THE CITY OF MIAMI, FLORIDA
By:
City Manager
36
APPENDIX A
GENERAL INFORMATION REGARDING THE CITY OF MIAMI
General
Now 112 years old, the City of Miami, Florida (the "City") is part of the nation's seventh largest
metropolitan area. Incorporated in 1896, the City is the only major 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 386,882 residents, 58.2% of them foreign
born. In physical size the City is not large, encompassing only 34.3 square miles. The City is situated at the
mouth of the Miami River on the western shore of Biscayne Bay, the main port entry in Florida. The City is
the southernmost major city and seaport in the continental United States. The nearest foreign territory is the
Bahamian Island of Bimini, 50 miles from the City's coast. In population, the City is the largest of the 35
municipalities that make up Miami -Dade County (the "County" or "Miami -Dade County") and is the County
seat.
Population
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°I°
1980 346,865 4.6 1,625,509 28.2 9,746,961 43.5
1990 358,648 3.4 1,937,194 19.2 12,938,071 32.7
2000 362,470 1.0 2,253,362 16.3 15,982,378 23.5
2006 386,882 6.7 2,402,208 6.6 18,089,888 13.2
Source: University of Florida, Florida Statistical Abstract 2006, US Census Bureau, Miami -Dade County, Annual Report to
Bondholders
Government
Since 1997, the City has been governed by a form of government known as the "Mayor -City
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
A-1
department directors, preparation of the City's annual budget and initiation of the investigative procedures.
In addition, the City Manager takes appropriate action on all administrative matters.
Climate
Miami's climate is sub -tropical -marine, characterized by long summers with abundant rain fall and
mild, dry winters. The average temperature in the summer is 81.4 degrees Fahrenheit and 69.1 degrees
Fahrenheit in the winter, with an average annual temperature of 75.4 degrees.
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 over 300 parks and recreational areas
totaling over one million acres, including Everglades and Biscayne National Parks. Eighteen public golf
courses and 504 public tennis courts are available throughout the County. -
Miami -Dade County's area's 22 miles of public beach 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 American Airlines Arena. Dolphin Stadium, which
is used by the Miami Dolphins, the Florida Marlins and the Miami Hurricanes, is located in North Central
Miami -Dade County. The City and County are considering plans to construct a new stadium for the Florida
Marlins baseball franchise. Sports competition includes professional and college football, basketball, baseball,
tennis, golf, sailing 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, as measured by
student enrollment. The countywide school district offers a wide variety of programs to meet the needs of its
398,000-plus students. For example, Miami -Dade County'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.
Miami -Dade County is also noted for its high quality private schools, which include Gulliver
Academy, Miami Country Day School and Ransom Everglades, as well as numerous schools affiliated with
religious organizations.
Overall, 80% of graduating seniors continue their education in a post -secondary institution. Miami -
Dade County is also home to Miami -Dade Community College, the largest comprehensive community
college in the United States. Florida International University is one of the 25 largest universities in the nation
and offers more than 200 bachelor's, master's and doctoral programs in 21 colleges. 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 University offer degrees in a variety of subjects and programs.
A-2
Medical
Miami -Dade County has the largest concentration of medical facilities in Florida, with 32 hospitals
and more than 32,000 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
22.4 mile above -ground system connecting South Miami -Dade and the City of Hialeah with the Downtown
and Civic Center areas. Metromover, a 4.4 mile automated loop, carries passengers around downtown
Miami, Brickell Avenue and the Omni shopping center areas. Miami -Dade County's Metrobus covers 35.6
million miles per year and over 111 million passenger trips annually. The County also provides para-transit
services to qualified riders in the amount of 1.6 million passenger trips annually. Cargo rail service is
available from both Miami International Airport and the Port of Miami, 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 sixteenth in the nation and twenty eighth in the world in passenger
traffic through the airport. The airport ranks fourth in the nation and eleventh in the world in tonnage of
domestic and international cargo movement. In 2007 over 34 million air travelers were serviced by Miami
International Airport, and approximately 2.10 million tons of cargo was handled. More than 80 airlines serve
Miami International Airport, flying passengers to more than 150 destinations around the globe.
Port of Miami. The Port of Miami, known as the "cruise capital of the world," is operated by the
Seaport Department of Miami -Dade County. In 2007, 3,787,000 passengers sailed from the Port of Miami
aboard one of the eight cruise companies who operate out of Miami. The Port of Miami is also a hub for
Caribbean and Latin American commerce. These countries account for over half of the 7.83 million tons of
cargo transferred through the Port of Miami in 2007. The Port of Miami is also reaching out to the global
community where trade with Asian countries accounted for almost 23% of the total cargo handled at the Port
of Miami. The Port of Miami is also important to the U.S. economy, contributing in excess of $16 billion
annually, which should increase after the completion of the Port of Miami's five year, $346 million capital
improvement program.
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Economy
The economic base of the City has diversified in recent years, shifting from reliance on the tourism
industry to a combination of motion picture production, manufacturing, service 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.
Federal Express Corporation
ABN AMRO Bank
Sony Broadcast Export Corporation
Olympus America
ExxonMobil Inter -America
Black & Decker Latin America Group
Hewlett Packard Co. Latin America
Eastman Chemical Latin America
Telefonica International USA, Inc.
Source: Beacon Council
Caterpillar Americas Co.
Ericsson, Inc.
Terra Networks USA
IBM Corporation
Canon Latin America
Acer Latin America
Komatsu Latin America
Tech Data
Chevron -Texaco
Johnson & Johnson
Lucent Technologies
Barclays Bank PLC
Oracle Latin America
Cisco Systems
AT&T Latin America
Olympus Latin America
Clorox Latin America
American Express .
Stanley Latin America
Distribution of Major Employment Classifications
for Miami -Dade County 2007
Occupational Title
Construction
Manufacturing
Mining and Natural Resources
Transportation, Warehousing, and Utilities
Wholesale Trade
Retail Trade
Information
Finance Activities
Professional and Business
Education and Health Services
Leisure and Hospitality
.Other Services
Government
Percentage
Employees of Totals
54,400 5.1 %
46,900 4.4
400 0
60,900 5.7
76,400 7.2
126,000 11.9
21,600 2.0
76,400 7.2
154,800 14.6
145,200 13.7
100,200 9.4
42,300 4.0
155,800 14.7
Total Employed 1,061,300 - 100.0%
Source: Miami -Dade County Annual Report to Bondholders 2007, General Information on Miami -Dade County
A-4
Labor Force and Employment Statistics
Greater Miami Metropolitan Area
Period Civilian Unemployment Florida
(July 1-June 30) Employment Labor Force Rate Unemployment Rate
2005 1,084,009 1,139,290 4.7% 3.9%
2006 1,121,491 1,167,795 4.0 3.4
2007 1,121,122 1,186,460 3.8 4.0
2008 1,142,461 1,209,054 5.5 5.5
Source: Bureau of Labor, June 2008
Public Employers:
Major Employers in Miami -Dade County
Name Number of Employees
Miami -Dade County Public Schools 50,000
Miami -Dade County 32,000
U.S. Federal Government 20,400
Florida State Government 17,000
Jackson Health System 10.500
Miami -Dade Community College 6,500
City of Miami 4,034
Florida International University 3,132
Miami Veteran Affairs Medical Center 2,300
City of Miami Beach 1,979
City of Hialeah 1,800
U.S. Coast Guard 1,220
U.S. Southern Command 1,200
City of Coral Gables 895
City of North Miami Beach 738
Source: City of Miami Comprehensive Annual Financial Report, September 2007
[Remainder of this page intentionally left blank.]
A-5
Private Employers:
Name Number of Employees
Publix Super Markets
Baptist Health Systems of South Florida
University of Miami
American Airlines
Precision Response Corporation
Bell South
Winn Dixie Stores
Florida Power Sr Light Company
Carnival Cruise Lines
Macy's of Florida
Mount Sinai Medical Center
Miami Children's Hospital
Mercy Hospital
Wachovia Bank, N.A.
Cordis (a Johnson & Johnson Company)
Royal Caribbean International
Assurant Group
Miami Herald Publishing CO.
Bank of America
United Parcel Service
Beckman Coulter Corp.
Cedars Medical Center
MasTec
Federal Express
Boston Scientific
Source: The Beacon Council 2007
International Banking
11,000
10,826
10,170
9,000
6,000
5,500
4,833
3,900
3,500
3,368
3,264
2,600
2,412
2,229
2,100
2,000
1,800
1,700
1,700
1,627
1,610
1,410
1,200
1,200
1,100
Miami -Dade County is established as a major international financial and banking center. Out of the
12 Edge Act Banks in the United States, six are located in Miami -Dade County. These are: Bancafe
International, Banco Santander International, Bank of Boston International, Citibank International, HSBC
Private Bank International and American Express Bank International, and they collectively hold $6.1 Billion in
deposits. 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 also established a branch
office in Miami -Dade County to assist the Atlanta office with financial transactions in the South Florida area.
In total, the FDIC has found that the Fort Lauderdale -Miami -Miami Beach area has 118 financial intuitions
with 1,494 offices and over $138 billion in deposits.
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Year
2002
2003
2004
2005
Per Capita Personal Income
Miami(1) Florida
$27,074 $29,709
27,670 30,128
29,076 31,469
31,347 34,001
Source: University of Florida, Florida Statistical Abstract 2006
in Data is for Metropolitan Statistical Area
Ad Valorem Assessments
As of September 30, 2007, the City's ten largest ad valorem taxpayers, the nature of their activities, the
assessed values of their properties (in thousands of dollars), and their relative percentage of total assessed
property values in the City follows:
THE CITY OF MIAMI, FLORIDA
TEN LARGEST TAX ASSESSMENTS
2007 ASSESSED VALUES
Taxpayer Nature of Activity Assessed Value Percent
SRI Miami Ventures, LP Real Estate $287,500,000 0.87%
Teachers Ins. & Annuity Association of America Labor 262,400,000 0.79%
Florida Power & Light Utility 256,746,419 0.78%
Crescent Miami Center Real Estate 163,000,000 0.49%
1111 Brickell Office LLC Real Estate 128,800,000 0.39%
Miami Herald Publishing Co. Publishing 121,636,670 0.37%
City National Bank of Florida Banking 96,241,152 0.29%
Trustees of L&B Real Estate 92,005,919 0.28%
Blue Capital US East Real Estate 91,200,000 0.28%
Cedars Healthcare Group Health 89,351,175 0.27%
Total
$1,588,611,335 4.81%
Source: City of Miami Comprehensive Annual Financial Report, September 2007
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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 September 30, 2007, including that which is payable from
sources other than ad valorem taxes. [2008 Available?]
Amount Outstanding
DESCRIPTION Issued Balance
General Obligations Bonds:
General Obligation Refunding Bonds, Series 1992 $70,100,000 $8,710,000
Homeland Defense/Neighborhood CIP, Series 2002 153,186,406 44,514,409
General Obligation Refunding Bonds, Series 2002A 32,510,000 27,490,000
General Obligations Bonds, Other Issues 23,190,000 1,255,000
General Obligation Refunding Bonds, Series 2003 18,680,000 6,450,000
General Obligation Refunding Bonds, Series 2003B 4,180,000 4,120,000
General Obligation Refunding Bonds, Series 2007A 103,060,000 103,060,000
General Obligation Refunding Bonds, 2007B 50,000,000 50,000,000
Total General Obligation Bonds $454,906,406 $245,689,409
Special Obligation and Revenue Bonds and Loans:
Special Revenue Refunding Bonds, Series 1987 65,271,325 7,504,708
Community Entitlement Revenue Bonds, Series 1990 11,500,000 2,180,000
Special Obligation Non -Ad Valorem, Series 1995 22,000,000 1,820,000
Special Obligation Non -Ad Valorem Revenue, Series 1995 72,000,000 30,875,000
Special Revenue Refunding Bonds, Series 2002A 27,895,000 27,895,000
Special Revenue Refunding Bonds, Series 2002B 13,170,000 1,495,000
Special Revenue Refunding Bonds, Series 2002C 28,390,000 23,585,000
Non Ad Valorem Variable Rate Refunding Bonds, Series
2006 30,615,000 30,615,000
Loans:
Sunshine State Governmental Financing
Commission Loans 27,630,900 9,214,300
Sunshine State Governmental Financing
SEOPW - Section 108 HUD Loan 5,100,000 3,500,000
Wynwood - Section 108 HUD Loan 5,500,000 2,935,000
Sunshine State Governmental Financing
Commission - Secondary Loan 3,500,000 1,450,000
Gran Central Corporation Loan 1,708,864 1,708;864
Parrot Jungle 6,112,000 5,312,000
Total Special Obligation and Revenue Bonds, and
Loans $320,393,089 %150,089,872
Total Debt $775,299,495 $395,779,281
Source: City of Miami Finance Department, Comprehensive Annual Financial Report 2007
A-8
Overlapping Debt
The table set forth below summarizes the general obligation debt of Miami -Dade County and the
School Board of Miami -Dade County as of September 30, 2007. While the City believes the amount of debt of
the School Board of Miami -Dade County and Miami -Dade County set forth below to be accurate, it should be
understood that this amount was derived from source materials which were not complied and are not subject
to verification by the City. Accordingly, no assurance can be given as to the absolute accuracy of these
amounts.
Government Unit
Debt Repaid with Property Taxes:
Miami -Dade County
Miami -Dade County School Board
Subtotal, Overlapping Debt
City of Miami, Florida Direct Debt
Total Direct and Overlapping Debt
Percentage Amount
Net Applicable to Applicable to
Debt the City of the City of
Outstanding Miami()) Miami
$472,236,000
475,919,000
19.00%
19.00%
$ 89,724,840
90,424,610
180,149, 450
245,689,409
$425,838,859
Sources: Data provided by the Miami -Dade County Finance Department and the Miami -Dade County School Board.
in For debt repaid with property taxes, the percentage of overlapping debt applicable to the City is estimated using taxable assessed
property values. Calculated by determining the value that is within the City's boundaries and dividing it by the County's and School
Board's total taxable assessed value. This approach was also used for the other debt.
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This
schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents
and businesses of the City of Miami. This process recognizes that, when considering the City's ability to issue and repay
long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this
does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping
government.
A-9
CITY OF MIAMI, FLORIDA
FOR FISCAL YEAR ENDED SEPTEMBER 30, 2007
SUMMARY OF DEBT RATIOS, MEASUREMENTS AND DEBT CONSTRAINTS CRITERIA
[Update 2008?]
Debt Ratios
General Obligation & Limited Ad Valorem Debt Per Capita
General Obligation & Limited Ad Valorem Debt as a Percentage
of Taxable value
Non -Self Supporting Revenue Debt Per Capita
Non -Self Supporting Revenue Debt as a Percentage of Taxable Assessed value
General Governmental Debt Service (non -self supporting) as a Percentage of
Non -Ad Valorem General Fund Expenditures
General Government Direct Debt Per Capita
Net Direct Debt as a Percentage of Taxable Assessed Value
General Government Debt Service as a Percentage of Non -Ad Valorem
General Fund Revenues
Source: Data provided by the City of Miami Finance Department
A-10
$67] .46
0.74%
$398.58
0.44%
45.14%
$671.46
.74%
83.14%
APPENDIX B
FORM OF RESOLUTION
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APPENDIX C
GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIAMI
FOR FISCAL YEAR ENDED SEPTEMBER 30, 2007
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C-1
APPENDIX D
FORM OF BOND COUNSEL OPINION
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