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HomeMy WebLinkAboutExhibit 1-SUBTHIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. City of Miami Legislation Resolution City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigOv.com File Number: 11-00411 Final Action Date: A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENTS), AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $140,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS IN ONE OR MORE SERIES. FROM TIME TO TIME. FOR THE PURPOSE OF, TOGETHER WITH OTHER AVAILABLE MONEYS, REFUNDING THE CITY'S OUTSTANDING $50,000,000 AGGREGATE PRINCIPAL AMOUNT OF REVENUE NOTE, SERIES 2010 (PORT OF MIAMI TUNNEL AND ACCESS IMPROVEMENT PROJECT) (THE "NOTE") AND REFINANCING CERTAIN OUTSTANDING LOANS FROM THE SUNSHINE STATE GOVERNMENTAL FINANCING COMMISSION; PROVIDING FOR THE RIGHTS AND SECURITY OF ALL HOLDERS OF 'BONDS ISSUED PURSUANT TO THIS RESOLUTION; PROVIDING CERTAIN DETAILS OF THE BONDS; DELEGATING OTHER DETAILS AND MATTERS IN CONNECTION WITH THE ISSUANCE OF THE BONDS TO THE CITY MANAGER, WITHIN THE LIMITATIONS AND RESTRICTIONS STATED HEREIN; PROVIDING FOR THE PAYMENT OF SUCH BONDS FROM LEGALLY AVAILABLE NON -AD VALOREM REVENUES BUDGETED AND APPROPRIATED BY THE CITY FOR SUCH PURPOSE; APPOINTING A BOND REGISTRAR; AUTHORIZING A BOOK -ENTRY REGISTRATION SYSTEM FOR THE BONDS: AUTHORIZING THE NEGOTIATE❑ SALE AND AWARD FROM TIME TO TIME BY THE CITY MANAGER OF THE BONDS TO THE UNDERWRITERS, WITHIN THE LIMITATIONS AND RESTRICTIONS STATED HEREIN; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; APPROVING THE FORM OF AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND OFFICIAL STATEMENTS AND AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE OFFICIAL STATEMENTS: COVENANTING TO PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE BONDS IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 15C2-12 AND AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE DISCLOSURE DISSEMINATION AGENT AGREEMENTS WITH RESPECT THERETO AND APPOINTING A DISCLOSURE DISSEMINATION AGENT THEREUNDER: CREATING CERTAIN FUNDS AND ACCOUNTS AND PROVIDING FOR THE APPLICATION OF THE PROCEEDS OF THE BONDS; DELEGATING TO THE CITY MANAGER AUTHORITY TO NEGOTIATE AND OBTAIN ONE OR MORE BOND INSURANCE POLICIES AND/OR A RESERVE ACCOUNT INSURANCE POLICIES FOR DEPOSIT TO THE CREDIT OF THE SUBACCOUNT OF THE DEBT SERVICE RESERVE ACCOUNT AND AUTHORIZING THE EXECUTION AND DELIVERY OF AGREEMENTS WITH THE PROVIDER THEREOF: PROVIDING COVENANTS FOR THE PROVIDER(S) OF SUCH BOND INSURANCE POLICY AND/OR RESERVE ACCOUNT INSURANCE POLICY; AUTHORIZING THE CITY MANAGER, THE CITY ATTORNEY AND CERTAIN OTHER OFFICIALS AND EMPLOYEES OF THE CITY TO TAKE ALL ACTIONS REQUIRED IN CONNECTION WITH THE ISSUANCE OF THE BONDS; AND City of hflgmi Page I of 29 the Id: 11-00441 /l eer+iol:; I) Printed On: 5/18/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Filo Number. 11-00441 PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Miami, Florida (the "City") has previously entered into several loans with the Sunshine State Government Financing Commission ("Sunshine State"); and WHEREAS, the City Commission of the City (the "Commission") has determined that it is desirable, subject to the provisions of this Resolution, to authorize the issuance by the City of its Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011A, in an aggregate principal amount not to exceed $80,000,000 (the "`Series 2011A Bonds"), for the purpose of, together with other available moneys. (i) refinancing certain outstanding loan obligations of the City with Sunshine State, as described herein, (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011A Bonds and (iii) paying certain costs of issuance of the Series 2011A Bonds, including, if necessary, the premium for a Bond Insurance Policy; and WHEREAS, the City has previously issued the Note to provide for the interim financing of the Port of Miami Tunnel and Access fmprovement Project (the "'Tunnel Project"), and WHEREAS, the Commission has determined that it is desirable, subject to the provisions of this Resolution, to authorize the issuance by the City of its Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011B, in an aggregate principal amount not to exceed S60,000,000 (the "Series 2011B Bonds" and, together with the Series 2011A Bonds, the "Bonds"), for the purpose of, together with other available moneys, (i) refinancing the Note, including the payment of accrued interest, (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011B Bonds, and (iii) paying certain costs of issuance of the Series 2011B Bonds, including if necessary, the premium for a Bond Insurance Policy; and WHEREAS, the Commission has further determined that due to the uncertainty of the municipal bond market and the need to access such market when most advantageous to the City, it is in the best interest of the City to delegate to the City Manager, who may consult with the Director of Finance and Financial Advisor (as such terms are defined below), the determination of various terms of the Bonds, the award of the Bonds and other actions in connection with the issuance of the Bonds, all as provided and subject to the limitations contained in this Resolution; and WHEREAS, for reasons more fully set forth herein, the Commission finds and determines it to be in the best interest of the City to authorize the sale of the Bonds on the basis of a negotiated sale rather than a public sale by competitive bid. NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF MIAMI, FLORIDA: TABLE OF CONTENTS ARTICLE I DEFINITIONS, AUTHORITY AND FINDINGS; RESOLUTION CONSTITUTES A CONTRACT Section 1.01. Definitions 1 Section 1.02. Authority for this Resolution 7 Section 1.03. Findings 7 Section 1.04. Resolution Constitutes Contract 7 ARTICLE II AUTHORIZATION AND DETAILS OF BONDS AND CERTAIN DOCUMENTS Cirs• of Mrumi Page 2 of 29' File id: 11-00441 (Version: 1) Prim ed On: 5/1&I2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number: 11-00441 Section 2.01. Authorization of Bonds and Refinancing of the Refunded Loans and Note 8 Section 2.02. Certain Details of Bonds 8 Section 2.03. Redemption Provisions 9 Section 2.04. Execution of Bonds 10 Section 2.05, Negotiability, Registration and Cancellation 10 Section 2.06. Bonds Mutilated, Destroyed, Stolen or Lost 11 Section 2.07. Preparation of Definitive Bonds; Temporary Bonds 11 Section 2.08. Form of Bonds 12 Section 2.09. Book -Entry Only System for the Bonds; Qualification for DTC 12 Section 2.10. Negotiated Sale; Bond Purchase Agreement 12 Section 2,11. Preliminary Official Statement; Official Statement 13 Section 2.12. Continuing Disclosure 13 Section 2.13. Guaranty Agreement 13 ARTICLE III COVENANTS, FUNDS AND APPLICATION THEREOF Section 3.01. Bonds Not to be Indebtedness of the City 15 Section 3.02. Bonds Secured By Pledge of Pledged Funds 15 Section 3.03. Application of Bond Proceeds 15 Section 3.04. Covenants of the City 16 Section 3.05. Events of Default; Remedies 23 Section 3.06. Enforcement of Remedies 24 Section 3.07. Effect of Discontinuing Proceedings 25 Section 3.08. Directions to Default Trustee as to Remedial Proceedings 25 Section 3.09. Restrictions on Actions by Individual Bondholders 25 Section 3.10. Additional Debt 26 ARTICLE IV City of Minn' Page 3 of 24 File !d: 11-00441 (Version: 1) Printed On: 511812011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number. 11-00441 CONCERNING THE BOND REGISTRAR Section 4.01. Appointment and Acceptance of Duties 27 Section 4.02. �' Responsibilities of Bond Registrar 27 Section 4.03. Evidence On Which Bond Registrar May Act 27 Section 4.04. Compensation 27 Section 4.05. Certain Permitted Acts 28 Section 4.06. Merger or Consolidation 2B Section 4.07. Adoption of Authentication 28 Section 4.08. Resignation or Removal of Bond Registrar and Appointment of Successor 28 Section 4,09. Vacancy 28 Section 5.01. ARTICLE V EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND PROOF OE OWNERSHIP OF BONDS Proof of Execution of Documents and Ownership 30 ARTICLE VI MISCELLANEOUS PROVISIONS Section 6,01. Modification or Amendment 31 Section 6.02. Severability of Invalid Provisions 32 Section 6.03. Unclaimed Money 32 Section 6.04_ Payments Due on Saturdays, Sundays and Holidays 33 Section 6.05, Controlling Law; Members of Commission Not Liable 33 Section 6.06. Further Authorizations 33 Section 6.07. Headings for Convenience Only 33 Section 6.08. Time of Taking Effect 34 Exhibit A - Form of Bond Exhibit 13 - Form of Bond Purchase Agreement Exhibit C - Form of Preliminary Official Statement Exhibit D - Form of Continuing Disclosure Agreement ARTICLE I airy of Miami Pagr 4 of .9 File Id: 11-00441 (Version: I) Printed On: 5/!8!2I111 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number 71.00441 DEFINITIONS, AUTHORITY AND FINDINGS, RESOLUTION CONSTITUTES A CONTRACT Section 1.01. Definitions. In addition to the terms defined elsewhere in this Resolution, including the recitals, the following terms shall have the following meanings in this Resolution: "Account" shall mean an account created and established under this Resolution. "Act" shall mean the Constitution of the State, Chapter 166, Florida Statutes, as amended, and the City of Miami Charter. "Amortization Requirements" shall mean such moneys required to be deposited in the Bond Redemption Account for the purpose of the mandatory redemption or payment al maturity of any Term Bonds, the specific amounts and times of such deposits to be set forth in the City Manager's Certificate.. "Annual Debt Service Requirement" for any Fiscal Year, as applied to the Bonds or any portion thereof, or such other Debt, as described in Section 3,10(b) hereof, as applicable, shall mean the respective amounts which are needed to provide: (a) for paying the interest on all Bonds then Outstanding which is payable on each Interest Payment Date in such Fiscal Year; (b) for paying the principal cf all Serial Bonds then Outstanding which is payable upon the maturity of such Serial Bonds in such Fiscal Year; and (c) the Amortization Requirements, if any, for the Term Bonds for such Fiscal Year. For purposes of computing (a), (b) and (c) above, (i) any principal, interest or Amortization Requirements due on October 1 in a Fiscal Year shall be deemed due in the preceding Fiscal Year, (ii) if all or a portion of the principal of or interest on Bonds is payable from funds irrevocably set aside or deposited for such purpose, together with projected earnings thereon to the extent such earnings are projected to be from Permitted Investments, such principal or interest shall not be included in determining Annual Debt Service Requirements if such funds and/or Permitted Investments will provide moneys which shall be sufficient to pay when due such principal and interest, (iii) if all or a portion of the principal of or interest on the Bonds is payable from any source other than Non -Ad Valorem Revenues, such portion of principal or interest shall not be included in the determination of Annual Debt Service Requirements. For purposes of computing (a), (b) and (c) above, in connection with Section 3.10(b) hereof "Bonds" shall include any Debt as described in such Section. "Authorized Depository" shall mean any bank, trust company, national banking association, savings and loan association, savings bank or other banking association selected by the City as a depository, which is authorized under Florida law to be a depository of municipal funds and which has complied with all applicable state and federal requirements concerning the receipt of City funds. "Bond Insurance Policy" shall mean the financial guaranty insurance policy to be issued by a bond insurer guaranteeing the payment when due of the principal of and interest on the Bonds as provided therein. "Bond Purchase Agreement" shall mean the Bond Purchase Agreement to be entered into between the City and the Underwriters providing for the sale of the Bonds to the Underwriters. "Bond Registrar' shall mean Regions Bank, an Alabama banking corporation, or any successor thereto. "Bonds" shall mean collectively, the Series 2011A Bonds and the Series 2011B Bonds. "Bondholder," "Holder," "Holder of Bonds" or "Owner" or any similar term, shall mean any person who shall be the registered owner of any Outstanding Bond or Bonds. "City" shall mean the City of Miami, Florida. "City Attorney" shall mean the City Attorney of the City or her designee or the officer succeeding to her principal functions. "City Clerk" shall mean the City Clerk of the City, any Deputy City Clerk or her designee or the officer succeeding to her principal functions_ City of Miami Page 5 of 29 Fife id. 11-00441(Versiion: 11 Printed On: 5/18/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number. 11-00441 "City Manager' shall mean the City Manager of the City, any Assistant City Manager or other designee of the City Manager. 'City Manager's Certificate' means the certificate dated the date of the sale of the Bonds to be executed by the City Manager, which certificate shall provide certain details of the Bonds as required under this Resolution. "Code' shall mean the Internal Revenue Code of 1966, as amended, and all temporary, proposed or permanent implementing regulation promulgated or applicable thereunder. "Commission" shall mean the City Commission of the City. "Continuing Disclosure Agreement" shall mean the Disclosure Dissemination Agent Agreement to be entered into between the City and the Disclosure Dissemination Agent, "CRA Interlocal Revenues" shall mean those revenues of the Omni CRA paid to the City pursuant to the Interlocal Agreement, to be used to pay the principal of and interest on the Series 2011 B Bonds and/or to make required deposits into the subaccount of the Debt Service Reserve Account corresponding to the Series 2011 B Bonds, which revenues shall not be considered Non -Ad Valorem Revenues for purposes of Section 310 hereof. "Director of Finance" shall mean the Director of Finance of the City or his or her designee or the officer succeeding to his or her principal functions. "Disclosure Dissemination Agent" shall mean Digital Assurance Certification, L.L.C. "DTC" shall mean The Depository Trust Company, New York, New York. "Financial Advisor" shall mean First Southwest Company, financial advisor to the City in connection with the issuance of the Bonds. "Fiscal Year" shall mean that period commencing on October 1 and continuing to and including the next succeeding September 30, or such other annual period as may be prescribed by law or by the City in accordance with law. "Fitch" shall mean. Fitch Ratings, its successors and assigns, and if such entity no longer performs the functions of a securities rating agency, "Fitch" shall refer to any other nationally recognized securities rating agency designated by the City in a written certificate filed with the City Clerk. "Fund" shall mean a fund created and established under this Resolution. "Government Obligations" means: (a) Direct obligations of, or obligations guaranteed by, the United States of America; (b) Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (i) which are not callable prior to maturity or as to which irrevocable instructions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (ii) which are secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds or other obligations of the character described in clause (a) hereof which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the redemption date or dates specified in the irrevocable instructions referred to in subciause (i) of this clause (b), as appropriate, and (iii) as to which the principal of and interest on the bonds and obligations of the character described in clause (a) hereof which have been deposited in such fund along with any cash on deposit in such fund are sufficient to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (b) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this clause (b), as appropriate, (c) Evidences of indebtedness issued by the Federal Home Loan Banks, Federal Home Loan Mortgage Corporation (including participation certificates), Federal Financing Banks, or City. of Miami Page 6 of 29 File Id: 11-00441 fVersion: 11 Primed On: 5/1&2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number. 11-00441 any other agency or instrumentality of the United States of America created by an act of Congress provided that the obligations of such agency or instrumentality are unconditionally guaranteed by the United States of America or any other agency or instrumentality of the United States of America or of any corporation wholly -owned by the United States of America; and (d) Evidences of ownership of proportionate interests in future interest and pnncipai payments on obligations described in (a) held by a bank or trust company as custodian. "Interest Payment Date"' shall mean such dates of each Fiscal Year on which interest on the Bonds is payable on any Bonds that are Outstanding, as set forth in the City Manager's Certificate. "Interlocal Agreement" shall mean that certain Interlocal Agreement dated June 24, 1996 among the City, Miami -Dade County, Florida and the Omni CRA, as amended. "Maximum Annual Debt Service" shall mean, at any time and with respect to all of the Bonds, the greatest Annual Debi Service Requirement in the then current or any succeeding Fiscal Year. "Mayor" shall mean the Mayor of the City or the officer succeeding to his or her principal functions. "Moody's" shall mean Moody's investors Services. Inc., its successors and assigns, and if such entity no longer performs the functions of a securities rating agency, "Moody's" shall refer to any other nationally recognized securities rating agency designated by the City in a written certificate filed with the City Clerk. "Non -Ad Valorem Revenues" shall mean all revenues of the City derived from any source whatsoever, other than ad valorem taxation on real or personal property, which are legally available to make the payments required herein; provided, however, for purposes of Section 3,10 hereof. CRA Interlocal Revenues shall not be considered Non -Ad Valorem Revenues. "Note" shall mean the City"s outstanding $50,000,000 aggregate principal amount of Revenue Note, Series 2010 (Port of Miami Tunnel and Access Improvement Project). "Official Statement" shall mean the final Official Statement with respect to the Bonds. "Omni CRA" shall mean the Community Redevelopment Agency for the Omni Community Redevelopment District, as amended, created pursuant to Resolution 86-868 of the City and Ordinance 87-47 of Miami -Dade County, Florida. "Outstanding" when used with reference to the Bonds, shall mean, as of any date of determination, all Bonds theretofore authenticated and delivered except: (a) Bonds theretofore canceled by the Bond Registrar or delivered to the Bond Registrar for cancellation; (b) Bonds which are deemed paid and no longer Outstanding as provided herein; (c) Bands in lieu of which other Bonds have been issued pursuant to the provisions hereof relating to Bonds destroyed, stolen or lost, unless evidence satisfactory to the Bond Registrar has been received that any such Bond is held by a bona fide purchaser; and (d) For purposes of any consent or other action to be taken hereunder by the Holders of a specified percentage of principal amount of Bonds, Bonds held by or for the account of the City. "Permitted Investments" shall mean and include such obligations as shall be permitted to be legal investments of the City by the laws of the State. "Pledged Funds" shall mean, collectively, the Series 2011A Pledged Funds and the Series 20116 Pledged Funds. "Preliminary Official Statement" shall mean the Preliminary Official Statement with respect to the Bonds. "Project" shall mean any project authorized under the Community Redevelopment Plan for the Omni CRA. "Provider" shall mean the provider of a Bond Insurance Policy and/or a Reserve Account Cih of -Miami Page 7 rrf 29 File hi: 11-00441 1 ye»inn: 1 i Printed On: 5/182011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number 11-00441 Insurance Policy or a Reserve Account Letter of Credit. "Rebate Amount" shall have the meaning assigned to such term in Section 3.04(g) of this Resolution.. "Refunded Loans" shall mean those certain loan obligations of the City through Sunshine State to be refinanced with the proceeds of the Series 2011A Bonds, described as follows: (i) a loan secured by a Loan Agreement between Sunshine State and the City dated as of September 30, 1987 issued in the original amount of $20,800,000, currently outstanding in the principal amount of $4,349,000, (ii) a loan secured by a Loan Agreement between Sunshine State and the City dated as of January 27, 1988 issued In the original amount of $150,000, currently outstanding in the principal amount of $32,000, (iii) a loan secured by a Loan Agreement between Sunshine State and the City dated May 31, 1988 issued in the original amount of $6,680,900, currently outstanding in the principal amount of $1,470,500, (iv) a loan secured by a Loan Agreement between Sunshine State and the City dated as of June 30, 1995 issued in the original amount of $3,500,000, currently outstanding in the principal amount of $920,000, (v) a loan secured by a Loan Agreement between Sunshine State and the City dated as of October 3, 2007 issued in the original amount of $5,600,000, all of which is currently outstanding, (vi) a loan secured by a Loan Agreement between Sunshine State and the City dated as of August 14, 2008 issued in the original amount of $42,500,000, all of which is currently outstanding, and (vii) a loan secured by a Loan Agreement between Sunshine State and the City dated as of March 25, 2009 issued in the original amount of $20,000,000, currently outstanding in the principal amount of $12,700,000. "Regular Record Date" shall have the meaning assigned to such term in Section 2,02 of this Resolution. "Reserve Account Insurance Policy" shall mean the insurance policy, surety bond or other acceptable evidence of insurance, if any, deposited in the Debt Service Reserve Account in lieu of or in partial substitution for cash or securities on deposit therein. The issuer providing such insurance shall be a municipal bond insurer rated, at the time of deposit in the Debt Service Reserve Account, in any of the two highest rating categories of Moody's, Standard & Poor's and Fitch. "Reserve Account Letter of Credit" shall mean the irrevocable, transferable letter of credit, if any, deposited in the Debt Service Reserve Account in lieu of or in partial substitution for cash or securities on deposit therein. The issuer providing such letter of credit shall be a banking association, bank or trust company or branch thereof rated, at the time of deposit into the Debt Service Reserve Account, in any of the two highest rating categories of Moody's, Standard & Poor's and Fitch. "Reserve Account Requirement" shall mean with respect to each series of Bonds, either one half of the Maximum Annual Debt Service on all Bonds Outstanding of such series or the lesser of (i) the Maximum Annual Debt Service on all Bonds Outstanding of such series, (ii) 125% of the average Annual Debt Service Requirement on all Bonds Outstanding of such series, or (iii) 10% of the proceeds of such series of Bonds within the meaning of the Code as shall be determined by the City Manager and set forth in the City Manager's Certificate. "'Resolution" shall mean this Resolution as the same may from time to time be further amended and supplemented in accordance with the terms hereof. "'Rule" shall mean Rule 15c2-12 promulgated by the United States Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. "Serial Bonds" shall mean the Bonds which shall be stated to mature in annual or semi-annual installments but not including Term Bonds. "Series 2011A Pledged Funds" shall mean, collectively, all moneys, securities and instruments held in subaccounts of the Funds and Accounts created and established by this Resolution for the Series 2011A Bonds. "Series 2011B Pledged Funds" shall mean, collectively, all moneys, securities and instruments held in subaccounts of the Funds and Accounts created and established by this Resolution for the City of Miami Page 8 of 29 Fik Id: II-00e'41 (Version: I) Primed On: 5/18 011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number: 11-00441 Series 2011B Bonds. "Standard & Poor's" shall mean Standard & Poor's Ratings Services, a Division of the McGraw -Hills Companies, Inc,, its successors and assigns, and if such entity no longer performs the functions of a securities rating agency, "Standard & Poor's" shall refer to any other nationally recognized securities rating agency designated by the City in a written certificate fled with the City Clerk. "State" shall mean the State of Florida. "Term Bonds" shall mean the Bonds which shall be stated to mature on one date and for the amortization of which Amortization Requirements are required to be deposited Into the Bond Redemption Account in the Sinking Fund. ''Tunnel Project" shall mean the acquisition, construction and reconstruction of the Port of Miami Tunnel and Access Improvement Project, as provided in the Omni CRA Community Redevelopment Plan. "Underwriters" shall mean RBC Capital Markets, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Keegan & Company, Inc., Goldman, Sachs & Co., and Raymond James & Associates, Inc. Words importing the singular number shall include the plural number in each case and vice versa. Words defined in Section 101 hereof that appear in this Resolution in lower case form shall have the meanings ascribed to them in the definitions in Section 101 unless the context shall otherwise indicate. The word "person" shall include corporations and associations, including public bodies, as well as natural persons, unless the context shall otherwise indicate. The word „Bond" or "Bonds" shall mean any Bond or Bonds or all of the Bonds, as the case may be, issued under the provisions of this Resolution. Section 1.02. Authority for this Resolution. This Resolution is adopted pursuant to the provisions of the Act. Section 1 03. Findings. It is hereby ascertained, determined and declared_ (a) The recitals to this Resolution are incorporated herein as findings. (b) The issuance of the Bonds to refinance the Note and the Refunded Loans with the proceeds thereof and any other available moneys will serve a valid public and municipal purpose in accordance with the Act. (c) The principal of and interest on the Bands and all required sinking fund, reserve and other payments shall be payable solely from the Pledged Funds and, solely to the extent provided in Section 3.04(a) hereof, the Non Ad -Valorem Revenues. None of the City, the State or any political subdivision thereof shall ever be required to levy ad valorem taxes to pay the principal of or interest on the Bonds or to make any of the sinking fund, reserve or other payments required by this Resolution or the Bonds, and the Bonds shall not constitute a lien upon any property owned by or situated within the corporate territory of the City, except as provided herein with respect to the Pledged Funds. (d) in accordance with Section 218.385(1), Florida Statutes, as amended, the Commission hereby finds, determines and declares, based upon the advice of the Financial Advisor, that a negotiated sale of the Bonds is in the best interest of the City for the following reasons: (i} the complex structure and timing of the issuance of the Bonds and the refinancing of the Note and the Refunded Loans require extensive planning, and it is not practical for the City and the Financial Advisor to engage in such planning within the time constraints and uncertainties inherent in a competitive bidding process; and (ii) it is necessary to be able to sell the Bonds when market conditions are most favorable in order to attain the most favorable interest rates on the Bonds; the vagaries of the current and near future municipal bond market demand that the Underwriters have the maximum time and flexibility to price and market the Bonds, in order to obtain the most favorable interest rates available. Ciry of Miami Page 9 uf,9 Meld: 11-00441 /Version; ',Printed On: 5/i8/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number. 11-00441 Section 1.04. Resolution Constitutes Contract. In consideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall own the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the City and such Bondholders, and the covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection and security of the owners of any and all of such Bonds, all of which shall be of equal rank and without preference, priority. or distinction of any of the Bonds over any other thereof except as expressly provided therein and herein, [END OF ARTICLE I] ARTICLE II AUTHORIZATION AND DETAILS OF BONDS AND CERTAIN DOCUMENTS Section 2.01. Authorization of Bonds and Refinancing of the Refunded Loans and Note. The refinancing of the Refunded Loans and the Note is hereby authorized. Subject and pursuant to the provisions of this Resolution, bonds of the City to be known as "Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011A" (the "Series 2011A Bonds"), are hereby authorized to be issued in an aggregate principal amount not to exceed Eighty Million dollars ($80,000,000), for the purpose of, together with other available moneys, (i) refinancing the Refundd Loans, (ii) funding a deposit to the applica subaccount of the Deb Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011A Bonds, and (ill) paying certain costs of issuance of the Series 2011A Bonds, including, if necessary, the premium fora Bond Insurance Policy. Subject and pursuant to the provisions of this Resolution, bonds of the City to be known as "Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011E (the "Series 2011E Bonds"). are hereby authorized to be issued in an aggregate principal amount not to exceed Sixty Million dollars ($60,000,000), for the purpose of, together with other available moneys, (i) refinancing the Note, including the payment of accrued interest, (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011B Bonds, and (iii) paying certain costs of issuance of the Series 2011B Bonds, including if necessary, the premium for a Bond Insurance Policy. Subject to the limitations contained herein, the Bonds shall be issued in separate series, and may be issued at one time or each series may be issued at separate times, the Bonds shall be issued in such aggregate principal amount, shall be dated, shall mature on such date or dates, but not later than February 1, 2031, and in such principal amounts, shall be in the form of Serial Bonds or Term Bonds or a combination thereof, shall have such Interest Payment Dates, shall bear interest at such rates not to exceed the maximum rate permitted by law, with respect to any Term Bonds shall have such Amortization Requirements, shall have a Reserve Account Requirement and shail be subject to redemption at such times and at such prices, all as shall be determined by the City Manager, after consultation with the Director of Finance and the Financial Advisor, and set forth in the City Manager's Certificate. The Commission hereby appoints Regions Bank, as Bond Registrar for the Bonds. Section 2.02. Certain Details of Bonds. The Bonds shall be issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof. The Bonds shall be numbered consecutively from 1 upward with respect to the Series 2011A Bonds preceded by the letters "RA" and with respect to the Series 2011B Bonds preceded by the letters "RB." The principal of and redemption premium, if any, on the Bonds shall be payable upon presentation and surrender at the designated corporate trust office of the Bond Registrar Interest on the Bonds shall be paid on each Interest Payment Date by check or draft drawn upon the Bond Registrar and mailed to the Holders of the Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar at the close of business on the 15th day (whether or not a business day) of the month next preceding the Interest Payment Date (the '"Regular Record Date"); City of Miami Pvt./0 of 29 File Id: 11-00441 (Version: 1) Printed an: 5/1 SJ2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number • 11-00441 provided, however, that (i) if ownership of Bonds is maintained in a book -entry only system by a securities depository, such payment may be made by automatic funds transfer to the securities depository or its nominee or (ii) if such Bonds are not maintained in a book -entry only system by a securities depository, upon written request of the Holder of $1.000,000 or more in principal amount of Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such Holder (such bank being a bank within the continental United States), if such Holder has advanced to the Bond Registrar the amount necessary to pay the cost of such wire transfer or authorized the Bond Registrar to deduct the cost of such wire transfer from the payment due to such Holder. Notwithstanding anything in this paragraph to the contrary, any interest not punctually paid on a Regular Record Date shall forthwith cease to be payable to the Holder on such Regular Record Date and may be paid at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Bond Registrar, notice of which shall be given not less than 10 days prior to such special record date to such Holder. Section 2,03. Redemption Provisions. The Bonds may be subject to redemption prior to maturity at such times, at such redemption prices and upon such terms in addition to the terms contained in this Resolution as may be set forth in the City Manager's Certificate. The optional redemption of the Bonds, if any, may be conditioned upon the receipt by the Bond Registrar of sufficient moneys to pay the redemption price of the Bonds to be redeemed. Notice of redemption for Bonds being redeemed shall be given by deposit in the U.S. mail of a copy of a redemption notice, postage prepaid, at least thirty (30) days before the redemption date, to all registered owners of the Bonds or portions of the Bonds to be redeemed at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof. Failure to mail any such notice to a registered owner of a Bond, or any defect therein, shall not affect the validity of the proceedings for redemption of any Bond or portion thereof with respect to which no failure or defect occurred. Such notice shall set forth the date fixed for redemption, the rate of interest borne by each Bond being redeemed, the name and address of the Bond Registrar. the redemption price to be paid and, if less than all of the Bonds of a series then Outstanding shall be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of such Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Bond Is to be redeemed in part only, the notice of redemption which relates to such Bond shall also state that on or after the redemption date, upon surrender of such Bond, a new Bond or Bonds in a principal amount equal to the unredeemed portion of such Bond will be issued. If the optional redemption of any of the Bonds is conditioned upon the receipt of sufficient moneys as described above, the notice of redemption which relates to such Bonds shall also state that the redemption is so conditioned. Any notice mailed as provided in this section shall be conclusively presumed to have been duly given, whether or not the owner of such Bond receives such notice. Notice having been given in the manner and under the conditions hereinabove provided, the Bonds or portions of Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption for such Bonds or portions of Bonds on such date; provided, however, that Bonds or portion of Bonds called for optional redemption and which redemption is conditioned upon the receipt of sufficient moneys as described above, shall not become due and payable on the redemption date if sufficient moneys to pay the redemption price of such Bonds or portions of Bonds have not been received by the Bond Registrar on or prior to the redemption date. On the date so designated for redemption, moneys for payment of the redemption price being held in separate accounts by the Bond Registrar in trust for the registered owners of the Bonds or portions thereof to be redeemed. all as provided in this Resolution, interest on the Bonds or portions of Bonds so called for redemption shall cease to accrue, such Bonds and portions of Bonds shall cease to be entitled to any lien, benefit or security under this Resolution and shall be deemed paid hereunder, and the registered owners of such Bonds or portions of Bonds shall have no right in respect thereof except to receive payment of the redemption price thereof and. to the extent provided below, to receive Bonds for any unredeemed portions of the Bonds. ci$y of -Marra Pugs 11 of 29 Pile Id: 11-00441 Il'erTirm: 11 Printed OH: 5/1812011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Fire Number. 11-00447 In case part but not all of a Bond shall be selected for redemption, the registered owners thereof shall present and surrender such Bond to the Bond Registrar for payment of the principal amount thereof so called for redemption, and the City shall execute and deliver to or upon the order of such registered owner, without charge therefor, for the unredeemed balance of the principal amount of the Bonds so surrendered, a Bond or Bonds fully registered as to principal and interest. Section 2.04. Execution of Bonds. The Bonds shall be executed in the name of the City by the City Manager and the seal of the City shall be imprinted, reproduced or lithographed on the Bonds and attested to and countersigned by the City Clerk. In addition, the City Attorney or any Assistant City Attorney shall sign the Bonds, showing approval of the form and correctness thereof. The signatures of the City Manager, the City Clerk and the City Attorney or Assistant City Attorney on the Bonds may be by facsimile. If any officer whose signature appears on the Bonds ceases to hold office before the delivery of the Bonds, his signature shall nevertheless be valid and sufficient for all purposes. In addition, any Bond may bear the signature of, or may be signed by, such persons as at the actual time of execution of such Bond shall be the proper officers to sign such Bond, although at the date of such Bond or the date of delivery thereof such persons may not have been such officers. The Bonds shall bear thereon a certificate of authentication, in the form set forth in Exhibit A hereto, executed manually by the Bond Registrar. Only such Bonds as shall bear thereon such certificate of authentication shall be entitled to any right or benefit under this Resolution and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Bond Registrar. Such certificate of the Bond Registrar upon any Bond executed on behalf of the City shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered under this Resolution and that the Holder thereof is entitled to the benefits of this Resolution. Section 2.05. Negotiability, Registration and Cancellation. At the option of the Holder thereof and upon surrender thereof at the designated corporate trust office of the Bond Registrar with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Holder or his duly authorized attorney and upon payment by such Holder of any charges which the Bond Registrar or the City may make as provided in this Section, the Bonds may be exchanged for Bonds of the same series, aggregate principal amount of the same maturity of any other authorized denominations. The Bond Registrar shall keep books for the registration of Bonds and for the registration of transfers of Bonds. The Bonds shall be transferable by the Holder thereof in person or by his attorney duly authorized in writing only upon the books of the City kept by the Bond Registrar and only upon surrender thereof together with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Holder or his duly authorized attorney. Upon the transfer of any such Bond, the City shall cause to be issued in the name of the transferee a new Bond or Bonds. The City, the Bond Registrar and any other fiduciaries may deem and treat the person in whose name any Bond shall be registered upon the books kept by the Bond Registrar as the absolute Holder of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of, redemption premium, if any, and interest on such Bond as the same becomes due and for all other purposes. All such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City, the Bond Registrar nor any other fiduciary shall be affected by any notice to the contrary. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the City shall execute and the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Resolution. All Bonds surrendered in any such exchanges or transfers shall forthwith be delivered to the Bond Registrar and canceled by the Bond Registrar in the manner provided in this Section. There shall be no charge for any such exchange or transfer of Bonds, but the City or the Bond Registrar may require the payment of a sum sufficient to pay any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Neither the City nor the Bond Registrar shall be required (a) to transfer or exchange Bonds for a period of 15 days next preceding any selection of Bonds to be redeemed or thereafter until after the mailing of any notice of redemption; City of Miami Page 12 of 29 File Id: 11-00441 (Version: 11 Printed (Ire: 5I18%1011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number: 11-00441 or (b) to transfer or exchange any Bonds called for redemption. All Bonds paid or redeemed, either at or before maturity shall be delivered to the Bond Registrar when such payment or redemption is made, and such Bonds, together with all Bonds purchased by the City, shall thereupon be promptly canceled. Bonds so canceled may at any time be destroyed by the Bond Registrar, who shall execute a certification of destruction in duplicate by the signature of one of its authorized officers describing the Bonds so destroyed, and one executed certificate shall be filed with the City and the other executed certificate shall be retained by the Bond Registrar. Section 2.06. Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated, destroyed, stolen or lost, the City may execute and the Bond Registrar shall authenticate and deliver a new Bond of like series, maturity, denomination and interest rate as the Bond so mutilated, destroyed, stolen or lost; provided that, in the case of any mutilated Bond. such mutilated Bond shall first be surrendered to the City and, in the case of any lost, stolen or destroyed Bond, there shall first be furnished to the City and the Bond Registrar evidence of such loss, theft, or destruction satisfactory to the City and the Bond Registrar, together with indemnity satisfactory to them. In the event any such Bond shall be about to mature or has matured or has been called for redemption, instead of issuing a duplicate Bond, the City may direct the Bond Registrar to pay the same without surrender thereof. The City and Bond Registrar may charge the Holder of such Bonds their reasonable fees and expenses in connection with this transaction. Any Bond surrendered for replacement shall be canceled in the same manner as provided in Section 2.05 hereof. Any such duplicate Bonds issued pursuant to this Section shall constitute additional contractual obligations on the part of the City, whether or not the lost, stolen or destroyed Bonds be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the applicable Pledged Funds, with all other Bonds issued hereunder. Section 2.07. Preparation of Definitive Bonds Temporary Bonds. The definitive Bonds shall be lithographed, printed or typewritten. Until the definitive Bonds are prepared, the City Manager and City Clerk may execute and the Bond Registrar may authenticate, in the same manner as is provided in Section 2.04, and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, one or more printed, lithographed or typewritten temporary fully registered Bonds, substantially of the tenor of the definitive Bonds in lieu of which such temporary Band or Bonds are issued, in authorized denominations, and with such omissions, insertions and variations as may be appropriate to such temporary Bonds. The City at its own expense shall prepare and execute and, upon the surrender at the designated corporate trust office of the Bond Registrar of such temporary Bonds for which no payment or only partial payment has been provided, the Bond Registrar shall authenticate and, without charge to the Holder thereof, deliver in exchange therefor, at the principal corporate trust office of the Bond Registrar, definitive Bonds of the same aggregate principal amount and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds issued pursuant to this Resolution. Section 2.06. Form of Bonds. The text of the Bands shall be of the tenor set forth in Exhibit A to this Resolution, with such omissions, insertions and variations as may be necessary and desirable and authorized or permitted by this Resolution. Section 2.09. Book -Entry Only System for the Bonds; Qualification for DTC. The Bonds shall initially be issued as uncertificated securities through the book -entry only system maintained by DTC. The City and the Bond Registrar are hereby authorized to take such actions as may be necessary to qualify the Bonds for deposit with DTC, including but not limited to those actions as are set forth in the letter of representations between the City and DTC, wire transfers of interest and principal payments with respect to the Bonds, utilization of electronic book entry data received from DTC in place of actual delivery of Bonds and provisions of notices with respect to Bonds registered by DTC (or any of its designees identified to the City and the Bond Registrar) by overnight delivery, courier service, telegram, tetecopy or other similar means of communication. City of Miami Page 13 of 29 File Id: 11-00441 (Version: 11 Printed On: 3/18/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number. 11-00441 Section 2-10 Negotiated Sale: Bond Purchase Agreement. The negotiated sale of each series of Bonds to the Underwriters is hereby authorized at a purchase price (not including original issue premium or original issue discount) of not less than 99% of the aggregate principal amount of the Bonds then issued (the "Minimum Purchase Price") and at a true interest cost rate ("TIC") not to exceed 7.5% (the "Maximum TIC"). The City Manager, after consultation with the Director of Finance and the Financial Advisor, is hereby authorized to award each series of Bonds to the Underwriters at one time or separately at a purchase price of not less than the Minimum Purchase Price and at a TIC not in excess of the Maximum TIC. The execution and delivery of a Bond Purchase Agreement for one or both series of Bonds for and on behalf of the City by the City Manager shall be conclusive evidence of the City's acceptance of the Underwriters' proposal to purchase such Bonds. Upon compliance by the Underwriters with the requirements of Section 218.385(2) and (3), Florida Statutes, and Section 218.385(6), Honda Statutes, by filing the "truth -in -bonding statement" and the "disclosure statement' required by said statutory provisions, the City Manager is hereby authorized to execute and the City Clerk is hereby authorized to attest to, seal and deliver one or more Band Purchase Agreements in substantially the form attached hereto as Exhibit "B", subject to such changes, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager upon the advice of the City Attorney and Bond Counsel. The execution, attestation and delivery of such Bond Purchase Agreement, as described herein, shall be conclusive evidence of the City's approval of any such determinations, changes, insertions, omissions or filling in of blanks. Section 2.11_ Preliminary Official Statement; Official Statement. The use of a Preliminary Official Statement in connection with the marketing of each series of the Bonds either together or separately is hereby authorized. The Preliminary Official Statement in substantially the form attached hereto as Exhibit "C" is hereby approved subject to such changes, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager. The City Manager is hereby authorized to approve and execute, on behalf of the City, one or more Official Statements relating to such Bonds with such changes from the Preliminary Official Statement, within the authorizations and limitations contained herein, as the City Manager in consultation with the City Attorney, Bond Counsel and the City's disclosure counsel in his sole discretion, may approve, such execution to be conclusive evidence of such approval. The City Manager is hereby authorized to deem the Preliminary Official Statement final for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). The City Manager or his designee is hereby authorized to provide for the printing of the Preliminary Official Statement and the Official Statement by the lowest and most responsive bidder therefor and the payment of the cost of such printing is hereby authorized to be paid from the proceeds of the Bonds. Section 2.12. Continuing Disclosure. For the benefit of the Holders and beneficial owners from time to time of the Bonds, the City agrees, in accordance with and as the only obligated person with respect to the Bonds under the Rule, to provide or cause to be provided certain financial information and operating data, financial statements and notices, in such manner, as may be required for purposes of paragraph (b)(5) of the Rule. In order to describe and specify the terms of the City's Continuing disclosure agreement, including provisions for enforcement, amendment and termination, the City Manager is hereby authorized and directed to sign and deliver, in the name and on behalf of the City, one or more Continuing Disclosure Agreements, in substantially the form attached hereto as Exhibit "D," subject to such changes, modifications, insertions and omissions and such filling in of blanks therein as may be approved by the City Manager, after consultation with the City Attorney and the City's disclosure counsel. Digital Assurance Certification, L.L.C. is hereby appointed as Disclosure Dissemination Agent under the Continuing Disclosure Agreement. The execution of such Continuing Disclosure Agreement for and on behalf of the City by the City Manager shall be deemed conclusive evidence of the City's approval of the Continuing Disclosure Agreement. Notwithstanding any other provisions of this Resolution, any failure by the City to comply with any provisions of such Continuing Disclosure Agreement shall not constitute a default under this Resolution and the remedies therefor shall be solely as provided in the Continuing Disclosure Agreement. The Director of Finance is further authorized to establish, or cause to be established, City of Miami Page 14 of 29 File Id: 11-00441 Mersion: 11 Printed On: 5/18/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number. 11-00441 procedures in order to ensure compliance by the City with the Continuing Disclosure Agreement, including the timely provision of information and notices. Prior to making any fling in accordance with such agreement, the Director of Finance may consult with the City Attorney and the City's disclosure counsel. The Director of Finance, acting in the name and on behalf of the City, shall be entitled to rely upon any legal advice provided by the City Attorney and the City's disclosure counsel in determining whether a filing should be made. Section 2.13. Guaranty Agreement. In order to produce the lowest true interest cost possible for the Bonds or any portion thereof, the City Manager is hereby authorized to secure one or more Bond Insurance Policies andlor a Reserve Account Insurance Policies with respect to one or both series of Bonds, if, after consultation with the Director of Finance and the Financial Advisor, the City Manager determines that obtaining one or more Bond Insurance Policies and/or a Reserve Account Insurance Policies is in the best interests of the City. The City is hereby authorized to provide for the payment of any premiums on such Bond Insurance Policies and Reserve Account Insurance Policies from the proceeds of the issuance of such Bonds and to enter into such agreements as may be necessary to secure one or more Bond Insurance Policies and/or Reserve Account Insurance Policies, with the City Manager's execution of any such agreements, after consultation with the City Attorney and Bond Counsel, to be conclusive evidence of the City's approval thereof. The provisions of any such agreement shall supersede any inconsistent provision of this Resolution. [END OF ARTICLE II] ARTICLE III COVENANTS, FUNDS AND APPLICATION THEREOF Section 3.01. Bonds Not to be Indebtedness of the City. The Bonds shall not be and shall not constitute an indebtedness of the City, within the meaning of any constitutional, statutory or charter provisions or limitations, but shall be payable solely, as provided in this Resolution, from the Pledged Funds and. solely to the extent provided in Section 3.04(a) hereof, the Non -Ad Valorem Revenues. No holder or holders of any Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the City, the State or any political subdivision thereof, or taxation in any form of any real or personal property therein, or the application of any funds of the City, except the Pledged Funds and, solely to the extent provided in Section 3.04(a) hereof, the Non -Ad Valorem Revenues to pay the Bonds or the interest thereon or the making of any sinking fund, reserve or other payments provided for herein. Section 3.02. Bonds Secured By Pledge of Pledged Funds, (a) The payment of the principal of, interest and redemption premium, if any, on all of the Series 2011A Bonds issued hereunder shall be secured forthwith equally and ratably by a first lien an and pledge of the Series 2011A Pledged Funds. The Series 2011A Pledged Funds are hereby irrevocably pledged to the payment of the principal of and interest on the Series 2011A Bonds authorized herein, and other payments provided for herein, as the same become due and payable, The Series 2011A Bonds and the obligation evidenced thereby shall not constitute a lien upon any properly of or in the City, but shall constitute a lien only on the Series 2011A Pledged Funds all in the manner provided in this Resolution. (b) The payment of the principal of, interest and redemption premium, if any, on all of the Series 2011E Bonds issued hereunder shall be secured forthwith equally and ratably by a first lien on and pledge of the Series 2011B Pledged Funds. The Series 2011B Pledged Funds are hereby irrevocably pledged to the payment of the principal of and interest on the Series 2011B Bonds authorized herein, and other payments provided for herein, as the same become due and payable. The Series 20118 Bonds and the obligation evidenced thereby shall not constitute a lien upon any property of or in the City, but shall constitute a lien only on the Series 2011B Pledged Funds all in the manner provided in this Resolution. The Bonds shall be payable from the Non -Ad Valorem Revenues solely in accordance with the provisions of Section 3.04(a) hereto. Section 3.03. Application of Bond Proceeds. (a) Proceeds (net of Underwriters' discount) City of Miami Pate IS of 29 File Id: 11-00441 (Version: I] Printed On: 5/18i2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number 11-004•11 from the sale of the Series 2011A Bonds shall be applied as follows: (1) An amount equal to the Reserve Account Requirement for the Series 2011A Bonds shall be deposited into the appropriate subaccount of the Debt Service Reserve Account or, if applicable, an amount equal to the premium payable for the Reserve Account Insurance Policy shall be paid to the Provider and such Reserve Account Insurance Policy shall be held by the Bond Registrar to the credit of the appropriate subaccount of the Debt Service Reserve Account for the benefit of the Series 2011A Bonds and the holders thereof. (2) An amount equal to the outstanding principal of and prepayment premium, if any, shall be paid to Deutsche Bank Trust Company Americas, as trustee with respect to the Refunded Loans. (3) An amount of proceeds to be determined by the City Manager shall be deposited in a separate account designated "City of Miami Special Obligation Non -Ad Valorem Revenue Refunding Bonds Series 2011A Cost of Issuance Account" which is hereby established with the City and shall be disbursed for payment of expenses incurred in connection with the issuance of the Series 2011A Bonds (including payment of the expenses of the City); provided that the premium far a Bond Insurance Policy, if any, may be paid on behalf of the City by the Underwriters directly to the Provider. Any balance remaining after payment or provision for payment of such costs and expenses has been made shall be transferred to the applicable subaccount of the Interest Account within the Sinking Fund and used solely to pay interest on the Series 2011A Bonds. (b) Proceeds (net of Underwriters' discount) from the sale of the Series 2011B Bonds shall be applied as follows: (1) An amount equal to the Reserve Account Requirement for the Series 2011B Bonds shall be deposited into the applicable subaccount of the Debt Service Reserve Account or, if applicable, an amount equal to the premium payable for the Reserve Account Insurance Policy shall be paid to the Provider and such Resrve Account insurance Policy shall be held by the Bond Registrar to the credit of the applicable subaccount of the Debt Service Reserve Account for the benefit of the Series 2011B Bonds and the holders thereof (2) An amount which is equal to the principal of and accrued interest on the Note, shall be transferred to Wells Fargo Bank, National Association, as holder of the Note. (3) An amount of proceeds to be determined by the City Manager shall be deposited in a separate account designated "City of Miami Special Obligation Non -Ad Valorem Revenue Refunding Bonds Series 2011B Cost of issuance Account" which is hereby established with the City and shall be disbursed for payment of expenses incurred in connection with the issuance of the Series 2011B Bonds (including payment of the expenses of the City); provided that the premium for a Bond Insurance Policy, if any, may be paid on behalf of the City by the Underwriters directly to the Provider. Any balance remaining after payment or provision for payment of such costs and expenses has been made shall be transferred to the applicable subaccount of the Interest Account within the Sinking Fund and used solely to pay interest on the Series 2011B Bonds. Section 3.04. Covenants of the City. The City hereby covenants and agrees with the holders of any and all of the Bonds issued pursuant to this Resolution as follows;; (a) Covenant to Budget and Appropriate. The City covenants and agrees to budget and appropriate in its annual budget, by amendment, if necessary, from Non -Ad Valorem Revenues lawfully available in each Fiscal Year, amounts sufficient to satisfy (i) the Annua Debt Service Requirement for such Fiscal Year, (ii) any deposits required to be made into the Debt Service Reserve Account during such Fiscal Year, (iii) any other amounts due the Providers of any Band Insurance Policy, Reserve Account Insurance Policy or ReserveAcunt Letter of Credit an the Bond Registrar during such Fiscal Year and (iv) any Rebate Amount due during such Fiscal Year as provided in Section 3,04(h). Such covenant and agreement on the part of the City to budget and appropriate such amounts of Non -Ad Valorem Revenues shall be cumulative to the extent not paid, and shall continue until such Non -Ad Valorem Revenues or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. Notwithstanding City of Miami Page 16 of29 File 1d. 11-00441 (Version: 1) Printed On: 5II8,2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number: 1/- 0441 the fcregoing covenant of the City, the City does not covenant to maintain any services or programs, now provided or maintained by the City, which generate Non -Ad Valorem Revenues. Such covenant to budget and appropriate does not create any lien upon or pledge of such Non -Ad Valorem Revenues, nor does it preclude the City from pledging in the future its Non -Ad Valorem Revenues, nor does it require the City to levy and collect any particular Non -Ad Valorem Revenues, nor does it give the Bondholders, the Providers of any Bond Insurance Policy, Reserve Account Insurance Policy or Reserve Account Letter of Credit or the Bond Registrar a prior claim on the Non -Ad Valorem Revenues as opposed to claims of general creditors of the City, Such covenant to budget and appropriate Non -Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non -Ad Valorem Revenues heretofore or hereinafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant to budget and appropriate in its general annual budget for the purposes and in the manner stated herein shall have the effect of making available in the manner described herein 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 obligations hereunder; subject, however, in all respects to the restrictions of Section 166.241(2), 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. (b) Disposition of Non -Ad Valorem Revenues, There is hereby created and established the "City of Miami Special Obligation Non -Ad Valorem Revenue Refunding Bonds Sinking Fund" (hereinafter referred to as the "Sinking Fund"). There are also hereby created four (4) separate Accounts in the Sinking Fund to be known as the "Interest Account," the "Principal Account," the "Bond Redemption Account°' and the "Debt Service Reserve Account." There are hereby further created within each Account a separate subaccount for the Series 2011A Bonds and for the Series 2011B Bonds. The Sinking Fund, the Accounts and subaccounts therein shall be held by the City in an Authorized Depository, Non Ad -Valorem Revenues appropriated in each Fiscal Year for the purposes under the provisions of Section 3.04(a) above shall be applied in the following manner. (1) To the full extent necessary, for deposit into each subaccount of 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 Bonds on each such Interest Payment Date; provided, however, that such deposits for interest shall not be required to be made into the applicable subaccount of 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 Bond Registrar moneys in an amount equal to the interest due on such Interest Payment Date or shall, prior to such Interest Payment Date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such Interest Payment Date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit, if any, on deposit in the appropriate subaccount of the Debt Service Reserve Account or from the Bond insurance Policy, as applicable. (2) (A) To the full extent necessary, for deposit into each subaccount of 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 date; provided, however, that such deposits for principal shall not be required to be made into the applicable subaccount of 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 Bond Registrar moneys in an amount equal to the principal due on such principal payment date or shall, prior to such Cln of Miami Page 17 of 29 Fide Id: 11-60441 CVersian: 11 Printed On: 5/18/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Fife Number 11-00441 principal payment date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such principal payment date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit, if any, on deposit in the appropriate subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable. (B) To the full extent necessary, for deposit into each subaccount of the Bond Redemption Account, if applicable, 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 any Term Bonds payable from such subaccount of the Bond Redemption Account on such redemption or maturity date; provided, however, that such deposits for Amortization Requirements shall not be required to be made into the applicable subaccount of the Bond Redemption Account to the extent that money on deposit therein is sufficient for such purpose. The moneys in such subaccount of the Bond Redemption Account shall be used solely for the purchase or redemption of Term Bonds payable therefrom, The City may at any time purchase any of said Term Bonds or portions thereof 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 shall be mandatorily obligated to use any moneys in such subaccount of the Bond Redemption 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 a subaccount of the Bond Redemption 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 shalt be credited in such manner and at such times as the Director of Finance shall determine over the remaining payment dates. The City shall, on each redemption or maturity date, transfer to the Bond Registrar moneys in an amount equal to the payments due on any Term Bonds on such redemption or maturity date or shall, prior to such redemption or maturity date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such redemption or maturity date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit in the applicable subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable. (3) To the full extent necessary, for deposit into each subaccount of the Debt Service Reserve Account in the Sinking Fund on the fifteenth (15th) day of each month in each year, beginning with the fifteenth (15th) day of the first full calendar month following the date on which there is a deficiency in the amount required to be on deposit in the subaccounts of the Debt. Service Reserve Account, such sums as shall be at least sufficient to pay an amount equal to one -twelfth (1/12) of the difference between the amount on deposit in the subaccounts of the Debt Service Reserve Account (including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) and the Reserve Account Requirement; provided, however, that no payments shall be required to be made into any subaccount of the Debt Service Reserve Account whenever and as long as the amount on deposit therein (including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) shall be equal to the Reserve Account Requirement for such series of Bonds, Moneys in the subaccounts of the Debt Service Reserve Account shall be used only for the purpose of making payments of principal of and interest on the corresponding series of Bonds when the moneys in any other subaccount of any Account held pursuant to this Resolution and available for such purpose are insufficient therefor. Moneys on deposit in a subaccount shall only be used for the corresponding series of Bonds. Any moneys in the subaccounts of the Debt Service Reserve Account in excess of the City of Miami i Page 18 of 29 File id; 11-U0441 (Version: 11 Primed On; 5/I8/2O1I THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number. 11-00441 Reserve Account Requirement for such series of Bonds may, in the discretion of the City, be transferred to and deposited in the applicable subaccount of the Interest Account, the Principal Account or the Bond Redemption Account as the City at its option may determine Notwithstanding the foregoing provisions, in lieu of or in substitute for the required deposits (including existing deposits therein) into the subaccounts of the Debt Service Reserve Account, the City may cause to be deposited Into the subaccounts of the Debt Service Reserve Account a Reserve Account Insurance Policy or a Reserve Account Letter of Credit for the benefit of the Holders of the corresponding series of Bonds Outstanding, which Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be payable or available to be drawn upon, as the case may be (upon the giving of notice as required thereunder), on any Interest Payment Date or principal payment date or mandatory redemption date on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant to this Resolution and available for such purpose. If a disbursement is made under the Reserve Account Insurance Policy or the Reserve Account Letter of Credit, the City shall be obligated to either (i) reinstate the maximum limits of such Reserve Account Insurance Policy or Reserve Account Letter of Credit within twelve months by increasing the amount payable or available to be drawn thereunder in equal monthly amounts over such twelve month period, or (ii) deposit, on a monthly basis in accordance with the first paragraph of this Section 3.04(b)(3), into the applicable subaccount of the Debt Service Reserve Account from the Non -Ad Valorem Revenues appropriated in accordance with Section 3.04(a) hereof, funds in the amount of the disbursements made under such Reserve Account Insurance Policy or Reserve Account Letter of Credit, or a combination of such alternatives as shall equal the Reserve Account Requirement for the applicable series of Bonds Outstanding. In the event that upon the occurrence of any deficiency in the subaccounts of the Interest Account, the Principal Account or the Bond Redemption Account, the applicable subaccount of the Debt Service Reserve Account is then funded with one or more Reserve Account Insurance Policies andlor Reserve Account Letters of Credit, the City or the Bond Registrar, as applicable, shall, on an interest or principal payment date or mandatory redemption date to which such deficiency relates, draw upon or cause to be paid under such facilities, on a pro-rata basis thereunder, an amount sufficient to remedy such deficiency, in accordance with the terms and provisions of such facilities and any corresponding reimbursement or other agreement governing such facilities; provided however, that if at the time of such deficiency the applicable subaccount of the Debt Service Reserve Account is only partially funded with one or rnore Reserve Account Insurance Policies andlor Reserve Account Letters of Credit, prior to drawing on such facilities or causing payments to be made thereunder, the City shall first apply any cash and securities on deposit in the applicable subaccount of the Debt Service Reserve Account to remedy the deficiency and, if after such application a deficiency still exists, the City or the Bond Registrar, as applicable, shall make up the balance of the deficiency by drawing on such facilities or causing payments to be made thereunder, as provided in this paragraph. Amounts drawn or paid under a Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be applied as set forth in the second paragraph of this Section 3.04(b)(3). Any amounts drawn or paid under a Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be reimbursed to the Provider thereof in accordance with the terms and provisions of the reimbursement or other agreement governing such facility. The subaccounts of the Debt Service Reserve Account shall be valued on the Cast day of each Fiscal Year and the value of securities on deposit therein shall be the lower of par, or if purchased at other than par, amortized value. Amortized value, when used with respect to securities purchased at a premium above or a discount below par, shall mean the value at any given date obtained by dividing the total premium or discount at which such securities were purchased by the number of interest payment dates remaining to maturity on such securities after such purchase and by multiplying the amount so calculated by the number of interest City nfArir�nu Page 19 of 29 File Id: II-00441 (rerun: Fi Printed On; 5/1872011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Fire Number 71-00441 payment dates having passed since the date of purchase; and (i) in the case of securities purchased at a premium, by deducting the product thus obtained from the purchase price, and (ii) in the case of securities purchased at a discount, by adding the product thus obtained to the purchase price. (4) To the Providers, if any, and the Bond Registrar, as applicable, in payment of amounts payable to such parties during such Fiscal Year not paid pursuant to the above provisions. Notwithstanding the foregoing or any other provision herein to the contrary, if any amount applied to the payment of principal of and redemption premium, if any, and interest on the Bonds that would have been paid from a subaccount in the Accounts in the Sinking Fund, is paid instead under the Bond Insurance Policy, amounts deposited in such relevant subaccount may be paid, to the extent required, to the Provider of the Bond Insurance Policy having theretofore made said corresponding payment. (c) Investment of Funds. The Sinking Fund, including the Interest Account, Principal Account, Bond Redemption Account and Debt Service Reserve Account, and the subaccounts therein, and the Cost of Issuance Funds shall constitute trust funds and shall be invested by the City as provided in this Section 3.04(c). Moneys on deposit in the subaccounts of the Interest Account, Principal Account, Bond Redemption Account, and the Cost of Issuance Funds may be invested in Permitted Investments maturing not later than the dates on which such moneys will be needed for the purposes of such fund or account. Moneys on deposit in the subaccounts of the Debt Service Reserve Account may be invested in Permitted Investments maturing not later than five years from the date of deposit of such Permitted Investment into the applicable subaccount of the Debt Service Reserve Account. All income and earnings received from the investment and reinvestment of moneys in the applicable subaccounts of the Interest Account, the Principal Account and the Bond Redemption Account in the Sinking Fund shall be retained in the respective subaccounts and applied as a credit against the obligation of the City to deposit moneys to such subaccounts pursuant to Section 3.04(b) (1) and Section 3.04 (b)(2)(A) and Section 3.04 (b)(2)(B) of this Resolution, respectively. All income and earnings received from the investment and reinvestment of moneys in the subaccounts of the Debt Service Reserve Account in the Sinking Fund shall be retained in such subaccount of the Debt Service Reserve Account and applied as a credit against the obligation of the City to deposit moneys to such subaccount, unless the amount in such subaccount shall exceed the Reserve Account Requirement for such series of Bonds, in which event such excess may be applied in the manner set forth for excess amounts in the subaccount of the Debt Service Reserve Account, as described in Section 3.04 (b)(3). All income and earnings received from the investment and reinvestment of moneys in the Cost of Issuance Fund and any excess amounts on deposit therein shall be transferred to the corresponding subaccounts of the Interest Account. For the purpose of investing or reinvesting. the City may commingle moneys in the Funds and Accounts created and established hereunder in order to achieve greater investment income; provided that the City shall separately account for the amounts so commingled. The amounts required to be accounted for in each of the Funds and Accounts designated herein may be deposited in a single bank account provided that adequate accounting procedures are maintained to reflect and control the restricted allocations of the amounts on deposit therein for the various purposes of such Funds and Accounts as herein provided. The designation and establishment of Funds and Accounts in and by this Resolution shall not be construed to require the establishment of any completely independent Funds and Accounts but rather is intended solely to constitute an allocation of certain revenues and assets for certain purposes and to establish such certain priorities for application of certain revenues and assets as herein provided. (d) Books and Records. The City will keep separately identifiable accounting records for the Pledged Funds by the use of a fund established in accordance with generally accepted accounting City of Miami Page 201).129 File Id: 11-00441 (Version: 1) Printed On; 5/18/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Fire Number 11-00441 principles, and any Holder of a Bond or Bonds issued pursuant to this Resolution, shall have the right at all reasonable times to inspect all records, accounts and data of the City relating thereto. Such records and accounts shall contain the statements required by generally accepted accounting principles applicable to governmental entities. (e) No Impairment of Contract. The City has full power and authority to irrevocably pledge the Pledged Funds to the payment of the principal of and interest on the Bonds, The pledge of such Pledged Funds, in the manner provided herein, shall not be subject to repeal, modification or impairment by any subsequent resolution, ordinance or other proceedings of the City so long as any Bonds are Outstanding hereunder. The City shall take all actions necessary and pursue such legal remedies which may be available to it either in law or in equity to prevent or cure any impairment by any entity other than the City within the meaning of this subsection. (f) Discharge and Satisfaction of Bonds. The covenants, liens and pledges entered into, created or imposed pursuant to this Resolution may be fully discharged and satisfied with respect to all or a portion of the Bonds in any one or more of the following ways: (1) by paying the principal of and interest on such Bonds when the same shall become due and payable„ or (2) by depositing in the applicable subaccount of the Interest Account, the Principal Account and the Bond Redemption Account and/or in such other accounts which are irrevocably pledged to the payment of such series of Bonds as the City may hereafter create and establish by resolution, certain moneys which together with other moneys lawfully available therefor, if any, shall be sufficient at the time of such deposit to pay when due the principal, redemption premium, if any, and interest due and to become due on said series of Bonds on or prior to the redemption date or maturity date thereof; or (3) by depositing in the applicable subaccount of the Interest Account, the Principal Account and the Bond Redemption Account and/or such other accounts which are irrevocably pledged to the payment of such series of Bonds as the City may hereafter create and establish by resolution, moneys which together with other moneys lawfully available therefor, when invested in Government Obligations which shall not be subject to redemption prior to their maturity other than at the option of the holder thereof, will provide moneys which shall be sufficient to pay when due the principal, redemption premium, if any, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof and delivering a verification report of a nationally recognized certified public accountant as to the adequacy of such deposit, together with investment earnings thereon, to pay when due the principal, redemption premium, if any, and interest due or to become due on or prior to the redemption date or maturity date of the applicable series of Bonds. (4) Notwithstanding the foregoing, all references to the discharge and satisfaction of Bonds shall include the discharge and satisfaction of any portion of the Bonds, any maturity or maturities of the Bonds, any portion of a maturity of the Bonds or any combination thereof. Upon such payment cr deposit in the amount and manner provided in this Section 3.04 (f), Bonds shall be deemed to be paid and shall no longer be deemed to be Outstanding for the purposes of this Resolution and all liability of the City with respect to said Bonds shall cease, terminate and be completely discharged and extinguished, and the Holders thereof shall be entitled to payment solely out of the moneys or securities so deposited; provided that in the event said Bonds do not mature and are not to be redeemed within the next succeeding sixty (60) days, the City shall have given the Bond Registrar irrevocable instructions to give. as soon as practicable, a notice to the Holders of said Bonds by first-class mail, postage prepaid. stating that the deposit of said moneys or Government Obtigations has been made with an appropriate fiduciary institution acting as escrow agent solely for the Holders of said Bonds and other Bonds being defeased, and that said Bonds are deemed to have been paid in accordance with this Section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal of and redemption premium, if any, and interest on said Bonds. In the event that the principal or redemption price, if applicable, and interest due on the Bonds Cm of Miami Page 21 of 29 File Id: 11-00441 (Version: 1) Printed On: 5/18%20!! THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number. 11-00441 shall be paid by the Provider pursuant to the terms of the Bond Insurance Policy, the assignment and pledge created hereunder and all covenants, agreements and other obligations of the City to the Bondholders shall continue to exist and the Provider shall be subrogated to the rights of such Bondholders. If any portion of the moneys deposited for the payment of the principal of and redemption premium, if any, and interest on any portion of Bonds is not required for such purpose, the City may use the amount of such excess free and clear of any trust, lien, security interest, pledge or assignment securing said Bonds or otherwise existing under this Resolution. (g) Compliance with Tax Requirements. The City covenants and agrees to comply with the requirements applicable to it contained in the Code to the extent necessary to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes. Specifically. without intending to limit in any way the generality of the foregoing, the City covenants and agrees: To pay to the United States of America, at the times required pursuant to Section 148(f) of the Code. any rebate amount ("Rebate Amount") determined pursuant to Section 148(f) of the Code; (1) To maintain and retain all records pertaining to and to be responsible for making or causing to be made all determinations and calculations of the Rebate Amount and required payments of the Rebate Amount as shall be necessary to comply with the Code; (2) To refrain from using proceeds from the Bonds in a manner that would cause the Bonds or any of them, to be classified as private activity bonds under Section 141(a) of the Code; and (3) To refrain from taking any action that would cause the Bonds, or any of them, to become arbitrage bonds under Section 148 of the Code, Section 3.05. Events of Default: Remedies, Each of the following events is hereby declared an "event of default," that is to say if: (a) payment of principal of any Bond shall not be made when the same shall become due and payable, either at maturity (whether by acceleration or otherwise) or on required payment dates by proceedings for redemption or otherwise; or (b) Payments of any installment of interest shall not be made when the same shall become due and payable; or (c) the City shall fail to make any deposits required to be made hereunder or shall otherwise fail to comply with any of the covenants and obligations of the City hereunder and such failure shall continue unremedied for a period of thirty (30) days after such failure to deposit or other such occurrence; or (d) an order or decree shall be entered, with the consent or acquiescence of the City. appointing a receiver or receivers of the City, or the filing of a petition by the City for relief under federal bankruptcy laws or any other similar law or statute of the Untied States of America or the State of Florida, which shall not be dismissed, vacated or discharged within thirty (30) days after the filing thereof; or (e) any proceedings shall be instituted, with the consent or acquiescence of the City, for the purpose of effecting a composition between the City and its creditors or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state statutes now or hereafter enacted, if the claims of such creditors are under any circumstances payable from the Pledged Funds. Notwithstanding the foregoing, with respect to the events described in clause (c), the City shall not be deemed in default hereunder if such default can be cured within a reasonable period of time and if the City in good faith institutes appropriate curative action and diligently pursues such action until the default has been corrected. Section 3.06. Enforcement of Remedies. Upon the happening and continuance of any event of default specified in Section 3,05, then and in every such case the owners of not less than twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding may appoint any state bank, national bank, trust company or national banking association qualified to transact business in Florida to serve as trustee for the benefit of the holders of al! Bonds then outstanding (the "Default Trustee'). Notice of such appointment, together with evidence of the requisite signatures of the holders of twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding ay of .Miami Page 22 of 29 File Id: II-O 44I (Version: 71 Printed On: II&/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Fife Number. 11-004.47 and the trust instrument under which the Default Trustee shall have agreed to serve shall be fired with the City and the Default Trustee and notice of such appointment shall be mailed to the registered holders of the Bonds. No more than one Default Trustee may be appointed and serving hereunder at any one time; however, the holders of a majority of the aggregate principal amount of the Bonds Outstanding may remove the Default Trustee initially appointed and appoint a successor and subsequent successors at any time. If the default for which the Default Trustee was appointed is cured or waived pursuant to this Section 3.06, the appointment of the Default Trustee shall terminate with respect to such default. After a Default Trustee has been appointed pursuant to the foregoing, the Default Trustee may proceed. and upon the written request of owners of twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding shall proceed, to protect and enforce the rights of the Bondholders under the laws of the State of Florida, including the Act, and under this Resolution, by such suits, actions or special proceedings in equity or at law, or by proceedings in the office of any board, body or officer having jurisdiction, either for the specific performance of any covenant or agreement contained herei or in aid of execution of any power herein granted or for the enforcement of any proper legal or equitable remedy, all as the Default Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights. In the enforcement of any remedy against the City under this Resolution the Default Trustee shall be entitled to sue for, enforce payment of and receive any and all amounts then or during any City default becoming, and at any time remaining, due from the City for principal, interest or otherwise under any provisions of this Resolution or of such Bonds and unpaid, with interest on overdue payments of principal and, to the extent permitted by law, on interest, at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and under such Bonds, without prejudice to any other right or remedy of the Default Trustee or of the Bondholders, and to recover and enforce any judgment or decree against the City, but solely as provided herein and in such Bonds, for any portion of such amounts remaining unpaid and interest, costs and expenses as above provided. and to collect (but solely from moneys in the Sinking Fund, the Reserve Fund and any other moneys available for such purpose) in any manner provided by law, the moneys adjudged or decreed to be payable. Section 3.07. Effect of Discontinuing Proceedings. In case any proceeding taken by the Default Trustee or any Bondholder on account of any default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Default Trustee or such Bondholder, then and in every such case the City, the Default Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies and powers of the Default Trustee shall continue as though no such proceeding had been taken. Section 3.08. Directions to Default Trustee as to Remedial Proceedings. Anything in this Resolution to the contrary notwithstanding, the holders of a majority of the aggregate principal amount of the Bonds Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Default Trustee, to direct the method and place of conducting all remedial proceedings to be takers byth Dfault Trustee hereunder,provided that such direction shall not be otherwise than in accordance with law or the provisions of this Resolution, and that the Default Trustee shall have the right to decline to follow any such direction which in the opinion of the Default Trustee would be unjustly prejudicial to Bondholders not parties to such direction. Section 3.09. Restrictions on Actions by Individual Bondholders. No Bondholder shall have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust hereunder or for any other remedy hereunder unless such Bondholder previously shall have given to the Default Trustee written notice of the event of default on account of which such suit, action or proceeding is to be taken. and unless the holders of not less than twenty-five percent (25%) of the aggregate principal amount of the Bonds Outstanding shall have made written request of the Default Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Default Trustee a reasonable opportunity either to proceed to exercise the powers hereinabove granted or to institute such action, suit or proceeding in its or their City of Miami Page 23 of 29 File Id: 11-00441 (Version: 11 Printed On: 5/18/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number 11-00441 name, and unless, also, there shall have been offered to the Default Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, including the reasonable fees of its attorneys (including fees on appeal), and the Default Trustee shall have refused or neglected to comply with such request within a reasonable period of time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Default Trustee, to be conditions precedent to the execution of the powers and trusts of this Resolution or for any other remedy hereunder. It is understood and intended that no one or more owners of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Resolution, or to enforce any right hereunder, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Bondholders, and that any individual rights of action or any other right given to one or more of such owners by law are restricted by this Resolution to the rights and remedies herein provided. Nothing contained herein, however, shall affect or impair the right of any Bondholder, individually, to enforce the payment of the principal of and interest on his Bond or Bonds at and after the maturity thereof, at the time. place, from the source and in the manner provided in this Resolution. Section 3.10. Additional Debt. (a) Issuance of Additional Indebtedness. The City will not issue any obligations (other than the Bonds authorized by Section 2,01 hereof) secured by or payable from the Pledged Funds, or any portion thereof, or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge, in each case, having priority to or being on a parity with the lien securing the Bonds issued pursuant to this Resolution upon the Pledged Funds or any portion thereof. The City hereby agrees that it will not issue or incur any other debt obligation (other than the Bonds authorized by Section 2.01 hereof) secured by or payable from a covenant to budget and appropriate all or a portion of the City legally available Non -Ad Valorem Revenues or secured by or payable from specific Non -Ad Valorem Revenues, unless the issuance of such debt obligations complies with Section 3.10(b) hereof, as evidenced by a certificate of the Director of Finance filed with the Commission on or prior to the issuance or incurrence of such debt. If the Bonds authorized by Section 2.01 hereof are issued on separate dates, it is not necessary to comply with the provisions of Section 3.10(b) hereof. (b) Anti -Dilution Test. The City may incur additional debt (other than the Bonds authorized by Section 2.01 hereof) that is payable from all or a portion of the Non -Ad Valorem Revenues only if the total amount of legally available Non -Ad Valorem Revenues for the prior Fiscal Year were (a) 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 Non -Ad Valorem Revenues and not other funds of the City (collectively. "Debt"), including any Debt payable from one or several specific Non -Ad Valorem Revenue sources but only to the extent such Non -Ad Valorem Revenues are legally available to pay debt service on the Bonds, and (b) so long as the Bonds are outstanding and if a Reserve Account Insurance Policy is in effect, at least 1.00 times the obligation of the City to repay any costs then due and owing to the Provider of a Reserve Account insurance Policy. [END OF ARTICLE lilt ARTICLE IV CONCERNING THE BOND REGISTRAR Section 4.01. Appointment and Acceptance of Duties. The Bond Registrar shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing and delivering to the City a written acceptance thereof. Section 4.02. Responsibilities of Bond Registrar. The recitals of facts contained herein and In the Bonds shall be taken as the statements of the City and the Bond Registrar assumes no responsibility for the correctness of the same. The Bond Registrar makes no representation as to the Gig, of Miami Page 21 Of 29 File Id: 11-()0441 (Version: 11 Printed On: 5/18/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number 11-00441 validity or sufficiency of this Resolution or of any Bonds issued thereunder or as to the security afforded by this Resolution, and the Bond Registrar shall not incur any liability in respect thereof. The Bond Registrar shall, however, be responsible for its representation contained in its certificate of authentication of the Bonds. The Bond Registrar shall be under no responsibility or duty with respect to the application of any moneys paid by the Bond Registrar in accordance with the provisions of this Resolution to or upon the order of the City. The Bond Registrar shall be under no obligation or duty to perform any act which would involve it in expense or liability or to institute or defend any suit in respect thereof, or to advance any of its own moneys, unless properly indemnified. The Bond Registrar shall not be liable in connection with the performance of its duties hereunder except for its own negligence, misconduct or default. Section 4.03. Evidence On Which Bond Registrar May Act. (a) The Bond Registrar, upon receipt of any notice, resolution, request, consent, order, certificate, report, opinion, bond, or other paper or document furnished to it pursuant to any provision of this Resolution, shall examine such instrument to determine whether it conforms to the requirements of this Resolution and shall be protected in acting upon any such instrument believed by it to be genuine and to have been signed or presented by the proper party or parties. The Bond Registrar may reasonably consult with counsel, who may or may not be counsel to the City, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it under this Resolution in good faith and in accordance therewith. (b) Whenever the Bond Registrar shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under this Resolution, such matter (unless other evidence in respect thereof be therein specifically prescribed) may be deemed to be conclusively proved and established by a certificate of the City Manager or the Director of Finance, and such certificate shall be full warrant for any action taken or suffered in good faith under the provisions of this Resolution upon the faith thereat but in its discretion the Bond Registrar may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as it may deem reasonable. (c) Except as otherwise expressly provided in this Resolution, any request, order, notice or other direction required or permitted to be furnished pursuant to any provision hereof by the City to the Bond Registrar shall be sufficiently executed in the name of the City by the City Manager or the Director of Finance. Section 4.04. Compensation. The City may agree with the Bond Registrar to pay to the Bond Registrar from time to time reasonable compensation for all services rendered under this Resolution, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution. The City may also agree with the Bond Registrar to indemnify the Bond Registrar for any and all of its reasonable fees, costs and expenses resulting from any claim, liability or the like incurred in and about the performance of its powers and duties under this Resolution. Section 4.05. Certain Permitted Acts. The Bond Registrar, individually or otherwise, may become the owner of any Bonds, with the same rights it would have if it were not a fiduciary. To the extent permitted by law, the Bond Registrar may act as depositary for, and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondholders or to effect or aid in any reorganization growing out of the enforcement of the Bonds or this. Resolution, whether or not any such committee shall represent the Holders of a majority in principal amount of the Bonds then Outstanding. Section 4.06. Merger or Consolidation. Any entity into which the Bond Registrar may be merged or converted or with which it may be consolidated or any entity resulting from any merger, conversion or consolidation to which it shall be a party or any entity to which the Bond Registrar may sell or transfer all or substantially all of its business, provided such entity shall be authorized by law to perform all duties imposed upon it by this Resolution, shall be the successor to the Bond Registrar without the execution or filing of any paper or the performance of any further act. Section 4,07. Adoption of Authentication. In case any of the Bonds contemplated to be City of Miami Page 25 of 29 File Id: 11-00441 (Version: II Printed Oh! 5/1 2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number 11-00441 issued under this Resolution shall have been authenticated but not delivered, any successor Bond Registrar may adopt the certificate of authentication of any predecessor Bond Registrar so authenticating such Bonds and deliver such Bonds so authenticated; and in case any of the said Bonds shall not have been authenticated, any successor Bond Registrar may authenticate such Bonds in the name of the predecessor Bond Registrar, or in the name of the successor Bond Registrar, and in all such cases such certificate shall be fully effective. Section 4.08. Resignation or Removal of Bond Registrar and Appointment of Successor. The Bond Registrar may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least 60 days" written notice to the Provider and the City, The Bond Registrar may be removed by the City at any time by an instrument filed with the Bond Registrar and the Provider signed by the City Manager or the Director of Finance. Any successor Bond Registrar shall be appointed by the City and shall be fully qualified to act in such capacity under the laws of the State, be wilting and able to accept the office on reasonable and customary terms and be authorized by law to perform all the duties imposed upon it by this Resolution. The City shall notify the Provider of the appointment of any successor Bond Registrar. In the event of the resignation or removal of the Bond Registrar, the Bond Registrar shall pay over, assign and deliver any moneys held by it as Bond Registrar to its successor. Section 4.09. Vacancy. If at any time hereafter the Bond Registrar shall resign, be removed, be dissolved, or otherwise become incapable of acting, by bankruptcy or otherwise, or if the bank, trust company or securities firm acting as Bond Registrar shall be taken over by any governmental official, agency, department or board, the position of Bond Registrar shall thereupon become vacant. If the position of Bond Registrar shall become vacant for any of the foregoing reasons or for any other reasons, the City shall appoint a successor Bond Registrar. If no appointment of a successor Bond Registrar shall be made pursuant to the foregoing provisions of this Section, the Holder of any Bond Outstanding hereunder or any retiring Bond Registrar may apply to any court of competent jurisdiction to appoint a successor Bond Registrar. Such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Bond Registrar. [END OF ARTICLE IV] ARTICLE V EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND PROOF OF OWNERSHIP OF BONDS Section 5.01. Proof of Execution of Documents and Ownership. (a) Any request, direction, consent or other instrument in writing required by this Resolution to be signed or executed by Bondholders may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Bondholders in person or by their attorneys or legal representatives appointed by an instrument in writing. Proof of the execution of any such instrument and of the ownership of Bonds shall be sufficient for any purpose of this Resolution and shall be conclusive in favor of the Bond Registrar with regard to any action taken by it under such instrument if made in the following manner. (1) The fact and date of the execution by any person of any such instrument may be proved by the verification of any officer in any jurisdiction who, by the laws thereof, has power to take affidavits within such jurisdiction, to the effect that such instrument was subscribed and sworn to before him, or by an affidavit of a witness to such execution. Where such execution is on behalf of a person other than an individual, such verification shall also constitute sufficient approval of the authority of the signor thereof. (2) The ownership of Bonds shall be proved by the registration books required to be maintained pursuant to the provisions of this Resolution. Nothing contained in this Article shall be construed as limiting the Bond Registrar to such proof, it being intended that the Bond Registrar may accept any other evidence of the matters herein stated Ciro of 3finnri Page 26 of 29 File Id: 11.00441 (Version: f l Printed On: 5/18i2OI f THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number. 11-00441 which it may deem sufficient. (b) If the City shall solicit from the Holders any request, direction, consent or other instrument in writing required or permitted by this Resolution to be signed or executed by the Holders, the City may, at its option, fix in advance a record date for determination of Holders entitled to give each request, direction, consent or other instrument, but the City shall have no obligation to do so. If such a record date is fixed, such request, direction, consent or other instrument may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Bonds have authorized or agreed or consented to such request, direction, consent or other instrument, and for that purpose the Bonds shall be computed as of such record date. (c) Any request or consent of the Holder of any Bond shall bind every future Holder of the same Bond in respect of anything done in pursuance of such request or consent. [END OF ARTICLE Vj ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.01. Modification or Amendment. Except as otherwise provided in the third paragraph hereof, no adverse material modification or amendment of this Resolution, or of any resolution amendatory hereof or supplemental hereto, may be made after the issuance of any Bonds without the consent in writing of the Holders of more than fifty per centum (50%) in aggregate principal amount of the Bonds then Outstanding; provided, however, that no modification or amendment shall permit a change in the maturity of such Bands or a reduction in the rate of interest thereon, or affect the promise of the City to pay the principal of and interest on the Bonds, as the same mature or become due, from the Pledged Funds or the Non -Ad Valorem Revenues as provided in Section 3.04(a) hereof, or reduce the percentage of Holders of Bonds required above for such modification or amendment, without the consent of the Holders of all the Bonds. For the purposes of this Section 6.01, so long as the Bond Insurance Policy is in effect and the Provider has not defaulted in its obligations thereunder, the Provider shall be deemed the sole Holder of the Bonds. This Resolution may be amended, changed, modified and altered without the consent of the Holders of Bonds or the Provider: (a) to cure any ambiguity or formal defect or omission in this Resolution or supplemental resolutions or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions contained herein; or (b) to grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders: or (c) to add to the conditions, limitations and restrictions on the issuance of Bonds under the provisions of this Resolution, other conditions, limitations and restrictions thereafter to be observed; or (d) to add to the covenants and agreements of the City in this Resolution other covenants and agreements thereafter to be observed by the City or to surrender any right or power herein reserved to or conferred upon the City; or (e) to qualify the Bonds or any of the Bonds for registration under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended; or (f) to qualify this Resolution as an "indenture" under the Trust Indenture Act of 1939, as amended; or (g) to permit Bonds to be issued in book entry form with or without physical bonds; or (h) to make such changes as may be necessary for the Bond Insurance Policy, a Reserve Account Insurance Policy or a Reserve Account Letter of Credit deposited in the Debt Service Reserve Account in connection with the issuance of the Bonds. If at any time the City shall so request the Bond Registrar, the Bond Registrar shall cause a notice of a proposed supplemental resolution requiring the consent of Bondholders to be mailed, City of tWkuni Page 27 of 29 File ld: 11-00441 (Version: 11 Printed On: 5/18)2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. File Number: 11-00441 postage prepaid, to all Holders of Bonds then Outstanding at their addresses as they appear on the registration books. Such notice shall briefly set forth the nature of the proposed supplemental resolution and shall state that a copy thereof is on file at the designated corporate trust office of the Bond Registrar for inspection by all Bondholders. The Bond Registrar shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail the notice required by this Section, and any such failure shall not affect the validity of such supplemental resolution when consented to or approved as provided in this Section. Whenever, at any time after the date of the mailing of such notice, the City shall have received an instrument or instruments purporting to be executed by the Holders of more than fifty per centum (5O%) in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed supplemental resolutions described in such notice and shall specifically consent to and approve the adoption thereof, and the City shall file with the City Clerk a certificate signed by the City Manager that the Holders of such required percentage of Bonds have filed such consents, the City may adopt such supplemental resolution in substantially such form without liability or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. It shall not be necessary for the consent of the Holders to approve the particular form of any proposed supplemental resolution, but it shall be sufficient if such consent shall approve the substance thereof. If the Holders of more than fifty per centum (50%) in aggregate principal amount of the Bonds Outstanding at the time of the execution of such supplemental resolution shall have consented to and approved the adoption thereof as herein provided, no Holder shall have any right to object to the adoption of such supplemental resolution, or to object to any of the terms and provisions therein contained, or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the City from adopting the same or from taking any action pursuant to the provisions thereof. Section 6.02. Severability of Invalid Provisions. If any one or more of the covenants, agreements or provisions of this Resolution should be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions, and shall in no way affect the validity of any of the other provisions of this Resolution or of the Bonds issued hereunder. Section 6.03. Unclaimed Money. Notwithstanding any provisions of this Resolution, any money held by the Bond Registrar for the payment of the principal or redemption price of, or interest on, any Bonds and remaining unclaimed for five (5) years after the principal of ail of the Bonds has become due and payable (whether at maturity or upon call for redemption), if such money were so held at such date, or five (5) years after the date of deposit of such money if deposited after such date when all of the Bonds became due and payable, shall be repaid to the City free from the provisions of this Resolution, and all liability of the Bond Registrar with respect to such money shall thereupon cease; provided. however, that before the repayment of such money to the City as aforesaid, the City shall first publish at least once in a financial newspaper or journal published and of general circulation in New York, New York, a notice, in such form as may be deemed appropriate by the City with respect to the Bonds so payable and not presented, and with respect to the provisions relating to the repayment to the City of the money held for the payment thereof. Section 6.04. Payments Due on Saturdays, Sundays and Holidays. in any case where the date of maturity of interest on or principal of the Bonds or the date fixed for redemption of any Bonds shall be a Saturday, Sunday or a day on which the Bond Registrar is required, or authorized or not prohibited, by law (including executive orders) to close and is closed, then payment of such interest, principal or redemption price, as applicable, need not be paid by the Bond Registrar on such date but may be paid on the next succeeding business day on which the Bond Registrar is open for business with the same force and effect as if paid on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date of maturity. Section 6.05. Controlling Law; Members of Commission Not Liable. The provisions of this City of Miami Page 28 of 29 File Id: 11-00441 (Version: 11 Printed On. 5/18/2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. f rfe Number: 17-00441 Resolution shall be governed by, and interpreted in accordance with, the laws of the State. All covenants, stipulations, obligations and agreements of the City contained in this Resolution shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized by the Act and provided by the Constitution and laws of the State. No covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent or employee of the Commission or the City in his individual capacity, and neither the members of the Commission nor any official executing the Bonds shalt be liable personally on the Bonds or this Resolution cr shall be subject to any personal liability or accountability by reason of the issuance or the execution of such Bonds. Section 6.06. Further Authorizations. The City Manager, the City Clerk, the Director of Finance, the City Attorney and such other officers, employees and staff of the City as may be designated by the City Manager are each designated as agents of the City in connection with the issuance and delivery of the Bonds and are authorized and empowered, collectively or individually, to take all action and steps and to execute all instruments, documents and contracts on behalf of the City, that are necessary or desirable in connection with the execution and delivery of the Bands, the refunding of the Refunded Loans, the refinancing of the Note and such other actions which are not inconsistent with the terms and provisions of this Resolution. Section 6.07. Headings for ConvenienceOnly. Any headings preceding the texts of the several articles and sections hereof shall be solely for convenience of reference and shall not constitute a part of this Resolution, nor shall they affect its meaning, construction or effect. Section 6.08. Time of Taking Effect. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED this day of May, 2011 APPROVED AS TO FORM AND CORRECTNESS, JULIE 0. BRU CITY ATTORNEY Cm' of Miami Page 2.9 of 29 ,File Id: 11-00441 114rsiun: 1) Printed On: 5/18/2011 No. R- THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 10 be Cam" e t. L4 f tfrn ems. ) EXHIBIT A l FORM OF BOND UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF MIAMI, FLORIDA SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BOND SERIES 2011[Aj[B] Date of Interest Maturity Original Rate Rate Issuance REGISTERED OWNER: 11AFT CUSIP PRINCIPAL AMOUNT: DOLLARS The City of Miami, Florida (the 'City'), for value received, hereby promises to pay to the registered owner specified above, or registered assigns, but solely from the sources hereinafter mentioned, the principal amount specified above on the maturity date specified above (or earlier upon redemption as described below), upon presentation and surrender hereof at the designated corporate trust office of Regions Bank (the "Bond Registrar"), and interest thereon, payable as described below, at the interest rate per annum specified above, on 1 and 1 of each year, commencing on 1 20_ Interest on this Bond is payable by check or draft of the Bond Registrar made payable to the registered owner as its name and address shall appear .on the registration books maintained by the Bond Registrar at the close of business on the fifteenth day of the calendar month preceding each interest payment date (the "Regular Record Date"); provided, however, that (i) if ownership of the Bands is maintained in a book -entry only system by a securities depository, such payment may be made by automatic funds transfer (wire) to such securities depository or its nominee or (ii) if such Bonds are not maintained in a book -entry only system by a securities depository, upon written request of the Holder of $1,000,000 or more in principal amount of Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such Holder (such bank being a bank within the continental United States), if such Holder has advanced to the Bond Registrar the amount necessary to pay the cost of such wire transfer or authorized the Bond Registrar to deduct the cost of such wire transfer from the payment due such Holder. Any interest not punctually paid on a Regular Record Date shall forthwith cease to be payable to the registered owner on such Regular Record Date and may be paid at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Bond Registrar, notice whereof shall be given not less than 10 days prior to such special record date to such registered owner. Such interest shall be payable from the most recent interest payment date next preceding the date of authentication to which interest has been paid, unless the date of authentication is a 1 or 1 to which interest has been paid, in which case from the date of authentication, or unless the date of authentication is prior to , 2011, in which case from , 2011, or A-1 MLAML/4265564.5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. unless the date of authentication is between a Regular Record Date and the next succeeding interest payment date, in which case from such interest payment date. Principal of and interest on this Bond is payable in lawful money of the United States of America. This Bond is one of an authorized series of bonds of the City designated as its "Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011[A][B]" (herein called the "Series 2011[A][B] Bonds'), in the aggregate principal amount of Dollars ($ ) of like date, tenor, and effect, except as to number, date of maturity and interest rate, issued for the purposes of, together with other available moneys, (I) refinancing the [Refunded Loans] [Note], (ii) funding a deposit to the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy, and (iii) paying certain costs of issuance of the Series 2011[A][B] Bonds, including if necessary, the premium for a Bond Insurance Policy. Concurrently. with the issuance of the Series 2011[A][B] Bonds, the City has issued its $ aggregate principal amount of Special obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011[A][B] (the 'Series 2011[A][B] Bonds" and, together with the Series 2011 [A][B] Bonds, the "Bonds") for the purposes of, together with other available moneys, (i) refinancing the [Note, including the payment of accrued interest] [Refunded Loans], (ii) funding a deposit to the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy and (iii) paying certain costs of issuance of the Series 2011[A][B] Bonds, including if necessary, the premium for a Bond Insurance Policy. The Bonds are being issued under the authority of and in full compliance with the Constitution of the State of Florida, Chapter 166, Florida Statutes, as amended, and the City Charter (collectively, the 'Act") and a resolution duly adopted by the City Commission of the City on (the "Resolution") and is subject to all the terms and conditions of the Resolution. All terms used in capitalized form and not defined herein are as defined in the Resolution. This Bond is secured by a lien on and pledge of the moneys held in certain Funds and Accounts established under the Resolution with respect to the Series 2011 [A][B] Bonds (collectively, the "Series 2011[A][B] Pledged Funds") and is payable solely from such Series 2011[A][B] Pledged Funds and, solely to the extent provided in the second and third succeeding paragraphs, the Non -Ad Valorem Revenues (defined below), all in the. manner provided in the Resolution. The City is not obligated to pay this Bond or the interest hereon except as provided above, and the full faith and credit of the City are not pledged for the payment of this Bond and this Bond does not constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation; and it is expressly agreed by the Holder of this Bond that such Hodder shall never have the right to require or compel the exercise of the ad valorem taxing power of the City, the State of Florida or any political subdivision thereof or taxation in any form of any real or personal property therein, for the payment of the principal of and interest on this Bond or the making of any other payments provided for in the Resolution. It is further agreed between the City and the Holder of this Bond that this Bond and the obligation evidenced thereby shall not constitute a lien upon property of or in the City, but shall constitute a lien only on the Pledged Funds, all in the manner provided in the Resolution. "Non -Ad Valorem Revenues" is defined in the Resolution as all revenues of the City derived from any source whatsoever, other than ad valorem taxation on real or personal property, which are legally available to make the payments required under the Resolution. The City covenants and agrees in the Resolution to budget and appropriate in its annual budget, by amendment, if necessary, from Non -Ad Valorem Revenues lawfully available in each Fiscal A-2 MIAMI/4265564.5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Year, amounts sufficient to satisfy (i) the Annual Debt Service Requirement for such Fiscal Year, (ii) any deposits required to be made into the Debt Service Reserve Account during such Fiscal Year, (iii) any other amounts due the Provider of a Bond insurance Policy, the issuers of any other Reserve Account Insurance Policy or Reserve Account Letter of Credit and the Bond Registrar during such Fiscal Year and (iv) any Rebate Amount due during such Fiscal Year as provided in the Resolution. Such covenant and agreement on the part of the City to budget and appropriate such amounts of Non -Ad Valorem Revenues shall be cumulative to the extent not paid, and shall continue until such Non -Ad Valorem Revenues or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. Notwithstanding the foregoing covenant of the City, the City does not covenant to maintain any services or programs, now provided er maintained by the City, which generate Non -Ad Valorem Revenues. Such covenant to budget and appropriate does not create any lien upon or pledge of such Non -Ad Valorem Revenues, nor does it preclude the City from pledging in the future its Non -Ad Valorem Revenues, nor does it require the City to levy and collect any particular Non - Ad Valorem Revenues, nor does it give the Bondholders, the Provider of a Bond Insurance Policy, the issuers of any other Reserve Account Insurance Policy or Reserve Account Letter of Credit or the Bond Registrar a prior claim on the Non -Ad Valorem Revenues as opposed to claims of general creditors of the City. Such covenant to budget and appropriate Non -Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non -Ad Valorem Revenues heretofore or hereinafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant to budget and appropriate in its general annual budget for the purposes and in the manner stated in the Resolution shall have the effect of making available In the manner described herein 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 obligations under the Resolution subject, however, in all respects to the restrictions of Section 166.241(3), 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. [Insert Redemption Provisions] Reference is hereby made to the Resolution for the provisions, among others, relating to the term, lien and security of the Bonds, the custody and application of the proceeds of the Bonds, continuing disclosure obligations of the City, the rights and remedies of the Bondholder, the extent of and limitations on the City's rights, duties and obligations and the provisions permitting the issuance of additional indebtedness, to all of which provisions the Bondholder hereof for himself and his successors in interest assents by acceptance of this Band. The City has previously issued and currently has outstanding other indebtedness payable from and secured by, in whole or in part, its legally available Non -Ad Valorem Revenues. A-3 MIAMIf4265564.5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The original registered owner, and each successive registered owner of this Bond shall be conclusively deemed to have agreed and consented to the following terms and conditions: 1. The Bond Registrar shall keep books for the registration of Bonds and for the registration of transfers of Bonds as provided in the Resolution. The Bonds shall be transferable by the registered owner thereof in person or by his attorney duly authorized in writing only upon the books kept by the Bond Registrar and only upon surrender thereof together with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the registered owner or his duly authorized attorney. Upon the transfer of any such Bond, the City shall issue in the name of the transferee a new Bond or Bonds_ 2 The City, the Bond Registrar and any other fiduciaries may deem and treat the person in whose name any Bond shall be registered upon the books kept by the Bond Registrar as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Bond as the same becomes due, and for all other purposes. All such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so pad, and neither the City, the Bond Registrar nor any other fiduciary shall be affected by any notice to the contrary. 3. At the option of the registered owner thereof and upon surrender thereof at the designated corporate trust office of the Bond Registrar with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the registered owner or his duly authorized attorney and upon payment by such registered owner of any charges which the Bond Registrar or the City may make as provided in the Resolution, the Bonds may be exchanged for Bonds of the same maturity of any other authorized denominations. 4. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised. the City shall execute and the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Resolution. There shall be no charge for any such exchange or transfer of Bonds, but the City or the Bond Registrar may require payment of a sum sufficient to pay any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Neither the City nor the Bond Registrar shall be required (a) to transfer or exchange Bonds for a period of 15 days next preceding an interest payment date on such Bonds or next preceding any selection of Bonds to be redeemed or thereafter until after the mailing of any notice of redemption, or (b) to transfer or exchange any Bonds called for redemption. It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed, precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the Act, and that the issuance of this Bond, and of the issue of Bonds of which this Bond is one, is in full compliance with all constitutional, statutory or charter limitations or provisions. IN WITNESS WHEREOF, the City of Miami, Florida, has issued this Bond and has caused the same to be signed by its City Manager and attested and countersigned by its City Clerk, either manually or with their facsimile signatures, and its seal to be affixed hereto or a facsimile of its seal to be reproduced hereon, aft as of the day of , 2011. A-4 MIAMv4265564.5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. CITY OF MIAMI, FLORIDA (SEAL) By: ATTESTED AND COUNTERSIGNED: City Manager By: APPROVED AS TO FORM City Clerk AND CORRECTNESS A-5 MIAMl14265564.5 By: City Attorney THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds delivered pursuant to the within mentioned Resolution. Date of Authentication: MlAMI/4265564.5 A-6 By: Authorized Signatory THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the right of survivorship and not as tenants in common UNIFORM GIFT MIN ACT - Custodian (Cost) (Minor) under Uniform Gifts to Minors Act (State) Additional abbreviations may also be used though not in the above list. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond, and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the said Bond on the bond register, with full power of substitution in the premises. Dated: Please insert Social Security or other identifying number of transferee: Signature guaranteed: NOTICE: The transferor's signature to this Assignment must correspond with the name as it appears on the face of the within Bond in every particular without alteration or any change whatever. A-7 MIAMI/4285564.5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. EXHIBIT B FORM OF BOND PURCHASE AGREEMENT 73. be MIAMI14265564,5 B-1 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. DRAFT #1: 05/03/11 347-00093.B1 BOND PURCHASE AGREEMENT. City of Miami, Florida Special Obligation Non -Ad Valorem Revenue Refunding Bonds Series 2011A & B July _. 2011 City. of Miami, Florida 444 Southwest 2nd Avenue Miami, FL 33130-1910 Attention: Tony E. Crapp, Jr., City Manager Dear Mr. Crapp: The undersigned, RBC Capital Markets, LLC (the "Representative" or "RBC CM") acting on its own behalf and on behalf of the other underwriters listed on Schedule I hereto (collectively, the "Underwriters"), offers to enter into the following agreement (this "Agreement") with the City of Miami, Florida (the "City") which, upon the City's written acceptance of this offer, will be binding upon the City and upon the Underwriters. This offer is made subject to the City's written acceptance hereof on or before 11:59 p.m., Eastern time, on July , 2011, and,. if not so accepted, will be subject to withdrawal by the Underwriters upon notice delivered to the City at any time prior to the acceptance hereof by the City. Terms not otherwise defined in this Agreement shall have the same meanings set forth in the Bond Resolution (as defined herein) or in the Official Statement (as defined herein). 1. Purchase and Sale of the Bonds. Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriters hereby agree to purchase from the City, and the City hereby agrees to sell and deliver to the Underwriters, all, but not less than all, of the City's $ Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011 A & B (collectively, the "Bonds"), consisting of the City's $ Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011A, and $ Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011 B. Inasmuch as this purchase and sale represents a negotiated transaction, the City acknowledges and agrees that: (i) the All dates and amounts are preliminary and subject to change, THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. transaction contemplated by this Agreement is an arm's length, commercial transaction between . the City and the Underwriters in which the Underwriters are acting solely as a principal and are not acting as a municipal advisor, financial advisor or fiduciary to the City; (ii) the Underwriters have not assumed any advisory or fiduciary responsibility to the City with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriters have provided other services or are currently providing other services to the City on other matters); (iii) the Underwriters are acting solely in their capacity as underwriters for their own accounts, (iv) the only obligations the Underwriters have to the City with respect to the transaction contemplated hereby expressly are set forth in this Agreement; and (v) the City has consulted its own legal, accounting, tax, financial and other advisors, as applicable, to the extent it has deemed appropriate. The Representative has been duly authorized to execute this Agreement and to act hereunder. The principal amount of the Bonds to be issued, the dated date therefor, the maturities, sinking fund and optional redemption provisions and interest rates per annum are set forth in Schedule II hereto. The Bonds shall be as described in, and shall be issued and secured under and pursuant to the provisions of Resolution No. adopted by the City on May 26, 2011 (the "Bond Resolution'). The aggregate purchase price for the Bonds shall be $ ($ original aggregate principal amount [less net original issue discount of $ )[plus net original issue premium of $ 1 and less Underwriters' discount of $ ). Delivered to the City herewith as a good faith deposit is a check payable to the order of the City in clearing house funds in the amount of $ In the event you accept this offer, such check shall be held uncashed by you until the time of Closing, at which time such check shall be returned uncashed to the Representative. In the event that the City does not accept this Agreement, such check will be immediately returned to the Representative. Should the City fail to deliver the Bonds at the Closing, or should the City be unable to satisfy the conditions of the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds, as set forth in this Agreement (unless waived by the Underwriters), or should such obligations of the Underwriters be terminated for any reason permitted by this Agreement, such check shall immediately be returned to the Representative. In the event that the Underwriters fail (other than for a reason permitted hereunder) to purchase, accept delivery of and_pay_for the 2 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Bonds at the Closing as herein provided, such check shall be cashed and the amount thereof retained by the City as .and for fully liquidated damages for such failure of the Underwriters, and, except as set forth in Sections 8 and 10 hereof, no party shall have any further rights against the other hereunder. The Underwriters and the City understand that in such event the City's actual damages may be greater or may be less than such amount. Accordingly, the Underwriters hereby waive any right to claim that the City's actual damages are less than such amount, and the City's acceptance of this offer shall constitute a waiver of any right the City may have to additional damages from the Underwriters. 2. Public Offering. The Underwriters agree to make a bona fide public offering of all of the Bonds at a price not to exceed the public offering price set forth on the 'inside] cover of the Official Statement and may subsequently change such offering price without any requirement of prior notice. The Underwriters may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and others at prices lower than the public offering price stated on the cover of the Official Statement. 3. The Official Statement. (a) At the time of or before acceptance of this Agreement, or at such later time as shall be agreeable to the Underwriters, the City shall deliver to the Underwriters three copies of the Official Statement, dated the date hereof (which together with the cover page and appendices contained therein, is herein called the "Official Statement") executed on behalf of the City by its City Manager. (b) The Preliminary Official Statement has been prepared by the City for use by the Underwriters in connection with the public offering, sale and distribution of the Bonds. The City hereby represents and warrants that the Preliminary Official Statement was deemed final by the City as of its date, except for the omission of such information which is dependent upon the final pricing of the Bonds for completion, all as permitted to be excluded by Section (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"). (c) The City represents that the governing body of the City has reviewed and approved the information in the Official Statement and hereby authorizes the Official Statement to be used by the Underwriters in connection with the public offering and the sale of the Bonds. The City shall provide, or cause to be provided, to the Underwriters as 3 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. soon as practicable after the date of the City's acceptance of this Agreement (but, in any event, not later than within seven business days after the City's acceptance of this Agreement and in sufficient time to accompany any confirmation that requests payment from any customer) copies of the Official Statement which is complete as of the date of its delivery to the Underwriters in such quantity as the Representative shall request and a electronic version of the Official Statement in searchable PDF format within one day of delivery of the Official Statement and, in any event, no later than the date of Closing in order for the Underwriters to comply with Section (b)(4) of the Rule and the rules of the Municipal Securities Rulemaking Board (the "MSRB"). The City hereby confirms that it does not object td the distribution of the Official Statement in electronic form. (d) If, after the date of this Agreement to and including the date the Underwriters are no longer required to provide an. Official Statement to potential customers who request the same pursuant to the Rule (the earlier of (i) 90 days from the "end of the underwriting period" (as defined in the Rule) and (ii) the time when the Official Statement is available to any person from the MSRB, but in no case less than 25 days after the "end of the underwriting period" for the Bonds), the City becomes aware of any fact or event which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or if it is necessary to amend or supplement the Official Statement to comply with law, the City will notify the Representative (and for the purposes of this clause provide the Representative with such information as it may from time to time request), and if, in the opinion of the Representative, such fact or event requires preparation and publication of a supplement or amendment to the Official Statement, the City will forthwith prepare and furnish, at the City's own expense (in a form and manner approved by the Representative), a reasonable number of copies of either amendments or supplements to the Official Statement so that the statements in the Official Statement as so amended and supplemented will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or so that the Official Statement will comply with law. If such notification shall be subsequent to the Closing, the City shall furnish such legal opinions, certificates, instruments and other documents as the Representative may deem necessary to evidence the truth and 4 (e) THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. accuracy of such supplement or amendment to the Official Statement. The Representative hereby agrees to file the Official Statement with the MSRB. Unless otherwise notified in writing by the Representative, the City can assume that the "end of the underwriting period" for purposes of the Rule is the date of the Closing. 4. Representations, Warranties, and Covenants of the City. The City hereby represents and warrants to and covenants with the Underwriters that: The City is a municipal corporation duly created, organized and existing under the laws of the State of Florida (the "State"). The City has full legal right, power and authority under the Constitution and laws of the State, including without limitation Florida Statutes, as amended, Chapter 166, Part II, and the Charter and Code of the City of Miami (the "Act") and the Bond Resolution and at the date of the Closing will have full legal right, power and authority under the Act and the Bond Resolution (i) to enter into, execute and deliver this Agreement, the Bond Resolution, the Continuing Disclosure Undertaking (the "Undertaking") as defined in Section 6(iX3) hereof, the Interlocal Agreements (the "lnterlocal Agreements") as defined in Section 6(i)(4) hereof, and all documents required hereunder and thereunder to be executed and delivered by the City (this Agreement, the Bond Resolution, the Undertaking and the other documents referred to in this clause are hereinafter referred to as the "City Documents"), (ii) to sell, issue and deliver the Bonds to the Underwriters as provided herein, and and (iii) to carry out and consummate the transactions contemplated by the City Documents and the Official Statement, and the City has complied, and will at the Closing be in compliance in all respects, with the terms of the Act and the City Documents as they pertain to such transactions; (b) By all necessary official action of the City prior to or concurrently with the acceptance hereof, the City has duly authorized all necessary action to be taken by it for (i) the adoption of the Bond Resolution and the issuance and sale of the Bonds, (ii) the approval, execution and delivery of, and the performance by the City of the obligations on its part, contained in the Bonds and the City Documents and (iii) the consummation by it of all other transactions contemplated by the Official Statement, and the City Documents and any and all such other agreements and documents as may be required to be executed, delivered and/or received by the City in order to 5 (a) (c) THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. carry out, give effect to, and consummate the transactions contemplated herein and in the Official Statement; The City Documents constitute legal, valid and binding obligations of the City, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; the Bonds, when issued, delivered and paid for, in accordance with the Bond Resolution and this Agreement, will constitute legal, valid and binding obligations of the City entitled to the benefits of the, Bond Resolution and enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; upon the issuance, authentication and delivery of the Bonds as aforesaid, the Bond Resolution will provide, for the benefit of the holders, from time to time, of the Bonds, the legally valid and binding pledge of and lien it purports to create as set forth in the Bond Resolution; (d) The City is not in breach of or default in any material respect under any applicable constitutional provision, law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or to which the City is or any of its property or assets are otherwise subject, and no event has occurred and is continuing which constitutes or with the passage of time or the giving of notice, or both, would constitute a default or event of default by the City under any of the foregoing; and the execution and delivery of the Bonds, the City Documents and the adoption of the Bond Resolution and compliance with the provisions on the City's part contained therein, will not conflict with or constitute a breach of or default under any constitutional provision, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or to which the City is or to which any of its property or assets are otherwise subject nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City to be pledged to secure the Bonds or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Bond Resolution; 6 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. (e) All authorizations, approvals, licenses, permits, consents and orders of any governmentalauthority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the City of its obligations under the City Documents, and the Bonds have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any jurisdiction in connection with the offering and sale of the Bonds;. The Bonds conform to the descriptions thereof contained in the Official Statement under the captions ; the Bond Resolution conforms to the description thereof contained in the Official Statement under the caption(s) ; the proceeds of the sale of the Bonds will be applied generally as described in the Official Statement under the caption(s) and the Undertaking conforms to the description thereof contained in the Official Statement under the caption (g) There is no legislation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of the City after due inquiry, threatened against the City, affecting the existence of the City or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the lien on and pledge of the Pledged Funds and the covenant to budget and appropriate Non -Ad Valorem Revenues pursuant to the Bond Resolution or in any way contesting or affecting the validity or enforceability of -the Bonds, the City Documents or the Bond Resolution, or contesting the exclusion from gross income of interest on the Bonds for federal income tax purposes, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the powers of the City or any authority for the issuance of the Bonds, the adoption of the Bond Resolution or the execution and delivery of the City Documents, nor, to the best knowledge of the City, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds or the City Documents; (0 7 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. (h) As of the date thereof, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; At the time of the City's acceptance hereof and (unless the Official Statement is amended or supplemented pursuant to paragraph (d) of Section 3 of this Agreement) at all times subsequent thereto during the period up to and including the date of Closing, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (j) If the Official Statement is supplemented or amended pursuant to paragraph (d) of Section 3 of this Agreement, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the period up to and including the date of Closing, the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which made, not misleading; (k) The City will apply, or cause to be applied, the proceeds from the sale of the Bonds as provided in and subject to all of the terms and provisions of the Bond Resolution and not to take or omit to take any action which action or omission will adversely affect the exclusion from gross income for federal income tax purposes of the interest on the Bonds; (i) (1) The City will furnish such information and execute such instruments and take such action in cooperation with the Underwriters as the Representative may reasonably request (A) to (y) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions in the United States as the Representative may designate and (z) determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions and (B) to continue such qualifications in effect so long as required for the distribution of the Bonds (provided, however, that the City will not be required to qualify as a foreign corporation or to file any general or special consents to service of process under the 8 (m) THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. laws of any jurisdiction) and will advise the Representative immediately of receipt by the.City of any notification with respect to the suspension of the qualification of the Bonds for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose; The financial statements of and other financial information regarding the City in the Official Statement fairly present the financial position and results of the City as of the dates and for the periods therein set forth, Prior to the Closing, there will be no adverse change of a material nature in such financial position, results of operations or condition, financial or otherwise, of the City. The City is not a party to any litigation or other proceeding pending or, to its knowledge, threatened which, if decided adversely to the City, would have a materially adverse effect on the financial condition of the City; (n) Prior to the Closing the City will not offer or issue any bonds, notes or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by any of the revenues or assets which will secure or otherwise support the payment of the Bonds without the prior approval of the Representative; (o) Any certificate, signed by any official of the City authorized to do so in connection with the transactions contemplated by this Agreement, shall be deemed a representation and warranty by the City to the Underwriters as to the statements made therein; Other than as described in the Official Statement, since December 31, 1975, and at all times subsequent thereto up to and including the Date of Closing, the City has not been and will not be in default with respect to payment of the principal of, or interest on, any bonds or. other debt obligations that it has issued or will issue or that it has guaranteed or will guarantee (including bonds or other debt obligations for which it has served as a conduit City, such as the Bonds); (q) The City has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon; (r) The City will not take any action nor omit to take any action which would adversely affect the exclusion from gross income for federal (p) 9 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. income tax purposes of interest on the Note or Refunded Loans or the Bonds under the Code; and (s) The City is presently in compliance with its prior continuing disclosure undertakings entered into pursuant to the Rule over the past five years. S. Closing. (a) At 12:00 p.m., Eastern time, on , 2011, or at such other time and date as shall have been mutually agreed upon by the City and .the Representative (the "Closing"), the City will, subject to the terms and conditions hereof, deliver the Bonds to the Underwriters duly executed and authenticated, together with the other documents hereinafter mentioned, and the Underwriters will, subject to the terms and conditions hereof, accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 of this Agreement by a wire transfer payable in immediately available funds to the order of the City. Payment for the Bonds as aforesaid shall be made at the offices of Bond Counsel, or such other place as shall have been mutually agreed upon by the City and the Representative. (b) Delivery of the Bonds shall be made to The Depository Trust Company, New York, New York. The Bonds shalt be delivered in definitive fully registered form, bearing CUSIP numbers without coupons, with one Bond for each maturity of each series of the Bonds, registered in the name of Cede & Co., all as provided in the Bond .Resolution, and shall be.made available to the Representative at least one business day before the Closing for purposes of inspection_ 6. Closing Conditions. The Underwriters have entered into this Agreement in reliance upon the representations, warranties and agreements of the City contained herein, and in reliance upon the representations, warranties and agreements to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriters' obligations under this Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the City of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions, including the delivery by the City of such documents as are 10 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. enumerated herein, in form and substance reasonably satisfactory to the Representative: (a) The representations and warranties of the City contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) The City shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing; (c) At the. time of the Closing, (i) the City Documents and the Bonds shall be in full force and effect in the form heretofore approved by the Representative and shall not have been amended, modified or supplemented, and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Representative; and (ii) ail actions of the City required to be taken by the City shall be performed in order for Bond Counsel and Disclosure Counsel to deliver their respective opinions referred to hereafter; (d) At or prior to the Closing, the Bond Resolution shall have been duly adopted by the City and the City shall have duly executed and delivered and the registrar shall have duly authenticated the Bonds; (e) [At or prior to the Closing, the Bond Insurance Policy and [Reserve Account Insurance Policy/Reserve Account Letter of Credit] shall have been duly executed, issued and delivered by the Provider; (f) At the time of the Closing, there shall not have occurred any change or any development involving a prospective change in the condition, financial or otherwise, or in the revenues or operations of the City, from that set forth in the Official Statement that in the judgment of the Representative, is material and adverse and that makes it, in the judgment of the Representative, impracticable to market the Bonds on the terms and in the manner contemplated in the Official Statement; (g) The City shall not have failed to pay when due principal of or interest on any of its outstanding obligations for borrowed money; (h) Al] steps to be taken and al] instruments and other documents to be executed, and all other legal matters in connection with the 11 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. transactions contemplated by this Agreement shall be reasonably satisfactory in legal form and effect to the Representative; (i) At or prior to the Closing, the Underwriters shall have received copies of each of the following documents: (1) (2) The Official Statement, and each supplement or amendment thereto, if any, executed on behalf of the City by its City Manager, or such other official as may have been agreed to by the Representative, and the reports and audits referred to or appearing in the Official Statement; A certified copy of the Bond Resolution with such supplements or amendments as may have been agreed to by the Representative; The Undertaking of the City which satisfies the requirements of section (b)(5)(i) of the Rule (the "Undertaking"); (4) The Interlocal Agreement dated as of , 2011, between the City and the Community Redevelopment Agency for the Omni District (the "Omni CRA") and the [Amended and Restated Interlocal Agreement dated as of 2011,] among the City, the Omni CRA and Miami -Dade County, Florida (together, the "Interlocal Agreements"); (3) (5) the approving opinion of Bond Counsel with respect to the Bonds, in substantially the form attached to the Official Statement with a reliance opinion addressed to the Underwriters; (6) a supplemental opinion of Bond Counsel addressed to the Underwriters, substantially to the effect that: (i) the Bond Resolution has been duly adopted and is in full force and effect; (ii) the Bonds are exempted securities under the Securities Act of 1933, as amended (the "1933 Act"), and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and it is not necessary, in connection with the offering and sale of the Bonds, to register the Bonds under the 1933 Act or to qualify the Bond Resolution under the Trust Indenture Act; and I2 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. (iii) the statements and information contained in the Official Statement under the captions fairly and accurately summarized the matters purported to be summarized therein; the opinion of Disclosure Counsel addressed to the Underwriters, substantially to the effect that based on the examinations which they have made as Disclosure Counsel and their participation at conferences at which the Official Statement was discussed, but without having undertaken to determine independently the accuracy or completeness of the statements in the Official Statement, such counsel has no reason to believe that the Official Statement as of its date and as of the date hereof contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except for any financial, forecast, technical and statistical data included in the Official Statement and except for information regarding DTC and its book -entry system land information regarding the Provider] in each case as to which no view need be expressed); 1(8) An opinion, dated the date of the Closing and addressed to the Underwriters, of counsel for the Underwriters in form and substance satisfactory to the Underwriters;] (9) An opinion of the City Attorney of the City, addressed to the Underwriters, to the effect that: (i) The City is a municipal corporation duly created, organized and existing under the laws of the State. The City has full legal right, power and authority under the Act and the Bond Resolution (A) to enter into, execute and deliver the City Documents and all documents required hereunder and thereunder to be executed and delivered by the City, (B) to sell, issue and deliver the Bonds to the Underwriters as provided herein, (C) to pledge the Fledged Funds and covenant to budget and appropriate Non -Ad Valorem Revenues as provided in the Bond Resolution and (D) to carry out and consummate the transactions contemplated by the City Documents, and the Official Statement, and l3 (7) THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. the City has complied, and will at the Closing be in compliance in all respects, with the terms of the Act and the City Documents as they pertain to such transactions; (ii) By all necessary official action of the City prior to or concurrently with the acceptance hereof, the City has duly authorized all necessary action to be taken by it for (A) the adoption of the Bond Resolution and the issuance and sale of the Bonds, (B) the approval, execution and delivery of, and the performance by the City of the obligations on its part, contained in the Bonds, the City Documents and the Bond Resolution, (C) the pledge of the Pledged Funds and the covenant to budget and appropriate Non -Ad Valorem Revenues as provided in the Bond Resolution and (D) the consummation by it of all other transactions contemplated by the Official Statement, the City Documents, the Bond Resolution and any and all such other agreements and documents as may be required to be executed, delivered and/or received by the City in order to carry out, give effect to, and consummate the transactions contemplated herein and in the Official Statement; (iii) The Bond Resolution has been duly and validly adopted by the City and is in full force and effect; the Bond Resolution and all other proceedings pertinent to the validity and enforceability of the Bonds have been duly and validly adopted or undertaken in compliance with all applicable procedural requirements of the City and in compliance with the Constitution and laws of the State, including the Act; (iv) The City Documents have been duly authorized, executed and delivered by the City, and constitute legal, valid and binding obligations of the City enforceable against the City in accordance with their respective terms, except to the extent limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws and equitable principles of general application relating to or affecting the enforcement of creditors' rights; and the Bonds, when issued, l4 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. delivered and paid for, in accordance with the Bond Resolution and this Agreement, will constitute legal, valid and binding obligations of the City entitled to the benefits of the Bond Resolution and enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; upon the issuance, authentication and delivery of the Bonds as aforesaid, the Bond Resolution will provide, for the benefit of the holders, from time to time, of the Bonds, the legally valid and binding pledge of and lien on the Pledged Funds and the covenant to budget and appropriate Non -Ad Valorem Revenues it purports to create as set forth in the Bond Resolution; (v) The distribution of the Preliminary Official Statement and the Official Statement has been duly authorized by the City; (vi) Al] authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the City of its obligations under the City Documents and the Bonds have been obtained; (vii) There is no legislation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of the City, after due inquiry threatened against the City, affecting the corporate existence of the City or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the lien on an pledge of the Pledged Funds and the covenant to budget and appropriate Non -Ad Valorem Revenues pursuant to the Bond Resolution or in any way contesting or affecting the validity or enforceability of the Bonds, 15 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. the City Documents or the Bond Resolution, or contesting the exclusion from gross income of interest on the Bonds for federal income tax purposes, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the powers of the City or any authority for the issuance of the Bonds, the adoption of the Bond Resolution or the execution and delivery of the City Documents, nor, to the best knowledge of the City, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds, or the City Documents; (viii) The adoption of the Bond Resolution and the execution and delivery of the other City Documents and compliance by the City with the provisions hereof and thereof, under the circumstances contemplated herein and therein, will not conflict with or constitute on the part of the City a material breach of or a default under any agreement or instrument to which the City is a party, or violate any existing law, administrative regulation, court order, or consent decree to which the City is subject; and Based on the examination which such counsel has caused to be made and its participation at conferences at which the Preliminary Official Statement and the Official Statement were discussed, such counsel has no reason to believe that the Official Statement as of its date and as of the date hereof contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respect (except for any financial forecast, technical and statistical data included in the Official Statement and except for information regarding DTC and its book -entry system and information regarding the Provider, in each case as to which no view need be expressed; 16 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. (GO) A certificate, dated the date of Closing, of the City to the effect that (i) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) no litigation or proceeding against it is pending or, to its knowledge, threatened in any court or administrative body nor is there a basis for Iitigation which would (a) contest the right of the members or officials of the City to hold and exercise their respective positions, (b) contest the due organization and valid existence of the City, (c) contest the validity, due authorization and execution of the Bonds or the City Documents or (d) attempt to limit, enjoin or otherwise restrict or prevent the City from functioning or from collecting revenues, including payments on the Bonds, pursuant to the Bond Resolution, and other income; (iii) the Bond Resolution has been duly adopted by the City, is in full force and effect and has not been modified, amended or repealed, and (iv) to the best of its knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein, in light of the circumstances under which made, not misleading in any respect as of the time of Closing, and the information contained in the Official Statement is correct in all material respects and, as of the date of the Official Statement did not, and as of the date of the Closing does not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (1 I) A certificate of the City in form and substance satisfactory to Bond Counsel and counsel to the Underwriters (a) setting forth the facts, estimates and circumstances in existence on the date of the Closing, which establish that it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and any applicable regulations (whether final, temporary or proposed), issued pursuant to the Code, and (b) certifying that to the best of the 17 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. knowledge and belief of the City there are no other facts, estimates or circumstances that would materially change the conclusions, representations and expectations contained in such certificate; (12) Any other certificates and opinions required by the Bond Resolution for the issuance thereunder of the Bonds; (13) Evidence satisfactory to the Representative that the Bonds have been rated "," " " and " " by yMood 's , Standard & Poor's and Fitch Ratings, respectively, and that all such ratings are in effect as of the date of Closing; [(14) Copies of the Bond Insurance Policy and [Reserve Account Insurance Policy/Reserve Account Letter of Credit] together with an opinion of counsel to the Provider in form and substance satisfactory to the Representative; (15) A certificate of the Provider with respect to the accuracy of statements contained in the Official Statement regarding the Bond Insurance Policy, the [Reserve Account Insurance Policy/Reserve Account Letter of Credit] and the Provider and the due authorization execution issuance and delivery of the Bond Insurance Policy and the [Reserve Account Insurance Policy/Reserve Account Letter of Credit];) [(I6) Evidence that the Note and Refunded Loans have been paid at Closing; and] (17) Such additional legal opinions, certificates, instruments and other documents as the Representative or counsel to the Underwriters may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the dare of the Closing, of the City's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the City on or prior to the date of the Closing of all the respective agreements then to be performed and conditions then to be satisfied by the City. All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions 18 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. hereof if, but only if, they are in form and substance satisfactory to the Underwriters. If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds contained in this Agreement, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Agreement, this Agreement shall terminate and neither the Underwriters nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriters set forth in Sections 4 and 8(c) hereof shall continue in full force and effect. Termination. The Underwriters shall have the right to cancel their obligation to purchase the Bonds if, between the date of this Agreement and the Closing, the market price or marketability of the Bonds shall be materially adversely affected, in the sole judgment of the Representative, by the occurrence of any of the following: (a) legislation shall be enacted by or introduced in the Congress of the United States or recommended to the Congress for passage by the President of the United States, or the Treasury Department of the United States or the Internal Revenue Service or any member of the Congress or the state legislature or favorably reported for passage to either House of the Congress by any committee of such House to which such legislation has been referred for consideration, a decision by a court of the United States or of the State or the United States Tax Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed), press release, statement or other form of notice by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made or proposed, the effect of any or all of which would be to impose, directly or indirectly, federal income taxation or state income taxation upon interest received on obligations of the general character of the Bonds, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal income tax consequences or state income tax consequences of any of the transactions contemplated herein; (b) legislation is introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction is issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice is 19 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the 1933 Act, or that the Bond Resolution is not exempt from qualification under or other requirements of the Trust Indenture Act, or that the issuance, offering, or sale of obligations of the general character of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect; any state Blue Sky or securities commission or other governmental agency or body shall have withheld registration, exemption or clearance of the offering of the Bonds as described herein, or issued. a stop order or similar ruling relating thereto; (d) a general suspension of trading in securities on the New York Stock Exchange or the American Stock Exchange is imposed, minimum prices on either such exchange are established, material restrictions (not in force as of the date hereof) upon trading securities generally by any governmental authority or any national securities exchange are established, or a general banking moratorium is declared by federal, State of New York, or State officials authorized to do so; the New York Stock Exchange or other national securities exchange or any governmental authority; shall impose, as to the Bonds or as to obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, Underwriters; (f) any amendment is made to the federal or state Constitution or action by any federal or state court, legislative body, regulatory body, or other authority is taken materially adversely affecting the tax status of the City, its property, income securities (or interest thereon); any event occurring, or information becoming known which, in the Judgment of the Representative, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the. statements 20 (c) (e) (g) THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. therein, in the light of the circumstances under which they were made, not misleading; (h) there shall have occurred any materially adverse change in the affairs or financial condition of the City, except for changes which the Official Statement discloses are expected to occur; (i) the United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency or there shall have occurred any other outbreak or escalation of hostilities or a national or international calamity or crisis, financial or otherwise; (1) any fact or event shall exist or have existed that, in the Representative's judgment, requires or has required an amendment of or supplement to the Official Statement; (k) there shall have occurred or any notice shall have been given of any intended review, downgrading, suspension, withdrawal, or negative change in credit watch status by any national rating service to any of the City's obligations or any rating of the Provider; the purchase of and payment for the Bonds by the Underwriters, or the resale of the Bonds by the Underwriters, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission; negative information relating to the financial condition of the Provider, its parent or any subsidiary of it, is made available to the Underwriters, which, in the reasonable judgment of the Underwriters, could result in a downgrade of any of the ratings assigned to the Bonds, and which, in the opinion of the Underwriters materially adversely affects the market price of the Bonds; or (n) the Provider shall inform the Underwriters or the City that it will not insure the Bonds,] (i) 1(m) 8. Expenses. (a) The Underwriters shall be under no obligation to pay, and the City shall pay, any expenses incident to the performance of the City's obligations hereunder, including, but not limited to (i) the cost of preparation and printing of the Bonds, (ii) the fees and disbursements of Bond Counsel, Disclosure Counsel and counsel to the City; (iii) the fees and disbursements of the Financial Advisor to 2! THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. the City; (iv) the fees and disbursements of any other engineers, accountants, and other experts, consultants or advisers retained by the City; and (v) the fees for bond ratings land credit enhancement fees or premiums]. (b) The Underwriters shall pay (i) the cast of preparation and printing of this Agreement, the Blue Sky Survey and Legal Investment Memorandum; (ii) all advertising expenses in connection with the public offering of the Bonds; and (Hi) all other expenses incurred by them in connection with the public offering of the Bonds, including the fees and disbursements of counsel retained by the Underwriters. (c) If this Agreement shall be terminated by the Underwriters because of any failure or refusal on the part of the City to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the City shall be unable to perform its obligations under this Agreement, the City will reimburse the Underwriters for all out-of- pocket expenses (including the fees and disbursements of counsel to the Underwriters) reasonably incurred by the Underwriters in connection with this Agreement or the offering contemplated hereunder. 9. Notices, Any notice or other communication to be given to the City under this Agreement may be given by delivering the same in writing at City of Miami, 444 Southwest 2"a Avenue, Miami, FL 33130-1910, Attention: Tony E. Crapp, Jr., City Manager, and any notice or other communication to be given to the Underwriters under this Agreement may be given by delivering the same in writing to RBC CM at RBC Capital Markets, 801 Brickell Avenue, l5th Floor, Miami, Florida 33131, Attention: Richard Montalbano, Managing Director. 10. Parties in Interest. This Agreement as heretofore specified shall constitute the entire agreement between us and is made solely for the benefit of the City and the Underwriters (including successors or assigns of the Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof. This Agreement may not be assigned by the City. All of the City's representations, warranties and agreements contained in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of any of the Underwriters; (ii) delivery of and payment for the Bonds pursuant to this Agreement; and (iii) any termination of this Agreement. 22 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 11. Effectiveness. This Agreement shall become effective upon the acceptance hereof by the City and shall be valid and enforceable at the time of such acceptance. 12. Choice of Law. This Agreement shall be governed by and construed in accordance with the law of the State. 13. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any Constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatever. 14. Business Day. For purposes of this Agreement, "business day" means any day on which the New York Stock Exchange is open for trading. 15. Section Headings_ Section headings have been inserted in this Agreement as a matter of convenience of reference only, and it is agreed that such sectionheadings are not a part of this Agreement and will not be used in the interpretation of any provisions of this Agreement. 16. Counterparts. This Agreement may be executed in several counterparts each of which shall be regarded as an original (with the same effect as if the signatures thereto and hereto were upon the same document) and all of which shall constitute one and the same document. 23 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. If you agree with the foregoing, please sign the enclosed counterpart of this Agreement and return it to the Underwriters. This Agreement shall become a binding agreement between you and the Underwriters when at least the counterpart of this letter shall have been signed by or on behalf of each of the parties hereto. Respectfully submitted, RBC CAPITAL MARKETS, LLC By Name: Richard Montalbano Title: Managing Director Date: duly 2011 24 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. ACCEPTANCE ACCEPTED at [a.m./p.m.], Eastern time, this _ day ofJuly, 201 ] . By Name: Tony E. Crapp, Jr. Title: City Manager 25 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. SCHEDULEI LIST OF UNDERWRITERS RBC Capital Markets, LLC Bank of America Merrill Lynch Morgan Keegan & Company, Inc. Goldman, Sachs & Co. Raymond James & Associates, Inc. SCHEDULE 1-1 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 7 be cerpfr*d -6gAt2 e_ c-ev SCHEDULE II MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS AND PRICES Maturity Date Principal Interest (October I) Amount Rate Yield Price REDEMPTION PROVISIONS [TO COME] SCHEDULE 11-1 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. beA f2-e_atos-eftiftes) 1 SCHEDULE III DISCLOSURE LETTER AND TRUTH-LN-BONDING STATEMENT July 2011 City of Miami, Florida 444 Southwest 2nd Avenue Miami, FL 33130-1910 Attention: Tony E. Crapp, Jr., City Manager RE: $ City of Miami, Florida Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011 A & B Ladies and Gentlemen: In connection with the proposed issuance by the City of Miami, Florida (the "City") of its $ aggregate principal amount of City of Miami, Florida Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011 A & B (the "Series 2011 Bonds"), RBC Capital Markets, LLC, as representative of itself. and the other Underwriters (collectively, the "Underwriters") set forth in the Bond Purchase Agreement dated as of July , 2011 (the "Purchase Agreement"), is underwriting a public offering of the Series 2011 Bonds. All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement. The purpose of the following paragraphs of this letter is to furnish, pursuant to the provisions of Section 218.385, Florida Statutes, certain information in respect of the arrangements contemplated for the purchase and sale of the Series 2011 Bonds, as follows: 1. The nature and estimated amount of expenses to be incurred by the Underwriters in connection with the purchase and offering of the Series 2011 Bonds are set forth in Schedule A attached hereto. 2. There are no "finders," as defined in Section 218.386. Florida Statutes, connected with the sale and purchase of the Series 2011 Bonds. 3. The underwriting spread, the difference between the price at which the Series 2011 Bonds will be initially offered to the public by the Underwriters and the price SCHEDULE III-1 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. to be paid to the City for the Series 2011 Bonds, exclusive of accrued interest, will be approximately $ per $1,000 of Series 2011 Bonds issued. 4. As part of the estimated underwriting spread set forth in paragraph (3) above, the Underwriters will charge a management fee of $ per $1,000 of Series 2011 Bonds issued. 5. No other fee, bonus or other compensation is estimated to be paid by the Underwriters in connection with the issuance of the Series 2011 Bonds to any person not regularly employed or retained by the Underwriters (including any "finder" as defined in Section 218.386, Florida Statutes), except as specifically enumerated as expenses to be incurred by the Underwriters, as set forth in paragraph (1) above. 6. The names and addresses of the Underwriters are: RBC Capital Markets, LLC 3 World Financial Center - 200 Vesey Street, Suite 1200 New York, NY 10281-8098 Bank of America Merrill Lynch [ADDRESS] Morgan Keegan & Company, Inc. [ADDRESS] Goldman, Sachs & Co. [ADDRESS] Raymond James & Associates, Inc. [ADDRESS] 7. Based on representations of the City, it is our understanding that the City is proposing to issue $ in aggregate principal amount of the Series 2011 Bonds for the purposes of refunding certain indebtedness, funding a reserve account and paying certain costs and expenses relating to the issuance of the Series 2011 Bonds. The Series 2011 Bonds are expected to be repaid over a period of approximately years. At an interest rate of approximately %, total interest paid over the life of the Series 2011 Bonds will be $ 8. Based on representations of the City, it is our understanding that the Series 2011 Bonds will be payable from the Pledged Funds and a covenant to budget and appropriate Non -Ad Valorem Revenues in the manner provided in the Bond Resolution. The Series 2011 Bonds carry an average annual debt service of approximately SCHEDULE I11-2 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. $ Assuming the City pays debt service on the Series 2011 Bonds from the Non -Ad Valorem Revenues, such funds equal to $ will not be available to finance the other services of the City each year that the Series 2011 Bonds will be outstanding, which is approximately — years. Notwithstanding the foregoing, we are not accountants or actuaries, nor are we engaged in the practice of law. Accordingly, while we believe the above -described calculations to be correct, we do not warrant them to be so. Yours very truly, RBC CAPITAL MARKETS, LLC, as representative of the Underwriters By: Managing Director SCHEDULE 111-3 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF.THIS DOCUMENT. 775 be comelosted cepsetjCs SCHEDULE A UNDERWRITER'S ESTIMATED EXPENSES (Per $1,000 of Bonds) Dalnet Wire Dalnet Wire Charges DTC Charges Order Monitor Day Loan CUM' CUSHP Disclosure Fee Messengers/Travel/Miscellaneous Total SCHEDULE III-4 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. /0 be L.pd 4e.Air Nee EXHIBIT C FORM OF PRELIMINARY OFFICIAL STATEMENT C-1 MIAMI1426556.4.5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. PRELIMINARY OFFICIAL STATEMENT DATED MAY 2011 NEW ISSUE — BOOK -ENTRY ONLY BMO Draft #3 5/17/20I1 Fitch:" Moody's: " " S&P: " " (See '"RATINGS" herein) In the opinion of Squire, Sanders & Dempsey (LIS) LLP, Bond Counsel, under existing law (0 assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Series 20I1 Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations the Series 201I Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Interest on the Series 2011 Bonds may be subject to certain federal taxes imposed only on certain corporations. For a more complete discussion of the tax aspects, see "TAX MATTERS" herein. $80,000,000* THE CITY OF MIAMI, FLORIDA SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS SERIES 2011A $60,000,000* THE CITY OF MIAMI, FLORIDA SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS SERIES 20110 Dated: Date of Delivery Due: February 1, as shown on inside cover The Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011A (the "Series 2011A Bonds") and the Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 20118 (the "Series 201113 Bonds") and together with the Series 2011 A Bonds are collectively refer, eel to herein as the "Series 2011 Bonds") are being issued by the City of Miami, Florida (the "City") pursuant to the Constitution and laws of the State of Florida, including Chapter 166, Part II, Florida Statutes, the Charter of the City, and other applicable provisions of law (the "Act") and pursuant to Resolution No. of the City adopted by the City Commission of the City on May 26, 2011 (the "Resolution"). The Series 2011A Bonds are being issued for the purpose of (i) refunding all or a portion of the Refunded Loans (as defined herein), on a current refunding basis; (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account, Insurance Policy for the Series 2011 A Bonds and (iii) paying certain costs and expenses incurred in connection with the issuance of the Series 2011A Bonds, iincluding the premiums for a municipal bond insurance policy and Reserve Account Insurance Policy, if necessary. The Series 2011E Bonds are being issued for the purpose of (i) refinancing the City's outstanding $50,000,000 aggregate principal amount of Revenue Note, Series 2010 (Port of Miami Tunnel and Access Improvement Project) plus accrued interest; (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011B Bonds and (iii) paying certain costs and expenses incurred in connection with the issuance of the Series 2011.13 Bonds, including the premiums for a municipal bond insurance policy and Reserve Account Insurance Policy, if necessary. THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The Series 2011 Bonds are being issued by the City as fully registered bonds, which initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (DTC). Interest on the Series 2011 Bonds will be payable semi-annually on February 1 and August 1, commencing February 1, 2012. Individual purchases will be made in book -entry form only through participants in authorized denominations in the amounts of 55,000 or integrals thereof. Purchasers of the Series 2011 Bonds (the "Beneficial Owners") will not receive physical delivery of certificates. Transfers of ownership interests in the Series 2011 Bonds will be effected through 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 for subsequent disbursement to the Beneficial Owners. Principal of and. interest on the Series 2011 Bonds will be payable by Regions Bank, Jacksonville, Florida, as Bond Registrar. Certain maturities of the Series 2011 Bonds are subject to optional redemption prior to their respective maturities, as described herein under "DESCRIPTION OF THE SERIES 2011 BONDS- Optional Redemption." The Series 2011A Bonds are payable from and secured by a lien upon and pledge of the Series 2011A Pledged Funds. The Series 2011 B Bonds are payable from and secured by a lien upon and pledge of the Series 2011B Pledged Funds. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS" and "INVESTMENT RISKS" herein. Ti-IE CITY I5 NOT OBLIGATED TO PAY THE SERIES 2011 BONDS OR THE INTEREST THEREON EXCEPT FROM THE APPLICABLE PLEDGED FUNDS, AS HEREAFTER DEFINED. THE ISSUANCE OF THE SERIES 2011 BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE CITY TO LEVY DR TO PLEDGE ANY TAXES WHATEVER THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT EXCEPT FROM THE APPLICABLE PLEDGED FUNDS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, MIAMI-DADE COUNTY, FLORIDA, THE STATE OF FLORIDA OR ANY OTHER POLITICAL SUBDIVISION THEREOF IS PLEDGED TO PAYMENT OF THE SERIES 20I1 BONDS. This cover page contains certain information for quick reference only. It is not a summary of the issue. investors must read the entire Official Statement to obtain information essential to making an informed investment decision. [The scheduled payment of principal of and interest on the Series 2011 Bonds when due will be guaranteed by a municipal bond insurance policy to be issued concurrently with the delivery of the Series 2011 Bonds by Assured Guaranty Municipal Corp (the "Insurer").] [Insert Lugo] The Series 20I1 Bonds are offered when, as, and if issued and received by the Underwriters, subject to the opinion an certain legal matters relating to their issuance by Squire, Sanders & Dempsey (US) LLP, Miami, Florida, Bond Counsel. Certain legal matters will be passed upon for the City by Julie 0. Box, Esq., City Attorney mud 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, Nabors, Giblin & Nickerson P.A., Tampa, Florida. First Southwest Company, Aventura, Florida is serving as Financial Advisor to the City. It is expected that the Series 202I 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 2072. RBC CAPITAL MARKETS Befit MERRILL LYNCH GOLDMAN SACHS & CO. MORGAN KEEGAN & COMPANY, INC RAYMOND JAMES &ASSOCIATES, II1ic Dated: . 2011 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. "Preliminary, subject to change. THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. $ SERIES 2011A BONDS MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, PRICES AND INITIAL CUSIP NUMBERS Maturity Principal Initial CUSIP (February 1) mount Interest Rate Yield Price Number $ SERIES 2011E BONDS MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, PRICES AND INITIAL CUSIP NUMBERS Maturity Principal Initial CUSIP fFebruary 1) Amount Interest Rate Yield rice Number THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. THE CITY OF MIAMI, FLORIDA MAYOR Tomas A. Regaledo CITY COMMISSIONERS Wifredo Gort, Chairman Frank Carollo, Vice Chair Mark Sarnoff Francis Suarez Richard Dunn CITY MANAGER Tony E. Crapp, Jr. CHIEF FINANCIAL OFFICER Larry Spring FINANCE DIRECTOR Diana M. Gomez CITY ATTORNEY Julie O. Sru, Esq. BOND COUNSEL Squire, Sanders & Dempsey (US) LLP. Miami, Horida DISCLOSURE COUNSEL Bryant Miller Olive P.A. Miami, Florida FINANCIAL ADVISOR First Southwest Company Aventura, Florida THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 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 2011 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 2011 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 hasbeenobtained from the City, DTCand other sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness by and is not to be construed as a representation by the Underwriters. The Underwriters listed on the cover page hereof have reviewed the information in this Official Statement in accordance with and as part of their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion stated herein are subject to change. [THE INFORMATION RELATING TO THE INSURER CONTAINED HEREIN HAS BEEN FURNISHED BY THE INSURER. NO REPRESENTATION I5 MADE 8Y THE CITY NOR THE UNDERWRITERS AS TO THE ACCURACY OR ADEQUACY OF SUCH INFORMATION OR THAT THERE HAS NOT BEEN ANY MATERIAL ADVERSE CHANGE IN SUCH INFORMATION SUBSEQUENT TO THE DATE OF SUCH INFORMATION. NEITHER THE CITY NOR THE UNDERWRITERS HAVE MADE ANY INVESTIGATION INTO THE FINANCIAL CONDITION OF THE INSURER, AND NO REPRESENTATION IS MADE AS TO THE ABILITY OF THE INSURER TO MEET ITS OBLIGATIONS UNDER THE MUNICIPAL BOND INSURANCE POLICY, The Insurer makes no representation regarding the Series 2011 Bonds or the advisability of investing in the Series 2011 Bonds. In addition, the Insurer has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding the Insurer, supplied by the Insurer, and presented under the heading "MUNICIPAL BOND INSURANCE" and in "APPENDIX F — SPECIMEN MUNICIPAL BOND INSURANCE POLICY"" attached hereto.' 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 2011 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 2011 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC) OR WIT1-1 ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2011 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY, THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS PRELIMINARY OFFICIAL STATEMENT IS IN A FORM DEEMED FINAL BY THE C II Y FOR PURPOSES OF RULE 15C2-12 ISSUED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT FOR CERTAIN INFORMATION PERMITTED TO BE OMITTED PURSUANT TO SUCH RULE. THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. RED HERR[NG LANGUAGE: This Preliminary Official Statement and the information contained herein are subject to completion or amendment. The Series 2011 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 2011 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. THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. TABLE OF CONTENTS Contents Eau INTRODUCTION THE REFUNDING PLAN 2 ESTIMATED SOURCES AND USES OF FUNDS 3 DEBT SERVICE SCHEDULES 4 DESCRIPTION OF THE SERIES 2011 BONDS 4 General 4 Book -Entry Only System 5 Optional Redemption 7 Mandatory Redemption 7 Notice of Redemption 8 Replacement of Bonds Mutilated. Destroyed, Stolen or Lost 9 Negotiability, Registration and Cancellation 9 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2003 BOND 11 General 11 Debt Service Reserve Account 14 Other Revenue and Financing Sources 19 MUNICIPAL BOND INSURANCE 27 RESERVE PRODUCT 27 GENERAL INFORMATION REGARDING THE CITY OF MIAMI 29 Background 29 City Government 29 Ability to be Sued, judgments Enforceable 34 Indebtedness of the City 34 LEGAL MATTERS 45 LITIGATION 46 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS 48 TAX MATTERS 48 RATINGS 50 FINANCIAL ADVISOR 51 AUDITED FINANCIAL STATEMENTS 51 UNDERWRITING 51 CONTINGENT FEES 51 ENFORCEABILITY OF REMEDIES 51 CONTINUING DISCLOSURE 52 ACCURACY AND COMPLETENESS OF PRELIMINARY OFFICIAL STATEMENT 52 FORWARD -LOOKING STATEMENTS 53 MISCELLANEOUS 53 AUTHORIZATION OF PRELIMINARY OFFICIAL STATEMENT 54 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. APPENDICES APPENDIX A: APPENDIX B: APPENDIX C: APPENDIX D: APPENDIX E: APPENDIX F: GENERAL INFORMATION REGARDING THE CITY OF MIAMI AND MIAMI-DADE COUNTY FORM OF THE BOND RESOLUTION GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010 FORM OF BOND COUNSEL OPINION FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT SPECIMEN MUNICIPAL BOND INSURANCE POLICY THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. PRELIMINARY OFFICIAL STATEMENT relating to THE CITY OF MIAMI, FLORIDA SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS SERIES 2011A $ " THE CITY OF MIAMI, FLORIDA SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS SERIES 2011E INTRODUCTION The purpose of this Preliminary Official Statement, including the cover page and appendices, is to set forth information concerning the Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011A (the "Series 2011A Bonds") and the Special Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011B (the "Series 20116 Bonds") and together with the Series 2011A Bonds are collectively referred to herein as the "Series 2011 Bonds"). The City is situated at the mouth of the Miami River on the western shores of Biscayne Bay. It is the county seat of Miami -Dade County, Florida. The City comprises 34.3 square miles of land and 19.5 square miles of water. The City's diversified economic base is comprised of light manufacturing, trade, commerce, wholesale, and retail trade and tourism. For more information about the City, see "APPENDIX A - GENERAL INFORMATION REGARDING THE CITY OF MIAMI AND MIAM1-DARE COUNTY, FLORIDA" attached hereto. The Series 2011 Bonds are being issued pursuant to the Constitution and Iaws of the State of Florida, including Chapter 166, Part II, Florida Statutes, the Charter of the City, and other applicable provisions of law (the "Act") and pursuant to Resolution No, of the City adopted by the City Commission of the City on May 26, 2011 (the "Resolution"). The Series 2011A Bonds are being issued for the purpose of (i) refunding all or a portion of the following Ioans on a cur -rent refunding basis: (a) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of September 30, 1987 issued in the original amount of $20,800,000, currently outstanding in the principal amount of $4,349,000, (b) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of January 27, 1988 issued in the original amount of $150,000, currently outstanding in the principal amount of $32,000, (c) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of May 31, 1988 issued in the original amount of $6,680,900, currently outstanding in the principal amount of $1,470,500, (d) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of June 30, 1995 issued in the original amount of $3,500,000, currently outstanding in the principal amount of $920,000, (e) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of October 3, 2007 issued in the original amount of $6,600,000, currently outstanding in the principal amount of 56,600,000, (f) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of August 14, 2008 issued in the original amount of S42,500,000, currently outstanding in the principal amount of $42,500,000, and (g) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as of March 25, 2009 issued in the original amount 'Preliminary, subject to change. 1 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. of $20,000,000, currently outstanding in the principal amount of $12,700,000 (collectively, the "Refunded Loans"); (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011A Bonds and (iii) paying certain costs and expenses incurred in connection with the issuance of the Series 2011A Bonds, including the premiums for a municipal bond insurance policy and Reserve Account Insurance Policy, if necessary. See "THE REFUNDING PLAN" herein. The Series 2011B Bonds are being issued for the purpose of (i) refinancing the City's outstanding $50,000,000 aggregate principal amount of Revenue Note, Series 2010 (Port of Miami Tunnel and Access Improvement Project) (the "Note"); (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account insurance Policy for the Series 2011B Bonds and (iii) paying certain costs and expenses incurred in connection with the issuance of the Series 2011B Bonds including the premiums for a municipal bond insurance policy and Reserve Account Insurance Policy. See "THE REFUNDING PLAN" herein, if necessary. The Series 2011 Bonds and any redemption premiums with respect thereto and the interest thereon shall not be or constitute a general debt, liability or obligation of the City or the State of Florida or any political subdivision thereof, or a pledge of the faith and credit of the City or of the State of Florida or any political subdivision thereof, but shall be payable solely from and secured by a lien upon and a pledge of the applicable Pledged Funds and the City is not obligated to pay the Series 2011 Bonds, the redemption premiums, if any, related thereto or the interest thereon except from the applicable Pledged Funds as provided in the Resolution. Neither the faith and credit nor the taxing power of the City or of the State of Florida or any political subdivision thereof is pledged to the payment of the Series 2011 Bonds. No Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power of the City or taxation in any form on any property to pay such Series 2011 Bonds or the interest thereon, nor shall such Bondholder be entitled to payment of such principal and interest or premium thereon from any other funds of the City except the applicable Pledged Funds as provided in the Resolution. [Payment of the principal of and interest on the Series 2011 Bonds will be guaranteed by a municipal bond insurance policy to be issued simultaneously with the delivery of the Series 2011 Bonds by (the "Insurer").] The summaries of and references to all documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by reference to each such document, statute, report or instrument. All capitalized terms used in this Preliminary Official Statement and not otherwise defined herein have the meanings set forth in the Resolution, unless the context would dearly indicate otherwise. A copy of the Resolution is attached hereto as "APPENDIX B -FORM OF THE BOND 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. THE REFUNDING PLAN The City has determined that it can restructure its annual debt service payments by providing for the refinancing of all of the Refunded Loans and the Note. The refunding of the Refunded Loans will be accomplished through the issuance of the Series 2011A Bonds and the use of a portion of the proceeds thereof. The refinancing of the Note will be accomplished through the issuance of the Series 2011 B Bonds and 2 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. the use of a portion of the proceeds thereof. Upon delivery of the Series 2011A Bonds, the Refunded Loans will be immediateIy paid off and upon delivery of the Series2011B Bonds, the Note will be immediately paid. ESTIMATED SOURCES AND USES OF FUNDS The table that follows summarizes the estimated sources and uses of funds to be derived from the sale of the Series 2011 Bonds: SOURCES: Principal Amount of Series 2011 Bonds [Plus/Minus Original Issue Premium/Discount] Available Monies» TOTAL SOURCES USES: Deposit to trustee for Refunded Loans Deposit to holder of Note [Deposit to applicable subaccount of the Debt Service Reserve Account] Costs of Lssuanc TOTAL USES Series Series 2011A 2011E Bonds Bonds Total $ $ $ $ $ $ $ $ $ $ $ $ $ S $ $ $ $ $ $ $ 11" Monies from the applicable Debt Service Fund relating to the Refunded Loans and Note. ao Includes underwriters' discount [insurance, surety], financial advisory and legal fees and expenses, rating agencies and miscellaneous costs of issuance. [Remainder of page intentionally left blank] 3 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. DEBT SERVICE SCHEDULES The following table sets forth the debt service requirements for the Series 2011 Bonds. Series 2011A Bonds Series 2011B Bonds Series Maturity 201I Bond (February 1) Principal Interest Total Principal Interest ti al Total DESCRIPTION OF THE SERIES 2011 BONDS General The Series 2011 Bonds shall be issued as fully registered, book -entry only bonds in the denomination of $5,000 each or any integral multiple thereof through the book -entry only system maintained by The Depository Trust Company, New York, New York. The Series 2071A Bonds shall be numbered consecutively from I upward preceded by the letter "RA" prefixed to the number and the Series 2011B Bonds shall be numbered consecutively from 1 upward precluded by the letter "RI3" prefixed to the number. The principal of and redemption premium, if any, on the Series 2011 Bonds shall be payable upon presentation and surrender at the principal office of Regions Bank, Jacksonville, Florida, (the 'Bond Registrar"). Interest on the Series 2011 Bonds is payable semi-annually on February 1 and August 1 of each year, commencing February 1, 2012 and shall be paid by check or draft drawn upon the Bond Registrar and mailed to the registered owners of the Series 2011 Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar at the close of business on the 15th day (whether or not a business day) of the month next preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Series 2011 Bonds subsequent to such Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date; provided, however, that (i) if ownership of Series 2011 Bonds is maintained in a book -entry only system by a securities depository, such payment may be made by automatic funds transfer (wire) to such securities depository or its nominee or (u) if such Series 2011 Bonds are not maintained in a book -entry only system by a securities depository, upon written request of the holder of $1,000,000 or more in principal amount of Series 2011 Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such Holder (such bank being a bank within the continental United States), if such Holder has advanced to the Bond Registrar the 4 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. amount necessary to pay the cost of such wire transfer or authorized the Bond Registrar to deduct the cost of such wire transfer from the payment due such Holder. Notwithstanding anything in this paragraph to the contrary, any interest not punctually paid an a Regular Record Date shall forthwith cease to be payable to the Holder on such Regular Record Date and may be paid at the close of business on a special record date for the payment of such defaulted interest to be fixed by the bond Registrar, notice of which shall be given not less than 10 days prior to such special record date to such Holder. 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 2011 Bonds. The Series 2011 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 2011 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 US. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that dear 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.conl and www.dtc.org. Purchases of Series 2011 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2011 Bonds on DTCs records. The ownership interest of each actual purchaser of each Series 2011 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 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 2011 5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2011 Bonds, except in the event that use of the book -entry system for the Series 2011 Bonds is discontinued. To facilitate subsequent transfers, all Series 2011 Bonds deposited by Direct Participants with DTC are registered in the name of DTCs partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2011 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 2011 Bonds; DTCs records reflect only the identity of the Direct Participants to whose accounts such Series 2011 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 arty statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2011 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2011 Bonds, such as redemptions and proposed amendments to the Series 2011 Bond documents. For example, Beneficial Owners of Series 2011 Bonds may wish to ascertain that the nominee holding the Series 2011 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 2011 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 2011 Bonds unless authorized by a Direct Participant in accordance with DTC's IvIMI 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 2011 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 2011 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 an the payable date in accordance with their respective holdings shown on OTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with Series 2011 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 Bond Registrar or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal 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 Bond Registrar, disbursement of such payments to Direct Participants wilt be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 6 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. DTC may discontinue providing its services as securities depository with respect to the Series 2011 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 2011 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 2011 Bond certificates will be printed and delivered to DTC. Thereafter, Series 2011 Bond certificates may be transferred and exchanged as described in the Resolution. See "-Registration, Transfer and Exchange" herein, THE CITY AND THE BOND REGISTRAR 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 2011 BONDS, FOR THE ACCURACY OF RECORDS OF DTC, CEDE & CO, OR ANY DTC PARTICIPANT WITH RESPECT TO THE SERIES 2011 BONDS OR THE PROVIDING OF NOTICE OR PAYMENT OF PRINCIPAL OR INTEREST ON THE SERIES 2011 BONDS, TO DTC PARTICIPANTS OR BENEFICIAL OWNERS, OR THE SELECTION OF SERIES 2011 BONDS FOR REDEMPTION. Optional Redemption The Series 2021A Bonds. The Series 2011A Bonds maturing on or prior to February 1 are not redeemable prior to their respective dates of maturity. The Series 2011A Bonds maturing on and after February 1, ,, are subject to redemption at the option of the City on or after February 1, , in whole or in part at any time, in such manner as shall be determined by the Bond Registrar, at a redemption price equal to the par amount thereof plus accrued interest to the date fixed for redemption. The Series 20118 Bonds. The Series 2011B Bonds maturing on or prior to February 1, are not redeemable prior to their respective dates of maturity. The Series 2011E Bonds maturing on and after February 1, , are subject to redemption at the option of the City on or after February 1, , in whole or in part at any time, in such manner as shall be determined by the Bond Registrar, at a redemption price equal to the par amount thereof plus accrued interest to the date fixed for redemption. Mandatory Redemption The Series 2011A Bonds. The Series 2011A Bonds maturing on February 1, _ will be subject to mandatory redemption prior to maturity, by lot, in such manner as the Bond Registrar may deem appropriate, at a redemption price equal to par plus accrued interest to the redemption date, on February 1, _ and on each February 1 thereafter, from moneys deposited in the Sinking Fund, in the following Amortization Requirements in the years specified: Year Amortization Requirements 'Maturity 7 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The Series 2011E Bonds. The Series 2011B Bonds maturing on February 1, will be subject to mandatory redemption prior to maturity, by lot, in such manner as the Bond Registrar may deem appropriate, at a redemption price equal to par plus accrued interest to the redemption date, on February 1, and on each February 1 thereafter, from moneys deposited in the Sinking Fund, in the following Amortization Requirements in the years specified: Year Amortization Requirements `Maturity Notice of Redemption Notice of redemption for Series 2011 Bonds being redeemed shall be given by deposit in the U.S. mail 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 2011 Bonds or portions of the Series 2011 Bonds to be redeemed at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof. Failure to mail any such notice to a registered owner of a Series 2011 Bond, or any defect therein, shall not affect the validity of the proceedings for redemption of any Series2011 Bond or portion thereof with respect to which no failure or defect occurred. Such notice shall set forth the date fixed for redemption, the rate of interest borne by each Series 2011 Bond being redeemed, the name and address of the Bond Registrar, the redemption price to be paid and, if less than all of the Series 2011 Bonds of a series then Outstanding shall be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of such Series 2011 Bonds to be redeemed and, in the case of Series 2011 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Series 2011 Bond is to be redeemed in part only, the notice of redemption which relates to such Series 2011 Bond shaII also state that on or after the redemption date, upon surrender of such Series 2011 Bond, a new Series 2011 Bond or Series 2011 Bonds in a principal amount equal to the unredeemed portion of such Series 2011 Bond will be issued. The optional redemption of the Series 2011 Bonds, if any, may be conditioned upon the receipt by the Bond Registrar of sufficient moneys to pay the redemption price of the Series 2011 Bonds to be redeemed. If the optional redemption of any of the Series 2011 Bonds is conditioned upon the receipt of sufficient moneys as described above, the notice of redemption which relates to such Series 2011 Bonds shall also state that the redemption is so conditioned. Any notice mailed as provided in this section shall be conclusively presumed to have been duly given, whether or not the owner of such Series 2011 Bond receives such notice. 8 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Notice having been given in the manner and under the conditions hereinabove provided, the Series 2011 Bonds or portions of Series 2011 Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption for such Series 2011 Bonds or portions of Series 2011 Bonds on such date; provided, however, that Series 2011 Bonds or portion of Series 2011 Bonds called for optional redemption and which redemption is conditioned upon the receipt of sufficient moneys as described above, shall not become due and payable on the redemption date if sufficient moneys to pay the redemption price of such Series 2011 Bonds or portions of Series 2011 Bonds have not been received by the Bond Registrar on or prior to the redemption date. On the date so designated for redemption, moneys for payment of the redemption price being held in separate accounts by the Bond Registrar in trust for the registered owners of the Series 2011 Bonds or portions thereof to be redeemed, all as provided in the Resolution, interest on the Series 2011 Bonds or portions of Series 2011 Bonds so called for redemption shall cease to accrue, such Series 2011 Bonds and portions of Series 2011 Bonds shall cease to be entitled to any lien, benefit or security under the Resolution and shall be deemed paid hereunder, and the registered owners of such Series 2011 Bonds or portions of Series 2011 Bonds shall have no right in respect thereof except to receive payment of the redemption price thereof and, to the extent provided below, to receive Series 2011 Bonds for any unredeemed portions of the Series 2011 Bonds. In case part but not ail of a Series 2011 Bond shall be selected for redemption, the registered owners thereof shall present and surrender such Series 2011 Bond to the Bond Registrar for payment of the principal amount thereof so called for redemption, and the City shall execute and deliver to or upon the order of such registered owner, without charge therefor, for the unredeemed balance of the principal amount of the Series 2011 Bonds so surrendered, a Series 2011 Bond or Series 2011 Bonds fully registered as to principal and interest. Replacement of Bonds Mutilated, Destroyed, Stolen or Lost In case any Series 2011 Bond shall become mutilated, destroyed, stolen or lost, the City may execute and the Bond Registrar shall authenticate and deliver a new Series 2011 Bond of like series, maturity, denomination and interest rate as the Series 2011 Bond so mutilated, destroyed, stolen or lost; provided that, in the case of any mutilated Series 2011 Bond, such mutilated Series 2011 Bond shall first be surrendered to the City and, in the case of any lost, stolen or destroyed Series 2011 Bond, there shall first be furnished to the City and the Bond Registrar evidence of such loss, theft, or destruction satisfactory to the City and the Bond Registrar, together with indemnity satisfactory to them. In the event any such Series 2011 Bond shall be about to mature or has matured or has been called for redemption, instead of issuing a duplicate Series 2011 Bond, the City may direct the Bond Registrar to pay the same without surrender thereof. The City and Bond Registrar may charge the Holder of such Series 2011 Bonds their reasonable fees and expenses in connection with this transaction. Any Series 20I1 Bond surrendered for replacement shalt be canceled in the same manner as provided in Resolution. Any such duplicate Series 2011 Bonds issued pursuant to the Resolution shall constitute additional contractual obligations on the part of the City, whether or not the Iost, stolen or destroyed Series 2011 Bonds be at any time found by anyone, and such duplicate Series 2011 Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the applicable Pledged Funds, with all other Series 2011 Bonds issued under the Resolution. Negotiability, Registration and Cancellation At the option of the Holder thereof and upon surrender thereof at the designated corporate trust office of the Bond Registrar with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Holder or his duly authorized attorney and upon payment by such Holder of any charges 9 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. which the Bond Registrar or the City may make as provided in this Section, the Series 2011 Bonds may be exchanged for Series 2011 Bonds of the sarne series, aggregate principal amount of the same maturity of any other authorized denominations. The Bond Registrar shall keep books for the registration of Series 2011 Bonds and for the registration of transfers of Series 2011 Bonds. The Series 2011 Bonds shall be transferable by the Holder thereof in person or by his attorney duly authorized in writing only upon the books of the City kept by the Bond Registrar and only upon surrender thereof together with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Holder or his duly authorized attorney. Upon the transfer of any such Series 2011 Bond, the City shall cause to be issued in the name of the transferee a new Series 2011 Bond or Series 2011 Bonds, The City, the Bond Registrar and any other fiduciaries may deem and treat the person in whose name any Series 2011 Bond shall be registered upon the books kept by the Bond Registrar as the absolute Holder of such Series 2011 Bond, whether such Series 2011 Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of, redemption premium, if any, and interest on such Series 2011 Bond as the same becomes due and for all other purposes. All such payments so made to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Series 2011 Bond to the extent of the sum or sums so paid, and neither the City, the Bond Registrar nor any other fiduciary shall be affected by any notice to the contrary, In all cases in which the privilege of exchanging Series 2011 Bonds or transferring Series 2011 Bonds is exercised, the City shall execute and the Bond Registrar shall authenticate and deliver Bonds in accordance with the provisions of the Resolution. All Series 2011 Bonds surrendered in any such exchanges or transfers shall forthwith be delivered to the Bond Registrar and canceled by the Bond Registrar in the manner provided in this Section. There shall be no charge for any such exchange or transfer of Series 2011 Bonds, but the City or the Bond Registrar may require the payment of a sum sufficient to pay any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Neither the City nor the Bond Registrar shall be required (a) to transfer or exchange Series 2011 Bonds for a period of 15 days next preceding any selection of Series 2011 Bonds to be redeemed or thereafter until after the mailing of any notice of redemption; or (b) to transfer or exchange any Series 2011 Bonds called for redemption. All Series 2011 Bonds paid or redeemed, either at or before maturity shall be delivered to the Bond Registrar when such payment or redemption is made, and such Series 2011 Bonds, together with all Series 2011 Bonds purchased by the City, shall thereupon be promptly canceled. Series 2011 Bonds so canceled may at any time be destroyed by the Bond Registrar, who shall execute a certification of destruction in duplicate by the signature of one of its authorized officers describing the Series 2011 Bonds so destroyed, and one executed certificate shall be filed with the City and the other executed certificate shafI be retained by the Bond Registrar. 10 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS General Payment of the principal of, premium, if any, and interest on the Series 2011A Bonds shall be secured by a lien upon and pledge of the Series 2011A Pledged Funds and the payment of the principal of, premium, if any, and interest of the Series 2011B Bands shall be secured by a lien upon and pledge of the Series 2011E Pledged Funds. The "Series 201IA Pledged Funds" are defined in the Resolution to mean collectively, all moneys, securities and instruments held in the subaccounts Funds and Accounts created and established under the Resolution for the Series 2011A Bonds. The "Series 2011B Pledged Funds" are defined in the Resolution to mean collectively, all moneys, securities and instruments held in the subaccounts Funds and Accounts created and established under the Resolution for the Series 2011 B Bonds. The Series 2011A Pledged Funds and the Series 2011E Pledged Funds shall collectively herein be referred as the "Pledged Funds". As more particularly described in the following paragraph, the City has covenanted in the Resolution to budget and appropriate, by amendment if necessary, and to deposit into the Sinking Fund, Non -Ad Valorem Revenues lawfully available in each Fiscal Year , amounts sufficient to satisfy the (i) Annual Debt Service Requirement for such Fiscal Year , (it) any deposits required to be made into the Debt Service Reserve Account during such Fiscal Year, (iii) any other amounts due the Providers of any Bond Insurance Policy, Reserve Account Insurance Policy or Reserve Account Letter of Credit and the Bond Registrar during such Fiscal Year and (iv) any Rebate Amount due during such Fiscal Year as provided in the Resolution. "Non -Ad Valorem Revenues" are defined in the Resolution to mean all revenues of the City derived from any source whatsoever, other than ad valorem taxation on real or personal property, which are legally available to make the payments required under the Resolution. [However for purposes of calculation of the test required for issuing additional debt secured by or payable from the Pledged Funds, CRA Interlocal Revenues shall not be considered Non -Ad Valorem Revenues. "CRA Interlocal Revenues" are defined in the Resolution to mean those revenues of the OMNI CRA paid to the City pursuant to the Interlocal Agreement dated June 24,1996 among the City, Miami -Dade County, Florida and the Omni CRA, as amended, to be used to pay the principal of and interest on the Series 2011B Bonds andfor to make required deposits into the subaccounts of the Debt Service Reserve Account corresponding to the Series 2011E Bonds, which revenues shall not be considered Non -Ad Valorem Revenues for purposes of calculation of the test required for issuing additional debt secured by or payable from the Non -Ad Valorem Revenues. Such covenant to budget and appropriate does not create any lien upon or pledge of such Non -Ad Valorem Revenues, nor does it preclude the City from pledging in the future its Non -Ad Valorem Revenues, nor does it require the City to levy and collect any particular Non -Ad Valorem Revenues, nor does it give the Bondholders, the Providers of any Bond Insurance Policy, Reserve Account Insurance Policy or Reserve Account Letter of Credit or the Bond Registrar a prior claim on the Non -Ad Valorem Revenues as opposed to claims of general creditors of the City. Such covenant to budget and appropriate Non -Ad Valorem Revenues is subject in all respects to the payment of obligations secured by a pledge of such Non -Ad Valorem Revenues heretofore or hereinafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant to budget and appropriate in its general annual budget for the purposes and in the manner stated herein shall have the effect of making available in the manner described herein 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 obligations hereunder; subject, however, in all respects to the restrictions of Section 166.241(3), 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. 11 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The Resolution established a Sinking Fund, and within the Sinking Fund, four separate accounts therein designated as the Interest Account, the Principal Account, the Bond Redemption Account and the Debt Service Reserve Account. There is further created within each account, a separate subaccount for the Series 2011A Bonds and for the Series 2011E Bonds. 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 2011 Bonds, shall be applied in the following manner; 1. To the full extent necessary, for deposit into each subaccount of 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 2011 Bonds on each such Interest Payment Date; provided, however, that such deposits for interest shall not be required to be made into the applicable subaccount of 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 Bond Registrar moneys in an amount equal to the interest due on such Interest Payment Date or shall, prior to such Interest Payment Date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such Interest Payment Date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit in the appropriate subaccount of the Debt Service Reserve Account or from the Bond insurance Policy, as applicable. 2. (a) To the full extent necessary, for deposit into each subaccount of 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 applicable subaccount of 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 Bond Registrar moneys in an amount equal to the principal due on such principal payment date or shall, prior to such principal payment date, advise the Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such principal payment date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit, if any, on deposit in the appropriate subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable. (b) To the full extent necessary, for deposit into each subaccount of the Bond Redemption Account, if applicable, 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 any Term Bonds payable from such subaccount of the Bond Redemption Account on such redemption or maturity dates; provided, however, that such deposits for Amortization Installments shall not be required to be made into the applicable subaccount of the Bond Redemption Account to the extent that money on deposit therein is sufficient for such purpose. The moneys in such subaccount of the Bond Redemption Account shall be used solely for the purchase or redemption of Terrn Bonds payable therefrom. The City may at any time purchase any of said Term Bonds or portions thereof 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 such subaccount of the Bond Redemption Account for the redemption prior 12 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 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 a subaccount of the Bond Redemption 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 credited in such manner and at such times as the Director of Finance shall determine over the remaining payment dates_ The City shall, on each redemption or maturity date, transfer to the Bond Registrar 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 Bond Registrar of the amount of any deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate notice required to provide for the payment of such deficiency on such redemption or maturity date from any Reserve Account Insurance Policy or Reserve Account Letter of Credit on deposit in the applicable subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable. 3. To the full extent necessary, for deposit into each subaccount of the Debt Service Reserve Account in the Sinking Fund on the fifteenth (15th) day of each month in each year, beginning with the fifteenth (15th) day of the first full calendar month following the date on which there is a deficiency in the amount required to be on deposit in the subaccounts of the Debt Service Reserve Account, such sums as shall be at least sufficient to pay an amount equal to one -twelfth (1/12) of the difference between the amount on deposit in the Debt Service Reserve Account (including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) and the Reserve Account Requirement; provided, however, that no payments shall be required to be made into the Debt Service Reserve Account whenever and as long as the amount on deposit therein (including any Reserve Account Insurance Policy or Reserve Account Letter of Credit) shall be equal to the Reserve Account Requirement for such Series of Bonds. Moneys in the subaccount of the Debt Service Reserve Account shall be used only for the purpose of making payments of principal of and interest cm the corresponding Series of Bonds when the moneys in any other subaccount of any Account held pursuant to the Resolution and available for such purpose are insufficient therefor. Moneys on deposit in a subaccount shall only be used for the corresponding Series of Bonds. Any moneys in the subaccounts of the Debt Service Reserve Account in excess of the Reserve Account Requirement for such Series of Bonds may, in the discretion of the City, be transferred to and deposited irtto the applicable subaccount of the Interest Account, the Principal Account or the Bond Redemption Account as the City at its option may determine. The Series 2011 Bonds shall not be and shall not constitute an indebtedness of the City, within the meaning of any constitutional, statutory or charter provisions or limitations, but shall be payable solely, as provided in the Resolution, from the applicable Pledged Funds, and solely to the extent provided in the Resolution, the Non -Ad Valorem Revenues. No holder or holders of any Series 2011 Bonds shall ever have the right to 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 therein or the application of any funds of the City, except the applicable Pledged Funds, and solely to the extent provided in the Resolution, the Non -Ad Valorem Revenues to pay the Series 2011 Bonds or the interest thereon or the making of any sinking fund, reserve or other payments provided for in the Resolution. Enforcement of the City's obligation to budget and appropriate legally available Non -Ad Valorem Revenues 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 13 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Interest for Non -Ad Valorem Revenue Bonds and Loans" herein. In addition, various contracts of the City which do not constitute debt may be secured in a similar manner. The City has not covenanted to maintain any programs or other activities which generate 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. Fora description of additional limitations see "Special Investment Considerations" herein, Debt Service Reserve Account The Resolution requires the City to maintain on deposit in each of the applicable subaccount of Debt Service Reserve Account an amount equal to the Reserve Account Requirement for such series of Series 2011 Bonds. The "Reserve Account Requirement" is defined in the Resolution to mean with respect to each series of Series 2011 Bonds,Ione half of the Maximum Annual Debt Service on all such Bonds Outstanding, the lesser of (i) the Maximum Annual Debt Service on all such series of Series 2011 Bonds Outstanding. (ii) 125% of the average Annual Debt Service Requirement on all such series of Series 2011 Bonds Outstanding, or (iii) 10% of the proceeds of such series of Series 2011 Bonds within the meaning of the Code.] The Reserve Acrount Requirement for the Series 2011A Bonds is equal to $ . The Reserve Account Requirement for the Series 2011B Bonds is equal to $ . Each subaccount in the Debt Service Reserve Account shall be funded with a portion of the proceeds from the Series 2011A Bonds and the Series 2011B Bonds, respectively, simultaneously with the delivery of the Series 2011 Bonds. See "ESTIMATED SOURCES AND USES OF FUNDS" herein. In lieu of or in substitute for the required deposits (including existing deposits therein) into the subaccount of the Debt Service Reserve Account, the City may cause to be deposited into such subaccount of the Debt Service Reserve Arcount a Reserve Account Insurance Policy or a Reserve Account Letter of Credit for the benefit of the Holders of the corresponding Series of Bonds Outstanding, which Reserve Arcount Insurance Policy or Reserve Account Letter of Credit shall be payable or available to be drawn upon, as the case may be (upon the giving of notice as required thereunder), on any Interest Payment Date or principal payment date or mandatory redemption date on which a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant to the Resolution and available for such purpose. If a disbursement is made under the Reserve Account Insurance Policy or the Reserve Account Letter of Credit, the City shall be obligated to either (i) reinstate the maximum limits of such Reserve Account Insurance Policy or Reserve Acrount Letter of Credit within twelve months by increasing the amount payable or available to be drawn thereunder in equal monthly amounts over such twelve month period, or (ii) deposit, on a monthly basis in accordance with the Resolution, into the applicable subaccount of the Debt Service Reserve Account from the Non -Ad Valorem Revenues appropriated in accordance with the Resolution, funds in the amount of the disbursements made under such Reserve Account Insurance Policy or Reserve Account Letter of Credit, or a combination of such alternatives as shall equal the Reserve Account Requirement for the applicable series of Bonds Outstanding. In the event that upon the occurrence of any deficiency in the subaccount of the Interest Account, the Principal Account or the Bond Redemption Account, the applicable subaccount of the Debt Service Reserve Account is then funded with one or more Reserve Account Insurance Policies and/or Reserve Account Letters of Credit, the City or the Bond Registrar, as applicable, shall, on an interest or principal payment date or mandatory redemption date to which such deficiency relates, draw upon or cause to be paid under such facilities, on a pro-rata basis thereunder, an amount sufficient to remedy such deficiency, in accordance with 14 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. the terms and provisions of such facilities and any corresponding reimbursement or other agreement governing such facilities; provided however, that if at the time of such deficiency the applicable subaccount of the Debt Service Reserve Account is only partially funded with one or more Reserve Account Insurance Policies and/or Reserve Account Letters of Credit, prior to drawing on such facilities or causing payments to be made thereunder, the City shall first apply any cash and securities on deposit in the applicable subaccount of the Debt Service Reserve Account to remedy the deficiency and, if after such application a deficiency still exists, the City or the Bond Registrar, as applicable, shall make up the balance of the deficiency by drawing on such facilities or causing payments to be made thereunder, as provided in this paragraph. Amounts drawn or paid under a Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be applied as set forth in the Resolution. Any amounts drawn or paid under a Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be reimbursed to the Provider thereof in accordance with the terrns and provisions of the reimbursement or other agreement governing such facility. Description of Non -Ad Valorem Revenues The following describes the sources of the City's Non -Ad Valorem Revenues: Franchise Feu 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 Jaa 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 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 oiI 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. 15 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 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. Low! 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 Chapter202, 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 an 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; (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 shalt 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 OOR's cost of administration is deposited in the Local Communications Services Tax clearing trust fund and distributed monthly to the appropriate jurisdictions. 16 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 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 States General Revenue Fund to counties and municipalities that meet strict eligibili ty 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 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 General 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 Genera! 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 = unincorporated + 2/3 incorporated Sales Tax receipts) area population area population total county + _ 2/3 incorporated population area population 17 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Municipality Share (percentage of total Half -Cent — Sales Tax receipts) municipality population total county 4- 2/3 incorporated population area population For purposes of the foregoing formula, "population" is based upon the latest official Stateestimateof 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. 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 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 Iaw 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,O1(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 18 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 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: (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. (Remainder of page intentionally left blank] 19 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The following table represents the City's audited determination of legally available Non -Ad Valorem Revenues for the Fiscal Years Ended September 30, 2006 through September 30, 2010. THE CITY OF MIAMI, FLORIDA LEGALLY AVAILABLE NON -AD VALOREM REVENUES YEAR ENDED SEFI LMBER 30th 2006 2007 7.0.0.$ 2009 2010 Revenues:: Franchise and Utility Taxes $ 41,342,214 $ 42,257,282 $ 35,319,051 $ 36,228.332 36,448,254 Licenses and Permits: Business Licenses and Permits 7,078,534 7,064.358 7,769,633 7,508,453 7,680,315 Construction Permits 21,390.059 25 766.010o 22,019,185 18.524.028 17.469 400 Total Licenses and Permits $ 28,468,593 $ 32,830,368 $ 29,788,818 $ 26,032,481 $ 25.149,775 Intergovernmental: State and Revenue Sharing $ 13,044,234 $ 13,073,886 $ 12,187,197 $ 10,791.455 $ 10,516,183 Ha1f-Cent Sales Tax 25,800,341 25,505,412 24,719,050 22,566,791 22,665,743 Fine and Forfeitures 5,175,457 5,283,695 6,031,799 6,396,471 4,298,283 Other 3,341,711 15.517.110 14 414,695 13.875,682 18.122.138 Total Intergovernmental $ 47,361,743 $ 59,360,103 $ 57,352,741 $ 53,6314399 $ 55,602,347 Charges for Services: Engineering Services $ 44,917,693 $ 46,587,956 $ 47,079,358 $ 47,715,500 $ 51,784,383 Public Safety 11,025,330 22,952,364 22,596,110 25,009,184 21,763,551 Recreation 662,557 3,488,492 3,144,370 2,541,056 3,085,270 Other 35,375,0J¢ 4145.3433 2.178.334 1242.353 1.496.625 Total Charges for Services $ 91,980,596 5 77,174,155 $ 74,998,172 $ 76,508,093 $ 78,129,829 Interest Income 11,144,320 16,248,307 10,086,415 4,064,924 2,733,028 Other 16 643,409 4,950,826 6.594 312 8,196.844 6.332,053 Component Units Operating: Transfers 1n0J 52,097,226 61,411.040 76,817,831 47,785,001 53.493,902 Total Sources of Legally Available Non -Ad Valorem Revenues 5289,038,101 $294,252,08I $290,957,360 $252,446,074 $257,889,188 Essential Expenses Not Paid with Ad Valorem TaxesPI {12,418,1041 (52,246,548) (49,012,5601 (39.317,193) (37.980,623) Net Non -Ad Valorem Revenues Available for Debt Service after Payment of Essential Governmental Services $2219,J2 $242.Q,p 533 $241,9.44,$QQ 1_2 5 2.8m, $2J 9 948,564 Source: City of Miami Finance Department (I) This increase has been due to growth in the City and in new development. (2) Amounts comprised primarily of Public Service Taxes, Local Option Gas Taxes and amounts from Public Works special revenue funds. Both Public Service Taxes and Local Option Gas Taxes are recurring each year although the amounts may differ from year to year. Transfers In are net of debt service, on other bond obligations, (3) Total ad valorem taxes minus General Fund government and public safety expenses. This amount does not include a pro rata share of the pension costs associated with the General Fund and Public Safety expenses. 20 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The following table represents current debt service on obligations payable from legally available Non -Ad Valorem Revenues as of April 30, 2011. THE CITY OF MIAMI, FLORIDA SCHEDULE OF PRINCIPAL AND INTEREST FOR NON -AD VALOREM•REVENUE BONDS AND LOANSw Prior to Refunding After Refunding Fiscal Year Principal Interest Total Principal Interest Total 2011 $ 3,845,999.70 7,767,725.17 11,613,724.87 2012 16, 032, 21.5.30 18,434,799,81 34, 467,015,.11 2013 20, 749,629.50 17,903,157.11 38,652,786.61 2014 22, 927,860.00 17, 064,175,11 39,992,035.11 2015 21,254,406.90 15,991,884.46 37,246,291.36 2016 27,645,000.00 10,531,021.36 38,176,021.36 2017 13,050,000.00 9,484,599.12 22,534,599.12 2018 13,375,000.00 8,674,736.62 22,049,736.62 2019 11,995,000.00 7, 806, 984.11 19, 801,984.11 2020 11,400,000.00 7,023,045.36 18,423,045.36 2021 7,160, 000.00 6,435,109.12 13,595,109.12 2022 3,490,000.00 6,086,288.20 9,576,288.20 2023 3,695,000.00 5,859,845.80 9,554,845.80 2024 3,915,000.00 5,620,121.80 9,535,121.80 2025 4,150,000.00 5,363,532.26 9,513,532.26 2026 6,960,000.00 4,971,581.61 11,931,581.61 2027 3,785,000.00 4,590,181,80 8,375,181.80 2028 4,035,000,00 4,339,612.50 8,374,612.50 2029 4,235,000.00 4,137,862.50 8,372,862.50 2030 4,450,000.00 3,926,112.50 8,376,112.50 2031 6,670,000.00 3, 703, 612.50 10, 373,612.50 2032 7,350,000.00 3,353,437.50 10,703,437.50 2033 7,735,000.00 2,967,562.50 10,702,562.50 2034 8,140,000.00 2,561,475.00 10,701,475.00 2035 8,565,000.00 2,134,125.00 10,699,125.00 2036 9,015,000.00 1,684,462.50 10, 699,462.50 2037 9,830,000.00 1,211,175.00 11,041,175.00 2038 10,350,000.00 695,100.00 11,045,100.00 2039 2,890,000.00 151,725.00 3,041,725.00 Total $278.695.111.40 E.1,9 469.170162.77 Source: City of Miami Finance Department As described herein, the obligation and the ability of the City to budget and appropriate Non -Ad Valorem Revenues is subject to a variety of factors, including the obligation of the City to provide essential governmental services and the obligation of the City to have a balanced budget. 21 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 2006 THE CITY OF MIAMI, FLORIDA HISTORICAL ANTI -DILUTION TEST YEAR ENDED SEPTEMBER 30TH 2007 2008 2009 2010 Non -Ad Valorem Funds Available to Pay Debt Service $ 276,619,997 $242,005,533 $241,944,800 $213,128,881 $ 219,908,565 Debt ServiceInm $ 21,583,712 $ 15,534,423 $ 37,323,086 $ 37,698,012 $ 39,992,035 Coverage°rf 12.82x 15.58x 6.48x 5.65x 5.50x 200% Debt Service $ 43,167,424 $ 31,668,846 $74,646,172 $75,396,024 $ 79,984,070 Coveragee) 6.41x 7.79x 3.24x 2,83x 2.75x "' 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 30, 2010. tr° 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, The Sunshine Loans include the Refunded Loans. s'1 Coverage based on 100% debt service. (4) Coverage based on 200% debt service. Special Investment Considerations As described above, the City's covenant to budget and appropriate Non -Ad Valorem Revenues does not constitute a lien, either Pega/ or equitable, on any of the City's revenues, The amount of such revenues available to make payments on the Series 2011 Bonds may be effectively limited by (i) the requirement for a balanced budget, (ii) funding requirements for essential governmental services of the City, (iii) a decrease in one or more of the sources of Non -Ad Valorem Revenues, for example, a fluctuation in the Half -Cent Sales Tax collections due to changes in economic activity and a decrease in the dollar volume of purchases in Miami -Dade County, and (iv) 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 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 2011 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 2011 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, 22 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Additional Debt Payable from Non -Ad Valorem Revenues Pursuant to the Resolution, the City may incur additional debt [(other than the Series 2011 Bonds)] that is payable from all or a portion of the legally available Non -Ad Valorem Revenues only if the total amount of Non -Ad Valorem Revenues for the prior Fiscal Year were (a) 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 Non - Ad Valorem Revenues and not other funds of the City (collectively, "Debt"), including any Debt payable from one or several specific Non -ad Valorem Revenue sources but only to the extent such Non -Ad Valorem Revenues are legally available to pay debt service on the Series 2011 Bonds, and (b) so long as the Series 2011 Bonds are outstanding and if a Reserve Account insurance Policy is in effect, at least 1.00 times the obligation of the City to repay any costs then due and owing to the Provider of a Reserve Account Insurance Policy, 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 2011 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. See "FUTURE DEBT" herein. [Remainder of page intentionally left blank.] 23 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. MANAGEMENT DISCUSSION OF BUDGET AND FINANCES The City's original Fiscal Year 2011 budget was adopted on September 27, 2010. The Fiscal Year 2011 budget was approximately $482.7 million which reflected an overall decrease of 1.3% ($22.1 million) from the Fiscal Year 2010 budget, including Transfers in as revenue and Transfers out as expenditures. Based upon actual results as of April 30, 2011, the City anticipates a projected Fiscal Year 2011 year end The table below compares actual audited revenues and expenditures to budgeted amounts for fiscal year 2011 to actual amounts as of March 2011: Actual vs. Budgeted Revenues, Expenditures and Net Changes in Fund Balance for the General Fund through March 2011 % of Actual Revenues Property Taxes $223,537,412 $173,442,468 77.59% Franchise Fees/Other Taxes 36,269,000 12,500,408 34.47 Licenses and permits 30,794,313 22,313,330 72.46 Fines and forfeitures 14,133,112 1,883,022 13.32 Intergovernmental 43,419,282 16,602,947 38.24 Charges for services 81,549,665 49,743,567 61,00 Interest 1,500,000 311,833 20.79 Fund Balance Allocation 0 0 Other 11,050,000 j,627.786 59.98 Total Revenues $442,252,784 $281425.362 Budget Actual to Budget Expenditures General government 41,383,236 19,191,594 44.24% Planning & Development 7,764,751 4,163,906 53.63 Public works 49,779,747 22,675,474 45.55 Public safety 196,633,133 I00,326,672 51.02 Public facilities 4,226,509 2,023,323 47.87 Parks and recreation 22,364,797 10,878,729 49/64 Risk management 62,844,050 31,591,568 50.24 Pensions 72,079,756 67,810,772 94.08 Non -departmental 25,660,698 5,964,957 23.25 Total Expenditures $482.736,676 $264.626.995 Excess (Deficiency) of Revenues (40.483.8921 18,798,367 Over(under) Expenditures Other financing sources and (uses): Operating transfers in 57,076,860 0 Operating transfers out 16.592,968 Q Total Other financing sources 40.483,892 and uses Net Change in Fund Balance $17,95 18.798.367 Source: The City of Miami, Florida See "Summary of Schedule of Revenues, Expenditures and Net Changes in Fund Balance for General 24 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Fund" herein for the historical revenue and expenditures. Fiscal Year 2010 Results The table below compares actual audited revenues and expenditures to budgeted amounts for the fiscal year ended September 30, 2010: Actual vs. Budgeted Revenues, Expenditures and Net Changes in Fund Balance for the General Fund through September 30, 2010 Revenues Property Taxes Franchise Fees/Other Taxes Licenses and Permits Fines and Forfeitures lntergovemntenral Revenues Charges for Services Interest Other Total Revenues Expenditures General Government Planning & Development Public Works Public Safety Pensions Public Facilities Parks and Recreation Risk Management Organizational Support Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance Beginning FY Fund Balance Ending FY Budgeted Amounts Original Amended $257,946,343 $247,646,519 39,086,516 36,448,254 29,172,916 25,149,775 6,142,461 4,298,283 41,323,714 51,304,064 80,146,969 78,129,829 3,200,000 2,733,028 2,140,22( 12,975,512 459,159,145 458,685,264 41,942,234 55,829,595 8,985,280 8,974,853 52,278,913 51,523,967 227,056,450 230,823,243 90,539,736 89,975,265 5,298,141 4,389,912 21,603,437 23,755,931 24,876,280 28,998,188 32,218,742 32.218 742 504,799,233 526,489,696 (45,640,088) (67,804,432) 54,619,085 53,493,902 (8,978.997) (13,135,534) 45,640,088 40,358,368 ,(277446,064) % of Actual to Actual Original Budget $ 247,646,519 36,448,254 25,149,775 4,298,283 51,304,064 78,129,829 2,733,028 6,332,053 452,041,805 54,913,599 8,974,853 51,276,106 230,713,543 89,975,265 4,389,912 23,755,930 22,354,729 32,218,742 518,572,679 (66,530.874) 53,493,902 (13,493.245) 40,000,657 (26,530,217) 39,972,5= ,. 13,442.17i 96,01% 93.25 86.21 69.98 124.15(2) 97.48 85.41 295.86 130,93%°t1} 99.88 98.08 I01.61tz1 99.38 82.86 109.96(2) 89.86 100.0e 97.94°h 150.28 (I)The difference represents amounts that were budgeted originally as credit balances to account for artrition and other savings in the non -departmental line item which is included in the function General Government, that were not realized. (2)The additional 510 million was allocated to allow for $9.1 million of 175/185 firefightersipolice pension trust fund monies as pass - through expenditures for Public Safety. For accounting purposes this pension supplement from the State is recorded as revenues under Intergovernmental Revenues and as an expense in Public Safety. (3)The additional $2, l million was allocated to cover costs associated with delivery of the summer programs. (4)The additional 54,3 million in Other revenues was allocated to account for group insurance revenues from retirees that was not transferred to the Risk Management function at year end, hut rather remained in the Other revenues line item. 25 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The City's Fiscal Year ended September 38, 2010 had an operating deficit of $26.5 million greater than the original budget. This budget deficit is categorically composed of operating expense deficiencies and revenue shortfalls and is discussed accordingly below by component. The operating expense component of approximately $20.9 million was associated with general operations of the City, The operating loss comprised• a number of favorable and unfavorable variances in multiple departments. Revenues were greatly impacted by the economic downturn affecting the local real estate market and the national banking industry. Specifically, Property Taxes were $10.3 trillion or3.9%less than anticipated in the original adopted budget. This was due to the millage budget requirement of the State of Florida that requires the adoption of the tax budget at a 95% collection rate instead of the City's actual collection rate which is approximately 90%. Franchise and Other Taxes were$2,6 million or6.7%less than anticipated in the original adopted budget due to an anticipated increase in FPL (electricity) rates that was not approved by the Public Service Commission. Additionally, FPL offered a fuel rebate in March 2010 which resulted in $900,000 Less revenue to the City. Collections of License and Permits were $4.0 million or 13.8% less than antidpated in the original adopted budget. Charges for Services were $2.1 million or 2.5% less than the original expectation. These unfavorable variances were offset, in part, by better than expected collections from Other Revenues of $4.2 million. The overall net deficit result in revenues collected (including Transfers In) as compared to the original adopted budget for these categories was approximately $8.2 million or 1.6% less than expected. The increase in expenditures was driven by amounts that were originally budgeted as credit balances to account for attrition and other savings related to vacancies that were not realized. These amounts are carried in the non -departmental accounts which are included in the General Government function. Additionally, the Parks and Recreation Department exceeded their budgeted expenditures by $2.1 million due primarily to expenses associated with the delivery of summer day camp programs. While the original adopted budget did provide for some of the operating cost associated with the summer programs, under -estimating the volume of the operating programs led to the budget overage, The City's Budget Department is working closer with the Parks and Recreation Department to better determine its operating needs, specifically costs associated with staffing the summer programs. The remaining $4.5 million increase in Transfers out was needed to allow for contributions to the special revenue funds to provide funding to projects that had deficit balances. 26 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. FUTURE DEBT The City expects to issue additional debt in the future which may include the Southeast Overtown Park West District CRA Bonds, in an amount not to exceed of $6,2 mil., payable from tax increment revenue of such community redevelopment area, expected to be issued in October 2011 The City also expects to issue debt for the purpose of refinancing and restructuring its Non -Ad Valorem Revenues debt. The City would refinance the fol lowing transactions: (i) Special Revenue Refunding Bonds, Series 2002A, (ii) Special Revenue Refunding Bonds, Series 2002C, (iii) Special Obligation Non -Ad Valorem Revenue Bonds, Series 1995 and (iv) Non -Ad Valorem Refunding Revenue Bonds, Taxable Pension Series 2009, Such debt is expected to be issued in October 2011 and the City expects to save over $11 mil over a two year period and $2.8 mit. in the third year, (Remainder of page intentionally left blank] MUNICIPAL BOND INSURANCE The following information has been furnished by (the "Insurer"), for use in this Preliminary Official Statement. Reference is made to Appendix F for a specimen of the policy. (TO COME) RESERVE PRODUCT [TO COME] MUNICIPAL BOND INSURANCE RISK FACTORS In the event of default of the payment of principal or interest with respect to the Series 2011 Bonds when all or some becomes due, any owner of the Series 2011 Bonds shall have a claim under the Municipal Bond Insurance Policy (the "Policy") for such payments. However, in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments are to be made in such amounts and at such times as such payments would have been due had there not been any such acceleration, The Policy does not insure against redemption premium, if any. The payment of principal and interest in connection with mandatory or optional prepayment of the Series 2011 Bonds by the issuer which is recovered by the issuer from the bond owner as a voidable preference under applicable bankruptcy law is covered by the insurance policy, however, 27 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. such payments will be made by the Insurer at such time and in such amounts as would have been due absence such prepayment by the City unless the Insurer chooses to pay such amounts at an earlier date. Under most circumstances, default of payment of principal and interest does not obligate acceleration of the obligations of the Insurer without appropriate consent. The Insurer may direct and must consent to any remedies and the Insurer's consent may be required in connection with amendments to the Resolution. In the event the Insurer is unable to make payment of principal and interest as such payments become due under the Policy, the Series 2011 Bonds are payable solely from the moneys received pursuant to the Resolution. In the event the Bond Insurer becomes obligated to make payments with respect to the Series 2011 Bonds, no assurance is given that such event will not adversely affect the market price of the Bonds or the marketability (liquidity) for the Series 2011 Bonds. The long-term ratings on the Series 2011 Bonds are dependent in part on the financial strength of the Insurer and its claim paying ability. The Insurer's financial strength and claims paying ability are predicated upon a number of factors which could change over time. No assurance is given that the long- term ratings of the Insurer and of the ratings on the Series 2011 Bonds insured by the Insurer will not be subject to downgrade and such event could adversely affect the market price of the Series 2011 Bonds or the marketability (liquidity) for the Series 2011 Bonds. See description of RATINGS herein. The obligations of the Insurer are contractual obligations and in an event of default by the Insurer, the remedies available may be limited by applicable bankruptcy law or state law related to insolvency of insurance companies. Neither the City nor the Underwriters have made independent investigation into the claims paying ability of the Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Insurer is given. Thus, when making an investment decision, potential investors should carefully consider the ability of the issuer to pay principal and interest on the Series 2011 Bonds and the claims paying ability of the Insurer, particularly over the life of the investment. See "MUNICIPAL BOND INSURANCE" herein for further information provided by the Insurer and the Policy, which includes further instructions for obtaining current financial information concerning the Insurer. (Remainder of page intentionally left blank,] 28 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. GENERAL INFORMATION REGARDING THE CITY OF MIAMI Background Now 115 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 424,662 residents, 58.9% 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 make up Miami -Dade County and is the county seat. For additional information concerting the City, see "APPENDIX A -GENERAL INFORMATION REGARDING THE CITY OF MIAMI, FLORIDA AND MIAM1-DADS COUNTY„ 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 Tomas P. Regalado whose term expires November 2013. The current members of the City Commission and expiration of their current terms of office are: Commission Members WiFreda Gort Marc D. Sarnoff Richard Dunn Frances Suarez Frank Carol.lo Date Term Expires November 2011 November 2011. November 2013 November 2011 November 2013 The City Manager, Tony E. Crapp, Jr., 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. Crapp has been City Manager since January 1, 2011. He is responsible for an organization that has more than [3,9541 employees and administers a budget of more than $534 million. Prior to his current position, he served as Deputy City Manager with oversight of every City department excluding Police, Fire and the Office of Equal Opportunity. Prior to being promoted to Deputy City Manager, he was the Assistant City manager in charge of operations overseeing a number of the City's largest departments including public facilities, community development, Solid Waste, Parks and Grants Administration. He holds a Bachelor of Arts Degree in Political Science from Florida International University. The City's Chief Financial Officer is Larry M. Spring, Jr. His primary responsibilities include the oversight of the following departments: Finance, Employee Relations, Risk Management and Purchasing. 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 29 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. February 2003 to February 2007. Prior to that, Mr. Spring spent the bulk of his career in the commercial 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 (1) Intergovernmental Investment Pool. Also, the City may invest in investment products that include the use of derivatives. As of September 30, 2010, approximately 74% of the City's investment portfolio was invested in United States Treasury Obligations and obligations of agencies of the United States Government and 30 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. approximately 20% of the City's investment portfolio was invested in commercial paper. AUI 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 2011 Bonds and their negotiated sale to the Underwriters. The following policies concerning the issuance and management of debt were established in the Debt Management Foiicy: (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. 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 attached hereto. 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] 31 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The following chart shows audited inforrnation regarding the General Fund for the Fiscal Years Ended September 30, 2006 through September 30, 2010. Summary Schedule of Revenues, Expenditures and Net Changes in Fund Balance for the General Fund Revenues Property Taxes 5214,329.257 $258,756,957 $258,294,391 $266,860,263 5247,646,519 Franchise Fees/Other Taxes 41,342,214 42,257,282 35,319,051 36,228,332 36,448,254 Licenses and permits 28,468,593 32,830,368 29,788,818 26,032,481 25,149,775 Fines and forfeitures 5.175,457 5,283,695 6,03 4,799 6,396,471 4,298,283 Intergovernmental 53,266,529 54,096,408 51,320,942 47,233,928 51,304,064 Charges for services 91,980,596 77,174, 155 74,998,172 76,508,093 78,129,829 Interest 11,144,320 16,248,307 10,086,415 4,064,924 2,733,028 Other 5.563,166 3,448,782 6,954,312 8.196,844 6,332.053 Total Revenues $451,270,132 5490,095,954 472,433,900 471,521,336 452,041,805 Expenditures General government Planning & development Community development Community redevelopment areas Public works Public safety Public facilities Parks and recreation Risk management Pensions Organizational Support/Group Benefits Non -departmental 13,204,324 Debt Service: Principal interest and Other Charges Capital Outlay 2006 2007 2004 2010 38,809,265 61,208,626 57,525,471 56,699,386 54,913,599 9,440.759 10,814,727 10,788,224 10,843,924 8,974,853 50,573,908 56,376,608 54,858,769 54,938,534 51,276.106 187,938,096 249,794,879 249,881,480 249,478,070 230,713,543 7,355:457 7,419,797 6,248,557 5,003,138 4,389,912 45,111,916 20.201,8.73 24,276,993 28,300,738 23,755,930 25,546,486 18,1 15,929 28,796,859 13,107,068 22,354,729 78,864,757 70,708,285 65.116,477 66,906,558 89,975.265 25,161,646 35,122,459 27,751,691 41,314,516 32„218,742 Total Expenditures 5452,006,614 5529,763,183 5525,244,521 526,591,932 $518,572,679 Excess (Deficiency) of Revenues Over (Under) Expenditures (736,482) (39,667,229) (52,810,621) (55,070,596) (66,530,874) Other financing sources and (uses): Operating transfers in 52,097,226 61,411,040 76,817,851 47,785,001 53,493.902 Operating transfers nut (42,209,286) (49,052,224) (30.879,926) (46,319,266) (13,493,245) Refunding Bonds Issued - Proceeds from sale of property 1,502,044 _ Payments to Refunded Bond Escrow Agent Bonds Issued Loan Capital Leases Sale of Capital Assets Total other financing sources(uses) 9,887,940 13,860,860 45,937,925 1.465,735 40,000,657 Net Change in Fund Balance 59,151,458 5(25,806,36) 5(6,872,696) 5(53,604,861) $(26,530,217) Fund Balance-Begining of Year 117,105,055 126,256,513 100,450,144 93,577,448 39.972.587 Fund Balance- End of Year 126,256,513 100,450,144 93,599,448 39,972,589 S40,888.434 Souk: The City of Miami, Florida. 32 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. LIABILITIES OF THE CITY Insurance Considerations Affecting the City Section 768.28, Florida Statutes, provides sovereign immunity limits on the liability of the State of Florida and its subdivisions of $100,000 to any one person, or $200,000 for any single occurrence or incident. Effective October 2011, the sovereign immunity threshold will increase to $200,000 per person or $300,000 per occurrence or incident. See "Ability to be Sued, Judgments Enforceable" below. Linder the protection of this sovereign immunity limit, Florida Statutes 768.28 and Chapter 440, Florida Statutes covering Workers' Compensation, the City has established a self -insured program to provide coverage for almost all areas of liability including Workers' Compensation, General Liability, Automotive Liability, Police Professional Liability, Public Officials' Liability, and Employment Practices Liability. In addition, the City also purchases excess insurance coverage to limit catastrophic losses associated with its liability exposures. The excess liability insurance program provides for $20 million in combined Iimits. The excess insurance program currently has a sel f-insured retention of $750,000 per occurrence for Workers' Compensation,. and $500,000 for all other liability coverages, The City also purchases dedicated commercial general liability policies for the Grapeland Waterpark, Bayfront Park, and the various various marinas that it operates. These policies typically carry a $1 million limit per occurrence and on an aggregate basis, with a $1,000 deductible. The City's master property insurance program provides for a total of $100 million in insurance limits for the City's $444 million property values. With the exception of earthquake, flood and named windstorm, the AI1-Other-Perils' deductible is $50,000 per occurrence. In regard to the named windstorm, flood, and earthquake exposures, the deductible is 5% of the location's values at the time of loss with a minimum of $250,000. The funds to account for liability losses within the self -insured retention level are derived from the General Fund balance. Claims are being predominantly adjusted by an independent third party administrator. Claims expenditures and liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated based on an independent actuarial valuation. The budgeting process utilizes information developed in the previous year's actuarial report in addition to historical information and present/specific knowledge on the status of claims and Iitigations. Workers' Compensation The City has been working diligently with its third party claims administrator and the City's Attorney's Office to effectively mitigate indemnity and medical expenses resulting from Workers' Compensation related losses. The City has been successful in significantly reducing its Experience Modification Rate (EMR) from 1.74 to 1.49 and finally to 1.33 in 2010..Currently, open WC claims total about 1,200 claims. Health Insurance The City provides group health benefits for its active employees, retirees, and their dependents through a fully self -funded health insurance program. The City is currently contributing approximately83% while the employees are contributing 17% to the cost of the group health insurance program. To limit catastrophic losses, the City is currently purchasing specific Stop Loss coverage for claims in excess of $200,000. 33 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Ability to be Sued, Judgments Enforceable Notwithstanding the liability limits described below, the laws of the State of Florida provide that each city has waived sovereign immunity for liability in tort to the extent provided in Section 768.28, Florida Statutes. Therefore, the City is Iiable for tort claims in the same manner and, subject to limits stated below, to the same extent as a private individual under like circumstances, except that the City is not liable for punitive damages or interest for the period prior to judgment. Such legislation also limits the liability of a city to pay a judgment in excess of $100,000 to any one person or in excess of $200,000 because of any single incident or occurrence. Judgments in excess of $100,000 and $200,000 may be rendered, but may be paid from City funds only pursuant to further action of the Florida Legislature. See Insurance Considerations Affecting the City herein. Notwithstanding the foregoing, the City may agree, within the limits of insurance coverage provided, to settle a claim made or a judgment rendered against it without further action by the Legislature, but the City shall not be deemed to have waived any defense or sovereign immunity or to have increased the limits of its liability as a result of its obtaining insurance coverage for tortious acts in excess of the $100,000 or $200,000 waiver provided by Florida Statutes. See "LITIGATION" herein. Indebtedness of the City Pursuant to the Debt Management Policy, the City's debt issuance is subject to the following constraints: (i) the Net Debt Per Capita and the Net Debt to Taxable Assessed Value percentages, which shall be determined by the finance committee by bench marking the City to current industry standards, and (ii) the maximum maturity shall be 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. 34 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 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 April 30, 2011, including that which is payable from sources other than ad valorem taxes. DESCRIPTION tQN Amnunr Outstanding 1 General Obligations Bonds; General Obligation Refunding Bonds, Series 1992 S70,000,000 S0 Homeland Defense/Neighborhood CI I', Series 2002 153,186,406 2,6,306,791 General Oblig tian Refunding Bonds, Series 2002A 32,510,000 23,590.000 General Obligations Honds, Other Issues 23,190,000 315,000 General Obligation Refunding Bonds, Series 2003 18,680,000 1,690,000 General Obligation Refunding Bonds, Series 2003E 4,180,000 4,030,000 General Obligation Refunding Bonds, Series 2007A 103,060,000 102,650,000 General Obligation Refunding Bonds, Series 2007B 50,000,000 50,000,000 General Obligation Refunding Bonds, Series 2009 51.055.000 47.715.000 Tonal General Obligation Bands 5505.961 A06 S255 756.791 Special Obligation and Revenue Bonds and Loans: Special Revenue Refunding Bonds, Series 1987 65,271,325 3,027,611 Community Entitlement Revenue Bonds, Series 1990 11,500,000 1,450,000 Special Obligation Non -Ad Valorem Revenue, Series 1995 72,000,000 28,950,000 Special Revenue Refunding Bonds, Series 2002A 27,895,000 22,995,000 Special Revenue Refunding Bonds, Series 2002C 28,390,000 16,065,000 Special Revenue Bonds, Series 2007 80,000,000 75,755,000 Special Revenue Bonds, Series 2009 65,000,000 64,090,000 Non Ad Valorem Refunding Bonds, Series 2009 37,435,000 36,160,000 Special Revenue Bonds, Marlins Garage, Series 2010A 84,540,000 84,540,000 Special Revenue Bonds, ,4iad ins Retail, Series 2010B 16,830,000 16,830,000 I-oans: 'Sunshine State Governmental Financing Commission Loans 27,630,900 5,851,000 'Sunshine State Governmental Financing Commission Loans 6,600,000 6,600,000 'Sunshine Stare Governmental Financing Commission Loans 42,500,000 42,500,000 *Sunshine State Governmental Financing Commission Loans 20,000,000 12,700,000 -Sunshine State Governmental Financing Commission - Secondary Loan 3,500,000 920,000 SBOI'W - Section 108 THUD Loan 5,100,000 2,300,000 Wagner Square -Section 108 HUD Loan 4,000,000 3,806,000 Gran Central Corporation Loan 1,708,794 1,708.864 Parrot Jungle 6.112.000 1555 000 Total Special Obligation and Revenue Bonds, and Loans S677.297 189 5427.759.975 Total Debt Sauce: City ofMimg Fie,mec Dspv1mrni „Li83..',58,a1s S.(+R'{.51g1G1t ' Being refunding by Series 2011 A Bonds 35 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Pension Plans The City's employees participate in two separate, single employer defined benefit contributory pension plans under the administration and management of separate Boards of Trustees; The City of Miami Fire Fighters' and Police Officers' Retirement Trust ("FIPO") and the City of Miami General Employees and Sanitation Employees' Retirement Trust ("GESE"). The plans cover substantially all City employees who contribute a percentage of their base salary or wage on a bi-weekly basis. The Board of Trustees of GESE administer three defined pension plans- (1) City of Miami General Employees and Sanitation Employees Retirement Trust ('GESE Retirement Trust"), (ii) an Excess Benefit Plan for the City of Miami and (iii) City of Miami General Employees and Sanitation Employees Retirement Trust Staff Pension Plan ("GESE Staff Trust"). Each plan's assets may be used only for the payment of benefits to the members of that plan, in accordance with the term of the plan. 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. The EORT is a non-contributory plan 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, 2008, 2009 and 2010. GESE Retirement Trust, The GESE Retirement Trust is a single -employer defined benefit plan. The GESE trust was established pursuant to the City of Miami Ordinance No. 10002 and subsequently revised under City of Miami Ordinance No. 12111. The GESE Trust covers ail City of Miami general and sanitation employees except certain employees eligible to decline membership. Participation in the GESE Trust is a mandatory condition of employment for all regular and permanent employees other than fire fighters, policy officers, and those eligible to decline membership, as defined by the Ordinance. The chart below shows the funding progress for GESE Retirement Trust and presents multi -year trend information about whether the actuarial value of plan assets are increasing or decreasing aver time relative to the actuarial accrued liability for benefits. Gese Retirement Trust UAAL as Actuarial Actuarial 'k Actuarial Value Accrued Unfunded ML Funded Annual of Annual Valuation of Assets Liability (AAL) (UAAL) Ratio Payroll Payroll Date (a) fbl (h al (a/b) c) (b-a)/c 10/1/06 $618,482.553 $732,016,189 $113,533,626 84.49% $75,609,062 150.16% 10/1/07 664,145,175 770.218,984 106,073,809 86.23 82,052,702 129.28 10/1/08 691,791,000 808,618,183 116,827,183 85.55 90,974,647 328.42 10/3/09 645.614,641 780,625,200 135,010,559 82.70 90,045,202 149.94 10/1/10 652,999,926 840,871,136 187,871,210 77.66 68,762,827 273.22 Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, t.LC The actuarial assumptions used in the October 1, 2010 valuation are as follows: • Actuarial Cost Method- Entry Age Normal Cost Method. Under this method, normal costs are determined on the individual entry age normal method. However, if the actuarial value of assets exceeds 36 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. the entry age accrued liability, the individual entry age normal cost rate for the Plan shall be adjusted by the excess actuarial value of assets divided by the present value of future payroll, in order for the unfunded accrued liability to not be less than zero. • Decrements -Pre Retirement Mortality: 1983 Group Annuity Mortality Table (male and female), set back 2 years. root -Retirement Healy Mortality: 1983 Group Annuity Mortality Table (male and female). Post -Retirement Disabled Mortality: 1983 Group Annuity Mortality Table (male and female), set forward 9 years, Disability: Representative values of the assumed annual rates of disability among members in active services are set forth in the following table. Disability decrements do not compete with retirement. Age Rate Age Rate Age Rate Age Rate 20 0.03% 30 0.04% 40 0.07% 50 0.17% 25 0.03% 35 0.05% 45 0.10% 55 0.25% Permanent Withdrawal from Active Status: Representative values of the assumed annual rates of withdrawal among members in active service are set forth in the following table. Age 20 25 12.0 10.5 30 12.0 10.5 35 12.0 10.5 40 11.4 9.9 45 10.8 9.3 50 10.2 8.7 55 9.9 8.4 Completed Years of Service 0 j 1 [ 2 3 12.0% 10.5% 9.0% 9.0 9.0 9.0 8.4 7,8 7.2 6.9 7.2% 7.2 7.2 7.2 6.6 6.0 5.4 5.1 4 6.0% 6.0 6.0 6.0 5.4 4.8 4.2 3.9 5 or more 5.3% 4,6 4.0 3.4 2.6 2.0 1.3 1.0 Retirement: Representative values of the assumed annual rates of retirement among members in active service are set forth in the following table. Age Rate Age Rate Age Rate Age Rate Age Rate 45 15% 50 20% 55 30% 60 20% 46 15% 51 20% 56 20% 61 20% 47 15% 52 20% 57 20% 62 20% 48 15% 53 20% 58 20% 63 20% 49 15% 54 20% 59 20% 64 20% 65 66 67 68 69 70 20% 20% 20% 20% 20% 100% In addition, the valuation assumes a 65% probability the Pension Administrator will retire upon reaching the Rule of 70 eligibility. For non -administrators, 20% is added to the rates in the table when the member first reaches Rule of 70 eligibility. ■ Interest Rate- 8.10% per annum, compounded annually, including inflation. • Salary Increases- Salaries are assumed to increase at the rate of 6.00% per annum, including inflation, There is no assumed total active member payroll increase. • inflation-3.5% per annum. 37 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. • Spouses -The Pension Administrator is assumed to not be married; 40% of active members are assumed to be married with the husband 3 years older than his wife. Expenses -The City shall provide for the non -investment expenses of the Plan. However, there may be some non -investment expenses during the Plan year which will be reimbursed by the City after the end of the year. An allowance for other expenses is made in that the interest rate assumption is net of investment expenses. Assets- The actuarial value of assets is based on a moving market value averaged over three years. Each year, the actuarial asset value is projected forward at the valuation date based on actual contributions and benefits payments at the assumed interest assumption. One third of the difference between the projected actuarial value and the market value pies prior deferrals is added to the projected actuarial value. The remaining two thirds is deferred to each of the next two years as future adjustments to the actuarial value. The results cannot be greater than 120% of market value or less than 80% of market value. As of October 1, 2000 the actuarial value is equal to the estimated present value of employee payments to purchase credit for services to the effective date of the Plan (July 1, 2001). • GASB Nos. 25-27.2- The determination of GASB Nos. 25 and 27 accounting information has been made on the basis of the same assumptions and methods, ■ Funding Period (Pursuant to Chapter 122, Florida Statutes) The following amortization periods apply all as lever dollar amounts: Benefit improvements for actives 20 years Benefit improvements for retirees 15 years Actuarial gain/loss 15 years Change in assumptions and methods 20 years The Plan's initial unfunded actuarial accrued liability as of October 1, 2000 is amortized over 30 years. • Maximum Benefit- The valuation reflects the maximum benefit Limits under Internal Revenue Code Section 415, indexed in future years at the 3.5% per year assumed rate of inflation. Annually Required Contribution for GESE Retirement Trust. State of Florida law requires that the City annually contribute to each of its defined benefit pension plans the actuarial determined Annually Required Contribution (the "ARC") as calculated by an independent actuary. The chart below shows amounts contributed by the City to the GESE Retirement Trust and the percentage of such contribution to the ARC. Year Ended Annual Required Annual Percentage September 30 Contribution Contribution Contributed 2006 $22,018,443 $22,018,443 100% 2007 24,229,028 24,229,028 100 2008 22,762,902 22,762,902 100 2009 23,191,828 23,191,828 100 2010 24,037,093 24,037,093 100 Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Actuarial Valuation Report as of October 1. 2010 prepared by Cavanaugh Macdonald Consulting, LLC 38 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The City's contribution increased from $23,191,828 for Fiscal Year 21308-2009 to 524,037,093 for Fiscal Year 2009-2010. GESE Staff Trust. The GESE Staff Trust is a single -employer, defined benefit plan. The Staff Trust was established by the rule -making authority of GESE Retirement Trust, pursuant to Chapter 40 of the Miami city rode. The GESE Staff Trust covers all administrative full-time employees and other positions as may be named by the Board of Trustees. Participation in the GE5E Staff Trust is a mandatory condition of employment for all full time employees, other than those eligible to decline membership, as defined in the plan document. The chart below shows the funding progress for GESE Staff Trust and presents multi -year trend information about whether the actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. GESE Staff Trust UAAL as Actuarial Actuarial % Actuarial Value Accrued Unfunded ML Funded Covered of Annual Valuation of Assets Liability (AAL) (UAAL) Ratio Payroll Payroll Date (a) (b) _ (b-a) (alb) lc) (b-aJ/c 10/1/06 $939,698 $1,129,276 $189,578 83.21% $643,770 29.45% 10/1/07 1,138,655 1,622,719 484,064 70.17 734,116 65.94 10/1/08 1,313,407 1,748,147 434,740 75.13 632,259 68.76 10/1/09 1,556,718 2,121,806 565,088 73.37 738,898 76.48 1011/10 1,834,613 2,826,982 99E369 64.90 842,955 117.72 Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Staff Pension Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC Annually Required Contribution for GESE Staff Trust. State of Florida law requires that the City annually contribute to each of its defined benefit pension plans the actuarial determined Annually Required Contribution (the "ARC") as calculated by an independent actuary. The chart below shows amounts contributed by the City to the GESE Staff Trust and the percentage of such contribution to the ARC. Year Ended Annual Required Percentage September 30 Contribution Contribution Contributed 2006 $72,380 $72,380 100% 2007 57,995 57,995 100 2008 109,163 109,163 100 2009 159,837 159,837 100 20I0 132,542 132,542 100 Source: City of Miami General Employees' and Sanitation Employees' Retirement Trust Staff Pension Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting ESE Exces$ Pian. The City of Miami Commission, in July 2000, pursuant to applicable Internal Revenue Code provisions, 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 benefit so the benefits for eligible members are not diminished by changes in the internal Revenue Code. The Board of Trustees of the Trust administers the excess benefit plan. Plan members are not required to contribute to the Excess Benefit 39 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Plan. Members of the GESE Trust participate in 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. TheCity's net pension obligation for the GESE Excess Plan as of September 30, 2010 was 54,493,186 and the annual pension costs have been contributed by the City for the Fiscal Years ended September 30, 2008, 2009 and 2010. The chart below shows the funding progress for GESE Excess Plan and presents multi -year trend information about whether the actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued Iiability for benefits. GESE Excess Plan UAAL as Actuarial Actuarial % Actuarial Value Accrued Unfunded ML Funded Covered of Annual Valuation of Assets Liability (AAL) (L1AAL) Ratio Payroll Payroll Date (a) (b) Pb-a) _ a{ /bj c) (b-a)/c 10/1/06 50 $7,999,872 57,999,872 0.00% $75,609,062 10.58% 10/1/07 0 8,600,801 8,600,801 0.00% 82,052,702 10.48 10/1/08 0 5,151,124 5,151,124 0.00% 90,974,647 5.66 10/1/09 0 5,833,742 5,833,742 0-00% 90,045,202 6.48 10/1/10 0 5,704,602 5,704,602 0-0O% 68,762,827 8.30 Source. City of Miami General Employees' and Sanitation Employees' Excess Senctit Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC [Remainder of page intentionally left blank.] 40 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Annually Required Contribution for GESE Excess Plan. State of Florida law requires that the City annually contribute to each of its defined benefit pension plans the actuarial determined Annually Required. Contribution (the "ARC") as calculated by an independent actuary. The chart below shows amounts contributed by the City to the GESE Excess Plan and the percentage of such contribution to the ARC, Year Ended Annual Required Annual Percentage September 30 Contribution Contribution Contributed 2006 $824,7156 $463,126 56.15% 2007 823,371 476,252 57.84 2008 898,149 446,916 49.76 2009 566,046 464,325 82.03 2010 625,539 339,602 54.29 Source: City of Miami General Employees' and Sanitation Employees' Excess Benefit Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC EORT. The City's elected officials participate in a single -employer, defined benefit pension plan under the administration and management of a separate Board of Trustees, the City of 'Miami Elected Officers Retirement Trust. Under the EORT plan, eligibility requires seven (7) years of total service as an elected official of the City to be vested without requiring that such service be continuous. This plan is non- contributory. The EORT's fiduciary administers the excess benefit plan established by the City Commission on July 2000. FIFO. FTPO is a single -employer, defined benefit plan established by the City pursuant to the provisions and requirements of Ordinance No.10002 as amended. Participants are contributing police officers and firefighters with full-time employment status it he Police or Fire Department of the City. The chart below shows the funding progress for FIFO and presents multi -year trend information about whether the actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. FIFO Actuarial UAAL Actuarial Accrued As % Actuarial Value Liability Unfunded Funded Covered of Valuation of Assets (ML) ML Ratio Payroll Covered Date (a) - Entry Age ., (UAAL) (alb) (c) Payroll Normal (b-a) (b-a)/c (b) 1011/05 $10,919,000 $12,216,000 $1,297,000 89 % $9,150,000 142% 10/1/06 11, 479, 000 12,605,000 1,126, 000 91 9,040, 000 125 10/1/07 12,689,000 13,184,000 495,000 96 1,036,000 48 10/1/08 10,189,000 14,525,000 4,336,000 70 1,294,000 335 10/1/09 9,708,000 15,393,000 5,685,000 63 1,222,000 465 Source: City of Miami Fire Fighters' and Police Officers' Retirement Trust Actuarial Report, October 1, 2009 41 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Prepared by Stanley, Holcombe & Associates, Inc. COLA. Effective January 1, 1994, the FIPO Trust entered into an agreement with at the City with regards to the funding methods, employee benefits, employee contributions and retiree COLA. Members no longer contribute to the original COLA account (COLA 1); a new COLA account (COLA II) was established. The agreement included the following: (a) the funding method was changed to an aggregate cost method. (b) all accounts were combined for investment purposes (membership and benefits, COLA I, and COLA 1I), (c) retirees receive additional COLA benefits, and (d) active members no longer contribute 2% if pretax earning to fund the original retiree COLA account (COLA I), The COLA II account is funded annually by a percentage of the excess investment return from the COLA I account assets. The excess earnings contributed to the COLA II account are used to fund a minimum annual payment of $2.5 million, increasing by 4% compounded annually. To the extent necessary, the City will fund the portion of the minimum annual payment not funded by the annual excess earnings no later than January 1 of the following year. 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 arnount accrued as of September 30, 2010 is $84,276,114 of which $13,672,940 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 FJPO and GESE. 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 was required to comply with the Governmental Accounting Standard's Board Statement No. 45 - Accounting and Financial Reporting by Employers for Posterployment Benefits Other than Pensions ("GASB 45") no later than its Fiscal Year ending September 30, 2010. 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 Iiability of such plan be funded. The City retained Gabriel Roeder Smith & Company (the "Actuary") to perform an actuarial valuation of its OPEB liabilities. The City's Actuary identified the City's OPEB liabilities as of October 1, 2010 as $31,572,155 for all covered employees and retirees (except police officers) and $12,540,416 for police officers (including retirees) with its net OPEB liability for the year ended September 30, 2010 being $18,488,637 and $66,271,536 respectively, based on GASB 45 methodology. 42 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The chart below shows the funding progress for OPEB and presents trend information for the two years since this information was compiled about whether the actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Post Employment Benefits Other Than Pension (OPEB) Actuarial Accrued Actuarial Liability (AAL) UAAL As % Actuarial Value Projected Unfunded Funded of Covered Valuation of Assets Unit Credit AAL(UAAL)) Ratio Covered Payroll Payroll Date fa! (b) (b-a) (a/la) (c) (b-1)c 10/1/06 $0 $146,802,1.56 $146,802,156 0.00% $129,892,623 113.02% 10/1/08 $0 $148,725,390 $148,725,390 0.00% $170,785,202 87.0814 source: City of Miami. Florida Other Post -Employment Benefits for City Employees other than Police Officers Actuarial Report, September 30, 2010 Employer Contributions Required Contribution for OPEB. Year Ended Employer Percentage Net OPEB September 30 Annual OPEB Cost Contribution Contributed Obligation 2008 $10,786,386 $5,261,988 42.12% $ 5,524,398 2009 10,926,498 5,220,141 47.78 11,230,755 2010 12,540,416 5,282,534 42.12 18,488,637 Source: City of Miami. Florida Other Post -Employment Benefits for City Employees other than Police Officers Actuarial Report, September 34, 2010 (Remainder of page intentionally left blank.] 43 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. RISK FACTORS THE PURCHASE OF THE SERIES 2011 BONDS INVOLVES A DEGREE OF RISK, AS IS THE CASE WITH ALL INVESTMENTS. FACTORS THAT COULD AFFECT THE CITY'S ABILITY TO PERFORM ITS OBLIGATIONS UNDER THE BOND RESOLUTION, INCLUDING THE TIMELY PAYMENT OF PRINCIPAL OF AND INTEREST ON THE SERIES 2011 BONDS, INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING: 1. There is no assurance that any rating assigned to the Series 2011 Bonds by the rating agencies will continue for any given period of time or that it will not be lowered or withdrawn entirely by such rating agency, if in its judgment, circumstances warrant. A downgrade change in or withdrawal of any rating may have an adverse effect on the market price of the Series 201]Bonds. Sec "RATINGS" herein_ 2. The City's covenant to budget and appropriate Non -Ad Valorem Revenues for the payment of the Series 2011 Bonds is limited by a number of factors. In addition, the City is not required and does not covenant to maintain any services or programs which generate Non -Ad Valorem Revenues. Cancellation of any services or programs which are not essential services that generate Non -Ad Valorem Revenues could have an adverse affect on the City fulfilling its covenant obligations under the Resolution. See "NON -AD VALOREM REVENUES - SPECIAL INVESTMENT CONSIDERATIONS" herein. 3. Recent and well publicized economic factors which have created crises in many geographic areas have affected the City, as property values, property tax revenues, and sales tax revenues have declined. For example, the total taxable value of assessed property in the City declined 1.6% in Fiscal Year 2009 as compared to Fiscal Year2008 and the estimated actual value of assessed property in the City declined 5.545% in Fiscal Year 2009 as compared to Fiscal Year 2008. See "APPENDIX A — GENERAL INFORMATION CONCERNING THE CITY — Assessed Property Values." As a further example, the office of the property appraiser of the County's June 1, 2010 release estimated the taxable value of the properties located in the City to be 531,381,000,000 which is a 15% decrease from Fiscal Year 2009. These severe economic conditions have contributed significantly to the City's financial distress and there maybe further declines in City property tax values, property tax revenues and other revenues of the City. The City cannot accurately predict when, how or to what extent these conditions will change, and there is no assurance that they will improve in the foreseeable future. [TO BE UPDATED] 4. The City has three separate, single employer defined benefit plans, in which its Current and former employees may participate. 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') are contributory plans that cover substantially all of the City's employees. The third plan is a non- contributory defined benefits plan, the City of Miami Elected Officers' Retirement Trust ("EORT"), in which all elected officials with seven or more years of elected service to the City may participate. The City annually funds its FIPO, the GESE and the EORT pension obligations. Such obligations collectively have averaged $ in the last three Fiscal Years and are projected to increase significantly if changes are not made to the current plans. See "THE CITY OF MIAMI - Indebtedness and Other Liabilities of the City - Pension Fund" herein and also Note 10 - Pensions to "APPENDIX C - GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CI I'Y OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010 (EXCERPTS OF THE CITY OF MIAMI COMPREHENSIVE ANNUAL FINANCIAL REPORT)." 5. The City has also experienced significant increases in its obligations for contributions for healthcare benefits for employees and retirees, and their dependents, and other post employment benefit ("OPEB") obligations. The City has two separate OPEB plans, one for police officers and the other for all 44 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. other employees. These obligations are projected to increase significantly if changes are not made to the current plans. See Note 11- Post -Employment Healthcare Benefits to "APPENDIX C - GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF M1AMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010 (EXCERI'I3 OF THE CITY OF MIAMI COMPREHENSIVE ANNUAL FINANCIAL REPORT)." 6. The City has four separate collective bargaining units, the American Federation of State, County and Municipal Employees ("AFSCME") Local 1907 for general City employees, AFSCME Local 871 for the City's solid waste employees, the Fraternal Order of Police ("FOP") Lodge No. 20 for police and detention officers, and the International Association of Fire Fighters ("IAFF") Local 587 for the City's firefighters. In connection with the IAFF collective bargaining agreement, the City has declared a financial urgency under Section 447.4095, Florida Statutes, seeking renegotiation of the collective bargaining agreement which is not due to expire until September 1, 2011. 7. After informal requests for documents in December 2009, in February 2010 the SEC instituted a formal investigation of the City in connection with various bond offerings by the City in 2007 and 2009 to determine whether the City violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. This investigation could temporarily divert the attention of City officials and employees from the conduct of City operations, could cause the City to incur significant expenses, and could have a material effect on the City's financial condition and operations. See "SECURITIES AND EXCHANGE COMMISSION INVESTIGATION" herein. 8. In the event of a default in the payment of principal of and interest on the Series 2011 Bonds, the remedies of the owners of the Series 2011 Bonds are limited under the Resolution. Sec "APPENDIX B - COPY OF RESOLUTION" herein. LEGAL MATTERS Certain legal matters incident to the validity of the Series 2011 Bonds are subject to the approval of Squire, Sanders & Dempsey (US) LLP, 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 2011 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 Nabors Gibtin & Nicerkson, PA., Tampa, Florida Counsel to the Underwriters. SECURITIES AND EXCHANGE COMMISSION INVESTIGATION On December 10, 2009, the City of Miami was notified by the Miami Regional Office of the SEC that the staff of the SEC was conducting a non-public inquiry concerning City of Miami bond offerings to determine whether there have been any violations of federal securities laws. In letters dated December 10, 2009 and December 23, 2009, the SEC staff requested that the City voluntarily provide the SEC staff with documents concerning (a) City bond offerings in 2007 and 2009, (b) the transfer of approximately $13.1 million from the Capital Projects Fund to the General Fund in Fiscal Year 2007, (c) the transfer of approximately $13,3 million from the Capital Projects Fund to the General Fund in Fiscal Year2008, and (d) Audit Report No. 010-005, Audit of Compliance with the Financial Integrity Principles, issued by the City of 45 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Miami Office of Independent Auditor General in November, 2009. In February 2010, the SEC issued a formal order directing a non-public investigation ("Formal Order"), stating that it has information tending to show possible violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. According to the Formal Order, the SEC is investigating whether, since at least 2005, the City and others may have violated these provisions by, among other things, employing devices, schemes or artifices to defraud, engaging in transactions which operated or would operate as a fraud or deceit, or making false statements of material fact or failing to disclose material facts concerning, among other things, the state of the City's financial condition. The SEC has requested documents from the City, both voluntarily and by subpoena, and has also issued subpoenas for documents from and the testimony of current and former City officials and employees, and has taken the testimony of some individuals. The City has received multiple subpoenas from the SEC asking for additional documents concerning primarily the Auditor General's report referenced above, the fund transfers referenced above, City bond issues in 2007 and 2009, bond document disclosures, reports to bondholders, City pension plans and obligations under such plans, any policies, procedures and guidelines related to inter -fund transfers, any adverse conditions concerning the City's finances, any internal investigation, review or analysis conducted by the City and related to matters that have been identified as subjects of the SEC investigation and documents related to the use of certain revenue sources as recently mentioned in the Internal Auditor General Report No. 11-001. Documents requested include communications with and among City management and elected officials. The City is cooperating fully with the SEC investigation and is providing information in response to the SEC's requests and subpoena. The SEC has not advised the City when the investigation, which appears to be in its early stages, is expected to be concluded or of any potential outcome of the investigation, and the City cannot predict either the duration of the investigation or its outcome. The SEC investigation may temporarily divert the attention of City officials and employees from the conduct of City operations, could cause the City to incur significant expenses, and could have a material effect on the City's financial condition and operations. The City cannot predict the outcome of this investigation or the ultimate consequences resulting from any action on the part of the SEC. See also "LITIGATION - Recent Legal Proceedings" discussed below and "RISK FACTORS" discussed herein. 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 2011 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 non -ad valorem revenues. Not 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. Certain Legal Proceedings Michael J. Boudreaux v. City of Miami, Florida Circuit Court, Case No. 10-24880CA09. On April 26, 2010, the City's former Director of Management and Budget filed a Complaint asserting that the termination of his employment was in retaliation for his cooperation with the SEC's investigation of the City. See "Securities and Exchange Commission Investigation" herein. The City was served with the complaint on May 3, 2010. The City has filed a motion to dismiss, which was heard on July 21, 2010. The Court denied the motion to dismiss, but has allowed the City to file a motion for summary judgment to be heard at a Iater date. Additionally, the Plaintiff filed a request for a civil service administrative hearing pursuant to Civil Service Rule 16.2 and Florida statutes Sections 112.3187 through 112.31895 (2009) (the "Florida Whistleblower Act"). 46 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The Complaint alleges, among other things, that the termination of Boudreaux's employment on or about March 8, 2010 violated the Florida Whistleblower Act. The complaint further alleges that Boudreaux insisted on telling the truth and reporting malfeasance of public officials, that the City had major budget shortfalls in fiscal years 2007-08 and 2008-09, that he advised others of unspent Capital Project Funds which could be transferred to the General Fund, that others approved of the transfers, that others were responsible for accurately reporting and accounting for the transfers, and that he informed other officials of violations of laws. The City cannot predict at this time the outcome of the final conclusion of this lawsuit. If Boudreaux prevails, the City could be required to reinstate him to his former position and pay his Iost compensation and benefits, as well as other possible damages, attorneys' fees and costs. Helene Hutt v. City of Miami, United States District Court for the Southern District of Florida, Case No, 10-21451-Civ-Martinez, filed May 4, 2010. This is a securities fraud class action in which the Plaintiff is the named class representative who represents the putative class of all persons and entities who purchased or otherwise acquired municipal bonds issued by the City from September 30, 2005 to November 17, 2009. Plaintiff alleges that the City made fraudulent material misrepresentations and omissions regarding the City's then current financial condition and future prospects to municipal bond purchasers and the investing public, in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Complaint further alleges that the misrepresentations were revealed only after the City's Office of Independent Auditor General reported that the City made improper transfers from capital funds to the General Fund, Plaintiff further claims that the City's bonds were overvalued, that bond prices were artificially inflated, and that the price of the bonds dropped when the truth was revealed, thereby damaging Plaintiff and the other members of the Class. Plaintiff seeks compensatory damages and attorneys' fees for all members of the class. The time period to join as a member of the class has expired with no additional plaintiffs being added. The City filed a motion to dismiss, which was granted in part and denied in part, with leave to amend. An Amended Complaint was filed and the City filed another motion to dismiss which is pending. The City cannot predict at this time the outcome of this lawsuit. Miami Association of Firefighters Local 587of the International Association of Firefighters, of Miami, Florida v. City of Miami, Florida Circuit Court, Case No. 10-27577CA20. On May 10, 2010, the Local Firefighters Union filed a verified complaint for declaratory and injunctive relief asserting that Florida Statutes Section 447.4095, pursuant to which the City declared a financial urgency and sought to compel negotiations to modify the collective bargaining agreement, is void and unenforceable. Plaintiff also requested a temporary and permanent injunction prohibiting re -negotiation of the contract. On May 26, 2010, the Circuit Court issued a final judgment finding the statute to be constitutional. On June 3, 2010 Plaintiff filed an appeal to the Florida Third District Court of Appeal. The Union has requested that the case be transferred to the Florida Supreme Court. At this time the City cannot predict the outcome of this lawsuit, Administrative Hearing with respect to Olatunbosu "Ola" Aluko On June 7, 2010, the City received a request, pursuant to the Whistleblower Act, for a hearing for Mr. Olatunbosu Aluko in connection with his termination of employment from the City on April 8, 2010. The request for hearing states that Mr. Aluko was terminated because, among other things, he had uncovered a change order scheme in connection with several City contracts and because he raised concerns about the consultant -run bid processes for the Construction Agreement in connection with the Project. Mr. Aluko claims that his termination was in violation of the Whistleblower Act. A civil service administrative hearing on this matter has been set for July 20, 2010. The City is unable at this time to determine the merits of this claim or the veracity of any of the allegations contained in the request for a hearing. 47 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 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 In the opinion of Squire, Sanders & Dempsey (US) LLP, Bond Counsel, under existing law: (i) interest on the Series 2011 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations the Series 2011 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 expresses no opinion as to any other tax consequences regarding the Series 2011 Bonds. The opinion on tax matters will be based on and will assume the accuracy of certain representations and certifications, and continuing compliance with certain covenants, of the City contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series2011 Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the City's certifications and representations or the continuing compliance with the City's covenants. The opinion of Bond Counsel is based on current legal authority and covers certain matters not directly addressed by such authority. it represents Bond Counsel's legal judgment as to exclusion of interest on the Bonds from gross income for federal income tax purposes but is not a guaranty of that conclusion. The opinion is not binding on the Internal Revenue Service ("IRS") or any court. Bond Counsel expresses no opinion about (i) the effect of future changes in the Code and the applicable regulations under the Code or (ii) the interpretation and the enforcement of the Code or those regulations by the IRS. The Code prescribes a number of qualifications and conditions for the interest on state and local government obligations to be and to remain excluded from gross income for federal income tax purposes, some of which require future or continued compliance after issuance of the obligations. Noncompliance with these requirements by the City may cause loss of such status and result in the interest on the Series 2011 Bonds being included in gross income for federal income tax purposes retroactively to the date of issuance of the Series 2011 Bonds, The City has covenanted to take the actions required of it for the interest on the Series 2011 Bonds to be and to remain excluded from gross income for federal income tax purposes, and not to take arty actions that would adversely affect that exclusion. After the date of issuance of the Series 2011 Bonds, Bond Counsel will not undertake to determine (or to so inform any person) whether any actions taken or not taken, or any events occurring or not occurring, or any other matters coming to Bond Counsel's attention, may adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 2011 Bonds or the market value of the Series 2011 Bonds. 48 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Under the Code, interest on the Series 2011B Bonds is excluded from the calculation of a corporation's adjusted current earnings for purposes of the corporate alternative minimum tax, but interest on the Series 2011E Bonds may be subject to a branch profits tax imposed on certain foreign corporations doing business in the United States and to a tax imposed on excess net passive income of certain 5 corporations. A portion of the interest on the Series 2011A Bonds earned by certain corporations may be subject to a federal corporate alternative minimum tax. In addition, interest on the Series 2011A Bonds may be subject to a federal branch profits tax imposed on certain foreign corporations doing business in the United States and to a federal tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes may have certain adverse federal income tax consequences on items of income, deduction or credit for certain taxpayers, including financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these and other tax consequences will depend upon the particular tax status or other tax items of the owner of the Series 2011 Bonds. Bond Counsel will express no opinion regarding those consequences. Payments of interest on tax-exempt obligations, including the Series 2011 Bonds, are generally subject to IRS Form 1099-INT information reporting requirements. If a Series 2011 Bond owner is subject to backup withholding under those requirements, then payments of interest will also be subject to backup withholding. Those requirements do not affect the exclusion of such interest from gross income for federal income tax purposes. Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may also be considered by the State legislature. Court proceedings may also be filed the outcome of which could modify the tax treatment of obligations such as the Series 2011 Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Series 2011 Bonds will not have an adverse effect on the tax status of interest on the Series 2011 Bonds or the market value of the Series 2011 Bonds. Prospective purchasers of the Series 2011 Bonds should consult their own tax advisers regarding pending or proposed federal and state tax legislation and court proceedings, and prospective purchasers of the Series 2011 Bonds at other than their original issuance at the respective prices indicated on the inside cover of this Official Statement should also consult their own tax advisers regarding other tax considerations such as the consequences of market discount, as to all of which Bond Counsel expresses no opinion. Bond Counsel's engagement with respect to the Series 2011 Bonds ends with the issuance of the Series 2011 Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the City or the owners of the Series 2011 Bonds regarding the tax status of interest thereon in the event of an audit examination by the IRS. The IRS has a program to audit tax-exempt obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the Series 2011 Bonds, under current IRS procedures, the IRS will treat the City as the taxpayer and the beneficial owners of the Series 2011 Bonds will have only limited rights, if any, to obtain and participate in judicial review of such audit. Any action of the IRS, including but not limited to selection of the Series 2011 Bonds for audit, or the course or result of such audit, or an audit of other obligations presenting similar tax issues, may affect the market value of the Series 2011 Bonds. Original Issue Discount and Original Issue Premium Certain of the Series 2011 Bonds ("Discount Bonds") as indicated on the inside cover of this Official Statement were offered and sold to the public at an original issue discount ("OID"). OM is the excess of the 49 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. stated redemption price at maturity over the "issue price" of a Discount Bond. The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity is sold pursuant to that offering. For federal income tax purposes, OID accrues to the owner of a Discount Bond over the period to maturity based on the constant yield method, compounded semiannually (or over a shorter permitted compounding interval selected by the owner). The portion of OID that accrues during the period of ownership of a Discount Bond (i) is interest excluded from the owner's gross income for federal income tax purposes to the same extent, and subject to the same considerations discussed above, as other interest on the Bonds, and (ii) is added to the owner's tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Bond. A purchaser of a Discount Bond in the initial public offering at the price for that ]Discount Bond stated on the cover of this Official Statement who holds that Discount Bond to maturity will realize no gain or loss upon the retirement of that Discount Bond. Certain of the Series 2011 Bonds ("Premium Bonds") as indicated on the inside cover of this Official Statement were offered and sold to the public at a price in excess of their stated redemption price (the principal amount) at maturity. That excess constitutes bond premium. For federal income tax purposes, bond premium is amortized over the period to maturity of a Premium Bond, based on the yield to maturity of that Premium Bond (or, in the case of a Premium Bond callable prior to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on that Premium Bond), compounded semiannually. No portion of that bond premium is deductible by the owner of a Premium Bond. For purposes of determining the owner's gain or loss on the sale, redemption (including redemption at maturity) or other disposition of a Premium t3ond, the owner's tax basis in the Premium Bond is reduced by the amount of bond premium that is amortized during the period of ownership. As a result, an owner may realize taxable gain for federal income tax purposes from the sale or other disposition of a Premium Bond for an amount equal to or less than the amount paid by the owner for that Premium Bond. A purchaser of a Premium Bond in the initial public offering at the price for that Premium Bond stated on the cover of this Official Statement who holds that Premium Bond to maturity (or, in the case of a callable Premium Bond, to its earlier call date that results in the lowest yield on that Premium Bond) will realize no gain or loss upon the retirement of that Premium Bond. Owners of Discount and Premium Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of OID or bond premium properly accruable or amortizable in any period with respect to the Discount or Premium Bonds and as to other federal tax consequences and the treatment of OID and bond premium for purposes of state and local taxes on, or based on, income. RATINGS Moody's Investor's Service ("Moody's"), Fitch Ratings ("Fitch") and Standard & Poor's Ratings Group ("S&P") are expected to assign their municipal bond ratings of "" ", "_" and respectively, to the Series 2011 Bonds with the understanding that upon delivery of the Series 2011 Bonds, the municipal bond insurance policy will be issued by the Insurer. Moody's, Fitch and S&P have assigned underlying ratings of "" and "" respectively, to the Series 2011 Bonds wit out giving any regard to the Policy. The ratings reflect only the views of said rating agencies and an explanation of the ratings may be obtained only from said rating agencies. There is no assurance that such ratings will continue for any given period of time or that they will not be lowered or withdrawn entirely by the rating agencies, or any of them, if 50 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THID DOCUMENT. in their judgment, circumstances so warrant. A downward change in or withdrawal of any of such ratings, may have an adverse effect on the market price of the Series 2011 Bonds. An explanation of the significance of the ratings can be received from the rating agencies, at the following addresses: Fitch Ratings, One State Street Plaza, New York, New York 10004 and Moody's Investor Service, 250 Greenwich Street, New York, New York 10007. 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 2011 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 2011 Bonds. AUDITED FINANCIAL STATEMENTS The Comprehensive Annual Financial Report of the City for the Fiscal Year ended September 30, 2010 (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, 2010" 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, 2010. UNDERWRITING The Series 2011 Bonds are being purchased by RBC Capital Markets, LLC, acting on behalf of itself and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Keegan & Company, Inc., Goldman Sachs & Co. and Raymond James & Associates, Inc. (collectively, the "Underwriters") at an aggregate purchase price of $ (the par amount of the Series 2011 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 2011 Bonds if any Series 2011 Bonds are purchased. The Series 2011 Bonds may be offered and sold to certain dealers (including dealers depositing such Series 2011 Bonds into investment trusts) at prices lower than such public offering prices, and such public offering prices may be changed, from time to time, by the Underwriters. CONTINGENT FEES The City has retained Bond Counsel, Disclosure Counsel and the Financial Advisor with respect to the authorization, sale, execution and delivery of the Series 2011 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 2011 Bonds, ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 2011 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 51 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. federal bankruptcy code, the remedies specified by the Resolution and the Series 2011 Bonds may not be readily available or may be limited. The various legal opinions tobedelivered concurrently with the delivery of the Series 2011 Bonds, including Bond Counsel's approving opinion, will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. CONTINUING DISCLOSURE The City has covenanted for the benefit of the holders of the Series 2011 Bonds to provide certain financial information and operating data relating to the City and the Series 2011 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 the audited financial statements with each entity authorized and approved by the SEC to act as a repository (each a "Repository") for purposes of complying with Rule 15c2-12 adopted by the SEC (the 'Rule), Effective July 1, 2009, the sole Repository is the Municipal Securities Rulemaking Board. The City has agreed to file notices of certain enumerated material events, when and if they occur, with the Repository. 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 2011 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 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 upon the issuance of the Series 2011 Bonds. These covenants have been made in order to assist the Underwriters in complying with the continuing disclosure requirements of the Rule. With respect to the Series 2011 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 bonds to provide certain financial and operating information and notices to each nationally recognized municipal securities information repository then approved by the Securities and Exchange Commission, and SID, if and when one is established, and others. 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 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. ACCURACY AND COMPLETENESS OF OFFICIAL STATEMENT The references, excerpts, and summaries of ail documents, statutes, and information concerning the City, the Department 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 2011 Bonds, the security for the payment of the Series 2011 Bonds and the rights and obligations of the owners thereof and to each such statute, report or instrument. The appendices attached hereto are integral parts of this Official Statement and must be read in their entirety together with all foregoing statements. The information and expressions of opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made 52 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. hereunder is to create, under any circumstances, any implication that there has been no change in the affairs of the City or the Department from the date hereof. FORWARD -LOOKING STATEMENTS This Official Statement contains certain "forward -looking statements" concerning the City's and the Department'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 or the Department. 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 matte's 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 2011 Bonds. [Remainder of page intentionally left blank.1 53 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 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 2011 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 2011 Bonds, contains art untrue statement of a material fact or omits to state a material fad 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. 54 THE CITY OF MIAMI, FLORIDA By: City Manager THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. APPENDIX A GENERAL INFORMATION REGARDING THE CITY OF MIAM1 AND MIAMI-DADE COUNTY General Now 115 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 399,457 residents according to the 2010 U.S. Census, 58.9% 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% 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 I5,982,378 23.5 2010 399,457 2,563,885 18,801,310 Source: Bureau of Economic and Business Research, University of Florida, US Census Bureau, Miami -Dade County, Annual Report to Bondholders 2010 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 far 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 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 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 The City'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. Land Shark 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 have approved 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 county -wide 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 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 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Mec_Leal 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 Childress 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 6 mile above -ground system connecting South Miami -Dade and the City of Hialeah with the Downtown and Civic Center areas providing 17.4 million passenger trips annually. Metromover, a 4.4 mile automated loop, carries approximately 8.1 million passenger trips annually around downtown Miami, Brickell Avenue and the Omni shopping center areas. Miami -Dade County's Metrobus operating over 29.8 million miles per year and over 70.5 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 72-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 twelfth in the nation and twenty-eighth in the world in passenger traffic through the airport. The airport ranks third in the nation and eleventh in the world in tonnage of domestic and international cargo movement. In 2010, over 35.7 million air travelers were serviced by Miami International Airport, and approximately 1.9 million tons of domestic and international cargo was handled. As of April 2011, 93 airlines serve Miami International Airport, flying passengers to more than 130 destinations around the globe. Currently, Miami International Airport has a $6.4 billion Capital Improvement Program being implemented which include a new runway, terminal, and cargo facility that is scheduled for completion in the winter of 2011. 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 2009, more than 4.1 million 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 6.5 million torts of cargo transferred through the Port of Miami in 2010. 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 $17 billion annually, which should increase after the completion of the Port of Miami's five year, $346 million capital improvement program. A-3 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. EconQmy 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 AMR° 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. 2110:0: 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 A-4 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 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Distribution of Major Employment Classifications for Miami -Dade County 2010 Percentage Occupational Title Employees of Total§ Construction 33,100 3,4% Manufacturing 34,500 3.5 Mining and Natural Resources 300 0.0 Transportation, Warehousing, and Utilities 57,100 5.8 Wholesale Trade 70,100 7.2 Retail Trade 119,700 12.3 Information 16,400 1.7 Finance Activities 61,700 6.3 Professional and Business 131,400 13.4 Education and Health Services 162,500 16.6 Leisure and Hospitality 102,100 10.5 Other Services 47,500 3.8 Government 151,000 15.5 Total Employed 277,400 100.0% Source: Miami -Dade County Department of Planning/Zoning Research Section. December 2010 Labor Force and Employment Statistics Greater Miami Metropolitan Area Civilian Unemployment Florida Year Employment Labor Force Rate Unemployment Rate 2006 1,118,704 1,166,002 3.40% 3.4% 2007 1,143,548 1,196,086 4.10 4.1 2008 1,142,665 1,212,446 6.10 6.2 2009 1,093,000 1,232,500 11.30 10.8 2010 1,117,000 1,281,900 12.80 11.7 Source: City of Miami, Florida A-5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Major Employers in Miami -Dade County 2010 Public Employers: Name Number of Employees Miami -Dade County Public Schools 38,571 Miami -Dade County 29,000 U.S. Federal Government 19,500 Florida State Government 17,100 Jackson Health System 12,57I Florida international University 8,000 Miami -Dade College 6,200 City of Miami 4,309 Homestead Airforce Base 2,700 VA healthcare System 2,385 City of Miami Beach 1,900 City of Hialeah 1,700 U.S. Southern Command 1,600 City of Coral Gables 901 City of North Miami Beach 626 Source.. The Beacon Council/ Miami -Dade County, Florida- Miami Business I'refik & Relocation Guide 2011 Private Employers: Name Number of Employe University of Miami Baptist Health Systems of South Florida Publix Supermarkets American Airlines Precision Response Corp Florida Power & Light Carnival Cruise Lines Winn Dixie Stores AT&T Mount Sinai Medical Center Miami Children's Hospital Sedano's Supermarket Wells Fargo Assurant Solutions Bank of America 16,000 13,376 10,800 9,000 5,000 3,840 3,500 3,400 3,100 3,000 2,800 2,500 2,179 2.100 2,000 Source: The Beacon Council/ Miami -Dade County, Florida -.Miami Business Profile Cr Relocation Guide 2011 A-6 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Record of Building Permits, 2003 through 2010 City of Miami, Florida New Other New Other Commercial Commercial Residential Residential Fiscal Building Building Building Building. Year ermits Estimated Cos( Permits Permits Estimated Cost Permits 2004-2005 175 $1.661,488,023 2581 404 $94,411,620 4761 2005-2006 125 2,573,453,643 2582 450 119,113,620 5208 2006.2097 98 1,266,199,562 2816 349 110,732,621 5283 2007-2008 80 1,615,039,791 3218 178 60,467,105 3759 2008-2009 264 128,192,793 3640 259 12,484,788 3346 2009-2010 236 592,111,103 5277 220 16,477,268 2794 Source: City of Miami, Florida Building Department Year 2005 2006 2007 2908 2009 2010 Per Capita Personal Income Miami Florida 31,437 35,636 33,712 37,992 36,701 39,078 35,887 39,572 N/A 38,572 NIA 39,230 Source: (1) City of Miami, Florida (2) Bureau of Economic and Business Research, University of Florida A-7 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The City of Miami, Florida Property Tax Rates Fiscal Year Tax Roll Year General Operations Debt Servkce Total City 2001 2000 8.99500 1.2800 10.2750 2002 2001 8.99500 1.2180 10.2130 2003 2002 8.85000 1.2180 10.0680 2004 2003 8.76250 1.0800 9.8425 2005 2004 8.71625 0.9500 9.6663 2006 2005 8.49950 0.7650 9.2645 2007 2006 8.37450 0.6210 8.9955 2008 2007 7.29990 0.5776 7,8775 2009 2008 7.67400 0.6595 8,3335 2010 2009 7.67400 0.9701 8,6441 Scram (ltv of Miami Comprehensive Annual Financial Report Fiscal Year201n and Miami -Dade County Property Appraiser's Office. Note: All m lage rates are based on Si for every $1,al0 of itsessed value. Property Tax Reform The Florida Legislature recently initiated a substantial review and reform of Florida's property tax structure. During a special legislative session that ended on June 14, 2007, the Florida Legislature adopted Chapter 2007-321, Laws of Florida, a property tax plan which may significantly impact ad valorem tax collections for Florida local governments. One component of the adopted legislation requires counties, cities and special districts to rollback their millage rates for the 2007-08 fiscal year to a level that, with certain adjustments and exceptions, will generate the same level of ad valorem tax revenue as in fiscal year 2006-07; provided, however, depending upon the relative growth of each local governrnent's own ad valorem tax revenues from 2001 to 2006, such rolled back millage rates will be determined after first reducing 2006-07ad valorem tax revenues by zero to nine percent (0% to 9%). In addition, the legislation limits how much the aggregate amount of ad valorem tax revenues may increase in future fiscal years. School districts are not required to comply with these particular provisions of the legislation. A local government may override certain portions of these requirements by a supermajority, and for certain requirements, a unanimous vote, and several local governments did so in their 2008 fiscal year budgets. The constitutional amendment ("Amendment One") which passed on January 29, 2008 did not impact the County's fiscal year 2007.08 budget, but the impact of such legislation, together with the general decline in property values, resulted in a property tax decreases in fiscal year 2008-09 and fiscal year 2009-10. The Property Appraiser tax roll released on reflected a % decrease to taxable property values in the City. The overall impact to the City will be an increase in ad valorem revenues of approximately $ In May 2009, the Florida Legislature passed SB 532 which proposed a statewide referendum placed on the November 2010 general election ballot for two measures: (i) an additional homestead exemption for first-time homebuyers; and (ii) a 5% assessment limitation on all commercial and non -homestead, residential A-8 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. property. However, an August 31, 2010, the Florida Supreme Court affirmed lower court rulings to strike the amendment from the November 2010 ballot. The Florida L.egislature also adopted HB 833 in May 2009, which provides an additional homestead exemption for deployed military personnel. The exemption was approved by the Florida voters in the November 2010 General Election, and took effect January 1, 2011. The exemption equals the percentage of days during the prior calendar year that the military homeowner was deployed outside of the United States in support of military operations designated by the legislature. At the present time, it is impossible to predict the impact that HB 833 may have on the City's financial condition. [The City has not yet completed an analysis of the impact of HB 833 on the level of ad valorem taxes that the City will collect. At this time, the extent to which HB 833 may affect the ad valorem tax collections of the City in future years is not currently known.] HB 381, which is currently being considered by the Florida Legislature, provides for a reduction from 10% to 3% of the limitation on annual ad valorem assessment increases applicable to non -homestead property and provides for a first-time homestead exemption which would be available to each person who has not received a homestead exemption in the last three (3) years. This measure requires approval of each house of the Florida Legislature and approval of Florida voters. If this measure is approved by the voters, it would take effect January 1, 2012. As it is very early in the legislative process, no assurance can be given as to what the measure would Iook like in final form. [At the present time, it is impossible to predict the likelihood of approval by the Florida Legislature and subsequent approval by Florida voters or, if approved in whatever form, the impact these measures would have on the City's financial condition.] In its 2011 Regular Session, the Honda Legislature enacted Senate Joint Resolution 958 ("SJR 958"). SJR 958 amends Article VII, Section 1 of the Florida Constitution and creates Article VII, Section 19 and Article XII, Section 32 of the Florida Constitution. SJR 958 (1) replaces the existing state revenue limitation based on. State personal income growth (as described above) with a new state revenue limitation based on changes in population and inflation; (2) requires excess revenues to be deposited into the Budget Stabilization Fund to support public education or returned to taxpayers; (3) adds fines and revenues used to pay debt service on bonds issued after July 1, 2012 to the state revenues subject to the limitation; (4) authorizes the Florida Legislature to increase the revenue limitation by a supermajority vote; and (5) authorizes the Florida Legislature to place a proposed increase before the voters, which would require approval of 60% of the voters. SJR 958 will be on the ballot in the 2012 general election or at an earlier election authorized by Iaw. If approved by 60% of the voters, the new state revenue limitation will be phased in starting in state fiscal year 2014-1015. Overtime the new state revenue limitation is more likely to constrain state revenues than the current state revenue limitation; however, the potential impact on the City or its finances cannot be ascertained at this time. The Honda Legislature convened for its 2011 Regular Session on March 8, 2011. During this Regular Session, the Florida Legislature passed House Joint Resolution 381 ("HJR 381"). Among other things, HJR 381 seeks to prohibit the increase of assessed value for property whose fair market value declined over the prior year. reduce the limitation on annual increases of non -homestead property from 10% to 3%, provide an additional homestead exemption for first-time homeowners and reduce from 10% to 5% the limitation on annual changes in assessments of nonhomestead property. Such proposal requires approval by 60% of the voters. At present, it is uncertain if this proposal will be approved by the voters. If approved, the impact of this proposal on the City's finances cannot be accurately ascertained. A-9 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Assessed Valuations CITY OF MIAMI, FLORIDA NET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS N cr Ax e,rstd Real Property Value as a Fiscall'ear Nct Teed EKtimated Percentageof Ended Rvr'idential Commercial Personal Assessed Dim/.r..x Actual 13scimated Actual September 30, Property Property Property Value Rate Value Value (1) 2001 6,000,474,083 6,113,340,757 1,657,551,519 13,771366,359 10.28 20,061,032,742 68.65% 2002 6,612,151,524 6,730,517,606 1,770,392,311 15,113,061,441 10.21 22,035,829,555 68.58% 2003 7,679,048,886 7,380,571,799 1,878,266,085 16,937,886,770 10.07 24,759,964,620 68.41% 2004 8,789,474,779 8,369,950,851 1,711,697,688 18,871,123,18 9.84 27,71.7,908,682 68.08% 2005 10,364,157,774 9,870,433,741 1,695,110,542 21,929,702,057 9.67 32,133,104,422 68.25% 2006 12,959,276,770 12,311,927, 89 1,676,173,129 26,977,377,288 9.26 39,120,899,711 68.96% 2007 20,320,801,612 11,038,460,135 1,673,647,599 33,032,909,346 9.00 47,925,276,742 68.93% 2008 24,279,025,389 11,727,240,945 1,749,572,760 37,755,839,094 7.88 55,249,891,635 68.34% 2009 23,572,178,928 11,890,691,413 1,686,320,651 37,149,190,992 8.33 52,185,972,858 71.19% 2010 23,341,894,079 11,921,087,043 1,686,540,244 36.949,521,366 8.64 52,146,883,603 70.86% Slaufss Miami-I}alc County Property Appctistr's Offfiicc. Note Pre pr rty in the City i rmactisedeach year. Stara law requires the Property Apprautx to appraise property at 100% of market value The Florida Constitution was nmendcxl, effeenve]anuary 1, 1995, to limit annual mcreases in assessed value of property with hcxrx"sttmd Lxemptiat to 3 pere t per year or the amount of the Consumer Price Index, whichever is lower. The inertias: is not automatic since ran assessed value shall exceed market value. Tax rates are per 51,000 of assessed viiue. (1) Inducts tax-cxempt property. Property Tax Levies and Collections CITY OF MIAMI, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collected within Total Taxes the Fiscal Year Total Collections Levied for of the Levy Collections in to Date Fiscal Year Ended Fiscal Percent Subsequent Percent September 30, Year Amount of Levy Year's Amount of Levy 2001 141,500,789 131,872,377 93.20% 5,959,373 137,831,750 97.41% 2002 154,349,696 145,506,737 94.27% 4,079,641 149,586,378 96.91% 2003 170, 530, 644 161,197,051 94.53% 7,735, 274 168,932,325 99.06% 2004 185,739,031 178,766,680 96.25% 1,640,252 180,406,932 97.13% 2005 211,977,983 206,451,562 97.39% 2,379,977 208,831,539 98.52% 2006 249,931,912 243,957,356 96.82% 3,801,414 247,758,770 99.13% 2007 297,147,536 290,449,738 97.76% 7,111,337 297,561,075 100.14% 2008 297,421,622 2134,001,962 95.49% 8,489,434 292,491,396 98.34% 2009 309,582,783 296,404,297 95.74% 9,200,940 305,605,237 98.72% 2010 319,395,358 278,010,020 87.04% 278,010,020 87.04% Source: City of Miami, Finance Department and Miami -Dade County Tax Collector's Office A -10 Ten Largest Tax Assessments THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. CITY OF MIAMI, FI.ORIDA PRINCIPAL PROPERTY TAXPAYERS 2010 Taxpayer Net Assessed Value Rank Percent of Total City Net Assessed Value Florida Power & Light $437,936,647 1 1.19% 2005 Biscayne TIC 1 LLC 290,700,000 2 0.79% Crescent Miami Center 196,500,000 3 0.533% Bellsouth Telecommunications 186,796,701 4 0.51 % TC 701 Brickeil LLC 172,900,000 5 0.47% 1111 Bricke11 Office LLC 146,100,000 6 0.40% Trustees of L&B 117,400,000 7 1132 % Opera Tower LLC 112,499,679 8 0.30% Estorillncorporated 107,400,000 9 0.29% Blue Capital US East 99,500,000 10 0.27% Net Assessed Value Source: City of Miami, Florida $ 1,867,733,027 5.05% $ 36,949521,366 5.05% A-I1 Overlapping Debt THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. CITY OF MIAMI, FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT A5 OF SEPTEMBER 30, 2010 Government Unit Debt Repaid With Property Taxes it Dori -Dads: County Miami -Dade Cutm§ School Board Subtotal, Overlapping Debt Ciry of Miami, Marida Dircit Debt (excludes TprCal obligation, revenue bonds, loans and apical k ) 'Total Direct anti Overlapping Debt Nct Dcbt Percentage Applicable Out.,tanding to the City of Miarnilt] 5 839,095,804 19.00'! 348,100,000 19.00% Amount Applicable to the City of Miami S 159,428,203 84,139,000 22S587,2(13 20,834,455 5 491,3311,658 Sources: Data provided by the Miami -Dade County Finance Department and the Miami -Dade County School Board. Note: Overlapping governments are those that coincide, at least in part, with the gutgt aphic boundaries of the City. This schedule estimate; 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 residtatts and businesses should be talccst into acct uunt. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government tP For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Value that is within the City's botntdaries and dividing it by theCounty's and School Board's total taxable assessed value. This approach was also used for the other debt - A -72 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. CITY OF MIAMI, FLORIDA FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010 SUMMARY OF DEBT RATIOS, MEASUREMENTS AND DEBT CONSTRAINTS CRITERIA Debt Ratios General Obligation & Limited Ad Valorem Debt Per Capita General Obligation & Limited Ad Valorem Debt as a Percentage of Taxable value Non•Se1f 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: City of Miami Finance Department A -13 665.52 0.510% 1,023.60 1.11% 9.76% 665,52 1.11% 10.76% THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. APPENDIX Ii FORM OF THE BOND RESOLUTION T be rialeolsoefed t r ApeRv u L 0 ss�d-;rit, THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. APPENDIX C GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 20Z0 9,4:e THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. APPENDIX D FORM OF BOND COUNSEL OPINION be p -14 welt Cy& .. P 'Ytiemuic t THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. -To .b . ce-ntfkAd m_ C P_ APPENDIX E DISCLOSURE DISSEMINATION AGENT AGREEMENT This Disclosure Dissemination Agent Agreement (the "Disclosure Agreement"), dated as of 2011, is executed and delivered by the City of Miami, Florida (the "Issuer') and Digital Assurance Certification, L.L.C., as the initial exclusive Disclosure Dissemination Agent (the "Disclosure Dissemination Agent" or "DAC") for the benefit of the Holders (hereinafter defined) of the Bonds (hereinafter defined) and in order to provide certain continuing disclosure with respect to the Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time (the "Rule"). SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the following meanings: "Annual Report" means an Annual Report described in and consistent with Section 3 of this Disclosure Agreement. "Annual Filing Date" means the date, set in Sections 2(a) and 2(f), by which the Annual Report is to be filed with the Repositories. "Annual Financial Information" means annual financial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure Agreement. "Audited Financial Statements" means the financial statements (if any) of the Issuer for the prior fiscal year, certified by an independent auditor as prepared in accordance with generally accepted accounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Disclosure Agreement. "Bonds" means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto, "Certification" means a written certification of compliance signed by the Disclosure Representative stating that the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice delivered to the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice required to be submitted to the Repositories under this Disclosure Agreement. A Certification shall accompany each such document submitted to the Disclosure Dissemination Agent by the Issuer and include the full name of the Bonds and the 9- digit CUSII' numbers for all Bonds to which the document applies. "Disclosure Representative" means the Finance Director of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Disclosure Dissemination Agent from time to time as the person responsible for providing Information to the Disclosure Dissemination Agent. "Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C, acting in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure Dissemination Agent designated in writing by the Issuer pursuant to Section 9 hereof. E •1 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. "Holder" means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income tax purposes. "Information" means the Annual Financial Information, the Audited Financial Statement (if any) the Notice Event notices, and the Voluntary Reports. "Notice Event" means an event listed in Section 4(a) of this Disclosure Agreement. "MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934. "Official Statement" means that Official Statement prepared by the Issuer in connection with the Bonds, as listed on Exhibit A. "Repository" means the MSRB. "Voluntary Report" means the information provided to the Disclosure Dissemination Agent by the Issuer pursuant to Section 7, SECTION 2. Provisi ji of Annual Reports. (a) The Issuer shall provide, annually, an electronic copy of the Annual Report and Certification to the Disclosure Dissemination Agent, together with a copy for the Trustee, not later than 30 days prior to the Annual Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and the Certification, the Disclosure Dissemination Agent shall provide a copy Annual Report to each National Repository and the State Depository (if any) not later than June 30 of each year, commencing with the fiscal year ending September 30, 2010. Such date and each anniversary thereof is the Annual Filing Date. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 3 of this Disclosure Agreement. (b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure Dissemination Agent has not received a copy of the Annual Report and Certification, the Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative shall either (i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report and the Certification no later than two (2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the Issuer will not be able to file the Annual Report within the time required under this Disclosure Agreement, state the date by which the Annual Report for such year will be provided and instruct the Disclosure Dissemination Agent that a Notice Event as described in Section 4(a)(12) has occurred and to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. (c) If the Disclosure Dissemination Agent has not received an Annual Report and Certification by 12.00 noon on the first business day following the Annual Filing Date for the Annual Report, a Notice Event described in Section 4(a)(12) shall have occurred and the Issuer irrevocably directs the Disclosure Dissemination Agent to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. E-2 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. (d) If Audited Financial Statements of the Issuer are prepared but not available prior to the Annual Filing Date, the Issuer shall, when the Audited Financial Statements are available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certificate, for filing with each National Repository and the State Depository (if any). (e) The Disclosure Dissemination Agent shall: (i) determine the name and address of each Repository each year prior to the Annual Filing Date; (ii) upon receipt, promptly file each Annual Report received under Section 2(a) with each National Repository, and the State Depository (if any); (iii) upon receipt, promptly file each Audited Financial Statement received under Section 2(d) with each National Repository, and the State Depository (if any); (iv) upon receipt, promptly file the text of each disclosure to be made with each National Repository or the MSRB and the State Depository (if any) together with a completed copy of the MSRB Material Event Notice Cover Sheet in the form attached as Exhibit C, describing the event by checking the box indicated below when filing pursuant to the Section of this Disclosure Agreement indicated: 1. "Principal and interest payment delinquencies," pursuant to Sections 4(c) and 4(a)(1); 2. "Non -Payment related defaults," pursuant to Sections 4(c) and 4(a)(2); 3. "Unscheduled draws on debt service reserves reflecting financial difficulties," pursuant to Sections 4(c) and 4(a)(3); 4. "Unscheduled draws an credit enhancements reflecting financial difficulties," pursuant to Sections 4(r) and 4(a)(4); 5. "Substitution of credit or liquidity providers, or their failure to perform," pursuant to Sections 4(c) and 4(a)(5); 6. "Adverse tax opinions or events affecting the tax-exempt status of the security," pursuant to Sections 4(c) and 4(a)(6); 7. "Modifications to rights of securities holders," pursuant to Sections 4(c) and 4(a)(7); B. "Bond calls," pursuant to Sections 4(c) and 4(a)(8); 9. "Defeasances," pursuant to Sections 4(c) and 4(a)(9); 10. "Release, substitution, or sale of property securing repayment of the securities," pursuant to Sections 4(c) and 4(a)(10); 11. "Ratings changes," pursuant to Sections 4(c) and 4(a)(11); E-3 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 12. "Failure to provide annual financial information as required," pursuant to Section 2(b)(ii) or Section 2(c), together with a completed copy of Exhibit B to this Disclosure Agreement; 13. "Other material event notice (specify)," pursuant to Section 7 of this Agreement, together with the summary description provided by the Disclosure Representative. (v) provide the Issuer evidence of the filings of each of the above when made, which shall be by means of the DAC system, for so long as DAC is the Disclosure Dissemination Agent under this Disclosure Agreement. (f) The Issuer may adjust the Annual Filing Date upon change of its fiscal year by providing written notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent, Trustee (if any) and the Repositories, provided that the period between the existing Annual Filing Date and new Annual Filing Date shall not exceed one year. SECTION 3. Content of Annual Reports. (a) Each Annual Report shall contain Annual Financial Information with respect to the Issuer including the information in the tables provided in "APPENDIX A" to the Official Statement. (b) Audited Financial Statements prepared in accordance with generally accepted accounting principles ("GAAP") as described in the Official Statement will be included in the Annual Report. If such Audited Financial Statements are unavailable at the Annual Filing Date, unaudited financial statements, prepared in accordance with GAAP will be included in the Annual Report. Audited Financial Statements (if any) will be provided pursuant to Section 2(d). Any or all of the items listed above may be included by specific reference from other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been previously filed with each of the National Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The Issuer will dearly identify each such document so incorporated by reference. SECTION 4. Reporting of Notice Events. (a) The occurrence of any of the following events, if material, with respect to the Bonds constitutes a Notice Event; 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; Substitution of credit or liquidity providers, or their failure to perform; E-4 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of Bond holders; B. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; 11. Rating changes on the Bonds; and 12. Failure to provide annual financial information as required. The Issuer shall promptly notify the Disclosure Dissemination Agent in writing upon the occurrence of a Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to subsection (c). Such notice shall be accompanied with the text of the disclosure that the issuer desires to make, the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information. (b) The Disclosure Dissemination Agent is under no obligation to notify the Issuer or the Disclosure Representative of an event that may constitute a Notice Event. In the event the Disclosure Dissemination Agent so notifies the Disclosure Representative, the Disclosure Representative will within five business days of receipt of such notice, instruct the Disclosure Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to report the occurrence pursuant to subsection (c) of this Section 4, together with the text of the disclosure that the Issuer desires to make, the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information. (c) If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall promptly file a notice of such occurrence with the State Depository (if any) and (i) each National Repository, or (ii) the MSRB. SECTION 5. CL.ISIP Numbers. Whenever providing information to the Disclosure Dissemination Agent, including but not limited to Annual Reports, documents incorporated by reference to the Annual Reports, Audited Financial Statements, notices of Notice Events, and Voluntary Reports filed. pursuant to Section 7(a), the Issuer shall indicate the full name of the Bonds and the 9-digit CUSIP numbers for the Bonds as to which the provided information relates. SECTION 6. Additional Disclosure Obligations. The Issuer acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, may apply to the Issuer, and that the failure of the Disclosure Dissemination Agent to so advise the Issuer shall not constitute a breach by the Disclosure Dissemination Agent of any of its duties and responsibilities under this Disclosure Agreement. The Issuer acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating information as described in this Disclosure Agreement, E-S THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. SECTION 7. Voluntary Reports. (a) The Issuer may instruct the Disclosure Dissemination Agent to file information with the Repositories, from time to time pursuant to a Certification of the Disclosure Representative accompanying such information (a "Voluntary Report"). (b) Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information through the Disclosure Dissemination Agent using the means of dissemination set forth in this Disclosure Agreement or including any other information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice, in addition to that required by this Disclosure Agreement. if the Issuer chooses to include any information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice in addition to that which is specifically required by this Disclosure Agreement, the issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice. SECTION 8. Termination of Reporting Obligation. The obligations of the Issuer and the Disclosure Dissemination Agent under this Disclosure Agreement shall terminate with respect to the Bonds upon the legal defeasance, prior redemption or payment in full of all of the Bonds, when the Issuer is no longer an obligated person with respect to the Bonds, or upon delivery by the Disclosure Representative to the Disclosure Dissemination Agent of an opinion of nationally recognized bond counsel to the effect that continuing disclosure is no longer required. SECTION 9. Disclosure Dissemination Agent. The Issuer has appointed Digital Assurance Certification, L.L.C. as the initial exclusive Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer may, upon thirty days written notice to the Disclosure Dissemination Agent and the Trustee, replace or appoint a successor Disclosure Dissemination Agent. Upon termination of DAC's services as Disclosure Dissemination Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint a successor Disclosure Dissemination Agent or, alternately, agrees to assume all responsibilities of Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the Holders of the Bonds. Notwithstanding any replacement or appointment of a successor, the Issuer shall remain liable until payment in full for any and all sums owed and payable to the Disclosure Dissemination Agent. The Disclosure Dissemination Agent may resign at any time by providing thirty clays' prior written notice to the Issuer. SECTION 10. Remedies in Event of Default. In the event of a failure of the Issuer or the Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Holders' rights to enforce the provisions of this Agreement shall be Iimited solely to a right, by action in mandamus or for specific performance, to compel performance of the parties' obligation under this Disclosure Agreement. Any failure by a party to perform in accordance with this Disclosure Agreement shall not constitute a default on the Bonds or under any other document relating to the Bonds, and all rights and remedies shall be limited to those expressly stated herein. SECTION 1I. Duties. Immunities and Liabilities of Disclosure Dissemination Agent. (a) The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent's obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issuer has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made E-6 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. pursuant to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify any information or any other information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for the Issuer's failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for fairing to determine, whether the Issuer has complied with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon certifications of the Issuer at all times. TO THE EXTENT PERMITTED BY LAW, THE ISSUER AGREES TO LNDEMNIFY AND SAVE THE DISCLOSURE DISSEMINATION AGENT AND ITS RESPECTIVE OFFICERS, DIRECTORS. EMPLOYEES AND AGENTS, HARMLESS AGAINST ANY L055, EXPENSE AND LIABILITIES WHICH THEY MAY INCUR ARISING OUT OF OR 1N THE EXERCISE OR PERFORMANCE OF THEIR POWERS AND DUTIES HEREUNDER, INCLUDING THE COSTS AND EXPENSES (INCLUDING ATTORNEYS FEES) OF DEFENDING AGAINST ANY CLAIM OF LIABILITY, BUT EXCLUDING LIABILITIES DUE TO THE DISCLOSURE DISSEMINATION AGENTS NEGLIGENCE OR WILLFUL MISCONDUCT. The obligations of the Issuer under this Section shall survive resignation or removal of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds. (b) The Disclosure Dissemination Agent may, from time to time, consult with legal counsel (either in-house or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, and the Disclosure Dissemination Agent shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The fees and expenses of such counsel shall be payable by the Issuer. SECTION 12. Amenment: Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issuer and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to both the Issuer and the Disclosure Dissemination Agent to the effect that such amendment or waiver does not materially impair the interests of Holders of the Bonds and would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in. or official interpretation of the Rule; provided neither the Issuer nor the Disclosure Dissemination Agent shall be obligated to agree to any amendment modifying their respective duties or obligations without their consent thereto. Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time by giving not less than 20 days written notice of the intent to do so together with a copy of the proposed amendment to the Issuer. No such amendment shall become effective if the Issuer shall, within 10 days following the giving of such notice, send a notice to the Disclosure Dissemination Agent in writing that it objects to such amendment, SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the issuer, the Trustee of the Bonds, the Disclosure Dissemination Agent, the Underwriters, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity. E-7 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. SECTION 14. Governing Law. This Disclosure Agreement shall be governed by the laws of the State of New York (other than with respect to conflicts of laws). SECTION 15. counterparts. This [}isdosure Agreement maybe executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [Remainder of page intentionally left blank.] E-8 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The Disclosure Dissemination Agent and the Issuer have caused this Continuing Disclosure Agreement to be executed, on the date first written above, by their respective officers duly authorized. DIGITAL ASSURANCE CERTIFICATION, L.LC., as Disclosure Dissemination Agent By: Name: Title: THE CITY OF MIAMI, FLORIDA as Issuer By: E-9 Name: Tony E. Crapp, jr Title: City Manager THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. be_ Cox pliekt lArrn C EXHIBIT A NAME AND CUSIP NUMBERS OF BONDS Name of issuer: City of Miami, Florida Obligated Person(s): City of Miami, Florida Name of Bond Issue: Special Obligation Non -Ad Valorem Refunding Bonds Series 2011A; and Special Obligation Non -Ad Valorem Refunding Bonds Series 2011B Date of Issuance: Date of Official Statement: ,2011 ,2011 Maturity Initial CUSIP fFebruary 1) Principal Amount Interest Rate Yield Price Number E-10 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. b err�pk'kd-1ii b4-Neee SI{ 1 EXHIBIT B NOTICE TO REPOSITORIES OF FAILURE TO FELE ANNUAL REPORT Name of Issuer: City of Miami, Florida Obligated Persan(s): City of Miami, Florida Name of Bond Issue: Special Obligation Non -Ad Valorem Refunding Bonds Series 2011A; and Special Obligation Non -Ad Valorem Refunding Bonds Series 2011E Date of Issuance: , 2011 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above -named Bonds as required by the Disclosure Agreement, dated as of between the Issuer and Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent. The Issuer has notified the Disclosure Dissemination Agent that it anticipates that the Annual Report will be filed by Dated: cc: Issuer Obligated Person Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent, on behalf of the Issuer E-11 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. b e a r to to # ed A s .4-Pid EXHIBIT C EVENT NOTICE COVER SHEET This cover sheet and material event notice will be sent to all Nationally Recognized Municipal Securities Information Repositories, and any State Information Depository, if applicable, pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D). Issuer's and/or Other Obligated Person's Name: Issuer's Six -Digit CUSIP Number: or Nine -Digit CURT' Number(s) of the bonds to which this material event notice relates: Number of pages of attached: Description of Material Event Notice (Check One): 1. Principal and interest payment delinquencies 2. /Non -Payment related defaults 3, !Unscheduled draws on debt service reserves reflecting financial difficulties 4. _Unscheduled draws on credit enhancements reflecting financial difficulties 5. Substitution of credit or liquidity providers, or their failure to perform 6. ,Adverse tax opinions or events affecting the tax-exempt status of the security 7. _Modifications to rights of securities holders 8. ,Bond calls 9. _Defeasances 10. _Release, substitution, or sale of property securing repayment of the securities 11. _Rating changes 12. — Failure to provide annual financial information as required 13. _Other material event notice (specify) I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly: Signature: Name: Title: Employer; Digital Assurance Certification, L.L.C. Address: City, State, Zip Code: Voice Telephone Number: Please print the material event notice attached to this cover sheet in 10-point type or larger. The cover sheet and notice may be faxed to the MSRB at f7031683.1930 or sent to CD1Net, Municipal Securities Rulemalang Board, 1900 Duke Street, Suite 600, Alexandria, VA 22314. Contact the MSRB at (7031 797.6600 with questions regarding this form or the dissemination of this notice. E-12 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. APPENDIX F SPECIMEN MUNICIPAL BOND INSURANCE POLICY THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. EXHIBIT D FORM OF CONTINUING DISCLOSURE AGREEMENT 10 be c4tThele-44"1 14Pftl ci247)"/ D-1 MIAMI/4265564.5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. FT DISCLOSURE DISSEMINATION AGENT AGREEMENT This Disclosure Dissemination Agent Agreement (the "Disclosure Agreement"), dated as of 2011, is executed and delivered by the City of Miami, Florida (the "Issuer") and Digital Assurance Certification, L.L.C., as the initial exclusive Disclosure Dissemination Agent (the 'Disclosure Dissemination Agent" or "DAC") for the benefit of the Holders (hereinafter defined) of the Bonds (hereinafter defined) and in order to provide certain continuing disclosure with respect to the Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time (the "Rule"). SECTION 1. Definitions. Capitalized terns not otherwise defined in this Disclosure Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the following meanings: "Annual Report" means an Annual Report described in and consistent with Section 3 of this Disclosure Agreement. "Annual Filing Date" means the date, set in Sections 2(a) and 2(f), by which the Annual Report is to be filed with the Repo'sitories. "Annual Financial Information" means annual financial information as such term is used in paragraph (b)(5)(1) of the Rule and specified in Section 3(a) of this Disclosure Agreement. "Audited Financial Statements" means the financial statements (if any) of the Issuer for the prior fiscal year, certified by an independent auditor as prepared in accordance with generally accepted accounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Disclosure Agreement. "Bonds" means the bonds as listed an the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto. "Certification" means a written certification of compliance signed by the Disclosure Representative stating that the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice delivered to the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice required to be submitted to the Repositories under this Disclosure Agreement. A Certification shall accompany each such document submitted to the Disclosure Dissemination Agent by the Issuer and include the full name of the Bonds and the 9-digit CUSIP numbers for all Bonds to which the document applies. "Disclosure Representative", means the Finance Director of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Disclosure Dissemination Agent from time to time as the person responsible for providing Information to the Disclosure Dissemination Agent. "Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C, acting in its capacity as l is t 1rr)isseminati'on--Agent—hereunder, or any successor Disclosure Dissemination Agent designated in writing by the Issuer pursuant to Section 9 hereof. �}1 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. "Holder" means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income tax purposes. "Information" means the Annual Financial Information, the Audited Financial Statements (if any) the Notice Event notices, and the Voluntary Reports. "Notice Event" means an event listed in Section 4(a) of this Disclosure Agreement. "MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934. "Official Statement" means that Official Statement prepared by the Issuer in connection with the Bonds, as listed on Exhibit A. "Repository" means the MSRU. "Voluntary Report" means the information provided to the Disclosure Dissemination Agent by the Issuer pursuant to Section 7. SECTION 2. Provision of Annual Reports. (a) The Issuer shall provide, annually, an electronic copy of the Annual Report and Certification to the Disclosure Dissemination Agent, together with a copy for the Trustee, not later than 30 days prior to the Annual Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and the Certification, the Disclosure Dissemination Agent shall provide a copy Annual Report to each National Repository and the State Depository (if any) not later than June 30 of each year, commencing with the fiscal year ending September 30, 2010. Such date and each anniversary thereof is the Annual Filing Date. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 3 of this Disclosure Agreement. (b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure Dissemination Agent has not received a copy of the Annual Report and Certification, the Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the Issuer of its undertaking to provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative shall either (i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report and the Certification no later than two (2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the Issuer will not -be able to file the Annual Report within the time required under this Disclosure Agreement, state the date by which the Annual Report for such year will be provided and instruct the Disclosure Dissemination ,Agent_that'a„Notice Event as described in Section 4(a)(I2) has occurred and to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. (c) it the Disclosure Vissemination Agent has not received an Annual Report and Certification by 12;00 noon on the first business day following the Annual Filing Date for the Annual Report, a Notice Event described in Section 4(a)(12) shall have occurred and the Issuer irrevocably directs 2 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. the Disclosure Dissemination Agent to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. (d) If Audited Financial Statements of the Issuer are prepared but not available prior to the Annual Filing Date, the Issuer shall, when the Audited Financial Statements are available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certificate, for filing with each National Repository and the State Depository (if any). (e) The Disclosure Dissemination Agent shall: (i) determine the name and address of each Repository each year prior to the Annual Filing Date; (ii) upon receipt, promptly file each Annual Report received under Section 2(a) with each National Repository, and the State Depository (if any); (iii) upon receipt, promptly file each Audited Financial Statement received under Section 2(d) with each National Repository, and the State Depository (if any); (iv) upon receipt, promptly file the text of each disclosure to be made with each National Repository or the MSRB and the State Depository (if any) together with a completed copy of the MSRB Material Event Notice Cover Sheet in the form attached as Exhibit C, describing the event by checking the box indicated below when filing pursuant to the Section of this Disclosure Agreement indicated: 1. "Principal and interest payment delinquencies," pursuant to Sections 4(c) and 4(a)(1); 2. "Non -Payment related defaults," pursuant to Sections 4(c) and 4(a)(2); 3. "Unscheduled draws on debt service reserves reflecting financial difficulties," pursuant to Sections 4(c) and 4(a)(3); 4. "Unscheduled draws on credit enhancements reflecting financial difficulties," pursuant to Sections 4(c) and 4(a)(4); 5. "Substitution of credit or liquidity providers, or their failure to perform," pursuant to Sections 4(c) and 4(a)(5); 5. "Adverse tax opinions or events affecting the tax-exempt status of the security," pursuant to Sections 4(c) and 4(a)(6); 7. "Modifications to rights of securities holders," pursuant to Sections 4(c) an 4(a)(7); 8. "Bond calls," pursuant to Sections 4(c) and 4(a)(8); 9. "Defeasances," pursuant to Sections 4(c) and 4(a)(9); 3 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 10. "Release, substitution, or sale of property securing repayment of the securities," pursuant to Sections 4(c) and 4(a)(10); 11. "Ratings changes," pursuant to Sections 4(e) and 4(a)(11); 12. "Failure to provide annual financial information as required," pursuant to Section 2(b)(ii) or Section 2(e), together with a completed copy of Exhibit B to this Disclosure Agreement; 13. "Other material event notice (specify)." pursuant to Section 7 of this Agreement, together with the summary description provided by the Disclosure Representative. (v) provide the Issuer evidence of the filings of each of the above when made, which shall be by means of the DAC system, for so long as DAC is the Disclosure Dissemination Agent under this Disclosure Agreement. (f) The Issuer may adjust the Annual Filing Date upon change of its fiscal year by providing written notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent, Trustee (if any) and the Repositories, provided that the period between the existing Annual Filing Date and new Annual Filing Date shall not exceed one year. SECTION 3. Content of Annual Reports. (a) Each Annual Report shall contain Annual Financial Information with respect to the Issuer including the information in the tables provided in "APPENDIX A" to the Official Statement. (b) Audited Financial Statements prepared in accordance with generally accepted accounting principles ("GAAPP") as described in the Official Statement will be included in the Annual Report. If such Audited Financial Statements are unavailable at the Annual Filing Date, unaudited financial statements, prepared in accordance with CAAP will be included in the Annual Report. Audited Financial Statements (if any) will be provided pursuant to Section 2(d). Any or all of the items listed above may be included by specific reference from other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been previously filed with each of the National Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The Issuer will clearly identify each such document so incorporated by reference. SECTION 4. Reporting.pf Notice Events. (a) The occurrence of any of the following events, if material, with respect to the Bonds constitutes a Notice Event: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 4 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of Bond holders; 8. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; 11. Rating changes on the Bonds; and 12. Failure to provide annual financial information as required. The Issuer shall promptly notify the Disclosure Dissemination Agent in writing upon the occurrence of a Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to subsection (c). Such notice shall be accompanied with the text of the disclosure that the Issuer desires to make, the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information. (b) The Disclosure Dissemination Agent is under no obligation to notify the Issuer or the Disclosure Representative of an event that may constitute a Notice Event. In the event the Disclosure Dissemination Agent so notifies the Disclosure Representative, the Disclosure Representative will within five business days of receipt of such notice, instruct the Disclosure Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to report the occurrence pursuant to subsection (c) of this Section 4, together with the text of the disclosure that the issuer desires to make, the written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the information. (c) If the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall promptly file a notice of such occurrence with the State Depository (if any) ind (i) each -National Repository; cir (ii) the SECTION 5, CUSIP Numbe s. Whenever providing information to the Disclosure 715sc1nhiatiol� A5c1,t, ii dudirig-but ,Xut-limited-to Ai nttai-Reports, documents incorporated by reference to the Annual Reports, Audited Financial Statements, notices of Notice Events, and Voluntary Reports filed pursuant to Section 7(a), the Issuer shall indicate the full name of the Bonds and the 9-digit CUSIP numbers for the Bonds as to which the provided information relates. THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. SECTION 6. Additional Disclosure Obligations. The Issuer acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of ]934,.may apply to the issuer, and that the failure of the Disclosure Dissemination Agent to so advise the Issuer shall not constitute a breach by the Disclosure Dissemination Agent of any of its duties and responsibilities under this Disclosure Agreement. The Issuer acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating information as described in this Disclosure Agreement. SECTION 7. Voluntary Reports. (a) The Issuer may instruct the Disclosure Dissemination Agent to file information with the Repositories, from time to time pursuant to a Certification of the Disclosure Representative accompanying such information (a "Voluntary Report"). (b) Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from disseminating any other information through the Disclosure Dissemination Agent using the means of dissemination set forth in this Disclosure Agreement or including any other information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice, in addition to that required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice. SECTION 8. Termination of Reporting Obligation. The obligations of the Issuer and the Disclosure Dissemination Agent under this Disclosure Agreement shall terminate with respect to the Bonds upon the legal defeasance, prior redemption or payment in full of all of the Bonds, when the Issuer is no longer an obligated person with respect to the Bonds, or upon delivery by the Disclosure Representative to the Disclosure Dissemination Agent of an opinion of nationally recognized bond counsel to the effect that continuing disclosure is no longer required. SECTION 9. Disclosure Dissemination Agent. The Issuer has appointed Digital Assurance Certification, L.L.C. as the initial exclusive Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer may, upon thirty days written notice to the Disclosure Dissemination Agent and the Trustee, replace or appoint a successor Disclosure Dissemination Agent. Upon termination of DAC's services as Disclosure Dissemination Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint a successor Disclosure Dissemination Agent or, alternately, agrees to assume all responsibilities of Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the Holders of the Bonds. Notwithstanding any replacement or appointment of a successor, the Issuer shall remain liable until payment in full for any -and all sums owed and payable to the Disclosure Dissemination Agent. The Disclosure Dissemination Agent may resign at any time by providing thirty days' prior written notice to the Issuer. SECTION 10. Remedies in Event of Default. In the event of a failure of the Issuer or the Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Holders' rights to enforce the provisions of this Agreement shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the parties' obligation under this 6 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. Disclosure Agreement. Any failure by a party to perform in accordance with this Disclosure Agreement shall not constitute a default on the Bonds or under any other document relating to the Bonds, and all rights and remedies shall be limited to those expressly stated herein. SECTION 11. Duties. Immunities and Liabilities of Disclosure Dissemination Agent. (a) The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent's obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issuer has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify any information or any other information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for the Issuer's failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the Issuer has complied with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon certifications of the Issuer at ail times. TO THE EXTENT PERMITTED BY LAW, THE ISSUER AGREES TO INDEMNIFY AND SAVE THE DISCLOSURE DISSEMINATION AGENT AND ITS RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, HARMLESS AGAINST ANY LOSS, EXPENSE AND LIABIL]77ES WHICH THEY MAY INCUR ARISING OUT OF OR IN THE EXERCISE OR PERFORMANCE OF THEIR POWERS AND DUTIES HEREUNDER, INCLUDING THE COSTS AND EXPENSES (INCLUDING ATTORNEYS FEES) OF DEFENDING AGAINST ANY CLAIM OF LIABILITY, BUT EXCLUDING L]ABILITIES DUE TO THE DISCLOSURE DISSEMINATION AGENT'S NEGLIGENCE OR WILLFUL MISCONDUCT. The obligations of the Issuer under this Section shall survive resignation or removal of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds. (b) The Disclosure Dissemination Agent may, from time to time, consult with legal counsel (either in-house or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, and the Disclosure Dissemination Agent shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The fees and expenses of such counsel shall be payable by the Issuer. SECTION 12. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issuer and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by.an opinion of counsel expert in federal securities laws acceptable to both the Issuer and the Disclosure Dissemination Agent to the effect that such amendment or waiver does not materially impair the interests of Holders of the Bonds and would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule; provided neither the Issuer nor 7 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. the Disclosure Dissemination Agent shall be obligated to agree to any amendment modifying their respective duties or obligations without their consent thereto. Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time by giving not less than 20 days written notice of the intent to do so together with a copy of the proposed amendment to the Issuer. No such amendment shall become effective if the Issuer shall, within 10 days following the giving of such notice, send a notice to the Disclosure Dissemination Agent in writing that it objects to such amendment. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Trustee of the Bonds, the Disclosure Dissemination Agent, the Underwriters, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity. SECTION 14. Governing Law. This Disclosure Agreement shall be governed by the laws of the State of New York (other than with respect to conflicts of laws). SECTION IS. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. (Remainder of page intentionally Left blank.) 8 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. The Disclosure Dissemination Agent and the Issuer have caused this Continuing Disclosure Agreement to be executed, on the date first written above, by their respective officers duly authorized. DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Disclosure Dissemination Agent By: Name: Title: • THE CITY OF MIAMI, FLORIDA as Issuer By: - - 9 Name: Tony E. Ci-app, Jr Title: City Manager Name of Issuer: Obligated Person(s): Name of Bond Issue: THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. 7i be c-ht f e d ip? ri tt-0s :4 1 EXHIBIT A NAME AND CUSIP NUMBERS OF BONDS City of Miami, Florida City of Miami, Florida Special Obligation Non -Ad Valorem Refunding Bonds Series 2011A; and Special Obligation Non -Ad Valorem Refunding Bonds Series 20116 Date of Issuance: , 2011 Date of Official Statement: , 2011 Matunty (February I) principal Amount Interest Rate 10 Initial CUSIP Yield Price Number THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. -76 c...,Pwifieleled .4s 414.8 i-F Affe.t.s.5,6424,d- EXHIBIT B NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of issuer: City of Miami, Florida Obligated Person(s): City of Miami, Florida Name of Bond Issue: Special Obligation Non -Ad Valorem Refunding Bonds Series 2O11A; and Special Obligation Non -Ad Valorem Refunding Bonds Series 2011B Date of Issuance: , 201 1 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above -named Bonds as required by the Disclosure Agreement, dated as of between the Issuer and Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent. The Issuer has notified the Disclosure Dissemination Agent that it anticipates that the Annual Report will be filed by Dated: cc: Issuer Obligated Person Digital Assurance Certification, L.L.C.„ as Disclosure Dissemination Agent, on behalf of the Issuer 11 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. le , mod- ^, "tt` 1 EXHIBIT C EVENT NOTICE COVER SHEET This cover sheet and material event notice will be sent to all Nationally Recognized Municipal Securities Information Repositories, and any State Information Depository, if applicable, pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D), Issuer's and/or Other Obligated Person's Name: Issuer's Six -Digit CUSIP Number: or Nine -Digit CUSIP Number(s) of the bonds to which this material event notice relates: Number of pages of attached: Description of Material Event Notice (Check One): 1. _Principal and interest payment delinquencies 2. _Non -Payment related defaults 3. _Unscheduled draws on debt service reserves reflecting financial difficulties 4. _Unscheduled draws on credit enhancements reflecting financial difficulties 5. Substitution of credit or liquidity providers, or their failure to perform 6, _Adverse tax opinions or events affecting the tax-exempt status of the security 7. _Modifications to rights of securities holders 8. :Bond calls 9. _Defeasances 10. 'Release, substitution, or sale of property securing repayment of the securities 11. _Rating changes 12. Failure to provide annual financial information as required 13. _Other material event notice (specify) I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly: Signature: Name: Title: Employer: Digital Assurance Certification, L.L.C.. Address: — — City, State, Zip Code: Voice Telephone Number: Please print the material event notice attached to this cover sheet in 10-point type or larger. The cover sheet and notice may be faxed to the MSRB at (703) 683-1930 or sent to CDINet, Municipal Securities Rulemaking Board, 1400 Duke Street, Suite 600, Alexandria, VA 22314. Contact the MSRB at (703) 797- 6600 with questions regarding this form or the dissemination of this notice. 12 No. R- SUBSTITUTE D EXHIBIT A FORM OF BOND UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF MIAMI, FLORIDA SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BOND SERIES 2011[A][B] Date of Interest Maturity Original Rate Rate Issuance REGISTERED OWNER: CUSIP PRINCIPAL AMOUNT: DOLLARS The City of Miami, Florida (the "City"), for registered owner specified above, or registered a mentioned, the principal amount specified abov upon redemption as described below), designated corporate trust office of Regio payable as described below, at the inter 1 and 1 of each year Bond is payable by check or draft o as its name and address . shall Registrar at the close of busin interest payment date (the " the Bonds is maintained in may be made by autom (ii) if such Bonds are upon written reques payments may be such Holder (su advanced to t authorized such Hol be pay of bu the v- e received, hereby promises to pay to the igns, but solely from the sources hereinafter on the maturity date specified above (or earlier u'on presentation and surrender hereof at the Bank (the "Bond Registrar"), and interest thereon, rate per annum specified above, on ommencing on 1, 20_. Interest on this he Bond Registrar made payable to the registered owner ppear on the registration books maintained by the Bond s on the fifteenth day of the calendar month preceding each gular Record Date"); provided, however, that (i) if ownership of book -entry only system by a securities depository, such payment c funds transfer (wire) to such securities depository or its nominee or of maintained in a book -entry only system by a securities depository, of the Holder of $1,000,000 or more in principal amount of Bonds, such ade by wire transfer to the bank and bank account specified in writing by bank being a bank within the continental United States), if such Holder has Bond Registrar the amount necessary to pay the cost of such wire transfer or e Bond Registrar to deduct the cost of such wire transfer from the payment due r. Any interest not punctually paid on a Regular Record Date shall forthwith cease to e to the registered owner on such Regular Record Date and may be paid at the close ness on a special record date for the payment of such defaulted interest to be fixed by and Registrar, notice whereof shall be given not less than 10 days prior to such special record date to such registered owner. Such interest shall be payable from the most recent interest payment date next preceding the date of authentication to which interest has been paid, unless the date of authentication is a 1 or 1 to which interest has been paid, in which case from the date of authentication, or unless the date of authentication is prior to , 2011, in which case from , 2011, or A-1 MIAMI/4265564.5 SUBSTITUTED unless the date of authentication is between a Regular Record Date and the next succeeding interest payment date, in which case from such interest payment date. Principal of and interest on this Bond is payable in lawful money of the United States of America. This Bond is one of an authorized series of bonds of the City designated as its "Spec Obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011 [A][B]" (herein called e "Series 2011[A][B] Bonds"), in the aggregate principal amount of Dollars ($ ) of like date, tenor, and effect, except as to number, ate of maturity and interest rate, issued for the purposes of, together with other available • •neys, (i) refinancing the [Refunded Loans] [Note], (ii) funding a deposit to the Debt Sery e Reserve Account or paying the premium for a Reserve Account Insurance Policy, and (iii) •aging certain costs of issuance of the Series 2011 [A][B] Bonds,. including if necessary, t premium for a Bond Insurance Policy. Concurrently, with the issuance of the Series 201 A][B] Bonds, the City has issued its $ . aggregate principalamount of Speci. obligation Non -Ad Valorem Revenue Refunding Bonds, Series 2011[A][B] (the "Series 211 [A][B] Bonds" and, together with the Series 2011[A][B] Bonds, the "Bonds") for the purpo- -s of, together with other available moneys, (i) refinancing the [Note, including the pay ent of accrued interest,] [Refunded Loans], (ii) funding a deposit to the Debt Service R- erve Account or paying the premium for a Reserve Account Insurance Policy and (iii) pa ng certain costs of issuance of the Series 2011[A][B] Bonds, including if necessary, the pre- ium for a Bond Insurance Policy. The Bonds are being issued under the authority of and in f compliance with the Constitution of the State of Florida, Chapter 166, Florida Statutes as amended, and the City Charter (collectively, the "Act") and a resolution duly adopteby the City Commission of the City on (the "Resolution") and is su%ject to all the terms and conditions of the Resolution. All terms used in capitalized form d not defined herein are as defined in the Resolution.. This Bond is secured by a lien on d pledge of the moneys held in certain Funds and Accounts established under the Reso ion with respect to the Series 2011 [A][B] Bonds (collectively, the "Series 2011[A][B] P -dged Funds") and is payable solely from such Series 2011[A][B] Pledged Funds and, .lely to the extent provided in the second and third succeeding. paragraphs, the No ' d Valorem . Revenues (definedbelow), all in the . manner provided in the Resolution. T City is not obligated to pay this Bond or the interest hereon except as provided above, - d the full faith and credit of the City are not pledged for the payment of this Bond and is Bond does not constitute an indebtedness of the City within the meaning of any constitu • na1, statutory or charter provision or limitation; and it is expressly agreed by the Holder if this Bond that such Holder shall never have the right to require or compel the exercise of the ad valorem taxing power of the City, the State of Florida or any political subdivision thereof or taxation in any form of any real or personal property therein, for the payment of e principal of and interest on this Bond or the making of any other payments provided for i e Resolution. It i further agreed between the City and the Holder of this Bond that this Bond and the obligatievidenced thereby shall not constitute a lien upon property of or in the City, but shall cons to a lien only on the Pledged Funds, all in the manner provided in the Resolution. "Non -Ad Valorem Revenues" is defined in the Resolution as all revenues of the City derived from any source whatsoever, other than ad valorem taxation on real or personal property, which are legally available to make the payments required under the Resolution. The City covenants and agrees in the Resolution to budget and appropriate in its annual budget, by amendment, if necessary, from Non -Ad Valorem Revenues lawfully available in each Fiscal MIA /4265564.5 A-2 SUBSTITUTED Year, amounts sufficient to satisfy (i) the Annual Debt Service Requirement for such Fiscal Year, (ii) any deposits required to be made into the Debt Service Reserve Account during such Fiscal Year, (iii) any other amounts due the Provider of a Bond Insurance Policy, the issuers of any other Reserve Account Insurance Policy or Reserve Account Letter of Credit and the Bond Registrar during such Fiscal Year and (iv) any Rebate Amount due during such Fiscal Year as provided in the Resolution. Such covenant and agreement on the part of the City to budget an appropriate such amounts of Non -Ad Valorem Revenues shall be cumulative to the extent o paid, and shall continue until such Non -Ad Valorem Revenues or other legally available fu :s in amounts sufficient to make all such required payments shall have been budgeted, appr• •riated and actually paid. Notwithstanding the foregoing covenant of the City, the City foes not covenant to maintain any services or programs, now provided or maintained by th- ity, which generate Non -Ad Valorem Revenues. Such covenant to budget and appropriate does not create any lien 4pon.or pledge of such Non -Ad Valorem Revenues, nor does it preclude the City from ple••Ing in the future its Non -Ad Valorem Revenues, nor does it require the City to levy and col - ct any particular Non - Ad Valorem Revenues, nor does it give the Bondholders, the Prov %er of a Bond Insurance Policy, the issuers of any other Reserve Account Insurance Policy • Reserve Account Letter of Credit or the Bond Registrar a prior claim on the Non -Ad Valor- m Revenues as opposed to claims of general creditors of the City. Such covenant to • dget and appropriate Non -Ad Valorem Revenues is subject in all respects to the payment obligations secured by a pledge of such Non -Ad Valorem Revenues heretofore or her: nafter entered into (including the payment of debt service on bonds and other debt ins uments). However, the covenant to budget and appropriate in its general annual budget f• the purposes and in the manner stated in the Resolution shall have the effect of making ay.' able in the manner described herein Non - Ad Valorem Revenues and placing on the City - positive duty to budget and appropriate, by amendment, if necessary, amounts sufficient o meet its obligations under the Resolution subject, however, in all respects to the re fictions of Section 166.241(3), Florida Statutes, which provides, in part, that the governin. •ody of each municipality make appropriations for each fiscal year which, in any one ye- shall not exceed the amount to be received from taxation or other revenue sources; nd subject, further, to the payment of services and programs which are for essential pu is purposes affecting the health, welfare and safety of the inhabitants of the City or which ar= egally mandated by applicable law. [Insert Redemption Provisions] Reference is here made to the Resolution for the provisions, among others, relating to the term, lien and sec ity of the Bonds, the custody and application of the proceeds of the Bonds, continuing di losure obligations of the City, the rights and remedies of the Bondholder, the extent of and mitations on the City's rights, duties and obligations and the provisions permitting the is ance of additional indebtedness, to all of which provisions the Bondholder hereof for him -If and his successors in interest assents by acceptance of this Bond. Th- City has previously issued and currently has outstanding other indebtedness payable rom and secured by, in whole or in part, its legally available Non -Ad Valorem Reve es. A-3 MIAMI/4265564.5 SUBSTITUTED The original registered owner, and each successive registered owner of this Bond shall be conclusively deemed to have agreed and consented to the following terms and conditions: 1. The Bond Registrar shall keep books for the registration of Bonds and for the registration of transfers of Bonds as provided in the Resolution. The Bonds shall b transferable by the registered owner thereof in person or by his attorney duly authorized writing only upon the books kept by the Bond Registrar and only upon surrender th- eof together with a written instrument of transfer satisfactory to the Bond Registrar duly exec ed by the registered owner or his duly authorized attorney. Upon the transfer of any such Bond, the City shall issue in the name of the transferee a new Bond or Bonds. 2. The City, the Bond Registrar and any other fiduciaries may deeand treat the person in whose name any Bond shall be registered upon the books kept by ' e Bond Registrar as the absolute owner of such. Bond, . whether such. Bond shall be ove +ue or not, for the purpose of receiving payment of, or on account of, the principal of and in ' rest on such Bond as the same becomes due, and for all other purposes. All such payme s so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, d neither the City, the Bond Registrar nor any other fiduciary shall be affected by any notice . the contrary. 3. At the option of the registered owner thereo and upon surrender thereof at the designated corporate trust office of the Bond Registrar ith a written instrument of transfer satisfactory to the Bond Registrar duly executed by th registered owner or his duly authorized attorney and upon payment by such registered own- of any charges which the Bond Registrar or the City may make as provided in the Resolution, the Bonds may be exchanged for Bonds of the same maturity of any other authorized deno nations. 4. In all cases in which the priv' ege of exchanging Bonds or transferring Bonds is exercised, the City shall execute and the : and Registrar shall authenticate and deliver Bonds in accordance with the provisions of the 'esolution. There shall be no charge for any such exchange or transfer of Bonds, but e City or the Bond Registrar may require payment of a sum sufficient to pay any tax, fee o' other governmental charge required to be paid with respect to such exchange or transfer. -ither the City nor the Bond Registrar shall be required (a) to transfer or exchange Bonds fo a period of 15 days next preceding an interest payment date on such Bonds or next precedi-g any selection of Bonds to be redeemed or thereafter until after the mailing of any notice .f redemption; or (b) to transfer or exchange any Bonds called for redemption. It is hereby 'ertified and recited that all acts, conditions and things required to exist, to happen, and to •e performed, precedent to and in the issuance of this Bond exist, have happened and ' ave been performed in regular and due form and time as required by the Act, and that the • suance of this Bond, and of the issue of Bonds of which this Bond is one, is in full complianc- ith all constitutional, statutory or charter limitations or provisions. WITNESS WHEREOF, the City of Miami, Florida, has issued this Bond and has cau -d the same to be signed by its City Manager and attested and countersigned by its City C rk, either manually or with their facsimile signatures, and its seal to be affixed hereto or a csimile of its seal to be reproduced hereon, all as of the day of , 2011. A-4 MIAMI/4265564.5 (SEAL) SUBSTITUTE E) CITY OF MIAMI, FLORIDA By: ATTESTED AND COUNTERSIGNED: City Manager By: APPROVED AS TO FORM City Clerk AND CORRECTNESS A-5 MIAMI/4265564.5 By: City Attorney SUBSTITUTED CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds delivered pursuant to the within mentioned Resolution. Date of Authentication: A-6 MIAMI/4265564.5 By: Authorized Signatory SUBSTITUTED ABBREVIATIONS The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the right of survivorship and not as to ' ants in common UNIFORM GIFT MIN ACT - Custodian (Gust) (Minor) under Uniform Gifts to Minors Act (State) Additional abbreviations may also •e used though not in the above t. ASSIGNM T For value received, the undersigned ` hereby sells, assigns and transfers unto the within Bond, and all rights thereunder, and hereby irrevocably constitutes and appoin attorney to transfer the said Bond on t - bond register, with full power of substitution in the premises. Dated: Please insert Social Security • other identifying number of transf: ee: Signature guaranteed: NOTICE: The trnsferor's signature to this Assignment must correspond with, the name as it app ars on the face of the within Bond in every particular without alteration or any cr-nge whatever. A-7 MIAMI/4265564.5 SUBSTITUTED EXHIBIT B FORM OF BOND PURCHASE AGREEMENT B-1 MIAMI/4265564.5 SUBSTITUTED EXHIBIT C FORM OF PRELIMINARY OFFICIAL STATEMENT C-1 MIAMI/4265564.5 SUBSTITUTED EXHIBIT D FORM OF CONTINUING DISCLOSURE AGREEMENT D-1 MIAMI/4265564.5 SUBSTITUTED PRELIMINARY OFFICIAL STATEMENT DATED MAY 2011. NEW ISSUE — BOOK -ENTRY ONLY BMO Draft #3 3/17/2011 Fitch: " Moody's: " S&P: " (See ''RATINGS" herein In the opinion of Squire, Sanders & Dempsey (US) LLP, Bond Counsel, under existing lazy (i) assuming con nuing compliance with certain covenants and the accuracy of certain representations, interest on the Series 2011 Bonds excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the feder alternative minimum tax imposed on individuals and corporations the Series 2011 Bonds and the income thereon ' e exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida St' utes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. In st on the Series 2011 Bonds may be subject to certain federal taxes imposed only on certain corporations. For a more nplete discussion of the tax aspects, see "TAX MATTERS" herein. $80,000,000* THE CITY OF MIAMI, FLORIDA SPECIAL OBLIGATION NON -AD VALOREM REVENU SERIES 2011A $60,000,000* THE CITY OF MIAMI, ' ORIDA SPECIAL OBLIGATION NON -AD VALOR REVENUE REFUNDING BONDS SERIES < f 11B EFUNDING BONDS Dated: Date of Delivery Due: February 1, as shown on inside cover The Special Obligation Non -Ad Val+ em Revenue Refunding Bonds, Series 2011A (the "Series 2011A Bonds") and the Special Obligation Non- d Valorem Revenue Refunding Bonds, Series 2011B (the "Series 2011E Bonds") and together with the S es 2011A Bonds are collectively referred to herein as the "Series 2011 Bonds") are being issued by the City .f Miami, Florida (the "City") pursuant to the Constitution and laws of the State of Florida, including C'apter 166, Part II, Florida Statutes, the Charter of the City, and other applicable provisions of law (t.- "Act") and pursuant to Resolution No. of the City adopted by the City Commission of the Cit •n May 26, 2011 (the "Resolution"). The Series 201 Bonds are being issued for the purpose of (i) refunding all or a portion of the Refunded Loans (as . -fined herein), on a current refunding basis; (ii) funding a deposit to the applicable subaccount of the ►'ebt Service Reserve Account or paying the premium for a Reserve Account. Insurance Policy for the Se - es 2011A Bonds and (iii) paying certain costs and expenses incurred in connection with the issuance of • Series 2011A Bonds, including the premiums for a municipal bond insurance policy and Reserve A ount Insurance Policy, if necessary. The Series 2011B Bonds are being issued for the purpose of (i) refinancing the City's outstanding $50 00,000 aggregate principal amount of Revenue Note, Series 2010 (Port of Miami Tunnel and Access provement Project) plus accrued interest; (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011B Bonds and (iii) paying certain costs and expenses incurred in connection with the issuance of the Series 2011B Bonds, including the premiums for a municipal bond insurance policy and Reserve Account Insurance Policy, if necessary. SUBSTITUTED The Series 2011 Bonds are being issued by" the City as fully registered bonds, which initially will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Interest on the Series 2011 Bonds will be payable semi-annually on February 1 and August 1, commencing February 1, 2012. Individual purchases will be made in book -entry form only through participants in authorized denominations in the amounts of $5,000 or integrals thereof. Purchasers of the Series 2011 Bonds (the "Beneficial Owners") will not receive physical delivery of certificates. Transfers of ownership interests in the Series 2011 Bonds will be effected through 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 for subsequent disbursement to the Beneficial Owners. Principal of interest on the Series 2011 Bonds will be payable by Regions Bank, Jacksonville, Florida, as Bond Registrar. Certain maturities of the Series 2011 Bonds are subject to optional redemption prio- to their respective maturities, as described herein under "DESCRIPTION OF THE SERIES 2011 BON P - Optional Redemption." The Series 2011A Bonds are payable from and secured by a lien upon and pledg: of the Series 2011A Pledged Funds. The Series 2011B Bonds are payable from and secured by a lien upon d pledge of the Series 2011B Pledged Funds. See "SECURITY AND SOURCES OF PAYMENT FOR THE RIES 2011 BONDS" and "INVESTMENT RISKS" herein. THE CITY IS NOT OBLIGATED TO PAY THE SERIES 2011 BOND , OR THE INTEREST THEREON EXCEPT FROM THE APPLICABLE PLEDGED FUNDS, AS HEREAFT . DEFINED. THE ISSUANCE OF THE SERIES 2011 BONDS SHALL NOT DIRECTLY OR INDIRECT OR CONTINGENTLY OBLIGATE THE CITY TO LEVY OR TO PLEDGE ANY TAXES WHATE R THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT EXCEPT FROM HE APPLICABLE PLEDGED FUNDS. NEITHER THE FULL FAITH AND CREDIT NOR THE TA G POWER OF THE CITY, MIAMI-DADE COUNTY, FLORIDA, THE STATE OF FLORIDA OR ANY i HER POLITICAL SUBDIVISION THEREOF IS PLEDGED TO PAYMENT OF THE SERIES 2011 BOND This cover page contains certain informatifor quick reference only. It is not a summary of the issue. Investors must read .the entire Official Stat: ent to obtain information essential to making an informed investment decision. [The scheduled payment of principal of and interest on the Series 2011 Bonds when due will be guaranteed by a municipal bond insurae policy to be issued concurrently with the delivery of the Series 2011 Bonds by Assured Guaranty M icipal Corp (the "Insurer").] [Insert Logo] The Series 2011 Bonds a offered when, as, and if issued and received by the Underwriters, subject to the opinion on certain legal matters relating to eir issuance by Squire, Sanders & Dempsey (US) LLP, Miami, Florida, Bond Counsel. Certain legal matters will be passed pon for the City by Julie 0. Bru, Esq., City Attorney and by Bryant Miller Olive P.A., Miami, Florida, Disclosure Couel to the City. Certain legal matters will be passed upon for the Underwriters by their counsel, Nabors, Giblin & ckerson P.A., Tampa, Florida. First Southwest Company, Aventura, Florida is serving as Financial Advisor to the C It is expected that the Series 2011 Bonds in definitive form will be available for delivery to the Underwriters ' New York, New York at the facilities of DTC on or about , 2011. RBC CAPITAL MARKETS BofA MERRILL LYNCH ORGAN KEEGAN Sr COMPANY, INC. Dated: ,2011 GOLDMAN SACHS & CO. RAYMOND JAMES & ASSOCIATES, INC SUBSTITUTED *Preliminary, subject to change. SUBSTITUTED SERIES 2011A BONDS MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, PRICES AND INITIAL CUSIP NUMBERS Maturity Principal (February 1) Amount Interest Rate Initial CUSIP Yield Price Number SERIES 2011B B G NDS MATURITIES, PRINCIPAL AMOU S, INTEREST RATES, YIELDS, PRICES AND INIT L CUSIP NUMBERS Maturity Principal (February 1) Amount terest Rate Initial CUSIP Yield Price Number SUBSTITUTED THE CITY OF MIAMI, FLORIDA MAYOR Tomas A. Regalado CITY COMMISSIONERS Wifredo Gort, Chairman Frank Carollo, Vice Chair Mark Sarnoff Francis Suarez Richard Dunn CITY MANAGER Tony E. Crapp, Jr. CHIEF FINANCIAL OFFICER Larry Spring FINANCE DIRECTOR Diana M. Gomez CITY ATTORY Julie O. Br Esq. B i ND COUNSEL Squire, nders & Dempsey (US) LLP. Miami, Florida DISCLOSURE COUNSEL Bryant Miller Olive P.A. Miami, Florida FINANCIAL ADVISOR First Southwest Company Aventura, Florida SUBSTITUTED No dealer, broker, salesman or other person has been authori zed by the City or the Underwriters to give any information or to make any representations in connection with the Series 2011 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 2011 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 belie d to be reliable, but is not guaranteed as to accuracy or completeness by and is not to be construed as a repres tation by the Underwriters. The Underwriters listed on the cover page hereof have reviewed the inform.. on in this Official Statement in accordance with and as part of their responsibilities to investors under the fe. ral securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do o guarantee the accuracy or completeness of such information. The information and expressions of opinion stat . herein are subject to change. [THE INFORMATION RELATING TO THE INSURER CONTAIN • HEREIN HAS BEEN FURNISHED BY THE INSURER. NO REPRESENTATION IS MADE :Y THE CITY NOR THE UNDERWRITERS AS TO THE ACCURACY OR ADEQUACY OF SUC INFORMATION OR THAT THERE HAS NOT BEEN ANY MATERIAL ADVERSE CHAN IN SUCH INFORMATION SUBSEQUENT TO THE DATE OF SUCH INFORMATION. EITHER THE CITY NOR THE UNDERWRITERS HAVE MADE ANY INVESTIGATION INTO T . FINANCIAL CONDITION OF THE INSURER, AND NO REPRESENTATION IS MADE AS TO T ' ABILITY OF THE INSURER TO MEET ITS OBLIGATIONS UNDER THE MUNICIPAL BOND IN PRANCE POLICY. • The Insurer makes no representation regardi. • the Series 2011 Bonds or the advisability of investing in the Series 2011 Bonds. In addition, the nsurer has not independently verified, makes no representation regarding, and does not accept any esponsibility for the accuracy or completeness of this Official Statement or any information or disciure contained herein, or omitted herefrom, other than with respect to the accuracy of the informon regarding the Insurer, supplied by the Insurer, and presented under the heading "MUNICIP • BOND INSURANCE" and in "APPENDIX F — SPECIMEN MUNICIPAL BOND INSURANCE PO CY" attached hereto.] All summaries herein of do ments and agreements are qualified in their entirety by reference to such documents and agreements, and . summaries herein of the Series 2011 Bonds are qualified in their entirety by reference to the form thereof i uded in the aforesaid documents and agreements. NO REGISTRAT iN STATEMENT RELATING TO THE SERIES 2011 BONDS HAS BEEN FILED WITH THE SECURITI : AND EXCHANGE COMMISSION (THE "SEC") OR WITH ANY STATE SECURITIES COMMISSION. IN AKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS •F THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLV " D. THE SERIES 2011 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR AN STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHO " IES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATE ENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. THIS PRELIMINARY OFFICIAL STATEMENT IS IN A FORM DEEMED FINAL BY THE CITY FOR RPOSES OF RULE 15C2-12 ISSUED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT FOR CERTAIN INFORMATION PERMITTED TO BE OMITTED PURSUANT TO SUCH RULE. SUBSTITUTED RED HERRING LANGUAGE: This Preliminary Official Statement and the information contained herein are subject to completion or amendment. The Series 2011.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 sh there be any sale, of the Series 2011 Bonds in any jurisdiction in which such offer, solicitation or .ale would be unlawful prior to registration, qualification or exemption under the securities laws of a.. such jurisdiction. SUBSTITUTED TABLE OF CONTENTS Contents Page INTRODUCTION 1 THE REFUNDING PLAN ESTIMATED SOURCES AND USES OF FUNDS 3 DEBT SERVICE SCHEDULES 4 DESCRIPTION OF THE SERIES 2011 BONDS 4 General 4 Book -Entry Only System 5 Optional Redemption 7 Mandatory Redemption 7 Notice of Redemption 8 Replacement of Bonds Mutilated, Destroyed, Stolen or Lost 9 Negotiability, Registration and Cancellation 9 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2003 BOND 11 General 11 Debt Service Reserve Account 14 Other Revenue and Financing Sources 19 MUNICIPAL BOND INSURANCE 27 RESERVE PRODUCT 27 GENERAL INFORMATION REGARDING THE CITY OF AMI 29 Background 29 City Government 29 Ability to be Sued, Judgments Enforceable 34 Indebtedness of the City 34 LEGAL MATTERS 45 LITIGATION 46 DISCLOSURE REQUIRED BY FLORID • CLUE SKY REGULATIONS 48 TAX MATTERS 48 RATINGS 50 FINANCIAL ADVISOR 51 AUDITED FINANCIAL STA MENTS 51 UNDERWRITING 51 CONTINGENT FEES 51 ENFORCEABILITY 0' REMEDIES 51 CONTINUING DIS' LOSURE 52 ACCURACY A COMPLETENESS OF PRELIMINARY OFFICIAL STATEMENT 52 FORWARD-LGOKING STATEMENTS 53 MISCELLA " EOUS 53 AUTHO r ZATION OF PRELIMINARY OFFICIAL STATEMENT 54 APPENDICES APPENDIX A: APPENDIX B: APPENDIX C: APPENDIX D: APPENDIX E: APPENDIX F: SUBSTITUTED GENERAL INFORMATION REGARDING THE CITY OF MIAMI AND MIAMI-DADE COUNTY FORM OF THE BOND RESOLUTION GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIA - I FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010 FORM OF BOND COUNSEL OPINION FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT SPECIMEN MUNICIPAL BOND INSURANCE POLICY SUBSTITUTED PRELIMINARY OFFICIAL STATEMENT relating to $ * THE CITY OF MIAMI, FLORIDA SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS SERIES 2011A $ * THE CITY OF MIAMI, FLORIDA SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS SERIES 2011B INTRODUCTION The purpose of this Preliminary Official Statement, including the cover page forth information concerning the Special Obligation Non -Ad Valorem Revenue R 2011A (the "Series 2011A Bonds") and the Special Obligation Non -Ad Valorem R Series 2011B (the "Series 2011B Bonds") and together with the Series 2011A Bon herein as the "Series 2011 Bonds"). ppendices, is to set nding Bonds, Series enue Refunding Bonds, are collectively referred to The City is situated at the mouth of the Miami River on the west n shores of Biscayne Bay. It is the county seat of Miami -Dade County, Florida. The City comprises 34. square miles of land and 19.5 square miles of water. The City's diversified economic base is comprised • light manufacturing, trade, commerce, wholesale, and retail trade and tourism. For more informa en about the City, see "APPENDIX A - GENERAL INFORMATION REGARDING THE CITY 0' MIAMI AND MIAMI-DADE COUNTY, FLORIDA" attached hereto. The Series 2011 Bonds are being issued pursu. t to the Constitution and laws of the State of Florida, including Chapter 166, Part II, Florida Statutes, the • arter of the City, and other applicable provisions of law (the "Act") and pursuant to Resolution No. •f the City adopted by the City Commission of the City on May 26, 2011 (the "Resolution"). The Series 2011A Bonds are bei. • issued for the purpose of (i) refunding all or a portion of the following loans on a current refundin • oasis: (a) Loan secured by a Loan Agreement between Sunshine State Governmental Financing Commissi.n and the City dated as of September 30, 1987 issued in the original amount of $20,800,000, currently .utstanding in the principal amount of $4,349,000, (b) Loan secured by a Loan Agreement between Su : ine State Governmental Financing Commission and the City dated as of January 27, 1988 issued in t original amount of $150,000, currently outstanding in the principal amount of $32,000, (c) Loan secured • a Loan Agreement between Sunshine State Governmental Financing Commission and the City dated as • ay 31, 1988 issued in the original amount of $6,680,900, currently outstanding in the principal amo ' of $1,470,500, (d) Loan secured by a Loan Agreement between Sunshine State Governmental Fi ncing Commission and the City dated as of June 30,1995 issued in the original amount of $3,500,000, cur ntly outstanding in the principal amount of $920,000, (e) Loan secured by a Loan Agreement between Su ine State Governmental Financing Commission and the City dated as of October 3, 2007 issued in the ori' nal amount of $6,600,000, currently outstanding in the principal amount of $6,600,000, (f) Loan secure. •y a Loan Agreement between Sunshine State Governmental Financing Commission and the City da. as of August 14, 2008 issued in the original amount of $42,500,000, currently outstanding in the pncipal amount of $42,500,000, and (g) Loan secured by a Loan Agreement between Sunshine State overnmental Financing Commission and the City dated as of March 25, 2009 issued in the original amount *Preliminary, subject to change. 1 SUBSTITUTED of $20,000,000, currently outstanding in the principal amount of $12,700,000 (collectively, the "Refunded Loans"); (ii) funding a deposit to the applicable subaccount of the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for the Series 2011A Bonds and (iii) paying certain costs an expenses incurred in connection with the issuance of the Series 2011A Bonds, including the premiums fo a municipal bond insurance policy and Reserve Account Insurance Policy, if necessary. See "THE REFUN P NG PLAN" herein. The Series 2011B Bonds are being issued for the purpose of (i) refinancing the City's .utstanding $50,000,000 aggregate principal amount of Revenue Note, Series 2010 (Port of Miami Tu el and Access Improvement Project) (the "Note"); (ii) funding a deposit to the applicable subaccount •. the Debt Service Reserve Account or paying the premium for a Reserve Account Insurance Policy for t Series 2011B Bonds and (iii) paying certain costs and expenses incurred in connection with the issuance o he Series 2011B Bonds including the premiums for a municipal bond insurance policy and Reserve Acc ; nt Insurance Policy. See "THE REFUNDING PLAN" herein, if necessary. The Series 2011 Bonds and any redemption premiums with respe• thereto and the interest thereon shall not be or constitute a general debt, liability or obligation of th• ity or the State of Florida or any political subdivision thereof, or a pledge of the faith and credit of • City or of the State of Florida or any political subdivision thereof, but shall be payable solely from and cured by a lien upon and a pledge of the applicable Pledged Funds and the City is not obligated to ,ty the Series 2011 Bonds, the redemption premiums, if any, related thereto or the interest thereon cept from the applicable Pledged Funds as provided in the Resolution. Neither the faith and credit ' or the taxing power of the City or of the State of Florida or any political subdivision thereof is pled:'d to the payment of the Series 2011 Bonds. No Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power of the City or taxation in any form on any property to pay suc eries 2011 Bonds or the interest thereon, nor shall such Bondholder be entitled to payment of such pri. ipal and interest or premium thereon from any other funds of the City except the applicable Pledged F ds as provided in the Resolution. [Payment of the principal of aninterest on the Series 2011 Bonds will be guaranteed by a municipal bond insurance policy to be issu• simultaneously with the delivery of the Series 2011 Bonds by (the "Insurer"). The summaries of an references to all documents, statutes, reports and other instruments referred to herein do not purport to b • omplete, comprehensive or definitive, and each such summary and reference is qualified in its entirety reference to each such document, statute, report or instrument. All capitalized terms used in this Pr iminary Official Statement and not otherwise defined herein have the meanings set forth in the Resol on, unless the context would clearly indicate otherwise. A copy of the Resolution is attached hereto "APPENDIX B -FORM OF THE BOND RESOLUTION". All ocuments of the City referred to herein may be obtained from Diana M. Gomez, CPA, Finance Director, 44 S.W. 2nd Avenue, 6th Floor, Miami, Florida 33130, Telephone (305) 416-1324. THE REFUNDING PLAN The City has determined that it can restructure its annual debt service payments by providing for the refinancing of all of the Refunded Loans and the Note. The refunding of the Refunded Loans will be accomplished through the issuance of the Series 2011A Bonds and the use of a portion of the proceeds thereof. The refinancing of the Note will be accomplished through the issuance of the Series 2011B Bonds and 2 SUBSTITUTED the use of a portion of the proceeds thereof. Upon delivery of the Series 2011A Bonds, the Refunded Loans will be immediately paid off and upon delivery of the Series 2011B Bonds, the Note will be immediately paid. ESTIMATED SOURCES AND USES OF FUNDS The table that follows summarizes the estimated sources and uses of funds to be derived fro • the sale of the Series 2011 Bonds: SOURCES: Principal Amount of Series 2011 Bonds [Plus/Minus Original Issue Premium/Discount] Available Moniesn) TOTAL SOURCES USES: Deposit to trustee for Refunded Loans Deposit to holder of Note [Deposit to applicable subaccount of the Debt Service Reserve Account] Costs of Issuance(2} TOTAL USES Series Series 2011A 2011 Bonds Bonds Total $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ ("Monies from the applicable Deb -rvice Fund relating to the Refunded Loans and Note. (2) Includes underwriters' disco t, [insurance, surety], financial advisory and legal fees and expenses, rating agencies and miscellaneo costs of issuance. [Remainder of page intentionally left blank] 3 SUBSTITUTED DEBT SERVICE SCHEDULES The following table sets forth the debt service requirements for the Series 2011 Bonds. Series 2011A Bonds Series 2011B Bonds S es Maturity 21.1 Bond (February 1) Principal Interest Total Principal Interest Total Total DESCRIPTION OF THE : ERIES 2011 BONDS General The Series 2011 Bonds shall be issued - fully registered, book -entry only bonds in the denomination of $5,000 each or any integral multiple t ' reof through the book -entry only system maintained by The Depository Trust Company, New York ew York. The Series 2011A Bonds shall be numbered consecutively from 1 upward preceded by the let r "RA" prefixed to the number and the Series 2011B Bonds shall be numbered consecutively from 1 u and precluded by the letter "RB" prefixed to the number. The principal of and redemption premium, any, on the Series 2011 Bonds shall be payable upon presentation and surrender at the principal of 'ce of Regions Bank, Jacksonville, Florida, (the "Bond Registrar"). Interest on the Series 2011 Bonds is payae semi-annually on February 1 and August 1 of each year, commencing February 1, 2012 and shall be p. ' by check or draft drawn upon the Bond Registrar and mailed to the registered owners of the Series 111 Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar at e close of business on the 15th day (whether or not a business day) of the month next preceding the i ' erest payment date (the "Record Date"), irrespective of any transfer or exchange of such Series 2011 : ands subsequent to such Record Date and prior to such interest payment date, unless the City shall be i : efault in payment of interest due on such interest payment date; provided, however, that (i) if owners ip of Series 2011 Bonds is maintained in a book -entry only system by a securities depository, such pay en t may be made by automatic funds transfer (wire) to such securities depository or its nominee or (ii) if s Series 2011 Bonds are not maintained in a book -entry only system by a securities depository, upon ritten request of the holder of $1,000,000 or more in principal amount of Series 2011 Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such Holder (such bank being a bank within the continental United States), if such Holder has advanced to the Bond Registrar the 4 SUBSTITUTED amount necessary to pay the cost of such wire transfer or authorized the Bond Registrar to deduct the cost of such wire transfer from the payment due such Holder. Notwithstanding anything in this paragraph to the contrary, any interest not punctually paid on Regular Record Date shall forthwith cease to be payable to the Holder on such Regular Record Date and r y be paid at the close of business on a special record date for the payment of such defaulted interest to b- "fixed by the Bond Registrar, notice of which shall be given not less than 10 days prior to such special recor date to such Holder. Book -Entry Only System THE FOLLOWING INFORMATION CONCERNING DTC AND DTC'S BO SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT THE CITY BELIEVES T NEITHER THE CITY NOR THE UNDERWRITERS TAKE ANY RESPONSIBILITY F COMPLETENESS THEREOF. K-ENTRY ONLY BE RELIABLE, BUT THE ACCURACY OR The Depository Trust Company ("DTC"), New York, New York, w act as securities depository for the Series 2011 Bonds. The Series 2011 Bonds will be issued as fully -re; stered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name . s may be requested by an authorized representative of DTC. One fully -registered certificate will be iss . ed for each maturity of the Series 2011 Bonds, each in the aggregate principal amount of such maturity and will be deposited with DTC. DTC, the world's largest securities depository, is al' ited-purpose trust company organized under the New York Banking Law, a "banking organization" w' in the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing orporation" 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 . nd provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity, corporate and muni ' . al debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct P. ticipants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of : es and other securities transactions in deposited securities through electronic computerized book -entry ansfers and pledges between Direct Participants' accounts. This eliminates the need for physical mo ement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and . ealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholl -owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding comp y for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of whi are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access t• e DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealer , banks, trust companies, and clearing corporations that clear through or maintain a custodial relatio ip with a Direct Participant,; either directly or indirectly ("Indirect Participants"). DTC has Standard & P•.r's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities a, d Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dt sr: Purchases of Series 2011 Bonds under the DTC system must be made by or through Direct P. ticipants, which will receive a credit for the Series 2011 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2011 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 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 2011 5 SUBSTITUTED Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2011 Bonds, except in the event that use of the book -entry system for the Series 2011 Bonds is discontinued. To facilitate subsequent transfers, all Series 2011 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 an authorized representative of DTC. The deposit of Series 2011 Bonds with DTC and their registration ' the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DT as no knowledge of the actual Beneficial Owners of the Series 2011 Bonds; DTC's records reflect only the ' : entity of the Direct Participants to whose accounts such Series 2011 Bonds are credited, which may or y not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keepin; . ccount of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct 9rticipants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Partici ants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regul, ory requirements as may be in effect from time to time. Beneficial Owners of Series 2011 Bonds may wish to take certain eps to augment the transmission to them of notices of significant events with respect to the Series 2011 Bo • ds, such as redemptions and proposed amendments to the Series 2011 Bond documents. For example, Be. -ficial Owners of Series 2011 Bonds may wish to ascertain that the nominee holding the Series 2011 Bon. for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Ben- cial Owners may wish to provide their names and addresses to the Registrar and request that copies of .tices be provided directly to them. Redemption notices shall be sent to DTC. If 1- : s than all of the Series 2011 Bonds are being redeemed, DTC's practice is to determine by lot the amount of e interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor y other DTC nominee) will consent or vote with respect to the Series 2011 Bonds unless authorized by . Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC ma an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns ?ede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2011 1 nds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and int- es t payments on the Series 2011 Bonds will be made to Cede & Co., or such other nominee as may be re. ested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accoun :, upon DTC's receipt of funds and corresponding detail information from the City on the payable date ' accordance with their respective holdings shown on DTC's records. Payments by Participants to : -neficial Owners will be governed by standing instructions and customary practices, as is the case with Se -s 2011 Bonds held for the accounts of customers in bearer form or registered in "street name," and will b. the responsibility of such Participant and not of DTC, the Bond Registrar or the City, subject to any sta tory or regulatory requirements as may be in effect from time to time. Payment of principal and inter st payments to Cede & Co. (or such other nominee as may be requested by an authorized representative o •TC) is the responsibility of the City or the Bond Registrar, disbursement of such payments to Direct articipants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 6 SUBSTITUTED DTC may discontinue providing its services as securities depository with respect to the Series 2011 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 2011 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 2011 Bond certificates will be printed and delivered to DTC. Thereafter, Series 2011 Bond certificates may be transferred and exchanged as described in Resolution. See "-Registration, Transfer and Exchange" herein. THE CITY AND THE BOND REGISTRAR WILL HAVE NO RESPONSIBILITY OR OBLIGA ON TO THE BENEFICIAL OWNERS, DTC PARTICIPANTS OR THE PERSONS FOR WHOM DTC PAR CIPANTS ACT AS NOMINEES WITH RESPECT TO THE SERIES 2011 BONDS, FOR THE ACCURACY 'i RECORDS OF DTC, CEDE & CO. OR ANY DTC PARTICIPANT WITH RESPECT TO THE SERIES ill BONDS OR THE PROVIDING OF NOTICE OR PAYMENT OF PRINCIPAL OR INTEREST ON HE SERIES 2011 BONDS, TO DTC PARTICIPANTS OR BENEFICIAL OWNERS, OR THE SELECT 4N OF SERIES 2011 BONDS FOR REDEMPTION. Optional Redemption The Series 2011A Bonds. The Series 2011A Bonds maturing on or .rior to February 1, are not redeemable prior to their respective dates of maturity. The Serie 2011A Bonds maturing on and after February 1, , are subject to redemption at the option of the Cit on or after February 1, , in whole or in part at any time, in such manner as shall be determined by th : and Registrar, at a redemption price equal to the par amount thereof plus accrued interest to the date f ed for redemption. The Series 2011B Bonds. The Series 2011B Bonds .turing on or prior to February 1, are not redeemable prior to their respective dates of matu r y. The Series 2011B Bonds maturing on and after February 1, , are subject to redemption at the o ion of the City on or after February 1, , in whole or in part at any time, in such manner as shall be de rmined by the Bond Registrar, at a redemption price equal to the par amount thereof plus accrued inter to the date fixed for redemption. Mandatory Redemption The Series 2011A Bonds. e Series 2011A Bonds maturing on February 1, will be subject to mandatory redemption prior o maturity, by lot, in such manner as the Bond Registrar may deem appropriate, at a redemptio r price equal to par plus accrued interest to the redemption date, on February 1, and on each Febru. y 1 thereafter, from moneys deposited in the Sinking Fund, in the following Amortization Require ents in the years specified: *Ma . ri Year Amortization Requirements 7 SUBSTITUTED The Series 2011B Bonds. The Series 2011B Bonds maturing on February 1, will be subject to mandatory redemption prior to maturity, by lot, in such manner as the Bond Registrar may deem appropriate, at a redemption price equal to par plus accrued interest to the redemption date, on February 1, and on each February 1 thereafter, from moneys deposited in the Sinking Fund, in the following Amortization Requirements in the years specified: Year Amortization Requirements *Maturity Notice of Redemption Notice of redemption for Series 2011 Bonds being - deemed shall be given by deposit in the U.S. mail of a copy of a redemption notice, postage prepaid, at le t thirty (30) days before the redemption date, to all registered owners of the Series 2011 Bonds or port'ins of the Series 2011 Bonds to be redeemed at their addresses as they appear on the registration books o be maintained in accordance with the provisions hereof. Failure to mail any such notice to a registered t ner of a Series 2011 Bond, or any defect therein, shall not affect the validity of the proceedings for red ption of any Series 2011 Bond or portion thereof with respect to which no failure or defect occurred. S notice shall set forth the date fixed for redemption, the rate of interest borne by each Series 2011 Bon. .eing redeemed, the name and address of the Bond Registrar, the redemption price to be paid and, if 1- : s than all of the Series 2011 Bonds of a series then Outstanding shall be called for redemption, the distinc ' e numbers and letters, including CUSIP numbers, if any, of such Series 2011 Bonds to be redeemed an., in the case of Series 2011 Bonds to be redeemed in part only, the portion of the principal amount thereo o be redeemed. If any Series 2011 Bond is to be redeemed in part only, the notice of redemption whi relates to such Series 2011 Bond shall also state that on or after the redemption date, upon surrender o uch Series 2011 Bond, a new Series 2011 Bond or Series 2011 Bonds in a principal amount equal to the redeemed portion of such Series 2011 Bond will be issued. The optional redemption of the Series 2011 ponds, if any, may be conditioned upon the receipt by the Bond Registrar of sufficient moneys to pay e redemption price of the Series 2011 Bonds to be redeemed. If the optional redemption of any of the S•. ies 2011 Bonds is conditioned upon the receipt of sufficient moneys as described above, the notice of demption which relates to such Series 2011 Bonds shall also state that the redemption is so conditi. ed. Any notice mailed as provided in this section shall be conclusively presumed to have been duly ven, whether or not the owner of such Series 2011 Bond receives such notice. 8 SUBSTITUTED Notice having been given in the manner and under the conditions hereinabove provided, the Series 2011 Bonds or portions of Series 2011 Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption for such Series 2011 Bonds or portions of Series 2011 Bonds on such date; provided, however, that Series 2011 Bonds or portion of Series 2011 Bonds called for optional redemption and which redemption is conditioned upon the receipt of sufficient moneys as described above, shall not become due and payable on the redemption date if sufficient moneys to pay the redemption price of such Series 2011 Bonds or portions Series 2011 Bonds have not been received by the Bond Registrar on or prior to the redemption date. • - the date so designated for redemption, moneys for payment of the redemption price being held in parate accounts by the Bond Registrar in trust for the registered owners of the Series 2011 Bonds or porti• thereof to be redeemed, all as provided in the Resolution, interest on the Series 2011 Bonds or portions c Series 2011 Bonds so called for redemption shall cease to accrue; such Series 2011 Bonds and portion of Series 2011 Bonds shall cease to be entitled to any lien, benefit or security under the Resolution and sh . 1 be deemed paid hereunder, and the registered owners of such Series 2011 Bonds or portions of Series 1 Bonds shall have no right in respect thereof except to receive payment of the redemption price the eof and, to the extent provided below, to receive Series 2011 Bonds for any unredeemed portions of t Series 2011 Bonds. In case part but not all of a Series 2011 Bond shall be selected for red- ption, the registered owners thereof shall present and surrender such Series 2011 Bond to the Bond Re•' trar for payment of the principal amount thereof so called for redemption, and the City shall execute an.. eliver to or upon the order of such registered owner, without charge therefor, for the unredeemed bala e of the principal amount of the Series 2011 Bonds so surrendered, a Series 2011 Bond or Series 2011 Bonds fully registered as to principal and interest. Replacement of Bonds Mutilated, Destroyed, Stolen o In case any Series 2011 Bond shall become m lated, destroyed, stolen or lost, the City may execute and the Bond Registrar shall authenticate and d ever a new Series 2011 Bond of like series, maturity, denomination and interest rate as the Series 201 : and so mutilated, destroyed, stolen or lost; provided that, in the case of any mutilated Series 2011 Bond uch mutilated Series 2011 Bond shall first be surrendered to the City and, in the case of any lost, stolen • destroyed Series 2011 Bond, there shall first be furnished to the City and the Bond Registrar evidence of .uch loss, theft, or destruction satisfactory to the City and the Bond Registrar, together with indemnity sa 'sfactory to them. In the event any such Series 2011 Bond shall be about to mature or has matured or has be called for redemption, instead of issuing a duplicate Series 2011 Bond, the City may direct the Bond gistrar to pay the same without surrender thereof. The City and Bond Registrar may charge the Holer of such Series 2011 Bonds their reasonable fees and expenses in connection with this transaction. An Series 2011 Bond surrendered for replacement shall be canceled in the same manner as provided in solution. Any such d . plicate Series 2011 Bonds issued pursuant to the Resolution shall constitute additional contractual obli; ions on the part of the City, whether or not the lost, stolen or destroyed Series 2011 Bonds be at any tim: found by anyone, and such duplicate Series 2011 Bonds shall be entitled to equal and proportione benefits and rights as to lien on and source and security for payment from the applicable Pledged • nds, with all other Series 2011 Bonds issued under the Resolution. iability, Registration and Cancellation At the option of the Holder thereof and upon surrender thereof at the designated corporate trust office of the Bond Registrar with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the Holder or his duly authorized attorney and upon payment by such Holder of any charges 9 SUBSTITUTED which the Bond Registrar or the City may make as provided in this Section, the Series 2011 Bonds may be exchanged for Series 2011 Bonds of the same series, aggregate principal amount of the same maturity of any other authorized denominations. The Bond Registrar shall keep books for the registration of Series 2011 Bonds and for the registration of transfers of Series 2011 Bonds. The Series 2011 Bonds shall be transferable by the Holder thereof in person or by his attorney duly authorized in writing only upon the books of the City kept by the Bond Registrar only upon surrender thereof together with a written instrument of transfer satisfactory to the Bond Reg i _ar duly executed by the Holder or his duly authorized attorney. Upon the transfer of any such Series 201 : ond, the City shall cause to be issued in the name of the transferee a new Series 2011 Bond or Series 20 Bonds. The City, the Bond Registrar and any other fiduciaries may deem and treat the personwhose name any Series 2011 Bond shall be registered upon the books kept by the Bond Registrar as the ..solute Holder of such Series 2011 Bond, whether such Series 2011 Bond shall be overdue or not, for the . rpose of receiving payment of, or on account of, the principal of, redemption premium, if any, and inter • st on such Series 2011 Bond as the same becomes due and for all other purposes. All such payments so m de to any such Holder or upon his order shall be valid and effectual to satisfy and discharge the liability u%on such Series 2011 Bond to the extent of the sum or sums so paid, and neither the City, the Bond Registr, nor any other fiduciary shall be affected by any notice to the contrary. In all cases in which the privilege of exchanging Series 2011 B. ds or transferring Series 2011 Bonds is exercised, the City shall execute and the Bond Registrar shall aut nticate and deliver Bonds in accordance with the provisions of the Resolution. All Series 2011 Bonds sur ndered in any such exchanges or transfers shall forthwith be delivered to the Bond Registrar and cancele. ay the Bond Registrar in the manner provided in this Section. There shall be no charge for any such exch• ge or transfer of Series 2011 Bonds, but the City or the Bond Registrar may require the payment of a sum .ufficient to pay any tax, fee or other govemmental charge required to be paid with respect to such excha :e or transfer. Neither the City nor the Bond Registrar shall be required (a) to transfer or exchange Serie 011 Bonds for a period of 15 days next preceding any selection of Series 2011 Bonds to be redeem:: or thereafter until after the mailing of any notice of redemption; or (b) to transfer or exchange a - Series 2011 Bonds called for redemption. All Series 2011 Bonds paid or red • med, either at or before maturity shall be delivered to the Bond Registrar when such payment or rede ption is made, and such Series 2011 Bonds, together with all Series 2011 Bonds purchased by the City, all thereupon be promptly canceled. Series 2011 Bonds so canceled may at any time be destroyed by the : •nd Registrar, who shall execute a certification of destruction in duplicate by the signature of one of its uthorized officers describing the Series 2011 Bonds so destroyed, and one executed certificate shall be led with the City and the other executed certificate shall be retained by the Bond Registrar. 10 General SUBSTITUTED SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS Payment of the principal of, premium, if any, and interest on the Series 2011A Bonds shall be secured by a lien upon and pledge of the Series 2011A Pledged Funds and the payment of the principal of, premiu if any, and interest of the Series 2011B Bonds shall be secured by a lien upon and pledge of the Series 2 Pledged Funds. The "Series 2011A Pledged Funds" are defined in the Resolution to mean collectiv moneys, securities and instruments held in the subaccounts Funds and Accounts created and e under the Resolution for the Series 2011A Bonds. The "Series 2011B Pledged Funds" are d Resolution to mean collectively, all moneys, securities and instruments held in the subacco Accounts created and established under the Resolution for the Series 2011 B Bonds. The Ser' Funds and the Series 2011B Pledged Funds shall collectively herein be referred as the " more particularly described in the following paragraph, the City has covenanted in t and appropriate, by amendment if necessary, and to deposit into the Sinkin Revenues lawfully available in each Fiscal Year , amounts sufficient to satisfy Requirement for such Fiscal Year , (ii) any deposits required to be made Account during such Fiscal Year, (iii) any other amounts due the Provid Reserve Account Insurance Policy or Reserve Account Letter of Credit Fiscal Year and (iv) any Rebate Amount due during such Fiscal Year Valorem Revenues" are defined in the Resolution to mean all rev whatsoever, other than ad valorem taxation on real or personal the payments required under the Resolution. [However for issuing additional debt secured by or payable from the P considered Non -Ad Valorem Revenues. "CRA Interlo those revenues of the OMNI CRA paid to the City p among the City, Miami -Dade County, Florida principal of and interest on the Series 2011B Bo the Debt Service Reserve Account correspo considered Non -Ad Valorem Revenues debt secured by or payable from the 1B y, all blished ned in the is Funds and s 2011A Pledged edged Funds". As Resolution to budget und, Non -Ad Valorem e (i) Annual Debt Service o the Debt Service Reserve s of any Bond Insurance Policy, nd the Bond Registrar during such provided in the Resolution. "Non -Ad ues of the City derived from any source roperty, which are legally available to make urposes of calculation of the test required for ged Funds, CRA Interlocal Revenues shall not be 1 Revenues" are defined in the Resolution to mean suant to the Interlocal Agreement dated June 24,1996 d the Omni CRA, as amended, to be used to pay the ds and/or to make required deposits into the subaccounts of ding to the Series 2011B Bonds, which revenues shall not be purposes of calculation of the test required for issuing additional n-Ad Valorem Revenues. Such covenant to budget a ' d appropriate does not create any lien upon or pledge of such Non -Ad Valorem Revenues, nor does it p clude the City from pledging in the future its Non -Ad Valorem Revenues, nor does it require the City to •vy and collect any particular Non -Ad Valorem Revenues, nor does it give the Bondholders, the Provider: of any Bond Insurance Policy, Reserve Account Insurance Policy or Reserve Account Letter of Credit . r the Bond Registrar a prior claim on the Non -Ad Valorem Revenues as opposed to claims of general cred' ors of the City. Such covenant to budget and appropriate Non -Ad Valorem Revenues is subject in all resp cts to the payment of obligations secured by a pledge of such Non -Ad Valorem Revenues heretofore or h- inafter entered into (including the payment of debt service on bonds and other debt instruments). owever, the covenant to budget and appropriate in its general annual budget for the purposes a r : in the manner stated herein shall have the effect of making available in the manner described herein .n-Ad Valorem Revenues and placing on the City a positive duty to budget and appropriate, by amenent, if necessary, amounts sufficient to meet its obligations hereunder; subject, however, in all res cts to the restrictions of Section 166.241(3), Florida Statutes, which provides, in part, that the governing dy 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. 11 SUBSTITUTED The Resolution established a Sinking Fund, and within the Sinking Fund, four separate accounts therein designated as the Interest Account, the Principal Account, the Bond Redemption Account and the Debt Service Reserve Account. There is further created within each account, a separate subaccount for the Series 2011A Bonds and for the Series 2011E Bonds. Non Ad -Valorem Revenues appropriated in each Fiscal Year for the payment of the principal o redemption premium, if any, and interest on the Series 2011 Bonds, shall be applied in the following ma er: 1. To the full extent necessary, for deposit into each subaccount of the Interest Acco tin the Sinking Fund, on the fifth (5th) day preceding each Interest Payment Date, such sums as shall be fficient to pay the interest becoming due on the Series 2011 Bonds on each such Interest Payment D e; provided, however, that such deposits for interest shall not be required to be made into the applica. e subaccount of the Interest Account to the extent that money on deposit therein is sufficient for such p rpose. The City shall, on each Interest Payment Date, transfer to the Bond Registr. moneys in an amount equal to the interest due on such interest Payment Date or shall, prior to such Int- est Payment Date, advise the Bond Registrar of the amount of any deficiency in the amount so to be ansferred so that the Bond Registrar may give the appropriate notice required to provide for the pay ent of such deficiency on such Interest Payment Date from any Reserve Account Insurance Policy or R- erve Account Letter of Credit on deposit in the appropriate subaccount of the Debt Service Reserve : ccount or from the Bond Insurance Policy, as applicable. 2. (a) To the full extent necessary, for de sit into each subaccount of the Principal Account in the Sinking Fund, on the fifth (5th) day prece.'_g each principal maturity date, the principal amount of Serial Bonds which will mature and become d on such maturity dates; provided, however, that such deposits for principal shall not be required to be ade into the applicable subaccount of the Principal Account to the extent that money on deposit there' is sufficient for such purpose. The City shall, on each principal paym: t date, transfer to the Bond Registrar moneys in an amount equal to the principal due on such principa .ayment date or shall, prior to such principal payment date, advise the Bond Registrar of the amount oany deficiency in the amount so to be transferred so that the Bond Registrar may give the appropriate no 'ce required to provide for the payment of such deficiency on such principal payment date from any R• serve Account Insurance Policy or Reserve Account Letter of Credit, if any, on deposit in the appropri. e subaccount of the Debt Service Reserve Account or from the Bond Insurance Policy, as applicable (b) T. the full extent necessary, for deposit into each subaccount of the Bond Redemption Account, if : pplicable, in the Sinking Fund, on the fifth (5th) day preceding each redemption or maturity date, the A. ortization Requirements as may be necessary for the payment of any Term Bonds payable from suc subaccount of the Bond Redemption Account on such redemption or maturity dates; provided, howe er, that such deposits for Amortization Installments shall not be required to be made into the applicablsubaccount of the Bond Redemption Account to the extent that money on deposit therein is sufficient fsuch purpose. The moneys in such subaccount of the Bond Redemption Account shall be used solely for the pur' ase or redemption of Term Bonds payable therefrom. The City may at any time purchase any of said m Bonds or portions thereof at prices not greater than the then redemption price of said Term Bonds. If he 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 such subaccount of the Bond Redemption Account for the redemption prior 12 SUBSTITUTED 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 a subaccount of the Bond Redemption 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 credited in such manner and at such times as the Director of Finance shall determine over the remaining payment dates. The City shall, on each redemption or maturity date, transfer to the Bond Registrar moneys in an amount equal to the payments due on the Term Bonds on such redemption or maturity date or shall, prior such redemption or maturity date, advise the Bond Registrar of the amount of any deficiency in the amo so to be transferred so that the Bond Registrar may give the appropriate notice required to provide f% the payment of such deficiency on such redemption or maturity date from any Reserve Account Insuran Policy or Reserve Account Letter of Credit on deposit in the applicable subaccount of the Debt Sery e Reserve Account or from the Bond Insurance Policy, as applicable. 3. To the full extent necessary, for deposit into each subaccount of the De Service Reserve Account in the Sinking Fund on the fifteenth (15th) day of each month in each yea eginning with the fifteenth (15th) day of the first full calendar month following the date on which the e is a deficiency in the amount required to be on deposit in the subaccounts of the Debt Service Reserve • ccount, such sums as shall be at least sufficient to pay an amount equal to one -twelfth (1/12) of the diffe nce between the amount on deposit in the Debt Service Reserve Account (including any Reserve Acco t Insurance Policy or Reserve Account Letter of Credit) and the Reserve Account Requirement; provid - however, that no payments shall be required to be made into the Debt Service Reserve Account whe ' ever and as long as the amount on deposit therein (including any Reserve Account Insurance Policy or r -serve Account Letter of Credit) shall be equal to the Reserve Account Requirement for such Series of Bo.: s. Moneys in the subaccount of the Debt Service Reser - Account shall be used only for the purpose of making payments of principal of and interest on the corre •onding Series of Bonds when the moneys in any other subaccount of any Account held pursuant to e Resolution and available for such purpose are insufficient therefor. Moneys on deposit in a subac unt shall only be used for the corresponding Series of Bonds. Any moneys in the subaccounts of t • ebt Service Reserve Account in excess of the Reserve Account Requirement for such Series of Bonds ma , in the discretion of the City, be transferred to and deposited into the applicable subaccount of the Interes Account, the Principal Account or the Bond Redemption Account as the City at its option may determine The Series 2011 Bonds s all not be and shall not constitute an indebtedness of the City, within the meaning of any constitutiona , statutory or charter provisions or limitations, but shall be payable solely, as provided in the Resolutio , from the applicable Pledged Funds, and solely to the extent provided in the Resolution, the Non -Ad ' alorem Revenues. No holder or holders of any Series 2011 Bonds shall ever have the right to compel t exercise of the ad valorem taxing power of the City, the State, or any other political subdivision thereo •r taxation in any form on any real or personal property therein or the application of any funds of the Cit , except the applicable Pledged Funds, and solely to the extent provided in the Resolution, the Non -Ad .lorem Revenues to pay the Series 2011 Bonds or the interest thereon or the making of any sinking fu ., reserve or other payments provided for in the Resolution. Enforcement of the City's obligation to budget and appropriate legally available Non -Ad Valorem Rev nues shall be through appropriate judicial proceedings. The City has issued and may issue other bonds debt obligations secured by a similar covenant. See "The City of Miami, Florida Schedule of Principal and 13 SUBSTITUTED Interest for Non -Ad Valorem Revenue Bonds and Loans" herein. In addition, various contracts of the City which do not constitute debt may be secured in a similar manner. The City has not covenanted to maintain any programs or other activities which generate 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. Debt Service Reserve Account The Resolution requires the City to maintain on deposit in each of the applicable subaccount of ebt Service Reserve Account an amount equal to the Reserve Account Requirement for such series of Ser. s 2011 Bonds. The "Reserve Account Requirement" is defined in the Resolution to mean with respect to :. ch series of Series 2011 Bonds,[one half of the Maximum Annual Debt Service on all such Bonds Outs anding, the lesser of (i) the Maximum Annual Debt Service on all such series of Series 2011 Bonds Outst. ding, (ii) 125% of the average Annual Debt Service Requirement on al] such series of Series 2011 Bonds 0 tstanding, or (iii) 10% of the proceeds of such series of Series 2011 Bonds within the meaning of the ode.] The Reserve Account Requirement for the Series 2011A Bonds is equal to $ . The Resery Account Requirement for the Series 2011B Bonds is equal to $ . Each subaccount in the Debt Se ce Reserve Account shall be funded with a portion of the proceeds from the Series 2011A Bonds d the Series 2011B Bonds, respectively, simultaneously with the delivery of the Series 2011 Bonds. Se ESTIMATED SOURCES AND USES OF FUNDS" herein. In lieu of or in substitute for the required deposits (inclu• ng existing deposits therein) into the subaccount of the Debt Service Reserve Account, the City may ca e to be deposited into such subaccount of the Debt Service Reserve Account a Reserve Account Insurane: olicy or a Reserve Account Letter of Credit for the benefit of the Holders of the corresponding Series Bonds Outstanding, which Reserve Account Insurance Policy or Reserve Account Letter of Credit shbe payable or available to be drawn upon, as the case may be (upon the giving of notice as required the eunder), on any Interest Payment Date or principal payment date or mandatory redemption date on w h a deficiency exists which cannot be cured by moneys in any other fund or account held pursuant the Resolution and available for such purpose. If a disbursement is made under the Reserve Acco. nt Insurance Policy or the Reserve Account Letter of Credit, the City shall be obligated to either (i) reinst.. e the maximum limits of such Reserve Account Insurance Policy or Reserve Account Letter of Credit with' twelve months by increasing the amount payable or available to be drawn thereunder in equal monthly a• ounts over such twelve month period, or (ii) deposit, on a monthly basis in accordance with the Resolu on, into the applicable subaccount of the Debt Service Reserve Account from the Non -Ad Valorem Reve . es appropriated in accordance with the Resolution, funds in the amount of the disbursements made unde uch Reserve Account Insurance Policy or Reserve Account Letter of Credit, or a combination of such alt= natives as shall equal the Reserve Account Requirement for the applicable series of Bonds Outstanding. In the event at upon the occurrence of any deficiency in the subaccount of the Interest Account, the Principal Accou ' or the Bond Redemption Account, the applicable subaccount of the Debt Service Reserve Account is theunded with one or more Reserve Account Insurance Policies and/or Reserve Account Letters of Credit, t City or the Bond Registrar, as applicable, shall, on an interest or principal payment date or mandato redemption date to which such deficiency relates, draw upon or cause to be paid under such faciliti , on a pro-rata basis thereunder, an amount sufficient to remedy such deficiency, in accordance with 14 SUBSTITUTED the terms and provisions of such facilities and any corresponding reimbursement or other agreement governing such facilities; provided however, that if at the time of such deficiency the applicable subaccount of the Debt Service Reserve Account is only partially funded with one or more Reserve Account Insurance Policies and/or Reserve Account Letters of Credit, prior to drawing on such facilities or causing payments to be made thereunder, the City shall first apply any cash and securities on deposit in the applicable subaccount of the Debt Service Reserve Account to remedy the deficiency and, if after such application a deficiency s 1 exists, the City or the Bond Registrar, as applicable, shall make up the balance of the deficiency by drawl ' g on such facilities or causing payments to be made thereunder, as provided in this paragraph. Amounts .. awn or paid under a Reserve Account Insurance Policy or Reserve Account Letter of Credit shall be apied as set forth in the Resolution. Any amounts drawn or paid under a Reserve Account Insurance Poll • or Reserve Account Letter of Credit shall be reimbursed to the Provider thereof in accordance wit' the terms and provisions of the reimbursement or other agreement governing such facility. Description of Non -Ad Valorem Revenues The following describes the sources of the City's Non -Ad Valorem Re enues: Franchise Fees Franchise fees are levied annually on utility companies by th- ity 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 gra d non-exclusive commercial solid waste franchises and levies certain fees thereunder against commer al solid waste service providers. Public Service Tax The Public Service Tax is imposed, levied , d collected by the City pursuant to Section 166.231, Florida Statutes, and other applicable provisions .f law, on the purchase of electricity, fuel oil, metered or bottled gas (natural liquefied petroleum gas or anufactured), water service, and other services on which a tax may be imposed by law. Florida law authorizes any m icipality in the State to levy a Public Service Tax on the purchase within such municipality of electri ' , metered natural gas, liquefied petroleum gas either metered or bottled, manufactured gas either etered or bottled, water service and fuel oil as well as any services competitive with those specificy enumerated. This tax may not exceed 10% of the payments received by the sellers of such services from . rchasers (except in the case of fuel oil, for which the maximum tax is four cents per gallon). The purchase natural gas or fuel oil by a public or private utility either for resale or for use as fuel in the generation o • lectricity, or the purchase of fuel oil or kerosene for use as an aircraft engine fuel or propellant or for use ' internal combustion engines, is exempt from the levy of such tax. Pursua to the Constitution of the State, Florida Statutes and a resolution of the City, the City levies a Public Sery e Tax, within the incorporated area of the City at the rate of 10% on sales of all services for which it is - lowed 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 kilo - atts,of electricity per month purchased for residential use. The City has not adopted such an exemption b. t it does exempt purchases by the United States Government, the State, Miami -Dade County, the City and is 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. 15 SUBSTITUTED 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 r " Florida, as amended by Chapter 2001-140, Laws of Florida, and now codified in part as Chapter 202, Flo da Statutes (the "Communications Services Tax Act") established, effective October 1, 2001, a communi . tions services tax on the sale of communications services as defined in Section 202.11, Florida Statutes, d as of the same date repealed Section 166.231(9), Florida Statutes, which previously granted municipal' ies the authority to levy a utility services tax on the purchase of telecommunication services. Florida Sta . tes, Section 202.19, as amended, provides that counties and municipalities may levy, by ordinance, a disc tionary communications services tax (the "Local Communications Services Tax") on communications :ervices, the revenues from which may be pledged for the repayment of current or future bonded indebt- . ness. The City set the rates for its Local Communications Services Tax pursuant to Ordinance No. 12078 -nacted on June 14, 2001. Communication services are defined as the transmission, conv• ance, or routing of voice, data, audio, video, or any other information or signals, including cable service , to a point, or between or among points, by or through any electronic, radio, satellite, cable, optical, mic .wave, or other medium or method now in existence or hereafter devised, regardless of the protocol useor such transmission or conveyance. The term does not include: (a) (b) (c) (d) (e) (f) (g) (h) Information services; Installation or maintenance o The sale or rental of tangible .ersonal property; The sale of advertising, i Bad check charges; Late payment ch. ges; Billing and co Internet a on-line ng or equipment on a customer's premises; uding, but not limited to, directory advertising; ection services; or ess service, electronic mail service, electronic bulletin board service, or similar rvices. Any sale of ommunications services charged to a service address in the City is subject to the City's local communicons services tax at a rate of 5.62%. The Communications Services Tax Act further provides that, to the ex t: t that a provider of communications services is required to pay to a local taxing jurisdiction a tax, charge, ' r other fee under any franchise agreement or ordinance with respect to the services or revenues that are . o subject to the tax, such provider is entitled to a credit against the amount of such tax payable to the St. e in the amount of such tax, charge, or fee with respect to such service or revenues. The amount of succredit 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. 16 S U BSTIT-UTE D 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 ' e 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 thin• :, the sales price of each item or article of tangible personal property sold at retail in the State, subject to c . ain exceptions and dealer allowances. In 1982, the Florida legislature created the Local Govemme. Half -Cent Sales Tax Program (the "Local Government Half -Cent Sales Tax Program") which distribut: a portion of the sales tax revenue and money from the State's General Revenue Fund to counties and . nicipalities that meet strict eligibility requirements. In 1982, when the Local Government Half -Cent Sal- Tax Program was created, the general rate of sales tax in the State was increased from 4% to 5%, and on: alf of the fifth cent was devoted to the Local Government Half -Cent Sales Tax Program, thus giving ri to the name "Half -Cent Sales Tax." Although the amount of sales tax revenue deposited into the Local Go emment Half -Cent Sales Tax Program is no longer one-half of the fifth cent of every dollar of the sales p e 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.'stribution of sales tax revenues collected by the State and further provides for the distribution of a por on of sales tax revenues to the Local Government Half -Cent Sales Tax Clearing Trust Fund (the "Trust F. nd"), after providing for transfers to the General Fund and the Ecosystem Management and Restoration T st Fund. The entire sales tax remitted to the State by each sales tax dealer located within a particular coun (the "Local Government Half -Cent Sales Tax Revenues") is deposited in the Trust Fund and earmarked .r distribution to the governing body of such county and each participating municipality within that co ty pursuant to a distribution formula. The percentage of Local Gove . ment Half -Cent Sales Tax Revenues deposited in the Trust Fund is 8.804%. The general rate of sales tax the State is currently 6.00%. After taking into account the distributions to the General Fund (historically % of taxes collected) and the Ecosystem Management and Restoration Trust Fund (.2% of the taxes collecte. , for every dollar of taxable sales price of an item, approximately 0.501 cents is deposited into the Trust F.nd. As of October 1, 101, the Trust Fund began receiving a portion of certain taxes imposed by the State on the sales of com .nication services (the "CST Revenues") pursuant to Chapter 202, Florida Statutes. Accordingly, mone - s distributed from the Trust Fund now consist of funds derived from both general sales tax proceeds an. ST Revenues required to be deposited into the Trust Fund. e alf-Cent Sales Tax collected within a county and distributed to local government units is distribute. among the county and the municipalities therein in accordance with the following formula: County Share (percentage of total Half -Cent = unincorporated + 2/3 incorporated Sales Tax receipts) area population area population total county + 2/3 incorporated population area population 17 SUBSTITUTED Municipality Share (percentage of total Half -Cent = Sales Tax receipts) municipality population total county + 2/3 incorporated population area population For purposes of the foregoing formula, "population" is based upon the latest official State imate of population certified prior to the beginning of the local government fiscal year. Should any uni ' corporated area of Miami -Dade County become incorporated as a municipality, the share of the Half-ent 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 bas : to participating units of local government in accordance with Part VI, Chapter 218, Florida Statutes (the ".ales Tax Act"). The Sales Tax Act permits the City to pledge its share of the Half -Cent Sales Tax for the ..yment of principal of and interest on any capital project. To be eligible to participate in the Half -Cent Sales Tax, the count • s and municipalities must comply with certain requirements set forth in the Sales Tax Act. These requi--ments include those concerning the reporting and auditing of its finances, the levying of ad valorem tax: or receipt of other revenue sources, and certifying certain requirements pertaining to the employment . compensation of law enforcement officers, the employment of fire fighters, the auditing of certain depen• -nt special districts, and the method of fixing millage rates for the levying of ad valorem taxes. Although the Sales Tax Act does not impose a limitation upon the number of years during which the City can receive distribution of the Half-Cen ales Tax from the Trust Fund, there may be future amendments to the Sales Tax Act. To be eligible participate in the Trust Fund in future years, the City must comply with certain eligibility and report' requirements of Chapter 218, Part VI, Florida Statutes, otherwise, the City will not be entitled to • y Trust Fund distributions for twelve (12) months following a "determination of noncompliance" by t DOR. State Revenue Sharing. A ..rtion of the taxes levied and collected by the State is shared with local governments under the provisio . of Chapter 218, Part II, Florida Statutes. The amount deposited by DOR into the State Revenue Shari Trust Fund for Municipalities is 1.3409% of available sales and use tax collections after certain req ed distributions, 12.5% of the Florida alternative fuel user decal fee collections, and the net collections fr. the one -cent municipal fuel tax. To be eligibl- for State Revenue Sharing funds, a local government must be audited, with certain exceptions; must ve filed its annual financial report with the Florida Department of Financial Services; must certify ce ain requirements pertaining to the employment and compensation of law enforcement officers and e employment of firefighters; must levy an ad valorem tax of at least 3 mills or collected equivalent :lternative revenues from a combination of the following sources available to municipalities: a remitta e from the county pursuant to Section 125.01(6)(a), Florida Statutes, occupational license taxes, utilit taxes, and ad valorem taxes. Eligibility is retained if the local government has met eligibility re. irements for the previous three years, even if the local government reduces its millage or utility taxes ecause 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 18 SUBSTITUTED 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 ith certain eligibility and reporting requirements, otherwise, the City will not be entitled to distributio for a period of time. Fines and Forfeitures. These are revenues derived from fines and forfeitures imposed % local courts. Charges for Services Charges for various services provided by the City to residents, property owrs, and grants received from other governments, including the following: (a) General Government: all money resulting from charges for cur nt 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 fee (d) Building and Zoning Inspections: fees for inspect".ns such as plumbing, electrical, elevator and mechanical inspections; (e) Marina Fees: all fees associated with open ons of the various City marinas; (f) Recreational and Special Events: fees f. parks and recreation activities and events; and (g) Other: fees for services not spec i 'cally mentioned above, i.e., engineering services, public hearing fees. Other Revenue and Financing Sources This category includes a v. iety of revenues and transfers from other funds, including the interest earnings on invested funds. [Remainder of page intentionally left blank] 19 SUBSTITUTED The following table represents the City's audited determination of legally available Non -Ad Valorem Revenues for the Fiscal Years Ended September 30, 2006 through September 30, 2010. THE CITY OF MIAMI, FLORIDA LEGALLY AVAILABLE NON -AD VALOREM REVENUES YEAR ENDED SEPTEMBER 30th 2006 2007 2008 2009 0 Revenues: Franchise and Utility Taxes $ 41,342,214 $ 42,257,282 $ 35,319,051 $ 36,228,332 36,448,254 Licenses and Permits: Business Licenses and Permits 7,078,534 7,064,358 7,769,633 7,50: 53 7,680,315 Construction Permits 21,390,059 25,766,010(1) 22 019 185 18 ' 4 028 17 469 460 Total Licenses and Permits $ 28,468,593 $ 32,830,368 $ 29,788,818 $ :,032,481 $ 25,149,775 Intergovernmental: State and Revenue Sharing $ 13,044,234 $ 13,073,886 $ 12,187,197 $ 10,791,455 $ 10,516,183 Half -Cent Sales Tax 25,800,341 25,505,412 24,719,05 22,566,791 22,665,743 Fine and Forfeitures 5,175,457 5,283,695 6,031 •9 6,396,471 4,298,283 Other 3,341,711 15,517,110 14 .4 695 13,875,682 18,122,138 Total Intergovernmental $ 47,361,743 $ 59,380,103 $ 5 ,352,741 $ 53,630,399 $ 55,602,347 Charges for Services: Engineering Services $ 44,917,693 $ 46,587,956 $ 47,079,358 $ 47,715,500 $ 51,784,383 Public Safety 11,025,330 22,952,3622,596,110 25,009,184 21,763,551 Recreation 662,557 3,488,' •2 3,144,370 2,541,056 3,085,270 Other 35,375,016 41' 343 2,178,334 1,242,353 1,496,625 Total Charges for Services $ 91,980,596 $ , 74,155 $ 74,998,172 $ 76,508,093 $ 78,129,829 Interest Income 11,144,320 16,248,307 10,086,415 4,064,924 2,733,028 Other 16,643,409 4,950,826 6,594,312 8,196,844 6,332,053 Component Units Operating: Transfers In(2) 52 097 26 61,411,040 76,817,851 47,785,001 53,493,902 Total Sources of Legally Available Non -Ad Valorem Revenues 289,038,101 $294,252,081 $290,957,360 $252,446,074 $257,889,188 Essential Expenses Not Paid with Ad Valorem Taxes(3) (12,418,1041 (52,246,548) (49,012,560) (39,317,193) (37,980,6231 Net Non -Ad Valorem Revenues Available o Debt Service afte ayment of Essential Go ernmental Services $276,619,997 $242.005,533 $241.944,800 521.3,1.28,88 $219,908.565 Source: City of Mi• i Finance Department (1) This i rease has been due to growth in the City and in new development. (2) Am nts comprised primarily of Public Service Taxes, Local Option Gas Taxes and amounts from Public Works special revenue f ds. Both Public Service Taxes and Local Option Gas Taxes are recurring each year although the amounts may differ from year to year. Transfers In are net of debt service, on other bond obligations. (3) Total ad valorem taxes minus General Fund government and public safety expenses. This amount does not include a pro rata share of the pension costs associated with the General Fund and Public Safety expenses. 20 SUBSTITUTED The following table represents current debt service on obligations payable from legally available Non -Ad Valorem Revenues as of April 30, 2011. THE CITY OF MIAMI, FLORIDA SCHEDULE OF PRINCIPAL AND INTEREST FOR NON -AD VALOREM.REVENUE BONDS AND LOANSm Prior to Refunding After Refunding Fiscal Year Principal Interest Total Principal Interest 2011 $ 3,845,999.70 2012 16,032,215.30 2013 20,749,629.50 2014 22,927,860.00 2015 21,254,406.90 2016 27,645,000.00 2017 13,050,000.00 2018 13,375,000.00 2019 11,995,000.00 2020 11,400,000.00 2021 7,160,000.00 2022 3,490,000.00 2023 3,695,000.00 2024 3,915,000.00 2025 4,150,000.00 2026 6,960,000.00 2027 3,785,000.00 2028 4,035,000.00 2029 4,235,000.00 2030 4,450,000.00 2031 6,670,000.00 2032 7,350,000.00 2033 7,735,000.00 2034 8,140,000.00 2035 8,565,000.00 2036 9,015,000.0: 2037 9,830,00:.00 2038 10,350 i00.00 2039 2,:'0,000.00 7,767,725.17 18,434,799.81 17,903,157.11 17,064,175.11 15,991,884.46 10,531,021.36 9,484,599.12 8,674,736.62 7,806,984.11 7,023,045.36 6,435,109.12 6,086,288.20 5,859,845.80 5,620,121.80 5,363,532.26 4,971,581.61 4,590,181.80 4,339,612.50 4,137,862.50 3,926,11 :0 3,703,. 2.50 3,3 .,437.50 * 67,562.50 2,561,475.00 2,134,125.00 1,684,462.50 1,211,175.00 695,100.00 151,725.00 11,613,724.87 34,467,015,.11 38,652,786.61 39,992,035.11 37,246,291.36 38,176,021.36 22,534,599.12 22,049,736.62 19,801,984.11 18,423,045.36 13,595,109.12 9,576,288.20 9,554,845.8 9,535,12 .80 9,513 32.26 11,9. ,581.61 375,181.80 8,374,612.50 8,372,862.50 8,376,112.50 10,373,612.50 10, 703,437.50 10, 702,562.50 10,701,475.00 10,699,125.00 10,699,462.50 11,041,175.00 11, 045,100.00 3,041,725.00 Total 78,695 111.40 190,475,051.32 469,170,162,72 Sou e: City of Miami Finance Department s described herein, the obligation and the ability of the City to budget and appropriate Non -Ad Valorem Revenues is subject to a variety of factors, including the obligation of the City to provide essential governmental services and the obligation of the City to have a balanced budget. 21 Non -Ad Valorem Funds Available to Pay Debt Sery ice Debt Service(' A') Coverage(3) 200% Debt Service Coverage(a) SUBSTITUTED THE CITY OF MIAMI, FLORIDA HISTORICAL ANTI -DILUTION TEST YEAR ENDED SEPTEMBER 30T" 2006 2007 2008 2009 2010 $ 276,619,997 $242,005,533 $241,944,800 $213,128,881 $ 9,908,565 $ 21,583,712 $ 15,534,423 $ 37,323,086 $ 37,698,012 '. 39,992,035 12.82x 15.58x 6.48x 5.65 5.50x $ 43,167,424 $ 31,068,846 $74,646,172 $75,396,1: 4 $ 79,984,070 6.41x 7.79x 3.24x 2.83x 2.75x (') Debt service is based on the maximum estimated annual loan payments on t r - Sunshine Loans during the remaining Fiscal Years until the date of maturity of such loans and m. imum annual debt service on bonds or other debt obligations payable from Non -Ad Valorem Rev ues outstanding as of September 30, 2010. Variable Interest Rate Debt on the Sunshine Loans is calculat:: at 12% which is the maximum rate pursuant to the covenants of loan agreements securing tdebt of Sunshine State Governmental Financing Commission. The Sunshine Loans include the e funded Loans. Coverage based on 100% debt service. Coverage based on 200% debt service. (2) (3) (4) Special Investment Considerations As described above, the City's cove . nt to budget and appropriate Non -Ad Valorem Revenues does not constitute a lien, either legal or equit• . e, on any of the City's revenues. The amount of such revenues available to make payments on the Ser' s 2011 Bonds may be effectively limited by (i) the requirement for a balanced budget, (ii) funding require ents for essential governmental services of the City, (iii) a decrease in one or more of the sources of No Ad Valorem Revenues, for example, a fluctuation in the Half -Cent Sales Tax collections due to change n economic activity and a decrease in the dollar volume of purchases in Miami -Dade County, and (i - the inability of the City to expend revenues not appropriated or in excess of funds actually available a er the use of such funds to satisfy obligations having an express lien or pledge on such funds. Further .re, except as provided in the Resolution (and described herein under the caption "SECURITY AND S P RCES OF PAYMENT FOR THE SERIES 2011 BONDS —Additional Debt Payable From Non -Ad Valorem '' evenues'), the City is not restricted in its ability (i) to pledge such revenues for other purposes or to '.sue additional debt specifically secured by such revenues or by a covenant similar to that securing the series 2011 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 de • service on the Series 2011 Bonds. In addition, there can be no certainty as to the outcome of any judicial oceedings to enforce the City's obligation to appropriate such funds. 22 SUBSTITUTED Additional Debt Payable from Non -Ad Valorem Revenues Pursuant to the Resolution, the City may incur additional debt [(other than the Series 2011 Bonds)] that is payable from all or a portion of the legally available Non -Ad Valorem Revenues only if the total amount of Non -Ad Valorem Revenues for the prior Fiscal Year were (a) 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 Non - Ad Valorem Revenues and not other funds of the City (collectively, "Debt"), including any Debt payable from one or several specific Non -ad Valorem Revenue sources but only to the extent such Non -Ad Valor Revenues are legally available to pay debt service on the Series 2011 Bonds, and (b) so long as the Series Bonds are outstanding and if a Reserve Account Insurance Policy is in effect, at least 1.00 times the ob gation of the City to repay any costs then due and owing to the Provider of a Reserve Account Insuran . Policy. Pledge of Non -Ad Valorem Revenues No specific source of Non -Ad Valorem Revenues (which includes Publi ervice Tax revenues, franchise revenues, occupational license tax revenues, the guaranteed entitle 'ent portion of the State Revenue Sharing funds and fines and forfeitures) are pledged to the payme- of the Series 2011 Bonds. Certain sources of Non -Ad Valorem Revenues are pledged for the payment • ' other indebtedness of the City as shown herein. Future issues of .other indebtedness of the City may b secured by a pledge of Non -Ad Valorem Revenues as described above. See "FUTURE DEBT" herein. [Remainder of page intentional ' left blank.] 23 SUBSTITUTED MANAGEMENT DISCUSSION OF BUDGET AND FINANCES The City's original Fiscal Year 2011 budget was adopted on September 27, 2010. The Fiscal Year 2011 budget was approximately $482.7 million which reflected an overall decrease of 1.3% ($22.1 million) from the Fiscal Year 2010 budget, including Transfers in as revenue and Transfers out as expenditures. Based upon actual results as of April 30, 2011, the City anticipates a projected Fiscal Year 2011 year end The table below compares actual audited revenues and expenditures to budgeted amounts fiscal year 2011 to actual amounts as of March 2011: Actual vs. Budgeted Revenues, Expenditures and Net Changes in Fund Balance for the General Fund through March 2011 of Ac., al Budget Actual to B : • et Revenues Property Taxes $223,537,412 $173,442,468 77.59% Franchise Fees/Other Taxes 36,269,000 12,500,408 34.47 Licenses and permits 30,794,313 22,313,3 1 72.46 Fines and forfeitures 14,133,112 1,88 ,122 13.32 Intergovernmental 43,419,282 16, • 42,947 38.24 Charges for services 81,549,665 °,743,567 61.00 Interest 1,500,000 311,833 20.79 Fund Balance Allocation - 0 0 Other 11050 0 0 1 6,627,786 59.98 Total Revenues .442 25 84 $283,425,362 Expenditures General government 41,383,236 19,191,594 44.24% Planning & Development 7,764,751 4,163,906 53.63 Public works 49,779,747 22,675,474 45.55 Public safety 196,633,133 100,326,672 51.02 Public facilities 4,226,509 2,023,323 47.87 Parks and recreation 22,364,797 10,878,729 49/64 Risk management 62,844,050 31,591,568 50.24 Pensions 72,079,756 67,810,772 94.08 Non-departme• al 25,660,698 5,964,957 23.25 Total Expen. tures $482,736,676 $264,626,995 Excess ieficiency) of Revenues (40,483,892) 18 798 367 Ove nder) Expenditures O er financing sources and ses): Operating transfers in 57,076,860 0 Operating transfers out 16,592,968 0 Total Other financing sources 40,483,892 and uses Net Change in Fund Balance $17,951,561 18,798,367 Source: The City of Miami, Florida See "Summary of Schedule of Revenues, Expenditures and Net Changes in Fund Balance for General 24 SUBSTITUTED Fund" herein for the historical revenue and expenditures. Fiscal Year 2010 Results The table below compares actual audited revenues and expenditures to budgeted amounts for the fiscal year ended September 30, 2010: Actual vs. Budgeted Revenues, Expenditures and Net Changes in Fund Balance for the General Fund through September 30, 2010 Revenues Property Taxes Franchise Fees/Other Taxes Licenses and Permits Fines and Forfeitures Intergovernmental Revenues Charges for Services Interest Other Total Revenues Expenditures General Government Planning & Development Public Works Public Safety Pensions Public Facilities Parks and Recreation Risk Management Organizational Support Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Transfers In Transfers Out Total Other Financing Sourc• (Uses) Net Change in Fund Bala Fund Balance Beginnin Y Fund Balance Ending Y Budgeted Amounts Ori'inal Amended of ctual to Actual Or'.: mal Bud e $257,946,343 39,086,516 29,172,916 6,142,461 41,323,714 80,146,969 3,200,000 2,140,22( 459,159,145 41,942,234 8,985,280 52,278,913 227,056,450 90,539,756 5,298,141 21,603,43 24,876 / 80 3 18 742 5 799 233 (45,640,088) 54,619,085 (8,978,997) 45,640,088 $247,646,519 $247,646,519 96.01% 36,448,254 36,448,254 93.25 25,149,775 25,149,7 86.21 4,298,283 4,291, 83 69.98 51,304,064 51, '4,064 124.15(2) 78,129,829 7!,129,829 97.48 2,733,028 2,733,028 85.41 12,975,512 6,332,053 295.86 458,685,264 452,041,805 55,8 ,595 54,913,599 130.93%(1) 8 ' 4,853 8,974,853 99.88 ,523,967 51,276,106 98.08 30,823,243 230,713,543 101.61(2) 89,975,265 89,975,265 99.38 4,389,912 4,389,912 82.86 23,755,931 23,75 5,930 109.96(3) 28,998,188 22,354,729 89.86 32,218,742 32,218,742 100.00t41 526,489,696 518,572,679 (67,804,432) (66,530,874) 53,493,902 53,493,902 97.94% (13,135,534) (13,493,245) 150.28 40,358,368 40,000,657 $ (27,446,064) (26,530,217) 39,972,5; S 13,442,371 (1) The difference presents amounts that were budgeted originally as credit balances to account for attrition and other savings in the non -depart i ntal line item which is included in the function General Government, that were not realized. (2)The additii al $10 million was allocated to allow for $9.1 million of 175/185 firefighters/police pension trust fund monies as pass- throu. . expenditures for Public Safety, For accounting purposes this pension supplement from the State is recorded as revenues und- Intergovernmental Revenues and as an expense in Public Safety. (3) T additional $2.1 million was allocated to cover costs associated with delivery of the summer programs. (4) ' e additional $4.3 million in Other revenues was allocated to account for group insurance revenues from retirees that was not transferred to the Risk Management function at year end, but rather remained in the Other revenues line item. 25 SUBSTITUTED The City's Fiscal Year ended September 30, 2010 had an operating deficit of $26.5 million greater than the original budget. This budget deficit is categorically composed of operating expense deficiencies and revenue shortfalls and is discussed accordingly below by component. The operating expense component of approximately $20.9 million was associated with general operations of the City. The operating loss comprised- a number of favorable and unfavorable variances in multiple departments. Revenues were greatly impacted by the economic downturn affecting the local real estate market and the national banking industry. Specifically, Property Taxes were $10.3 million or 3.9°10 less than anticipated in the original adopted budget. This was due to the millage budget requirement of the State of Florida that requires the adoption of the tax budget at a 95% collection rate instead of the City's actual collection rate which i approximately 90%. Franchise and Other Taxes were $2.6 million or 6.7% less than anticipated in the origi al adopted budget due to an anticipated increase in FPL (electricity) rates that was not approved by the P blic Service Commission. Additionally, FPL offered a fuel rebate in March 2010 which resulted in $900 00 less revenue to the City. Collections of License and Permits were $4.0 million or 13.8% less than antici., ted in the original adopted budget. Charges for Services were $2.1 million or 2.5% less than the origin. expectation. These unfavorable variances were offset, in part, by better than expected collections from 0 er Revenues of $4.2 million. The overall net deficit result in revenues collected (including Transfers In) s compared to the original adopted budget for these categories was approximately $8.2 million or 1.6% ss than expected. The increase in expenditures was driven by amounts that were originally bud ted as credit balances to account for attrition and other savings related to vacancies that were not realize • These amounts are carried in the non -departmental accounts which are included in the General Gove . -nt function. Additionally, the Parks and Recreation Department exceeded their budgeted expenditure •y $2.1 million due primarily to expenses associated with the delivery of summer day camp programs. ' ile the original adopted budget did provide for some of the operating cost associated with the summer pr. • rams, under -estimating the volume of the operating programs led to the budget overage. The City's Bud et Department is working closer with the Parks and Recreation Department to better determine its opera •ng needs, specifically costs associated with staffing the summer programs. The remaining $4.5 million increase in Transfers out . s needed to allow for contributions to the special revenue funds to provide funding to projects that hadeficit balances. 26 SUBSTITUTED FUTURE DEBT The City expects to issue additional debt in the future which may include the Southeast Overtown Park West District CRA Bonds, in an amount not to exceed of $6.2 mil., payable from tax increment revenue of such community redevelopment area, expected to be issued in October 2011 The City also expects to issue debt for the purpose of refinancing and restructuring its N . -Ad Valorem Revenues debt. Th'e City would refinance the following transactions: (i) Special Revenue nding Bonds, Series 2002A, (ii) Special Revenue Refunding Bonds, Series 2002C, (iii) Special Obligat an Non -Ad Valorem Revenue Bonds, Series 1995 and (iv) Non -Ad Valorem Refunding Revenue Bonds, T able Pension Series 2009. Such debt is expected to be issued in October 2011 and the City expects to save . ver $11 mil over a two year period and $2.8 mil. in the third year. [Remainder of page intentionally left blank] MUNICIPAL BOND INSURA The following information has been furnished by (the "Insurer"), for use in this Preliminary Official Statement. Reference is made o Appendix F for a specimen of the policy. [TO OME] ESERVE PRODUCT [TO COME] MUNICIPAL BOND INSURANCE RISK FACTORS In the ev t of default of the payment of principal or interest with respect to the Series 2011 Bonds when all or so e becomes due, any owner of the Series 2011 Bonds shall have a claim under the Municipal Bond Insur. ce Policy (the "Policy") for such payments. However, in the event of any acceleration of the due date % such principal by reason of mandatory or optional redemption or acceleration resulting from defaul or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund pay - ent, the payments are to be made in such amounts and at such times as such payments would have b -n due had there not been any such acceleration. The Policy does not insure against redemption premium, if any. The payment of principal and interest in connection with mandatory or optional prepayment of the Series 2011 Bonds by the issuer which is recovered by the issuer from the bond owner as a voidable preference under applicable bankruptcy law is covered by the insurance policy, however, 27 SUBSTITUTED such payments will be made by the Insurer at such time and in such amounts as would have been due absence such prepayment by the City unless the Insurer chooses to pay such amounts at an earlier date. Under most circumstances, default of payment of principal and interest does not obligate acceleration of the obligations of the Insurer without appropriate consent. The Insurer may direct and must consent to any remedies and the Insurer`s consent may be required in connection with amendme to the Resolution. In the event the Insurer is unable to make payment of principal and interest as such .ayments become due under the Policy, the Series 2011 Bonds are payable solely from the moneys rece -ed pursuant to the Resolution. In the event the Bond Insurer becomes obligated to make payments wi respect to the Series 2011 Bonds, no assurance is given that such event will not adversely affect the arket price of the Bonds or the marketability (liquidity) for the Series 2011 Bonds. The long-term ratings on the Series 2011 Bonds are dependent in part • the financial strength of the Insurer and its claim paying ability. The Insurer's financial strength . d claims paying ability are predicated upon a number of factors which could change over time. No ..surance is given that the long- term ratings of the Insurer and of the ratings on the Series 2011 Bonds ' sured by the Insurer will not be subject to downgrade and such event could adversely affect the ma et price of the Series 2011 Bonds or the marketability (liquidity) for the Series 2011 Bonds. See descr'.tion of RATINGS herein. The obligations of the Insurer are contractual obliga ' •ns and in an event of default by the Insurer, the remedies available may be limited by applicable bank ptcy law or state law related to insolvency of insurance companies. Neither the City nor the Underwriters hav a ade independent investigation into the claims paying ability of the Insurer and no assurance or rep •sentation regarding the financial strength or projected financial strength of the Insurer is given. Th , when making an investment decision, potential investors should carefully consider the ability of th ssuer to pay principal and interest on the Series 2011 Bonds and the claims paying ability of the Ins er, particularly over the life of the investment. See "MUNICIPAL BOND INSURANCE" herein for f her information provided by the Insurer and the Policy, which includes further instructions for o.taining current financial information concerning the Insurer. [Remainder of page intentionally left blank.] 28 SUBSTITUTED GENERAL INFORMATION REGARDING THE CITY OF MIAMI Background Now 115 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 a ethnic diversity of approximately 424,662 residents, 58.9% of them foreign born. In physical size, the C. is not large, encompassing only 34.3 square miles. In population, the City is the largest of the 35 munic .alities that make up Miami -Dade County and is the county seat. For additional information concerning - City, see "APPENDIX A - GENERAL INFORMATION REGARDING THE CITY OF MIAMI, FLORIDA AND i -DADE COUNTY" City Government Since 1997, the City has been governed by a form of government known as t "Mayor -Commissioner plan." The City Commission is the legislative body of the City. There are five C missioners elected every four years from designated districts within the City. The Mayor is elected :t large every four years. As official head of the City, the Mayor has veto authority over actions of the Ci •• Commission, however, the City Commission can override such veto with a 4/5 vote. The Mayor appoint e City Manager who functions as chief administrative officer. The Mayor of the City is presently Tomas P. Regalado ose term expires November 2013. The current members of the City Commission and : piration of their current terms of office are: Commission Members Wifredo Gort Marc D. Sarnoff Richard Dunn Frances Suarez Frank Carollo The City Manager, Tony E the City. The City Manager is res in compliance with the polici Manager since January 1, 20 and administers a budget Manager with oversigh Prior to being prom overseeing a num Solid Waste, Pa Florida Inter Date Term Expires November 2011 November 2011 November 2013 November 2011 November 2013 app, Jr., is a full-time employee and is the chief administrative officer of nsible for directing the administrative and operational aspects of the City set by the City Commission and the Mayor. Mr. Crapp has been City He is responsible for an organization that has more than [3,954] employees more than $534 million. Prior to his current position, he served as Deputy City f every City department excluding Police, Fire and the Office of Equal Opportunity. ed to Deputy City Manager, he was the Assistant City manager in charge of operations of the City's largest departments including public facilities, community development, s and Grants Administration. He holds a Bachelor of Arts Degree in Political Science from ational University. e City's Chief Financial Officer is Larry M. Spring, Jr. His primary responsibilities include the covers. ht of the following departments: Finance, Employee Relations, Risk Management and Purchasing. He w.: appointed the interim Chief Financial Officer in July 2006 and appointed the Chief Financial Officer in ebruary 2007. He served as Assistant City Manager for Strategic Planning, Budgeting and Performance from 29 SUBSTITUTED February 2003 to February 2007. Prior to that, Mr. Spring spent the bulk of his career in the commercial 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, 200 Prior to joining the City, Ms. Gomez was a Supervising Senior Auditor/C.P.A. for five years with KPMG P, one of the "big four" accounting firms. Ms. Gomez received a Bachelor of Arts in Psychology from tgers College, NJ, and a Masters in Business Administration in Professional Accounting from the Uri' ersity 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 • . plies to all cash and investments held or controlled by the City and identified as "general operating fu ' ds" of the City with the exception of the City's Pension Funds, Deferred Compensation & Section 401(a) P . ns, and such funds related to the issuance of debt where there are other existing policies or indent es in effect for such funds. Additionally, any future revenues, which have statutory investment requir, ents conflicting with the City's Investment Policy and funds held by state agencies (e.g. Department v Revenue), are not subject to the provisions of the policy. The primary objective of the investment program is the s, ety of the principal of those funds within the portfolios. Investment transactions shall seek to keep capi . losses at a minimum, whether they are from securities defaults or erosion of market value. To attain this ..jective, diversification is required in order that potential losses on individual securities do not exceed e income generated from the remainder of the portfolio. The portfolios are required to be manage in such a manner that funds are available to meet reasonably anticipated cash flow requirements i .n orderly manner. Return on investment is of least importance compared to the safety and Liquidity .bjectives described in the policy. In accordance with the City's Administrative Policies, the responsib' ity for providing oversight and direction in regard to the management of the investment program re des with the City's Finance Director. The Finance Director has established written procedures for the .peration of the investment portfolio and a system of internal accounting and administrative contro The City's investment policy may be modified from time to time by the City Commission. Subject to the except . in the City's investment policy, the City may invest in the following types of securities: (a) The Florida .cal Government Surplus Funds Trust Fund, (b) United States Government Securities, (c) United Stat- Government Agencies, (d) Federal Instrumentalities, (e) Interest Bearing Time Deposit or Savings Ac .unts, (f) Repurchase Agreements, (g) Commercial Paper, (h) Corporate Notes, (i) Bankers' Acceptanc ., (j) State and/or Local Government Taxable and/or Tax -Exempt Debt, (k) Registered Investment Co es (Money Market Mutual Funds) and (1) Intergovernmental Investment Pool. Also, the City may inves in investment products that include the use of derivatives. A of September 30, 2010, approximately 74% of the City's investment portfolio was invested in United :rates Treasury Obligations and obligations of agencies of the United States Government and 30 SUBSTITUTED approximately 20% 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 policy. It is the responsibility of the City's finance committee to review and make recommenda %ons regarding the issuance of debt obligations and the management of outstanding debt. The finance co • ittee has approved the Series 2011 Bonds and their negotiated sale to the Underwriters. The following policies concerning the issuance and management of debt were establis ed in the Debt Management Policy: (a) the City will not issue debt obligations or use debt proceeds t•, finance current operations; (b) the City will utilize debt obligations only for acquisition, construction or • modeling of capital improvement projects that cannot be funded from current revenue sources or in such ses wherein it is more equitable to the users of the projects to finance the project over its useful life; and ( he City will measure the impact of debt service requirements of outstanding and proposed debt obligations on single year, five, ten and twenty year periods. Fiscal and Accounting Procedures The accounts of the City are organized on the basis of fu : s or account groups, each of which is considered a separate accounting entity in accordance with ge rally accepted accounting principles, as defined by the Governmental Accounting Standards Boar. "GASB"). The operation of each fund is accounted for in a separate, self -balancing set of accou which comprise its assets and other debits, liabilities, fund equities and other credits, revenues an. xpenditures. Individual funds that have similar characteristics are combined into fund types. For the past two years the City has receiv the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Of "cers Association of the United States and Canada. For a complete description of the fund types a account groups, see "Notes to General Purpose Financial Statements of the City" in APPENDIX C .ttached hereto. General Fund The General Fund is th- general operating fund of the City. it accounts for all financial resources except for those required to , accounted for in another fund. The largest source of revenue in this fund is generated from ad valore axation. Operations are removed from the General Fund only when they can be operated as true enterp e operations. [Remainder of page intentionally left blank] 31 SUBSTITUTED The following chart shows audited information regarding the General Fund for the Fiscal Years Ended September 30, 2006 through September 30, 2010. Summary Schedule of Revenues, Expenditures and Net Changes in Fund Balance for the General Fund 2006 2007 2008 2009 2010 Revenues Property Taxes $214,329,257 $258,756,957 $258,294,391 $266,860,263 $24 .646,519 Franchise Fees/Other Taxes 41,342,214 42,257,282 35,319,051 36,228,332 6,448,254 Licenses and permits 28,468,593 32,830,368 29,788,818 26,032,481 25,149,775 Fines and forfeitures 5,175,457 5,283,695 6,031,799 6,396,471 4,298,283 Intergovernmental 53,266,529 54,096,408 51,320,942 47,233,92 51,304,064 Charges for services 91,980,596 77,174,155 74,998,172 76,508,r•3 78,129,829 Interest 11,144,320 16,248,307 10,086,415 4,0.',924 2,733,028 Other 5,563,166 3,448,782 6,954,312 8 96,844 6,332,053 Total Revenues $451,270,132 $490,095,954 472,433,900 4 ,521,336 452,041,805 Expenditures General government 38,809,265 61,208,626 57,525,471 56,699,386 54,913,599 Planning & development 9,440,759 10,814,727 10,788,2 10,843,924 8,974,853 Community development - - - - Community redevelopment areas - - - - - Public works 50,573,908 56,376,608 5',.58,769 54,938,534 51,276,106 Public safety 187,938,096 249,794,879 ' 9,881,480 249,478,070 230,713,543 Public facilities 7,355,457 7,419,797 6,248,557 5,003,138 4,389,912 Parks and recreation 15,111,916 20,201,873 24,276,993 28,300,738 23,755,930 Risk management 25,546,486 18,115,929 28,796,859 13,107,068 22,354,729 Pensions 78,864,757 70,708, 65,116,477 66,906,558 89,975,265 Organizational Support/Group 25,161,646 35,12 ,459 27,751,691 41,314,516 32,218,742 Benefits Non -departmental 13,204,324 - - - Debt Service: Principal Interest and Other Charges Capital Outlay Total Expenditures $452 06,614 $529,763,183 $525,244,521 526,591,932 $518,572,679 Excess (Deficiency) of Revenues Over (Under) Expenditures (736,482) (39,667,229) (52,810,621) (55,070,596) (66,530,874) Other financing sources and (uses): Operating transfers in 52,097,226 61,411,040 76,817,851 47,785,001 53,493,902 Operating transfers out (42,209,286) (49,052,224) (30,879,926) (46,319,266) (13,493,245) Refunding Bonds issued - Proceeds from sale of r operty 1,502,044 - Payments to Refund': Bond Escrow Agent - - Bonds Issued Loan Capital L-.ses - - - Sale of ' apital Assets Tota .ther financing sources(uses) 9,887,940 13,860,860 45,937,925 1,465,735 40,000,657 Change in Fund Balance $9,151,458 $(25,806,36) $(6,872,696) $(53,604,861) $(26,530,217) Fund Balance-Begining of Year 117,105,055 126,256,513 100,450,144 93,577,448 39,972,587 Fund Balance- End of Year 126,256,513 100,450,144 93,599,448 39,972,589 $40,888,434 Source: The City of Miami, Florida. 32 SUBSTITUTED LIABILITIES OF THE CITY Insurance Considerations Affecting the City Section 768.28, Florida Statutes, provides sovereign immunity limits on the liability of the State of Florida and its subdivisions of $100,000 to any one person, or $200,000 for any single occurrence or incident. Effective October 2011, the sovereign immunity threshold will increase to $200,000 per person or $300,000 per occurrence or incident. See "Ability to be Sued, Judgments Enforceable" below. Under the protection of this sovereign immunity limit, Florida Statutes 768.28 and Chapter 440, Florida Statutes covering Work - Compensation, the City has established a self -insured program to provide coverage for almost all ar:. s of liability including Workers' Compensation, General Liability, Automotive Liability, Police Prof sional Liability, Public Officials' Liability, and Employment Practices Liability. In addition, the City als• •urchases excess insurance coverage to limit catastrophic losses associated with its liability exposure The excess liability insurance program provides for $20 million in combined limits. The excess ins ance program currently has a self -insured retention of $750,000 per occurrence for Workers' Compensati • , and $500,000 for all other liability coverages. The City also purchases dedicated commercial general lia.ility policies for the Grapeland Waterpark, Bayfront Park, and the various various marinas that it o-.erates. These policies typically carry a $1 million limit per occurrence and on an aggregate basis, wit . $1,000 deductible. The City's master property insurance program provides for a total o '.100 million in insurance limits for the City's $444 million property values. With the exception of earthq e, flood and named windstorm, the All -Other -Perils' deductible is $50,000 per occurrence. In regard • the named windstorm, flood, and earthquake exposures, the deductible is 5% of the location's value . t the time of loss with a minimum of $250,000. The funds to account for liability losses within the s- insured retention level are derived from the General Fund balance. Claims are being predomin. tly adjusted by an independent third party administrator. Claims expenditures and liabilities are ported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimed based on an independent actuarial valuation. The budgeting process utilizes information develop•. in the previous year's actuarial report in addition to historical information and present/specific kno • ledge on the status of claims and litigations. Workers' Compensation The City has been working iligently with its third party claims administrator and the City's Attorney's Office to effectively r Itigate indemnity and medical expenses resulting from Workers' Compensation related losses. he City has been successful in significantly reducing its Experience Modification Rate (EMR) fro .74 to 1.49 and finally to 1.33 in 2010. Currently, open WC claims total about 1,200 claims. Health Insurance The City . ovides group health benefits for its active employees, retirees, and their dependents through a fully if -funded health insurance program. The City is currently contributing approximately 83% while the e •loyees are contributing 17% to the cost of the group health insurance program. To limit catastrop losses, the City is currently purchasing specific Stop Loss coverage for claims in excess of $200,00 33 SUBSTITUTED Ability to be Sued, Judgments Enforceable Notwithstanding the liability limits described below, the laws of the State of Florida provide that each city has waived sovereign immunity for liability in tort to the extent provided in Section 768.28, Florid Statutes. Therefore, the City is liable for tort claims in the same manner and, subject to limits stated below, o the same extent as a private individual under like circumstances, except that the City is not liable for p itive damages or interest for the period prior to judgment. Such legislation also limits the liability of a ci o pay a judgment in excess of $100,000 to any one person or in excess of $200,000 because of any single cident or occurrence. Judgments in excess of $100,000 and $200,000 may be rendered, but may be paid fr m City funds only pursuant to further action of the Florida Legislature. See Insurance Considerations ' ecting the City herein. Notwithstanding the foregoing, the City may agree, within the limits of insurance overage provided, to settle a claim made or a judgment rendered against it without further action by the L gislature, but the City shall not be deemed to have waived any defense or sovereign immunity or to have ' creased the limits of its liability as a result of its obtaining insurance coverage for tortious acts in excess .f the $100,000 or $200,000 waiver provided by Florida Statutes. See "LITIGATION" herein. Indebtedness of the City Pursuant to the Debt Management Policy, the City's deissuance is subject to the following constraints: (i) the Net Debt Per Capita and the Net Debt to Taxab Assessed Value percentages, which shall be determined by the finance committee by bench marking the ' ity to current industry standards, and (ii) the maximum maturity shall be the earlier of (a) the estimate • useful life of the capital improvements being financed or (b) thirty years or (c) in the event debt was i ed to refinance outstanding debt obligations the final maturity of the debt obligations being refinance. unless a longer term is recommended by the finance committee. 34 SUBSTITUTED 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 April 30, 2011, including that which is payable from sources other than ad valorem taxes. Amount Outstanding DESCRIPTION Issued Balance General Obligations Bonds: General Obligation Refunding Bonds, Series 1992 S70,000,000 $0 Homeland Defense/Neighborhood CIP, Series 2002 153,186,406 ,306,791 General Obligation Refunding Bonds, Series 2002A 32,510,000 23,590,000 General Obligations Bonds, Other Issues 23,190,000 315,000 General Obligation Refunding Bonds, Series 2003 18,680,000 1,690,000 General Obligation Refunding Bonds, Series 2003B 4,180,004,030,000 General Obligation Refunding Bonds, Series 2007A 103,061,100 102,650,000 General Obligation Refunding Bonds, Series 2007B 51 100,000 50,000,000 General Obligation Refunding Bonds, Series 2009 1,055,000 47.715,000 Total General Obligation Bonds S505,961,406 $255,756,791 Special Obligation and Revenue Bonds and Loans: Special Revenue Refunding Bonds, Series 1987 65,271,325 3,027,611 Community Entitlement Revenue Bonds, Series 1990 11,500,000 1,450,000 Special Obligation Non -Ad Valorem Revenue, Series 1995 72,000,000 28,950,000 Special Revenue Refunding Bonds, Series 2002A 27,895,000 22,995,000 Special Revenue Refunding Bonds, Series 2002C 28,390,000 16,065,000 Special Revenue Bonds, Series 2007 80,000,000 75,755,000 Special Revenue Bonds, Series 2009 65,000,000 64,090,000 Non Ad Valorem Refunding Bonds, Series 200 37,435,000 36,160,000 Special Revenue Bonds, Marlins Garage, Se -s 2010A 84,540,000 84,540,000 Special Revenue Bonds, Marlins Retail, 'tics 2010B 16,830,000 16,830,000 Loans: *Sunshine State Governmental Pi , ncing Commission Loans 27,630,900 5,851,000 *Sunshine State Governmen : Financing Commission Loans 6,600,000 6,600,000 *Sunshine State Gover ental Financing Commission Loans 42,500,000 42,500,000 *Sunshine State G • ernmental Financing Commission Lo s 20,000,000 12,700,000 *Sunshine St a- Governmental Financing Commissio- - Secondary Loan 3,500,000 920,000 SLOP - Section 108 HUD Loan 5,100,000 2,300,000 Wa.- cr Square -Section 108 I -IUD Loan 4,000,000 3,806,000 ran Central Corporation Loan 1,708,794 1,708,864 ?arrot J unglc 6,112,000 1 556 000 Total Special Obligation and Revenue Bonds, and Loans $677,297,189 5427 759 975 Total Debt S1 183.,258,523 S683,516,766 Source: City of Miami Finance Depanment * Being refunding by Series 2011 A Bonds 35 SUBSTITUTED Pension Plans The City's employees participate in two separate, single employer defined benefit contributory pension plans under the administration and management of separate Boards of Trustees: The City of Miami Fire Fighters' and Police Officers' Retirement Trust ("FIPO") and the City of Miami General Employees and Sanitation Employees' Retirement Trust ("GESE"). The plans cover substantially all City employees who contribute a percentage of their base salary or wage on a bi-weekly basis. The Board of Trustees of GES administer three defined pension plans- (1) City of Miami General Employees and Sanitation Emplo, ees Retirement Trust ('GESE Retirement Trust"), (ii) an Excess Benefit Plan for the City of Miami and (iii) ' ity of Miami General Employees and Sanitation Employees Retirement Trust Staff Pension Plan (" 'SE Staff Trust"). Each plan's assets may be used only for the payment of benefits to the members of at plan, in accordance with the term of the plan. The City's elected officials participate in a single employer defined benefit non •ntributory pension plan under the administration and management of a separate Board of Trustees, th ity of Miami Elected Officers' Retirement Trust ("EORT"). This plan covers all elected officials with 7 or more years of elected service. The EORT is a non-contributory plan 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 c• tributed by the City for the Fiscal Years ended September 30, 2008, 2009 and 2010. GESE Retirement Trust. The GESE Retirement Trust is a Ingle -employer defined benefit plan. The GESE trust was established pursuant to the City of Miami 0 . finance No. 10002 and subsequently revised under City of Miami Ordinance No. 12111. The GESE Trus ' covers all City of Miami general and sanitation employees except certain employees eligible to decline embership. Participation in the GESE Trust is a mandatory condition of employment for all regular a : permanent employees other than fire fighters, policy officers, and those eligible to decline membership, :s defined by the Ordinance. The chart below shows the funding p egress for GESE Retirement Trust and presents multi -year trend information about whether the actuar 1 value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability f benefits. Gese Retirement Trust UAAL as Actuarial Actuarial Actuarial Value Accrued Unfunded ML Funded Annual of Annual Valuation of Assets Liability (AAL) (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a/b) (c) (b-a)/c 10/1/06 $618, .:2,563 $732,016,189 $113,533,626 84.49% $75,609,062 150.16% 10/1/07 6' ,145,175 770,218,984 106,073,809 86.23 82,052,702 129.28 10/1/08 691,791,000 808,618,183 116,827,183 85.55 90,974,647 128.42 10/1/09 645,614,641 780,625,200 135,010,559 82.70 90,045,202 149.94 10/1/10 652,999,926 840,871,136 187,871,210 77.66 68,762,827 273.22 So , rce: City of Miami General Employees' and Sanitation Employees' Retirement Trust Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC The actuarial assumptions used in the October 1, 2010 valuation are as follows: • Actuarial Cost Method- Entry Age Normal Cost Method. Under this method, normal costs are determined on the individual entry age normal method. However, if the actuarial value of assets exceeds 36 SUBSTITUTED the entry age accrued liability, the individual entry age normal cost rate for the Plan shall be adjusted by the excess actuarial value of assets divided by the present value of future payroll, in order for the unfunded accrued liability to not be less than zero. • Decrements - Pre Retirement Mortality: 1983 Group Annuity Mortality Table (male and female), set back 2 years. Post -Retirement Healthy Mortality: 1983 Group Annuity Mortality Table (male and female). Post -Retirement Disabled Mortality: 1983 Group Annuity Mortality Table (male and female), set forward 9 years. Disability: Representative values of the assumed annual rates of disability among members in active services are set forth in the following table. Disability decrements do not compete with retirement. Age Rate Age Rate Age Rate Age to 20 0.03% 30 0.04% 40 0.07% 50 0.17% 25 0.03% 35 0.05% 45 0.10% 55 0.25% Permanent Withdrawal from Active Status: Representative values of the assumed annual tes of withdrawal among members in active service are set forth in the following table. Age 0 1 20 12.0% 10.5% 25 12.0 10.5 30 12.0 10.5 35 12.0 10.5 40 11.4 9.9 45 10.8 9.3 50 10.2 8.7 55 9.9 8.4 Completed Years of Service Retirement: Representative values of the assumed are set forth in the following table. 2 9.0% 9.0 9.0 9.0 8.4 7.8 7.2 6.9 3 7.2% 7.2 7.2 7 .6 6.0 5.4 5.1 4 6.0% 6.0 6.0 6.0 5.4 4.8 4.2 3.9 5 or more 5.3% 4.6 4.0 3.4 2.6 2.0 1.3 1.0 al rates of retirement among members in active service Age Rate Age Rate ge Rate Age Rate Age Rate 45 15% 50 20% 55 30% 60 20% 65 20%. 46 15% 51 20% 56 20% 61 20% 66 20% 47 15% 52 20°/ 57 20% 62 20% 67 20% 48 15% 53 % 58 20% 63 20% 68 20% 49 15% 54 20% 59 20% 64 20% 69 20% 70 100% In addition, the v. uation assumes a 65% probability the Pension Administrator will retire upon reaching the Rule of 70 igibility. For non -administrators, 20% is added to the rates in the table when the member first reache ule of 70 eligibility. • Interes ate- 8.10% per annum, compounded annually, including inflation. • S.. ry Increases- Salaries are assumed to increase at the rate of 6.00% per annum, including inflation, Ther- s no assumed total active member payroll increase. Inflation-3.5% per annum. 37 SUBSTITUTED • Spouses -The Pension Administrator is assumed to not be married; 40% of active members are assumed to be married with the husband 3 years older than his wife. • Expenses -The City shall provide for the non -investment expenses of the Plan. However, there may be some non -investment expenses during the Plan year which will be reimbursed by the City after the end of the year. An allowance for other expenses is made in that the interest rate assumption is net of investment expenses. • Assets- The actuarial value of assets is based on a moving market value averaged over three years. Each year, the actuarial asset value is projected forward at the valuation date based on actual contributions and benefits payments at the assumed interest assumption. One third of the difference between th projected actuarial value and the market value plus prior deferrals is added to the projected actuarial val The remaining two thirds is deferred to each of the next two years as future adjustments to the ac . rial value. The results cannot be greater than 120% of market value or less than 80% of market val As of October 1, 2000 the actuarial value is equal to the estimated present value of employee p f ments to purchase credit for services to the effective date of the Plan (July 1, 2001). • GASB Nos. 25-27.2- The determination of GASB Nos. 25 and 27 accounting inf ; mation has been made on the basis of the same assumptions and methods. • Funding Period (Pursuant to Chapter 122, Florida Statutes) The following ortization periods apply all as lever dollar amounts: Benefit improvements for actives 20 ye. s Benefit improvements for retirees 15 ears Actuarial gain/loss years Change in assumptions and methods 20 years The Plan's initial unfunded actuarial accrued liability of October 1, 2000 is amortized over 30 years. • Maximum Benefit- The valuation reflects the m. imum benefit limits under Internal Revenue Code Section 415, indexed in future years at t ' e 3.5% per year assumed rate of inflation. Annuall Required Contribution for GE . Retirement Trust. State of Florida law requires that the City annually contribute to each of its defin-. benefit pension plans the actuarial determined Annually Required Contribution (the "ARC") as ca ulated by an independent actuary. The chart below shows amounts contributed by the City to the GE Retirement Trust and the percentage of such contribution to the ARC. Year Ended A al Required Annual Percentage September 30 ontribution Contribution Contributed 2006 $22,018,443 $22,018,443 100% 2007 24,229,028 24,229,028 100 2008 22,762,902 22,762,902 100 2009 23,191,828 23,191,828 100 2010 24,037,093 24,037,093 100 Source: Ci of Miami General Employees' and Sanitation Employees' Retirement Trust tuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting, LLC 38 SUBSTITUTED The City's contribution increased from $23,191,828 for Fiscal Year 2008-2009 to $24,037,093 for Fiscal Year 2009-2010. GESE Staff Trust. The GESE Staff Trust is a single -employer, defined benefit plan. The Staff Trust was established by the rule -making authority of GESE Retirement Trust, pursuant to Chapter 40 of the Miami city code. The GESE Staff Trust covers all administrative full-time employees and other positions as may b named by the Board of Trustees. Participation in the GESE Staff Trust is a mandatory conditio o employment for all full time employees, other than those eligible to decline membership, as defined ' the plan document. The chart below shows the funding progress for GESE Staff Trust and presents m i-year trend information about whether the actuarial value of plan assets are increasing or decreasing ov time relative to the actuarial accrued liability for benefits. GESE Staff Trust UAAL as Actuarial Actuarial % Actuarial Value Accrued Unfunded ML Funded Covered of Annual Valuation of Assets Liability (AAL) (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) a ./ (c) (b-a)/c 10/1/06 $939,698 $1,129,276 $189,578 83.21% $643,770 29.45% 10/1/07 1,138,655 1,622,719 484,064 70.17 734,116 65.94 10/1/08 1,313,407 1,748,147 434,740 75.13 632,259 68.76 10/1/09 1,556,718 2,121,806 565,0:: 73.37 738,898 76.48 10/1/10 1,834,613 2,826,982 9'. ,369 64.90 842,955 117.72 Source: City of Miami General Employees' and Sanitatio mployees' Retirement Trust Staff Pension Plan Actuarial Valuation Report as of October 1, 20 J prepared by Cavanaugh Macdonald Consulting, LLC Annuall Re uired Contributio• for GESE Staff Trust. State of Florida law requires that the City annually contribute to each of its deli dbenefit pension plans the actuarial determined Annually Required Contribution (the "ARC") as calc ated by an independent actuary. The chart below shows amounts contributed by the City to the G.. E Staff Trust and the percentage of such contribution to the ARC. Year Ended Annual Required Percentage September 30 Contribution Contribution Contributed 2006 $72,380 $72,380 100% 2007 57,995 57,995 100 2008 109,163 109,163 100 2009 159,837 159,837 100 2 ►. 0 132,542 132,542 100 Sour City of Miami General Employees' and Sanitation Employees' Retirement Trust Staff Pension Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consulting GESE Excess Plan. The City of Miami Commission, in July 2000, pursuant to applicable Internal Revenue Code provisions, 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 benefit so the benefits for eligible members are not diminished by changes in the Internal Revenue Code. The Board of Trustees of the Trust administers the excess benefit plan. Plan members are not required to contribute to the Excess Benefit 39 SUBSTITUTED Plan. Members of the GESE Trust participate in 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, 2010 was $4,493,186 and the annual pension costs have been contributed by the City for the Fiscal Years ended September 30, 2008, 200 and 2010. The chart below shows the funding progress for GESE Excess Plan and presents multi-y .r trend information about whether the actuarial value of plan assets are increasing or decreasing over ti relative to the actuarial accrued liability for benefits. GESE Excess Plan UAAL as Actuarial Actuarial % Actuarial Value Accrued Unfunded ML Funded Covered of Annual Valuation of Assets Liability (AAL) (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) a/b (c) (b-a)/c 10/1/06 $0 $7,999,872 $7,999,872 0.% $75,609,062 10.58% 10/1/07 0 8,600,801 8,600,801 .00% 82,052,702 10.48 10/1/08 0 5,151,124 5,151,124 0.00% 90,974,647 5.66 10/1/09 0 5,833,742 5,833,742 0.00% 90,045,202 6.48 10/1/10 0 5,704,602 5,704,.: 0.00% 68,762,827 8.30 Source: City of Miami General Employees' and Sanitation Emp yees' Excess Benefit Plan Actuarial Valuation Report as of October 1, 2010 pre ared by Cavanaugh Macdonald Consulting, LLC [Remainder of %age intentionally left blank.] 40 SUBSTITUTED Annually Required Contribution for GESE Excess Plan. State of Florida law requires that the City annually contribute to each of its defined benefit pension plans the actuarial determined Annually Required Contribution (the "ARC") as calculated by an independent actuary. The chart below shows amounts contributed by the City to the GESE Excess Plan and the percentage of such contribution to the ARC. Year Ended Annual Required Annual Percentage September 30 Contribution Contribution Contributed 2006 $824,766 $463,126 56.15% 2007 823,371 476,252 57.84 2008 898,149 446,916 49.76 2009 566,046 464,325 82.03 2010 625,539 339,602 54. Source: City of Miami General Employees' and Sanitation Employees' Excess Benefit Plan Actuarial Valuation Report as of October 1, 2010 prepared by Cavanaugh Macdonald Consultin,, LLC EORT. The City's elected officials participate in a single -employer, defi ed benefit pension plan under the administration and management of a separate Board of Trustees, the of Miami Elected Officers Retirement Trust. Under the EORT plan, eligibility requires seven (7) yea . of total service as an elected official of the City to be vested without requiring that such service bcontinuous. This plan is non- contributory. The EORT's fiduciary administers the excess benefit plan established by the City Commission on July 2000. FIPO. FIPO is a single -employer, defined benefit plan es . shed by the City pursuant to the provisions and requirements of Ordinance No. 10002 as amended. Participants • contributing police officers and firefighters with full-time employment status it he Police or Fire Department o e City. The chart below shows the funding progress or FIPO and presents multi -year trend information about whether the actuarial value of plan assets are ' creasing or decreasing over time relative to the actuarial accrued liability for benefits. FIPO Actu• al UAAL Actuarial Ac. ued As % Actuarial Value ability Unfunded Funded Covered of Valuation of Assets (ML) ML Ratio Payroll Covered Date (a) - Entry Age (UAAL) (a/b) (c) Payroll Normal (b-a) (b-a)/c (b) 10/1/05 $10 ' 9,000 $12,216,000 $1,297,000 89 % $9,150,000 142% 10/1/06 ,479,000 12,605,000 1,126,000 91 9,040,000 125 10/1/07 12,689,000 13,184,000 495,000 96 1,036,000 48 10/1/08 10,189,000 14,525,000 4,336,000 70 1,294,000 335 10/1 : • 9,708,000 15,393,000 5,685,000 63 1,222,000 465 Source: City of Miami Fire Fighters' and Police Officers' Retirement Trust Actuarial Report, October 1, 2009 41 SUBSTITUTED Prepared by Stanley, Holcombe & Associates, Inc. COLA. Effective January 1, 1994, the FIPO Trust entered into an agreement with at the City with regards to the funding methods, employee benefits, employee contributions and retiree COLA. Members no longer contribute to the original COLA account (COLA I); a new COLA account (COLA II) was established The agreement included the following: (a) the funding method was changed to an aggregate cost method all accounts were combined for investment purposes (membership and benefits, COLA I, and COLA I (c) retirees receive additional COLA benefits, and (d) active members no longer contribute 2% if pretax - rning to fund the original retiree COLA account (COLA I). The COLA II account is funded annually by a percentage of the excess investment turn from the COLA I account assets. The excess earnings contributed to the COLA II account are used , fund a minimum annual payment of $2.5 million, increasing by 4% compounded annually. To the exte r necessary, the Ci ty will fund the portion of the minimum annual payment not funded by the annual exc a earnings no later than January 1 of the following year. Accrued Compensated Absences Under terms of Civil Service regulations, labor contracts and are granted vacation and sick leave in varying amounts. Addition and carried forward as earned time off. Unused vacation and service, subject to various limitations depending upon the em The amount accrued as of September 30, 2010 is $84,276,1 amount only includes the primary government emplo units. Every three years the maximum number of h FIPO and GESE. Other Postemployment Benefits dministrative policy, City employees , certain overtime hours can be accrued ick time is payable upon separation from oyee's seniority and civil service classification. of which $13,672,940 is the current portion. Such es and does not include employees of component s which can be carried forward is renegotiated with In accordance with Section 112.0801 he City provides medical coverage and life insurance benefits to its retirees. Although not required by .w, the City pays a portion of such cost of participation for its retirees. As with all governmental entit s providing similar plans, the City was required to comply with the Governmental Accounting St. dard's Board Statement No. 45 — Accounting and Financial Reporting by Employers for Postemploy nt Benefits Other than Pensions ("GASB 45") no later than its Fiscal Year ending September 30, 2010. Th ity has historically accounted for its other post employment benefit ("OPEB") contributions on a pay . s you go basis. GASB 45 applies accounting methodology similar to that used for pension liabilities OPEB and attempts to more fully reveal the costs of employment by requiring governmental u ' s to include future OPEB costs in their financial statements. While GASB 45 requires recognition andisclosure of the unfunded OPEB liability, there is no requirement that the liability of such plan be funs d. e City retained Gabriel Roeder Smith & Company (the "Actuary") to perform an actuarial valu. ion of its OPEB liabilities. The City's Actuary identified the City's OPEB liabilities as of October 1, 2010 as 31,572,155 for all covered employees and retirees (except police officers) and $12,540,416 for police fficers (including retirees) with its net OPEB liability for the year ended September 30, 2010 being $18,488,637 and $66,271,536 respectively, based on GASB 45 methodology. 42 SUBSTITUTED The chart below shows the funding progress for OPEB and presents trend information for the two years since this information was compiled about whether the actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Post Employment Benefits Other Than Pension (OPEB) Actuarial Accrued Actuarial Liability (AAL) AAL As % Actuarial Value Projected Unfunded Funded of Covered Valuation of Assets Unit Credit AAL(UAAL)) Ratio Covered Payr•. 1 Payroll Date (a) (b) (b-a) (a/b) (c) (b-1)c 10/1/06 $0 $146,802,156 $146,802,156 0.00% $12',:92,623 113.02% 10/1/08 $0 $148,725,390 $148,725,390 0.00% $. 0,785,202 87.08% Source: City of Miami, Florida Other Post -Employment Benefits for City Employees .ther than Police Officers Actuarial Report, September 30, 2010 Em.lo er Contributions Resuired Contribution for OP Year Ended Em. oyer Percentage Net OPEB September 30 Annual OPEB Cost Co ribution Contributed Obligation 2008 $10,786,386 $5,261,988 42.12% $ 5,524,398 2009 10,926,498 5,220,141 47.78 11,230,755 2010 12,540,416 5,282,534 42.12 18,488,637 Source: City of Miami, Florida Other Post-'mployment Benefits for City Employees other than Police Officers Actuarial Report, September 30, 2010 [Remainder of page intentionally left blank.] 43 SUBSTITUTED RISK FACTORS THE PURCHASE OF THE SERIES 2011 BONDS INVOLVES A DEGREE OF RISK, AS IS THE CASE WITH ALL INVESTMENTS. FACTORS THAT COULD AFFECT THE CITY'S ABILITY TO PERFORM ITS OBLIGATIONS UNDER THE BOND RESOLUTION, INCLUDING THE TIMELY PAYMENT OF PRINCIPAL OF AND INTEREST ON THE SERIES 2011 BONDS, INCLUDE, BUT A NOT LIMITED TO, THE FOLLOWING: 1. There is no assurance that any rating assigned to the Series 2011 Bonds by the ratinagencies will continue for any given period of time or that it will not be lowered or withdrawn entirely b such rating agency, if in its judgment, circumstances warrant. A downgrade change in or withdrawal of . ny rating may have an adverse effect on the market price of the Series 2011Bonds. See "RATINGS" her: n. 2. The City's covenant to budget and appropriate Non -Ad Valorem Re enues for the payment of the Series 2011 Bonds is limited by a number of factors. In addition, the City is • of required and does not covenant to maintain any services or programs which generate Non -Ad Valore • Revenues. Cancellation of any services or programs which are not essential services that generate No' -Ad Valorem Revenues could have an adverse affect on the City fulfilling its covenant obligations und the Resolution. See "NON -AD VALOREM REVENUES - SPECIAL INVESTMENT CONSIDERATIO " herein. 3. Recent and well publicized economic factors whi have created crises in many geographic areas have affected the City, as property values, property tax re nues, and sales tax revenues have declined. For example, the total taxable value of assessed property i he City declined 1.6% in Fiscal Year 2009 as compared to Fiscal Year 2008 and the estimated actual val • of assessed property in the City declined 5.545% in Fiscal Year 2009 as compared to Fiscal Year 2008. ee "APPENDIX A — GENERAL INFORMATION CONCERNING THE CITY — Assessed Property Va • es." As a further example, the office of the property appraiser of the County's June 1, 2010 release esti ated the taxable value of the properties located in the City to be $31,381,000,000 which is a 15% decrease f .m Fiscal Year 2009. These severe economic conditions have contributed significantly to the City's financ.. distress and there may be further declines in City property tax values, property tax revenues and other r• 'enues of the City. The City cannot accurately predict when, how or to what extent these conditions wi change, and there is no assurance that they will improve in the foreseeable future. [TO BE UPDAT 4. The City has t ee separate, single employer defined benefit plans, in which its current and former employees may parti ' pate. The City of Miami Fire Fighters' and Police Officers' Retirement Trust ("FIFO") and the City of ami General Employees' and Sanitation Employees' Retirement Trust ("GESE") are contributory plans at cover substantially all of the City's employees. The third plan is a non- contributory defined •enefits plan, the City of Miami Elected Officers' Retirement Trust ("EORT"), in which all elected official ith seven or more years of elected service to the City may participate. The City annually funds its FIPO, e GESE and the EORT pension obligations. Such obligations collectively have averaged $ in the last three Fiscal Years and are projected to increase significantly if changes are not made to t• • current plans. See "THE CITY OF MIAMI - Indebtedness and Other Liabilities of the City - Pensio und" herein and also Note 10 - Pensions to "APPENDIX C - GENERAL PURPOSE AUDITED FIN CIAL STATEMENTS OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010 (E CERPTS OF THE CITY OF MIAMI COMPREHENSIVE ANNUAL FINANCIAL REPORT)." 5. The City has also experienced significant increases in its obligations for contributions for healthcare benefits for employees and retirees, and their dependents, and other post employment benefit ("OPEB") obligations. The City has two separate OPEB plans, one for police officers and the other for all 44 SUBSTITUTED other employees. These obligations are projected to increase significantly if changes are not made to the current plans. See Note 11- Post -Employment Healthcare Benefits to "APPENDIX C - GENERAL PURPOS AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMB 30, 2010 (EXCERPTS OF THE CITY OF MIAMI COMPREHENSIVE ANNUAL FINANCIAL REPOR ' .' 6. The City has four separate collective bargaining units, the American Federati• of State, County and Municipal Employees ("AFSCME") Local 1907 for general City employees, AFS 1 E Local 871 for the City's solid waste employees, the Fraternal Order of Police ("FOP") Lodge No. 2 for police and detention officers, and the International Association of Fire Fighters ("IAFF") Local " 87 for the City's firefighters. In connection with the IAFF collective bargaining agreement, the City h.. declared a financial urgency under Section 447.4095, Florida Statutes, seeking renegotiation of the collecti "e bargaining agreement which is not due to expire until September 1, 2011. 7. After informal requests for documents in December 2009, in 'ebruary 2010 the SEC instituted a formal investigation of the City in connection with various bond offeri gs by the City in 2007 and 2009 to determine whether the City violated Section 10(b) of the Securities change Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. This in -stigation could temporarily divert the attention of City officials and employees from the conduct of Ci operations, could cause the City to incur significant expenses, and could have a material effect on the ty's financial condition and operations. See "SECURITIES AND EXCHANGE COMMISSION INVEST " ATION" herein. 8. In the event of a default in the payme of principal of and interest on the Series 2011 Bonds, the remedies of the owners of the Series 2011 Bond are limited under the Resolution. See "APPENDIX B - COPY OF RESOLUTION" herein. LEGAL MATTERS Certain legal matters incide ' t to the validity of the Series 2011 Bonds are subject to the approval of Squire, Sanders & Dempsey (US) P, Bond Counsel, Miami, Florida whose approving opinion in the form attached hereto as "APPEND I • - FORM OF BOND COUNSEL OPINION" will be furnished without charge to the purchasers of the Se es 2011 Bonds at the time of their delivery. The actual legal opinion to be delivered may vary from at text if necessary to reflect facts and law on the date of delivery. Certain lega atters will be passed upon for the City by Julie O. Bru, Esq., City Attorney, and by Bryant Miller OlivP.A„ Miami, Florida, Disclosure Counsel to the City. Certa' legal matters will be passed upon for the Underwriters by Nabors Giblin & Nicerkson, P.A., Tampa, Fl• da Counsel to the Underwriters. SECURITIES AND EXCHANGE COMMISSION INVESTIGATION On December 10, 2009, the City of Miami was notified by the Miami Regional Office of the SEC that e staff of the SEC was conducting a non-public inquiry concerning City of Miami bond offerings to determine whether there have been any violations of federal securities laws. In letters dated December 10, 2009 and December 23, 2009, the SEC staff requested that the City voluntarily provide the SEC staff with documents concerning (a) City bond offerings in 2007 and 2009, (b) the transfer of approximately $13.1 million from the Capital Projects Fund to the General Fund in Fiscal Year 2007, (c) the transfer of approximately $13.3 million from the Capital Projects Fund to the General Fund in Fiscal Year 2008, and (d) Audit Report No. 010-005, Audit of Compliance with the Financial Integrity Principles, issued by the City of 45 SUBSTITUTED Miami Office of Independent Auditor General in November, 2009. In February 2010, the SEC issued a formal order directing a non-public investigation ("Formal Order"), stating that it has information tending to show possible violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. According to the Formal Order, the SEC is investigating whether, since at least 2005, the City and others may have violated these provisions by, among other things, employing devices, schemes or artifices to defraud, engaging in transactions which operated or would operate as a fraud or deceit, or making false statements of material fact or failing to disclose material facts concerning, among other things, the state of the City's financial conditi The SEC has requested documents from the City, both voluntarily and by subpoena, and h.. also issued subpoenas for documents from and the testimony of current and former City officials and e .loyees, and has taken the testimony of some individuals. The City has received multiple subpoenas frc the SEC asking for additional documents concerning primarily the Auditor General's report referen.ed above, the fund transfers referenced above, City bond issues in 2007 and 2009, bond document disci. ures, reports to bondholders, City pension plans and obligations under such plans, any policies, proced • res and guidelines related to inter -fund transfers, any adverse conditions concerning the City's f' ances, any internal investigation, review or analysis conducted by the City and related to matters th ave been identified as subjects of the SEC investigation and documents related to the use of certain venue sources as recently mentioned in the Internal Auditor General Report No. 11-001. Documents req sted include communications with and among City management and elected officials. The City is cooperating fully with the SEC investigation and the SEC's requests and subpoena. The SEC has not advised the City be in its early stages, is expected to be concluded or of any pote City cannot predict either the duration of the investigation temporarily divert the attention of City officials and emplo cause the City to incur significant expenses, and could ha and operations. The City cannot predict the outcom resulting from any action on the part of the SEC discussed below and "RISK FACTORS" discuss is roviding information in response to en the investigation, which appears to al outcome of the investigation, and the its outcome. The SEC investigation may es from the conduct of City operations, could a material effect on the City's financial condition of this investigation or the ultimate consequences See also "LITIGATION - Recent Legal Proceedings" herein. LITIGATION There is no pending or, to the kno ledge of the City, any threatened litigation against the City of any nature whatsoever which in any wa, questions or affects the validity of the Series 2011 Bonds, or any proceedings or transactions relati , to their issuance, sale, execution, or delivery, or the adoption of the Resolution, or the levy of the noad valorem revenues. Not the creation, organization or existence, nor the title of the present members o the City Commission or other officers of the City is being contested, Certain Legal Proceedin Michael J. B. dreaux v. City of Miami, Florida Circuit Court, Case No. 10-24880CA09. On April 26, 2010, the City's fo er Director of Management and Budget filed a Complaint asserting that the termination of his employ • •nt was in retaliation for his cooperation with the SEC's investigation of the City. See "Securities a' G Exchange Commission Investigation" herein. The City was served with the complaint on May 3, 2010. e City has filed a motion to dismiss, which was heard on July 21, 2010. The Court denied the motion o dismiss, but has allowed the City to file a motion for summary judgment to be heard at a later date. Ad. Tonally, the Plaintiff filed a request for a civil service administrative hearing pursuant to Civil Service R e 16.2 and Florida statutes Sections 112.3187 through 112.31895 (2009) (the "Florida Whistleblower Act"). 46 SUBSTITUTED The Complaint alleges, among other things, that the termination of Boudreaux's employment on or about March 8, 2010 violated the Florida Whistleblower Act. The complaint further alleges that Boudreaux insisted on telling the truth and reporting malfeasance of public officials, that the City had major budget shortfalls in fiscal years 2007-08 and 2008-09, that he advised others of unspent Capital Project Funds which could be transferred to the General Fund, that others approved of the transfers, that others were responsible for accurately reporting and accounting for the transfers, and that he informed other officials of violation • f laws. The City cannot predict at this time the outcome of the final conclusion of this lawsuit. If : •udreaux prevails, the City could be required to reinstate him to his former position and pay his lost com nation and benefits, as well as other possible damages, attorneys' fees and costs. Helene Hutt v. City of Miami, United States District Court for the Southern Dis ict of Florida, Case No. 10-21451-Civ-Martinez, filed May 4, 2010. This is a securities fraud class action ' which the Plaintiff is the named class representative who represents the putative class of all persons and ' ntities who purchased or otherwise acquired municipal bonds issued by the City from September 30, 05 to November 17, 2009. Plaintiff alleges that the City made fraudulent material misrepresentations an • omissions regarding the City's then current financial condition and future prospects to municipal bond p chasers and the investing public, in violation of Section 10(b) of the Securities Exchange Act of 1934 and R . e 10b-5 thereunder. The Complaint further alleges that the misrepresentations were revealed only after t r - City's Office of Independent Auditor General reported that the City made improper transfers from catal funds to the General Fund. Plaintiff further claims that the City's bonds were overvalued, that bon• •rices were artificially inflated, and that the price of the bonds dropped when the truth was revealed, the • •y damaging Plaintiff and the other members of the Class. Plaintiff seeks compensatory damages and at •rneys' fees for all members of the class. The time period to join as a member of the class has expired with • o additional plaintiffs being added. The City filed a motion to dismiss, which was granted in part an. : enied in part, with leave to amend. An Amended Complaint was filed and the City filed another m. ion to dismiss which is pending. The City cannot predict at this time the outcome of this lawsuit. Miami Association of Firefighters ocal 587 of the International Association of Firefighters, of Miami, Florida v. City of Miami, Florida Cir .it Court, Case No. 10-27577CA20. On May 10, 2010, the Local Firefighters Union filed a verified .mplaint for declaratory and injunctive relief asserting that Florida Statutes Section 447.4095, pursua• to which the City declared a financial urgency and sought to compel negotiations to modify the co ective bargaining agreement, is void and unenforceable. Plaintiff also requested a temporary and p> manent injunction prohibiting re -negotiation of the contract. On May 26, 2010, the Circuit Court issued a nal judgment finding the statute to be constitutional. On June 3, 2010 Plaintiff filed an appeal to the F •rida Third District Court of Appeal. The Union has requested that the case be transferred to the Flo • da Supreme Court. At this time the City cannot predict the outcome of this lawsuit. Admini ative Hearing with respect to Olatunbosu "Ola" Aluko On June 7, 2010, the City received a request, purs : nt to the Whistleblower Act, for a hearing for Mr. Olatunbosu Aluko in connection with his terminatio •f employment from the City on April 8, 2010. The request for hearing states that Mr. Aluko was terminat:.4 because, among other things, he had uncovered a change order scheme in connection with several City c ; tracts and because he raised concerns about the consultant -run bid processes for the Construction Ag •ement in connection with the Project. Mr. Aluko claims that his termination was in violation of the istleblower Act. A civil service administrative hearing on this matter has been set for July 20, 2010. The City is unable at this time to determine the merits of this claim or the veracity of any of the allegations contained in the request for a hearing. 47 SUBSTITUTED 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 wit respect to obligations issued by the City after December 31, 1975. Rule 69W-400.003 further provi. s, however, that if the City in good faith believes that such disclosures would not be considered materi. .y a reasonable investor, such disclosures may be omitted. The City has not defaulted on the payment of • incipal or interest with respect to obligations issued by the City after December 31, 1975. TAX MATTERS In the opinion of Squire, Sanders & Dempsey (US) LLP, Bond Counsel, under e ling law: (i) interest on the Series 2011 Bonds is excluded from gross income for federal income tax purpa:es under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), and is not an ' •m of tax preference for purposes of the federal alternative minimum tax imposed on individuals and orporations the Series 2011 Bonds and the income thereon are exempt from taxation under the laws of tr • State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net inco e and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Bond Counsel expres s no opinion as to any other tax consequences regarding the Series 2011 Bonds. The opinion on tax matters will be based on and will as me the accuracy of certain representations and certifications, and continuing compliance with certain co nants, of the City contained in the transcript of proceedings and that are intended to evidence and assure e foregoing, including that the Series 2011 Bonds are and will remain obligations the interest on which i xcluded from gross income for federal income tax purposes. Bond Counsel will not independently erify the accuracy of the City's certifications and representations or the continuing compliance wit the City's covenants. The opinion of Bond Counsel is ba, d on current legal authority and covers certain matters not directly addressed by such authority. It re. esents Bond Counsel's legal judgment as to exclusion of interest on the Bonds from gross income for fed •. al income tax purposes but is not a guaranty of that conclusion. The opinion is not binding on the Intern. Revenue Service ("IRS") or any court. Bond Counsel expresses no opinion about (i) the effect of futurchanges in the Code and the applicable regulations under the Code or (ii) the interpretation and the enfor'-ment of the Code or those regulations by the IRS. The Code prescrib:, a number of qualifications and conditions for the interest on state and local government obligations be and to remain excluded from gross income for federal income tax purposes, some of which requir • 'uture or continued compliance after issuance of the obligations. Noncompliance with these requirements •y the City may cause loss of such status and result in the interest on the Series 2011 Bonds being inc l : ed in gross income for federal income tax purposes retroactively to the date of issuance of the Series 201 onds. The City has covenanted to take the actions required of it for the interest on the Series 2011 Bonds . be and to remain excluded from gross income for federal income tax purposes, and not to take any actio' s that would adversely affect that exclusion. After the date of issuance of the Series 2011 Bonds, Bond ?ounsel will not undertake to determine (or to so inform any person) whether any actions taken or not tak , or any events occurring or not occurring, or any other matters coming to Bond Counsel's attention, ay adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 2011 Bonds or the market value of the Series 2011 Bonds. 48 SUBSTITUTED Under the Code, interest on the Series 2011B Bonds is excluded from the calculation of a corporation's adjusted current earnings for purposes of the corporate alternative minimum tax, but interest on the Series 2011B Bonds may be subject to a branch profits tax imposed on certain foreign corporations doing business in the United States and to a tax imposed on excess net passive income of certain S corporations. A portion of the interest on the Series 2011A Bonds earned by certain corporations may be subject to a federal corporate alternative minimum tax. In addition, interest on the Series 2011A Bonds may be subject to a federal branch profits tax imposed on certain foreign corporations doing business in the United States and to a federal tax imposed on excess net passive income of certain S corporations. Under the Cod the exclusion of interest from gross income for federal income tax purposes may have certain adverse fed a income tax consequences on items of income, deduction or credit for certain taxpayers, including fi .ncial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement bene s, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, an.. dividuals otherwise eligible for the earned income tax credit. The applicability and extent of these nd other tax consequences will depend upon the particular tax status or other tax items of the owner . the Series 2011 Bonds. Bond Counsel will express no opinion regarding those consequences. Payments of interest on tax-exempt obligations, including the Series 2011 Bo ' ds, are generally subject to IRS Form 1099-INT information reporting requirements. If a Series 2011 Bon..wner is subject to backup withholding under those requirements, then payments of interest will also be bject to backup withholding. Those requirements do not affect the exclusion of such interest from gross income for federal income tax purposes. Legislation affecting tax-exempt obligations is regularly co ' sidered by the United States Congress and may also be considered by the State legislature. Court pro edings may also be filed the outcome of which could modify the tax treatment of obligations such as the eries 2011 Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, a er the date of issuance of the Series 2011 Bonds will not have an adverse effect on the tax status of interes . n the Series 2011 Bonds or the market value of the Series 2011 Bonds. Prospective purchasers of the Series 201 onds should consult their own tax advisers regarding pending or proposed federal and state tax legi ation and court proceedings, and prospective purchasers of the Series 2011 Bonds at other than their o ':inal issuance at the respective prices indicated on the inside cover of this Official Statement should als consult their own tax advisers regarding other tax considerations such as the consequences of market di ount, as to all of which Bond Counsel expresses no opinion. Bond Counsel's engagem - t with respect to the Series 2011 Bonds ends with the issuance of the Series 2011 Bonds, and, unless separat y engaged, Bond Counsel is not obligated to defend the City or the owners of the Series 2011 Bonds regding the tax status of interest thereon in the event of an audit examination by the IRS, The IRS has a pro am to audit tax-exempt obligations to determine whether the interest thereon is includible in gross inco r e for federal income tax purposes. If the IRS does audit the Series 2011 Bonds, under current IRS procedur , the IRS will treat the City as the taxpayer and the beneficial owners of the Series 2011 Bonds will have o y limited rights, if any, to obtain and participate in judicial review of such audit. Any action of the IR , including but not limited to selection of the Series 2011 Bonds for audit, or the course or result of suc udit, or an audit of other obligations presenting similar tax issues, may affect the market value of the Seri 2011 Bonds. Original Issue Discount and Original Issue Premium Certain of the Series 2011 Bonds ("Discount Bonds") as indicated on the inside cover of this Official Statement were offered and sold to the public at an original issue discount ("OID"). OID is the excess of the 49 SUBSTITUTED stated redemption price at maturity over the "issue price" of a Discount Bond. The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity is sold pursuant to that offering. For federal income tax purposes, OID accrues to the owner of Discount Bond over the period to maturity based on the constant yield method, compounded semiannu y (or over a shorter permitted compounding interval selected by the owner). The portion of OID that a rues during the period of ownership of a Discount Bond (i) is interest excluded from the owner's gross i .me for federal income tax purposes to the same extent, and subject to the same considerations discusse above, as other interest on the Bonds, and (ii) is added to the owner's tax basis for purposes of determini ' g gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Bond. A purch.ser of a Discount Bond in the initial public offering at the price for that Discount Bond stated on the c. er of this Official Statement who holds that Discount Bond to maturity will realize no gain or loss upo e retirement of that Discount Bond. Certain of the Series 2011 Bonds ("Premium Bonds") as indicated on t inside cover of this Official Statement were offered and sold to the public at a price in excess of thestated redemption price (the principal amount) at maturity. That excess constitutes bond premium. Fo' ederal income tax purposes, bond premium is amortized over the period to maturity of a Premium Bond .ased on the yield to maturity of that Premium Bond (or, in the case of a Premium Bond callable prior . its stated maturity, the amortization period and yield may be required to be determined on the bas'. of an earlier call date that results in the lowest yield on that Premium Bond), compounded semia . ally. No portion of that bond premium is deductible by the owner of a Premium Bond. For purpose of determining the owner's gain or loss on the sale, redemption (including redemption at maturity) or o er disposition of a Premium Bond, the owner's tax basis in the Premium Bond is reduced by the amount o .ond premium that is amortized during the period of ownership. As a result, an owner may realize taxae gain for federal income tax purposes from the sale or other disposition of a Premium Bond for an am.. nt equal to or less than the amount paid by the owner for that Premium Bond. A purchaser of a Pre um Bond in the initial public offering at the price for that Premium Bond stated on the cover of this 0 icial Statement who holds that Premium Bond to maturity (or, in the case of a callable Premium Bond, to s earlier call date that results in the lowest yield on that Premium Bond) will realize no gain or loss upo the retirement of that Premium Bond. Owners of Discount a . Premium Bonds should consult their own tax advisers as to the determination for federal inco e tax purposes of the amount of OID or bond premium properly accruable or amortizable in any period - ith respect to the Discount or Premium Bonds and as to other federal tax consequences and the trement of OID and bond premium for purposes of state and local taxes on, or based on, income. RATINGS Moo. 's Investor's Service ("Moody's"), Fitch Ratings ("Fitch") and Standard & Poor's Ratings Group ("S ") are expected to assign their municipal bond ratings of "_", "_" and " ," respectively, to the S es 2011 Bonds with the understanding that upon delivery of the Series 2011 Bonds, the municipal bond ' surance policy will be issued by the Insurer. Moody's, Fitch and S&P have assigned underlying rat gs of "_", "" and " ", respectively, to the Series 2011 Bonds wit out giving any regard to the olicy. 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 50 SUBSTITUTED in their judgment, circumstances so warrant. A downward change in or withdrawal of any of such ratings, may have an adverse effect on the market price of the Series 2011 Bonds. An explanation of the significance of the ratings can be received from the rating agencies, at the following addresses: Fitch Ratings, One State Street Plaza, New York, New York 10004 and Moody's Investor Service, 250 Greenwich Street, New York, New York 10007. FINANCIAL ADVISOR The City has retained First Southwest Company, Aventura, Florida, as Financial dvisor in connection with the City's financing plans and with respect to the authorization and issuan•- of the Series 2011 Bonds. The Financial Advisor is not obligated to undertake and has not undertaken •. independently verify or to assume responsibility for the accuracy, completeness or fairness of the infor ation contained in this Official Statement. The Financial Advisor did not participate in the underwr' ng of the Series 2011 Bonds. AUDITED FINANCIAL STATEMENTS The Comprehensive Annual Financial Report of the City for the F' (the "Audited Financial Statements"), and report thereon of McG1 certified public accountants, are attached hereto as "APPEND FINANCIAL REPORT OF THE CITY OF MIAMI FOR FISCAL part of this Official Statement. McGladrey & Pullen LLP has n this Official Statement. The Audited Financial Statements Such statements speak only as of September 30, 2010. cal Year ended September 30, 2010 ey & Pullen LLP, as independent C - COMPREHENSIVE ANNUAL AR ENDED SEPTEMBER 30, 2010" as a participated in the preparation or review of attached hereto as a matter of public record. UNDE BITING The Series 2011 Bonds are being purch ed by RBC Capital Markets, LLC, acting on behalf of itself and Merrill Lynch, Pierce, Fenner & Smith I •.rporated, Morgan Keegan & Company, Inc., Goldman Sachs & Co. and Raymond James & Associates, In collectively, the "Underwriters") at an aggregate purchase price of $ (the par amount of t r Series 2011 Bonds, less Underwriters' discount of $ [plus/less] net original issue prem' . m/discount). The Underwriters' obligations are subject to certain conditions precedent described i- the Bond Purchase Agreement entered into between the City and the Underwriters, and they will be igated to purchase all of the Series 2011 Bonds if any Series 2011 Bonds are purchased. The Series 2011 :ends may be offered and sold to certain dealers (including dealers depositing such Series 2011 Bonds i o investment trusts) at prices lower than such public offering prices, and such public offering prices ..y be changed, from time to time, by the Underwriters. CONTINGENT FEES The C has retained Bond Counsel, Disclosure Counsel and the Financial Advisor with respect to the authori ation, sale, execution and delivery of the Series 2011 Bonds. Payment of the fees of such professie als and an underwriting discount to the Underwriters, including the fees of Underwriters' counsel, are ea • contingent upon the issuance of the Series 2011 Bonds. ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 2011 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 51 SUBSTITUTED federal bankruptcy code, the remedies specified by the Resolution and the Series 2011 Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2011 Bonds, including Bond Counsel's approving opinion, will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. CONTINUING DISCLOSURE The City has covenanted for the benefit of the holders of the Series 2011 Bonds to pro - ide certain financial information and operating data relating to the City and the Series 2011 Bonds in eayear, and to provide notices of the occurrence of certain enumerated material events. The City has agr ed to file annual financial information and operating data and the audited financial statements with each e ' tity authorized and approved by the SEC to act as a repository (each a "Repository") for purposes of comp ing with Rule 15c2-12 adopted by the SEC (the "Rule"). Effective July 1, 2009, the sole Repository is e Municipal Securities Rulemaking Board. The City has agreed to file notices of certain enumerated ' aterial events, when and if they occur, with the Repository. The obligation undertaken is an oblig. ion to provide only limited information at limited times and may not include all information necessa to value the Series 2011 Bonds. The specific nature of the financial information, operating ..ta, and of the type of events which trigger a disclosure obligation, and other details of the undertaking are described in "APPENDIX E - FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT" at . ched hereto. The Disclosure Dissemination Agent Agreement shall be executed by the City upon the issu ce of the Series 2011 Bonds. These covenants have been made in order to assist the Underwriters in comp ing with the continuing disclosure requirements of the Rule. With respect to the Series 2011 Bonds, no 'arty other than the City is obligated to provide, nor is expected to provide, any continuing disclosure i • ormation with respect to the Rule. The City has undertaken certain continuing disclosure obligations in . or continuing disclosure certificates in connection with its outstanding debt and its outstanding bon s to provide certain financial and operating information and notices to each nationally recognized • nicipal securities information repository then approved by the Securities and Exchange Commission . nd SID, if and when one is established, and others. Due to a change in auditors and financial managemen ystem (which was changed to an Enterprise Resource Planning System), the City did not timely file its 20►. annual report. Such report has been filed, and as of the date hereof, the City is compliance with all .f its continuing disclosure obligations, in all material respects, and has implemented procedures t assure future compliance with all of its continuing disclosure obligations. CURACY AND COMPLETENESS OF OFFICIAL STATEMENT The ref: ences, excerpts, and summaries of all documents, statutes, and information concerning the City, the Deprtment and certain reports and statistical data referred to herein do riot purport to be complete, comprehe ive and definitive and each such summary and reference is qualified in its entirety by reference to each su: document for full and complete statements of all matters of fact relating to the Series 2011 Bonds, the s urity for the payment of the Series 2011 Bonds and the rights and obligations of the owners thereof and to ach such statute, report or instrument. The appendices attached hereto are integral parts of this Official Statement and must be read in their entirety together with all foregoing statements. The information and expressions of opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made 52 SUBSTITUTED hereunder is to create, under any circumstances, any implication that there has been no change in the affairs of the City or the Department from the date hereof. FORWARD -LOOKING STATEMENTS This Official Statement contains certain "forward -looking statements" concerning the City's and the Department'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 or the Department. e words "may," "would," "could," "will," "expect," "anticipate," "believe," "intend," "plan," "estimate" and similar expressions are meant to identify these forward -looking statements. Actual results m. - 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 . estimates, whether or not so expressly stated are set forth as such and not as representations of fact, a . no representation is made that any of the estimates will be realized. Neither this Official Statement n. any statement that may have been made verbally or in writing is to be construed as a contract with t ° owners of the Series 2011 Bonds. [Remainder of page intentionally left bl 53 SUBSTITUTED 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 2011 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 2011 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 54 SUBSTITUTED APPENDIX A GENERAL INFORMATION REGARDING THE CITY OF MIAMI AND MIAMI-DADE COUNTY General Now 115 years old, the City of Miami, Florida (the "City") is part of the nation's seve metropolitan area. Incorporated in 1896, the City is the only major municipality conceived an woman, Julia Tuttle. According to the U.S. Census Bureau, the City's population in 1900 w Today it is a city rich in cultural and ethnic diversity with 399,457 residents accordi Census, 58.9% of them foreign born. In physical size the City is not large, encompas miles. The City is situated at the mouth of the Miami River on the western shore o port entry in Florida. The City is the southernmost major city and seaport in th The nearest foreign territory is the Bahamian Island of Bimini, 50 miles from the City is the largest of the 35 municipalities that make up Miami -Dade C Dade County") and is the County seat. City of Year Miami 1960 291,688 1970 331,553 1980 346,865 1990 358,648 2000 362,470 2010 399,457 Population Percent Miami -Dade Change County 13.6% 4.6 3.4 1.0 Source: Bureau of Economic and Busine 935,047 1,267, 79 1,625, i9 1,9 ,194 53,362 2,563,885 P rcent Change 35.6% 28.2 19.2 16.3 h largest ounded by a s 1,700 people. to the 2010 U.S. ng only 34.3 square scayne Bay, the main ontinental United States. City's coast. In population, my (the "County" or "Miami - State of Florida 4,951,560 6,791,418 9,746,961 12,938,071 15,982,378 18,801,310 Percent Change 37.2% 43.5 32.7 23.5 Research, University of Florida, US Census Bureau, Miami -Dade County, Annual Report to Bondholder: 2010 Government Since 1997, the rlty has been governed by a form of government known as the "Mayor -City Commissioner plan." ere are five Commissioners elected from designated districts within the City. The Mayor is elected at rge every four years. As official head of the City, the Mayor has veto authority over actions of the Co ' mission. The Mayor appoints the City Manager who functions as chief administrative officer. C' elections are held in November every two years on a non -partisan basis. Candidates for Mayor must r as such and not for the Commission in general. At each election, two or three members of the Co ission are elected for four-year terms. Thus, the terms are staggered so that there are always at least 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 SUBSTITUTED 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 The City'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 a . fishing can be enjoyed year-round. Altogether, Miami -Dade County has over 300 parks and recre. ' onal areas totaling over one million acres, including Everglades and Biscayne National Parks. Eight n 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 ac s, which are freely accessible and are enjoyed year round by residents and tourists. Athletics for spectator sports fans are held at the American Airlines r rena. Land Shark Stadium, which is used by the Miami Dolphins, the Florida Marlins and the Miami urricanes, is located in North Central Miami -Dade County. The City and County have approved plan o construct a new stadium for the Florida Marlins baseball franchise. Sports competition includes profe : onal and college football, basketball, baseball, tennis, golf, sailing and championship boat races. Other . letic events include amateur football, basketball, soccer, baseball, motorcycle speedway racing and ro -ing events. Education Miami -Dade County's public school system is t ' e fourth largest in the United States, as measured by student enrollment. The countywide school district • fers a wide variety of programs to meet the needs of its 398,000-plus students. For example, Miami -Da • County's magnet schools provide intensive levels of instruction in subjects like science and tec ology, foreign languages, health care, architecture, the performing arts and marine sciences. Other . blic school programs serve students with different academic, physical or emotional needs, including gi ed, advanced and remedial courses. Miami -Dade County is also oted for its high quality private schools, which include Gulliver Academy, Miami Country Day Sc .ol and Ransom Everglades, as well as numerous schools affiliated with religious organizations. Overall, 80% of gra • ating seniors continue their education in a post -secondary institution. Miami - Dade County is also ho e to Miami -Dade College, the largest comprehensive community college in the United States. Florid. nternational University is one of the 25 largest universities in the nation and offers more than 200 bach: or's, master's and doctoral programs in 21 colleges. The University of Miami, a private undergraduate aid graduate institution, includes diversified research facilities and exceptional schools of law, music, m e: icine, and marine sciences. Barry University, St. Thomas University and Florida Memorial University • fer degrees in a variety of subjects and programs. A-2 SUBSTITUTED 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 i e nation, forms the hub of the region's medical centers, which includes world-renowned specialized f. lities like Bascom Palmer Eye Institute, the Mailman Center for Child Development and the ylvester Comprehensive Cancer Center. Miami -Dade County has an extensive network of community hospitals, such as Mo t Sinai Medical Center, Cedars Medical Center, Baptist Hospital, Mercy Hospital and Miami Children's ospital. Nine area hospitals have formed the Miami Medical Alliance, a cooperative effort to serve paties from Latin America and the Caribbean Transportation Miami -Dade County has a comprehensive transportation netwo designed to meet the needs of residents, travelers and area businesses. The County's internal transp. tation system includes Metrorail, a 22.6 mile above -ground system connecting South Miami -Dade and ' e City of Hialeah with the Downtown and Civic Center areas providing 17.4 million passenger trips a . ally. Metromover, a 4.4 mile automated loop, carries approximately 8.1 million passenger trips annual] around downtown Miami, Brickell Avenue and the Omni shopping center areas. Miami -Dade County's etrobus operating over 29.8 million miles per year and over 70.5 million passenger trips annually. T'e County also provides para-transit services to qualified riders in the amount of 1.6 million passenge rips annually. Cargo rail service is available from both Miami International Airport and the Port of Mi. i, and Amtrak has a passenger station in the City. Tri- Rail, a 72-mile train system, links West Palm Be. , Boca Raton, Fort Lauderdale, Hollywood and Miami International Airport. Miami International Airport. Miam ntemational Airport is one of the busiest airports in the world for both passengers and cargo traffic. It ra s twelfth in the nation and twenty-eighth in the world in passenger traffic through the airport. The airt ranks third in the nation and eleventh in the world in tonnage of domestic and international cargo ' ovement. In 2010, over 35.7 million air travelers were serviced by Miami International Airport, and appr imately 1.9 million tons of domestic and international cargo was handled. As of April 2011, 93 airlin: serve Miami International Airport, flying passengers to more than 130 destinations around the ;lobe. Currently, Miami International Airport has a $6.4 billion Capital Improvement Program .eing implemented which include a new runway, terminal, and cargo facility that is scheduled for compl ion in the winter of 2011. Porto ami. The Port of Miami, known as the "cruise capital of the world," is operated by the Seaport Depa ent of Miami -Dade County. In 2009, more than 4.1 million passengers sailed from the Port of Miami a..ard one of the eight cruise companies who operate out of Miami. The Port of Miami is also a hub for . ribbean and Latin American commerce. These countries account for over half of the 6.8 million tons o cargo transferred through the Port of Miami in 2010. The Port of Miami is also reaching out to the glo%al community where trade with Asian countries accounted for almost 23% of the total cargo handled at e Port of Miami. The Port of Miami is also important to the U.S. economy, contributing in excess of $17 billion annually, which should increase after the completion of the Port of Miami's five year, $346 million capital improvement program. A-3 SUBSTITUTED 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 AMR() Bank Sony Broadcast Export Corporation Olympus America ExxonM ob it 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. Lucent Technolo • ' • s Ericsson, Inc. Barclays Bank P C Terra Networks USA Oracle Latin , merica IBM Corporation Cisco Sys t: s Canon Latin America AT&T in America Acer Latin America Olym•.us Latin America Komatsu Latin America Cl• ox Latin America Tech Data erican Express Chevron -Texaco Stanley Latin America Johnson & Johnson A-4 SUBSTITUTED Distribution of Major Employment Classifications for Miami -Dade County 2010 Percentage Occupational Title Employees of Totals Construction 33,100 3.4% Manufacturing 34,500 3.5 Mining and Natural Resources 300 0.0 Transportation, Warehousing, and Utilities 57,100 5.8 Wholesale Trade 70,100 7.2 Retail Trade 119,700 12 Information 16,400 .7 Finance Activities 61,700 6.3 Professional and Business 131,400 13.4 Education and Health Services 162,500 16.6 Leisure and Hospitality 102,100 10.5 Other Services 47,500 3.8 Government 151,000 15.5 Total Employed I t 100 0% Source: Miami -Dade County Department of Planning/Zoning Research Section, D- ember 2010 Labor Force and Emplo ment Statistics Greater Miami M opolitan Area ivilian Unemployment Florida Year Employment abor Force Rate Unemployment Rate 2006 1,118,704 1,166,002 3.40% 3.4% 2007. 1,143,548 1,196,086 4.10 4.1 2008 1,142,665 1,212,446 6.10 6.2 2009 1,093,000 1,232,500 11.30 10.8 2010 1,117,0t 1 1,281,900 12.80 11.7 Source: City of Miami, Florida A-5 SUBSTITUTED Major Employers in Miami -Dade County 2010 Public Employers: Name Number of Employees Miami -Dade County Public Schools 38,571 Miami -Dade County 29,000 U.S. Federal Government 19,500 Florida State Government 17,100 Jackson Health System 12,571 Florida international University 8,000 Miami -Dade College 6, 0 City of Miami C,309 Homestead Airforce Base 2,700 VA healthcare System 2,385 City of Miami Beach 1,900 City of Hialeah 1,700 U.S. Southern Command 1,600 City of Coral Gables 901 City of North Miami Beach 626 Source: The Beacon Council/ Miami -Dade County, Florida- Miar Business Profile & Relocation Guide 2011 Private Employers: Nam • Number of Employees University of Miami Baptist Health Sy: ems of South Florida Publix Super •rkets American : trlInes Precision esponse Corp Flori.. Power & Light C nival Cruise Lines inn Dixie Stores AT&T Mount Sinai Medical Center Miami Children's Hospital Sedano's Supermarket Wells Fargo Assurant Solutions Bank of America 16,000 13,376 10,800 9,000 5,000 3,840 3,500 3,400 3,100 3,000 2,800 2,500 2,179 2,100 2,000 Source: The Beacon Council/ Miami -Dade County, Florida -Miami Business Profile & Relocation Guide 2011 A-6 New Commercial Fiscal Building Year Permits 2004-2005 175 2005-2006 125 2006-2007 98 2007-2008 80 2008-2009 264 2009-2010 236 SUBSTITUTED Record of Building Permits, 2003 through 2010 City of Miami, Florida Estimated Cost $1,661,488,023 2,573,453,643. 1,266,199,562 1,615,039,791 128,192,793 592,111,103 Source: City of Miami, Florida Building Department Year 2005 2006 2007 2008 2009 2010 Source: (1) City of Miami, Florida (2) Bureau of Economic and Business Research niversity of Florida Other New Commercial Residential Building Building Permits Permits 2581 404 2582 450 2816 349 3218 178 3640 259 5277 220 Per Capita Personal Income Miami 31,437 33,712 36,701 35,887 N/A N/A A-7 Estimated Cost $94,411,620 119,113,620 110,732,621 60,467,105 12,484,788 16,477,268 Florida 35,636 37,992 39,078 39,572 38,572 39,230 Other Residential Building Permits 4761 5208 528 59 3346 2794 SUBSTITUTED The City of Miami., Florida Property Tax Rates Fiscal Year Tax Roll Year General Operations Debt Service Total City 2001 2000 8.99500 1.2800 10.2750 2002 2001 8.99500 1.2180 10.2130 2003 2002 8.85000 1.2180 10.0680 2004 2003 8.76250 1.0800 9.8425 2005 2004 8.71625 0.9500 9.6663 2006 2005 8.49950 0.7650 9.2645 2007 2006 8.37450 0.6210 8.9955 2008 2007 7.29990 0.5776 7.8775 2009 2008 7.67400 0.6595 8.33 2010 2009 7.67400 0.9701 8.441 Source: City of Miami Comprehensive Annual Financial Report Fiscal Year 2010 and Miami -Dade County Property App - •r's Office. Note: All millage rates are based on $1 for every $1,000 of assessed value. Property Tax Reform The Florida Legislature recently initiated a substantial review a : reform of Florida's property tax structure. During a special legislative session that ended on June 14, 107, the Florida Legislature adopted Chapter 2007-321, Laws of Florida, a property tax plan which m- significantly impact ad valorem tax collections for Florida local governments. One component of the : opted legislation requires counties, cities and special districts to rollback their millage rates for the 20t -08 fiscal year to a level that, with certain adjustments and exceptions, will generate the same level of , d valorem tax revenue as in fiscal year 2006-07; provided, however, depending upon the relative grow of each local government's own ad valorem tax revenues from 2001 to 2006, such rolled back millage r. es will be determined after first reducing 2006-07 ad valorem tax revenues by zero to nine percent (0% . 9%). In addition, the legislation limits how much the aggregate amount of ad valorem tax revenues ..y increase in future fiscal years. School districts are not required to comply with these particular pro sions of the legislation. A local government may override certain portions of these requirements by a permajority, and for certain requirements, a unanimous vote, and several local governments did so in eir 2008 fiscal year budgets. The constitutional amen. ent ("Amendment One") which passed on January 29, 2008 did not impact the County's fiscal year 2007-0:.udget, but the impact of such legislation, together with the general decline in property values, resulten a property tax decreases in fiscal year 2008-09 and fiscal year 2009-10. The Property ppraiser tax roll released on reflected a % decrease to taxable property values in e City. The overall impact to the City will be an increase in ad valorem revenues of approximately $ In ay 2009, the Florida Legislature passed SB 532 which proposed a statewide referendum placed on the N e ember 2010 general election ballot for two measures: (i) an additional homestead exemption for first-ti e homebuyers; and (ii) a 5% assessment limitation on all commercial and non -homestead, residential A-8 SUBSTITUTED property. However, on August 31, 2010, the Florida Supreme Court affirmed lower court rulings to strike the amendment from the November 2010 ballot. The Florida Legislature also adopted HB 833 in May 2009, which provides an additional homestead exemption for deployed military personnel. The exemption was approved by the Florida voters in th November 2010 General Election, and took effect January 1, 2011. The exemption equals the percentag .f days during the prior calendar year that the military homeowner was deployed outside of the United ates in support of military operations designated by the legislature. At the present time, it is impossible to predict the impact that HB 833 may have on the ty's financial condition. [The City has not yet completed an analysis of the impact of HB 833 on the lev- of ad valorem taxes that the City will collect. At this time, the extent to which HB 833 may affect . e ad valorem tax collections of the City in future years is not currently known.] HB 381, which is currently being considered by the Florida Legislature, p .vides for a reduction from 10% to 3% of the limitation on annual ad valorem assessment increases applicae to non -homestead property and provides for a first-time homestead exemption which would be avail .le to each person who has not received a homestead exemption in the last three (3) years. This measu r equires approval of each house of the Florida Legislature and approval of Florida voters. If this measu is approved by the voters, it would take effect January 1, 2012. As it is very early in the legislative proc s, no assurance can be given as to what the measure would look like in final form. [At the present time, is impossible to predict the likelihood of approval by the Florida Legislature and subsequent approval .y Florida voters or, if approved in whatever form, the impact these measures would have on the City's nancial condition.] In its 2011 Regular Session, the Florida Legis . ture enacted Senate Joint Resolution 958 ("SJR 958"). SJR 958 amends Article ViI, Section 1 of the Flo Constitution and creates Article VII, Section 19 and Article XII, Section 32 of the Florida Constitutio SJR 958 (1) replaces the existing state revenue limitation based on State personal income growth (as d cribed above) with a new state revenue limitation based on changes in population and inflation; (2) re • . ires excess revenues to be deposited into the Budget Stabilization Fund to support public education or re. rned to taxpayers; (3) adds fines and revenues used to pay debt service on bonds issued after July 1, i12 to the state revenues subject to the limitation; (4) authorizes the Florida Legislature to increase the r enue limitation by a supermajority vote; and (5) authorizes the Florida Legislature to place a proposencrease before the voters, which would require approval of 60% of the voters. SJR 958 will be on the ..l lot in the 2012 general election or at an earlier election authorized by law. If approved by 60% of the vot rs, the new state revenue limitation will be phased in starting in state fiscal year 2014-1015. Overtime th new state revenue limitation is more likely to constrain state revenues than the current state revenu imitation; however, the potential impact on the City or its finances cannot be ascertained at this e. The F . rida Legislature convened for its 2011 Regular Session on March 8, 2011. During this Regular Session, the ' lorida Legislature passed House Joint Resolution 381 ("HJR 381"). Among other things, HJR 381 seeks to . ohibit the increase of assessed value for property whose fair market value declined over the prior year, duce the limitation on annual increases of non -homestead property from 10% to 3%, provide an ad.' Tonal homestead exemption for first-time homeowners and reduce from 10% to 5% the limitation on ual changes in assessments of nonhomestead property. Such proposal requires approval by 60% of the voters. At present, it is uncertain if this proposal will be approved by the voters. If approved, the impact of this proposal on the City's finances cannot be accurately ascertained. A-9 SUBSTITUTED Assessed Valuations CITY OF MIAMI, FLORIDA NET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Net Asse Real Property Value a Fiscal Year Net Total Estimated Perce .ge of Ended Residential Commercial Personal Assessed DittTax .Actual Esti ted Actual September 30, Property Property Property Value Rate Value alue (1) 2001 6,000,474,083 6,113,340,757 1,657,551,519 13,771,366,359 10.28 20,061,032,74 68.65% 2002 6,612,151,524 6,730,517,606 1,770,392,311 15,113,061,441 10.21 22,035,829, 5 68.58% 2003 7,679,048,886 7,380,571,799 1,878,266,085 16,937,886,770 10.07 24,759,9 ,620 68.41% 2004 8,789,474,779 8,369,950,851 1,711,697,688 18,871,123,318 9.84 27,717 ' 08,682 68.08% 2005 10,364,157,774 9,870,433,741 1,695,110,542 21,929,702,057 9.67 32,1. ,104,422 68.25% 2006 12,959,276,770 12,341,927,389 1,676,173,129 26,977,377,288 9.26 3•,120,899,711 68.96% 2007 20,320,801,612 11,038,460,135 1,673,647,599 33,032,909,346 9.00 47,925,276,742 68.93% 2008 24,279,025,389 11,727,240,945 1,749,572,760 37,755,839,094 7.88 55,249,891,635 68.34% 2009 23,572,178,928 11,890,691,413 1,686,320,651 37,149,190,992 8.3 52,185,972,858 71.19% 2010 23,341,894,079 11,921,087,043 1,686,540,244 36,949,521,366 :. 4 52,146,883,603 70.86% Source Miami -Dade County Property Appraiser's Office. Note: Property in the City is reassessed each year. State law requires the Property Appraiser to ae raise property at 100% of market value_ The Florida Constitution was amended, effective January 1, 1995, to limit annual incrca s in assessed value of property with homestead exemption to 3 percent per year or the amount of the Consumer Price Index, ichever is lower. The increase is not automatic since no assessed value shall exceed market value. "Pax rates are per $1,000 assessed value. (1) Includes tax-exempt property. Property Tax Levies and Collections CITY ii F MIAMI, FLORIDA PROPERTY X LEVIES AND COLLECTIONS ST TEN FISCAL YEARS Collected within Total Taxes the Fiscal Year Total Collections Levied f • of the Levy Collections in to Date Fiscal Year Ended F'.cal Percent Subsequent Percent September 30, Year Amount of Levy Year's Amount of Levy 2001 141,500,789 131,872,377 93.20% 5,959,373 137,831,750 97.41% 2002 154,349,696 145,506,737 94.27% 4,079,641 149,586,378 96.91% 2003 170,530,644 161,197,051 94.53% 7,735,274 168,932,325 99.06% 2004 185,739,031 178,766,680 96.25% 1,640,252 180,406,932 97.13% 2005 211,977,983 206,451,562 97.39% 2,379,977 208,831,539 98.52% 2046 249,931,912 243,957,356 96.82% 3,801,414 247,758,770 99.13% 07 297,147,536 290,449,738 97.76% 7,111,337 297,561,075 100.14% 2008 297,421,622 284,001,962 95.49% 8,489,434 292,491,396 98.34% 2009 309,582,783 296,404,297 95.74% 9,200,940 305,605,237 98.72% 2010 319,395,358 278,010,020 87.04% - 278,010,020 87.04% Source: City of Miami, Finance Department and Miami -Dade County Tax Collectors Office A -10 Ten Largest Tax Assessments SUBSTITUTED CITY OF MIAMI, FLORIDA PRINCIPAL PROPERTY TAXPAYERS 2010 Taxpayer Florida Power & Light 200 S Biscayne TIC 1 LLC Crescent Miami Center Bellsouth Telecommunications T C 701 Brickell LLC 1111 Brickell Office LLC Trustees of L&B Opera Tower LLC Estoril Incorporated Blue Capital US East Net Assessed Value Source: City of Miami, Florida Net Assessed Value $437,936,647 290,700,000 196,500,000 186,796,701 172,900,000 146,100,000 117,400,000 112,499,679 107,400,000 99,500,000 $ 1,867,733,027 $ 36,949,521 66 A-11 Rank 1 2 3 4 5 6 7 8 9 Percent of Total City Net Assessed Value 1.19% 0.79% 0.53% 0.5 .47% 0.40% 0.32% 0.30% 0.29% 0.27% 5.05% 5.05% Overlapping Debt SUBSTITUTED CITY OF MIAMI, FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2010 Government Unit Debt Repaid With Property Taxes Miami -Dade County Miami -Dade County School Board Subtotal, Overlapping Debt City of Miami, Florida Direct Debt (excludes special obligation, revenue bonds, loans and capital leases) Total Direct and Overlapping Debt Nct Debt Percentage Applicable Outstanding to the City of Miamiti) $ 839,095,804 19 00% 348,100,000 19.00% Amount Applicable to the City of Miami $ 159,428,203 66,139,000 225,567 ,804,455 $ 491,371,658 Sources: Data provided by the Miami -Dade County Finance Department and the Miami -Dade County Scho• : oard. Note: Overlapping governments are those that coincide, at least in part, with the geographicboundarie .f the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is bome by the residen . and businesses of the City of Miami. This process recognizes that, when considering the City's ability to issue and repay long-te _ . ebt the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that • ery taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (I) For debt repaid with property taxes, the percentage of overlapping debt applicable ' estimated using taxable assessed property values. Value that is within the Ci ty's boundaries and dividing it by the County's and ool Board's total taxable assessed value. This approach was also used for the other debt. A -12 SUBSTITUTED CITY OF MIAMI, FLORIDA FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010 SUMMARY OF DEBT RATIOS, MEASUREMENTS AND DEBT CONSTRAINTS CRITERIA 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 Valore General Fund Revenues Source: City of Miami Finance Department A -13 665 2 510% 1,023.60 1.11% 9.76% 665.52 10.76% SUBSTITUTED APPENDIX B FORM OF THE BOND RESOLUTION SUBSTITUTED APPENDIX C GENERAL PURPOSE AUDITED FINANCIAL STATEMENTS OF THE CITY OF MIAMI FOR FISCAL YEAR ENDED SEPTEMBER 30, 2010 SUBSTITUTED APPENDIX D FORM OF BOND COUNSEL OPINION SUBSTITUTED APPENDIX E DISCLOSURE DISSEMINATION AGENT AGREEMENT This Disclosure Dissemination Agent Agreement (the "Disclosure Agreement"), dated of 2011, is executed and delivered by the City of Miami, Florida (the "Issuer") and D':ital Assurance Certification, L.L.C., as the initial exclusive Disclosure Dissemination Agent (the "Disosure Dissemination Agent" or "DAC") for the benefit of the Holders (hereinafter defined) of the Bonds ( reinafter defined) and in order to provide certain continuing disclosure with respect to the Bonds in acc. dance with Rule 15c2-12 of the United States Securities and Exchange Commission under the Securities . change Act of 1934, as the same may be amended from time to time (the "Rule"). SECTION 1. Definitions. Capitalized terms not otherwise defined in thi disclosure Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict wit. the Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the followin meanings: "Annual Report" means an Annual Report described in and .nsistent with Section 3 of this Disclosure Agreement. "Annual Filing Date" means the date, set in Sections 2(a) d 2(f), by which the Annual Report is to be filed with the Repositories. "Annual Financial Information" means annual nancial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in section 3(a) of this Disclosure Agreement. "Audited Financial Statements" means th financial statements (if any) of the Issuer for the prior fiscal year, certified by an independent-uditor as prepared in accordance with generally accepted accounting principles or otherwise, :s such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Di osure Agreement. "Bonds" means the bonds a isted on the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto. "Certification" mean written certification of compliance signed by the Disclosure Representative stating that the A ual Report, Audited Financial Statements, Voluntary Report or Notice Event notice delivered o the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, V untary Report or Notice Event notice required to be submitted to the Repositories under this P sclosure Agreement. A Certification shall accompany each such document submitted to the Discl•, sure Dissemination Agent by the Issuer and include the full name of the Bonds and the 9- digit SIP numbers for all Bonds to which the document applies. iisclosure Representative" means the Finance Director of the Issuer or his or her designee, or such other person as the Issuer shall designate in writing to the Disclosure Dissemination Agent from time to time as the person responsible for providing Information to the Disclosure Dissemination Agent. "Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C, acting in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure Dissemination Agent designated in writing by the Issuer pursuant to Section 9 hereof. E -1 SUBSTITUTED "Holder" means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income tax purposes. "Information" means the Annual Financial Information, the Audited Financial Statements (if any) Notice Event notices, and the Voluntary Reports. "Notice Event" means an event listed in Section 4(a) of this Disclosure Agreement. "MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934. "Official Statement" means that Official Statement prepared by the Issuer ' connection with the Bonds, as listed on Exhibit A. "Repository" means the MSRB. "Voluntary Report" means the information provided to the Dis- osure Dissemination Agent by the issuer pursuant to Section 7. SECTION 2. Provision of Annual Reports. (a) The Issuer shall provide, annually, an elec onic copy of the Annual Report and Certification to the Disclosure Dissemination Agent, together with a . py for the Trustee, not later than 30 days prior to the Annual Filing Date. Promptly upon receipt o an electronic copy of the Annual Report and the Certification, the Disclosure Dissemination Agen shall provide a copy Annual Report to each National Repository and the State Depository (if any) not ater than June 30 of each year, commencing with the fiscal year ending September 30, 2010. Such date .nd each anniversary thereof is the Annual Filing Date. The Annual Report may be submitted as a sing document or as separate documents comprising a package, and may cross-reference other information provided in Section 3 of this Disclosure Agreement. (b) if on the fifteenth th) day prior to the Annual Filing Date, the Disclosure Dissemination Agent has not received a copy o he Annual Report and Certification, the Disclosure Dissemination Agent shall contact the Disclosure R:.resentative by telephone and in writing (which maybe by e-mail) to remind the Issuer of its undertaken, o provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representativ • shall either (i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report . d the Certification no later than two (2) business days prior to the Annual Filing Date, or (ii) instruct the D closure Dissemination Agent in writing that the Issuer will not be able to file the Annual Report within th ime required under this Disclosure Agreement, state the date by which the Annual Report for such year ' ill be provided and instruct the Disclosure Dissemination Agent that a Notice Event as described i. ection 4(a)(12) has occurred and to immediately send a notice to each National Repository or the MSR and the State Depository (if any) in substantially the form attached as Exhibit B. (c) If the Disclosure Dissemination Agent has not received an Annual Report and Certification b - 12:00 noon on the first business day following the Annual Filing Date for the Annual Report, a Notice Event described in Section 4(a)(12) shall have occurred and the Issuer irrevocably directs the Disclosure Dissemination Agent to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. E-2 SUBSTITUTED (d) If Audited Financial Statements of the Issuer are prepared but not available prior to the Annual Filing Date, the Issuer shall, when the Audited Financial Statements are available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certificate, for filing with each National Repository and the State Depository (if any). (e) The Disclosure Dissemination Agent shall: (i) determine the name and address of each Repository each year prior to the Annua Filing Date; (ii) upon receipt, promptly file each Annual Report received under Section a) with each National Repository, and the State Depository (if any); (iii) upon receipt, promptly file each Audited Financial Statement eceived under Section 2(d) with each National Repository, and the State Depo: tory (if any); (iv) upon receipt, promptly file the text of each disclosure to be r ade with each National Repository or the MSRB and the State Depository (if any ogether with a completed copy of the MSRB Material Event Notice Cover Sheet ' the form attached as Exhibit C, describing the event by checking the box indicat:. below when filing pursuant to the Section of this Disclosure Agreement indic. '-d: 1. "Principal and interest payment d inquencies," pursuant to Sections 4(c) and 4(a)(1); 2. "Non -Payment related def lts," pursuant to Sections 4(c) and 4(a)(2); 3. "Unscheduled draw on debt service reserves reflecting financial difficulties," pursu t to Sections 4(c) and 4(a)(3); 4. "Unschedule. draws on credit enhancements reflecting financial difficulties," pursuant to Sections 4(c) and 4(a)(4); 5. "Subs ' tion of credit or liquidity providers, or their failure to perform," pur ant to Sections 4(c) and 4(a)(5); 6. 'Adverse tax opinions or events affecting the tax-exempt status of the security," pursuant to Sections 4(c) and 4(a)(6); "Modifications to rights of securities holders," pursuant to Sections 4(c) and 4(a)(7); 8. "Bond calls," pursuant to Sections 4(c) and 4(a)(8); "Defeasances," pursuant to Sections 4(c) and 4(a)(9); 10. "Release, substitution, or sale of property securing repayment of the securities," pursuant to Sections 4(c) and 4(a)(10); 11. "Ratings changes," pursuant to Sections 4(c) and 4(a)(11); E-3 SUBSTITUTED 12. "Failure to provide annual financial information as required," pursuant to Section 2(b)(ii) or Section 2(c), together with a completed copy of Exhibit B to this Disclosure Agreement; 13. "Other material event notice (specify)," pursuant to Section 7 of this Agreement, together with the summary description provided by the Disclosure Representative. (v) provide the Issuer evidence of the filings of each of the above when made, which shall be by means of the DAC system, for so long as DAC is the Disclosure Dissemination Agent under this Disclosure Agreement. (f) The Issuer may adjust the Annual Filing Date upon change of its fiscal year by pr• 'iding written notice of such change and the new Annual Filing Date to the Disclosure Dissemination Age , Trustee (if any) and the Repositories, provided that the period between the existing Annual Filing D e and new Annual Filing Date shall not exceed one year. SECTION 3. Content of Annual Reports. (a) Each Annual Report shall contain Annual Financial Information - ith respect to the Issuer including the information in the tables provided in "APPENDIX A" to the Offial Statement. (b) Audited Financial Statements prepared in accordance wi generally accepted accounting principles ("GAAP") as described in the Official Statement will be incl : ed in the Annual Report. If such Audited Financial Statements are unavailable at the Annual Filing Gate, unaudited financial statements, prepared in accordance with GAAP will be included in the Annual ' eport. Audited Financial Statements (if any) will be provided pursuant to Section 2(d). Any or all of the items listed above may be inclu. •d by specific reference from other documents, including official statements of debt issues with respe to which the Issuer is an "obligated person" (as defined by the Rule), which have been previously led with each of the National Repositories or the Securities and Exchange Commission. If the docu • nt incorporated by reference is a final official statement, it must be available from the MSRB. The Issuer 11 clearly identify each such document so incorporated by reference. SECTION 4. Re.ortinof ► otice Events. (a) The occurrence of .ny of the following events, if material, with respect to the Bonds constitutes a Notice Event: 1. Principal a : interest payment delinquencies; 2. Non-p, ment related defaults; 3. U scheduled draws on debt service reserves reflecting financial difficulties; Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; Substitution of credit or liquidity providers, or their failure to perform; E-4 SUBSTITUTED 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of Bond holders; S. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; 11. Rating changes on the Bonds; and 12. Failure to provide annual financial information as required. The Issuer shall promptly notify the Disclosure Dissemination Agent in writing .on the occurrence of a Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to re r .rt the occurrence pursuant to subsection (c). Such notice shall be accompanied with the text of the discl ure that the Issuer desires to make, the written authorization of the Issuer for the Disclosure Dissemi tion Agent to disseminate such information, and the date the Issuer desires for the Disclosure Disse• ination Agent to disseminate the information. (b) The Disclosure Dissemination Agent is unde no obligation to notify the Issuer or the Disclosure Representative of an event that may constitute Notice Event. In the event the Disclosure Dissemination Agent so notifies the Disclosure Representa ' e, the Disclosure Representative will within five business days of receipt of such notice, instruct the Discl. ure Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made or (ii) a Notice vent has occurred and the Disclosure Dissemination Agent is to report the occurrence pursuant to sub tion (c) of this Section 4, together with the text of the disclosure that the Issuer desires to make, t written authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such i .rmation, and the date the Issuer desires for the Disclosure Dissemination Agent to disseminate the i ormation. (c) If the Disclosure Disc-mination Agent has been instructed by the Issuer as prescribed in subsection (a) or (b)(ii) of this S ction 4 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall pro . tly file a notice of such occurrence with the State Depository (if any) and (i) each National Repository, or i) the MSRB. SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure Dissemination Agent, eluding but not limited to Annual Reports, documents incorporated by reference to the Annual Report , Audited Financial Statements, notices of Notice Events, and Voluntary Reports filed pursuant to Sect' on 7(a), the Issuer shall indicate the full name of the Bonds and the 9-digit CUSIP numbers for the Bonds . to which the provided information relates. S CTlON 6. Additional Disclosure Obligations. The Issuer acknowledges and understands that other ate and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-5 pro ulgated under the Securities Exchange Act of 1934, may apply to the Issuer, and that the failure of the sclosure Dissemination Agent to so advise the Issuer shall not constitute a breach by the Disclosure issemination Agent of any of its duties and responsibilities under this Disclosure Agreement. The Issuer acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating information as described in this Disclosure Agreement. E-5 SUBSTITUTED SECTION 7. Voluntary Reports. (a) The Issuer may instruct the Disclosure Dissemination Agent to file information with the Repositories, from time to time pursuant to a Certification of the Disclosure Representative accompanying such information (a "Voluntary Report"). (b) Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer om disseminating any other information through the Disclosure Dissemination Agent using the ans of dissemination set forth in this Disclosure Agreement or including any other information in a Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notice, in addition to threquired by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual ' eport, Annual Financial Statement, Voluntary Report or Notice Event notice in addition to that which is s ically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure greement to update such information or include it in any future Annual Report, Annual Financial Statem t, Voluntary Report or Notice Event notice. SECTION 8. Termination of Reporting Obligation. The Disclosure Dissemination Agent under this Disclosure Agreement shall upon the legal defeasance, prior redemption or payment in full of all longer an obligated person with respect to the Bonds, or upon deliv the Disclosure Dissemination Agent of an opinion of nationally continuing disclosure is no longer required. obl • ations of the Issuer and the minate with respect to the Bonds f the Bonds, when the Issuer is no y by the Disclosure Representative to cognized bond counsel to the effect that SECTION 9. Disclosure Dissemination A t. The Issuer has appointed Digital Assurance Certification, L.L.C. as the initial exclusive Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer may, upon thirty days written notice to e Disclosure Dissemination Agent and the Trustee, replace or appoint a successor Disclosure Disse ' nation Agent. Upon termination of DAC's services as Disclosure Dissemination Agent, whether by • otice of the Issuer or DAC, the Issuer agrees to appoint a successor Disclosure Dissemination Agent o alternately, agrees to assume all responsibilities of Disclosure Dissemination Agent under this Disclo re Agreement for the benefit of the Holders of the Bonds. Notwithstanding any replacement or a ointment of a successor, the Issuer shall remain liable until payment in full for any and all sums owed nd payable to the Disclosure Dissemination Agent. The Disclosure Dissemination Agent may resign any time by providing thirty days' prior written notice to the Issuer. SECTION 10. Disclosure Dissemination rights to enforce the pro for specific performa Any failure by a p on the Bonds o to those expr in Event of Default. In the event of a failure of the Issuer or the gent to comply with any provision of this Disclosure Agreement, the Holders' isions of this Agreement shall be limited solely to a right, by action in mandamus or ce, to compel performance of the parties' obligation under this Disclosure Agreement. y to perform in accordance with this Disclosure Agreement shall not constitute a default nder any other document relating to the Bonds, and all rights and remedies shall be limited sly stated herein. edies CTION 11. Duties, Immunities and Liabilities of Disclosure Dissemination Agent. (a) The Disclosure Dissemination Agent shall have only such duties as are specifically set forth this Disclosure Agreement. The Disclosure Dissemination Agent's obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issuer has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made E-6 SUBSTITUTED pursuant to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify any information or any other information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for the Issuer's failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the Issuer has complied with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon certifications of the Issuer at all times. TO THE EXTENT PERMITTED BY LAW, THE ISSUER AGREES TO INDEMNIFY AND SAV ' THE DISCLOSURE DISSEMINATION AGENT AND ITS RESPECTIVE OFFICERS, DIRECTORS, EMP OYEES AND AGENTS, HARMLESS AGAINST ANY LOSS, EXPENSE AND LIABILITIES WHICH EY MAY INCUR ARISING OUT OF OR IN THE EXERCISE OR PERFORMANCE OF THEIR POWERS ND DUTIES HEREUNDER, INCLUDING THE COSTS AND EXPENSES (INCLUDING ATTOR YS FEES) OF DEFENDING AGAINST ANY CLAIM OF LIABILITY, BUT EXCLUDING LIABILI S DUE TO THE DISCLOSURE DISSEMINATION AGENT'S NEGLIGENCE OR WILLFUL MISCO UCT. The obligations of the Issuer under this Section shall survive resignation %r removal of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds. (b) The Disclosure Dissemination Agent may, from time . time, consult with legal counsel (either in-house or external) of its own choosing in the event of any di greement or controversy, or question or doubt as to the construction of any of the provisions hereof or ' s respective duties hereunder, and the Disclosure Dissemination Agent shall not incur any liability an'. shall be fully protected in acting in good faith upon the advice of such legal counsel. The fees and exnses of such counsel shall be payable by the Issuer. SECTION 12. Amendment; Waiver. No ' ithstanding any other provision of this Disclosure Agreement, the Issuer and the Disclosure Dissemi tion Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may .e waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securi 'es laws acceptable to both the Issuer and the Disclosure Dissemination Agent to the effect that such . mendment or waiver does not materially impair the interests of Holders of the Bonds and would not, in . d of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effec ' e on the date hereof but taking into account any subsequent change in or official interpretation of the Rule .rovided neither the Issuer nor the Disclosure Dissemination Agent shall be obligated to agree to any a r ndment modifying their respective duties or obligations without their consent thereto. Notwithstandin e preceding paragraph, the Disclosure Dissemination Agent shall have the right to adopt amendments this Disclosure Agreement necessary to comply with modifications to and interpretations of provisions of the Rule as announced by the Securities and Exchange Commission from time to time by ing not less than 20 days written notice of the intent to do so together with a copy of the proposed ame • dment to the Issuer. No such amendment shall become effective if the Issuer shall, within 10 days followg the giving of such notice, send a notice to the Disclosure Dissemination Agent in writing that it objects o such amendment. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the I .uer, the Trustee of the Bonds, the Disclosure Dissemination Agent, the Underwriters, and the Holders from ime to time of the Bonds, and shall create no rights in any other person or entity. E-7 SUBSTITUTED SECTION 14. Governing Law. This Disclosure Agreement shall be governed by the laws of the State of New York (other than with respect to conflicts of laws). SECTION 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [Remainder of page intentionally left blank.] E-8 SUBSTITUTED The Disclosure Dissemination Agent and the Issuer have caused this Continuing Disclosure Agreement to be executed, on the date first written above, by their respective officers duly authorized. DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Disclosure Dissemination Agent By: Name: Title: THE CITY OF MIAMI, FLORIDA as Issuer By: Name: Tony Crapp, Title: Cit anager E-9 SUBSTITUTED EXHIBIT A NAME AND CUSIP NUMBERS OF BONDS Name of Issuer: City of Miami, Florida Obligated Person(s): City of Miami, Florida Name of Bond Issue: Special Obligation Non -Ad Valorem Refunding Bonds Series 2011A; and Special Obligation Non -Ad Valorem Refunding Bonds Series 2011B Date of issuance: , 2011 Date of Official Statement: , 2011 Maturity Initial CUSIP (February I) Principal Amount Interest Rate Yield Price Number E-10 SUBSTITUTED EXHIBIT B NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Obligated Person(s): Name of Bond Issue: City of Miami, Florida City of Miami, Florida Special Obligation Non -Ad Valorem Refunding Bonds Series 2011A; and Special Obligation Non -Ad Valorem Refunding Bonds Series 2011B Date of Issuance: , 201 1 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual ' eport with respect to the above -named Bonds as required by the Disclosure Agreement, dated as of between the Issuer and Digital Assurance Certification, L.L.C., as Disclosure Disseminate• Agent. The Issuer has notified the Disclosure Dissemination Agent that it anticipates that the ual Report will be filed by Dated: cc: Issuer Obligated Person Digital A : rance Certification, L.L.C., as Disclosure Disse ation Agent, on behalf of the Issuer E-11 SUBSTITUTED EXHIBIT C EVENT NOTICE COVER SHEET This cover sheet and material event notice will be sent to all Nationally Recognized Municipal Securities Information Repositories, and any State Information Depository, if applicable, pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D). Issuer's and/or Other Obligated Person s Name: Issuer's Six -Digit CUSIP Number: or Nine -Digit CUSIP Number(s) of the bonds to which this material event notice relates: Number of pages of attached: Description of Material Event Notice (Check One): 1. _Principal and interest payment delinquencies 2. _Non -Payment related defaults 3. Unscheduled draws on debt service reserves reflec 4. Unscheduled draws on credit enhancements re 5. Substitution of credit or liquidity providers, 6. Adverse tax opinions or events affecting th 7. Modifications to rights of securities ho 8. Bond calls 9. Defeasances 10. Release, substitution, or sa 11. _Rating changes 12. _ Failure to provide annual 13. Other material event no s g financial difficulties ting financial difficulties their failure to perform tax-exempt status of the security e of . operty securing repayment of the securities ancial information as required e (specify) I hereby represent that I am authorized .y the issuer or its agent to distribute this information publicly: Signature: Name: Title: Employer: Digital Assura 'e Certification, L.L.C. Address: City, State, Zip Code: Voice Telephone . mber: Please print th : aterial event notice attached to this cover sheet in 10-point type or larger. The cover sheet and notice : y be faxed to the MSRB at (703) 683-1930 or sent to CDINet, Municipal Securities Rulemaking Board, 19! t Duke Street, Suite 600, Alexandria, VA 22314. Contact the MSRB at (703) 797-6600 with questi . s regarding this form or the dissemination of this notice. E -12 SUBSTITUTED APPENDIX F SPECIMEN MUNICIPAL BOND INSURANCE POLICY E -1 SUBSTITUTED DRAFT #1: 05/03/11 347-00093.B1 BOND PURCHASE AGREEMENT* City of Miami, Florida Special Obligation Non -Ad Valorem Revenue Refunding Bonds Series 2011A & B July , 2011 City of Miami, Florida 444 Southwest 2nd Avenue Miami, FL 33130-1910 Attention: Tony E. Crapp, Jr., City Manager Dear Mr. Crapp: The undersigned, RBC Capital Markets, LLC (the "Rep CM') acting on its own behalf and on behalf of the oth Schedule I hereto (collectively, the "Underwriters following agreement (this "Agreement") with the "City") which, upon the City's written acceptan upon the City and upon the Underwriters. This written acceptance hereof on or before 11:59 and, if not so accepted, will be subject t notice delivered to the City at any time Terms not otherwise defined in this forth in the Bond Resolution (as defined herein). 1. Purchase and Sale of e Bonds. Subject to the terms and conditions and in reliance upon the epresentations, warranties and agreements set forth herein, the Und- riters hereby agree to purchase from the City, and the City hereby aees to sell and deliver to the Underwriters, all, but not less than all, . ' the City's $ Special Obligation Non -Ad Valorem evenue Refunding Bonds, Series 2011A & B (collectively, the "Bond , consisting of the City's $ Special Obligation Non ° d Valorem Revenue Refunding Bonds, Series 2011A, and $ Special Obligation Non -Ad Valorem Revenue Refunding onds, Series 2011 B. Inasmuch as this purchase and sale represents a negotiated transaction, the City acknowledges and agrees that: (i) the esentative" or "RBC underwriters listed on offers to enter into the ty of Miami, Florida (the of this offer, will be binding ffer is made subject to the City's .m., Eastern time, on July _, 2011, ithdrawal by the Underwriters upon for to the acceptance hereof by the City. eement shall have the same meanings set ined herein) or in the Official Statement (as All dates and amounts are preliminary and subject to change. 1 SUBSTITUTED transaction contemplated by this Agreement is an arm's length, commercial transaction between . the City and _ the Underwriters in which the Underwriters are acting solely as a principal and are not acting as a municipal advisor, financial advisor or fiduciary to the City; (ii) the Underwriters have not assumed any advisory or fiduciary responsibility to the City with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriters have provided other services or are currentl; providing other services to the City on other matters); (iii) the Underwr -rs are acting solely in their capacity as underwriters for their own acc.unts, (iv) the only obligations the Underwriters have to the City with r; pect to the transaction contemplated hereby expressly are set fo in this Agreement; and (v) the City has consulted its own legal, ac . stinting, tax, financial and other advisors, as applicable, to the exten rt has deemed appropriate. The Representative has been n duly author i d to execute this Agreement and to act hereunder. The principal amount of the Bonds to be issued, t► dated date therefor, the maturities, sinking fund and optional redemp on provisions and interest rates per annum are set forth in Schedule II , ereto. The Bonds shall be as described in, and shall be issued and se i red under and pursuant to the provisions of Resolution No. adopted by the City on May 26, 2011 (the "Bond Resolution"). The aggregate purchase pric ($ original a issue discount of $ $ l and less U for the Bonds shall be $ egate principal amount [less net original [plus net original issue premium of erwriters' discount of $ ). Delivered to the City erewith as a good faith deposit is a check payable to the order of the C. in clearing house funds in the amount of $ In the event you crept this offer, such check shall be held uncashed by you until the tim of Closing, at which time such check shall be returned uncashed t the Representative. In the event that the City does not accept this Ag ement, such check will be immediately returned to the Repre ntative. Should the City fail to deliver the Bonds at the Closing, or sho d the City be unable to satisfy the conditions of the obligations of the U derwriters to purchase, accept delivery of and pay for the Bonds, as set orth in this Agreement (unless waived by the Underwriters), or should such obligations of the Underwriters be terminated for any reason permitted by this Agreement, such check shall immediately be returned to the Representative. In the event that the Underwriters fail (other than for a reason permitted hereunder) to purchase, accept delivery _.of and .pay for the • • 2 SUBSTITUTED Bonds at the Closing as herein provided, such check shall be cashed and the amount thereof retained by the City as and for fully liquidated damages for such failure of the Underwriters, and, except as set forth in Sections 8 and 10 hereof, no party shall have any further rights against the other hereunder. The Underwriters and the City understand that in such event the City's actual damages may be greater or may be less than such amo Accordingly, the Underwriters hereby waive any right to claim tha the City's actual damages are less than such amount, and the City's acc-stance of this offer shall constitute a waiver of any right the City ma, have to additional damages from the Underwriters. 2. Public Offering. The Underwriters agree to make a . • na fide public offering of all of the Bonds at a price not to exceed the p ..lic offering price set forth on the [inside] cover of the Official : tatement and may subsequently change such offering price without . requirement of prior notice. The Underwriters may offer and sell : onds to certain dealers (including dealers depositing Bonds into inv: tment trusts) and others at prices lower than the public offering pri - stated on the cover of the Official Statement. 3. The Official Statement. (a) At the time of or before . cceptance of this Agreement, or at such later time as shall be _reeable to the Underwriters, the City shall deliver to the Under, riters three copies of the Official Statement, dated the date h eof (which together with the cover page and appendices co ained therein, is herein called the "Official Statement") e ecuted on behalf of the City by its City Manager. (b) The Pre l inary Official Statement has been prepared by the City for us: •y the Underwriters in connection with the public offering,. sale nd distribution of the Bonds. The City hereby represents and w ants that the Preliminary Official Statement was deemed final y the City as of its date, except for the omission of such information which is dependent upon the final pricing of the Bonds for completion, all as permitted to be excluded by Section (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"). (c) The City represents that the governing body of the City has reviewed and approved the information in the Official Statement and hereby authorizes the Official Statement to be used by the Underwriters in connection with the public offering and the sale of the Bonds. The City shall provide, or cause to be provided, to the Underwriters as 3 SUBSTITUTED soon as practicable after the date of the City's acceptance of this Agreement (but, in any event, not later than within seven business days after the City's acceptance of this Agreement and in sufficient time to accompany any confirmation that requests payment from any customer) copies of the Official Statement which is complete as of the date of its delivery to the Underwriters in such quantity as ' e Representative shall request and a electronic version of the Of cial Statement in searchable PDF format within one day of deli -ry of the Official Statement and, in any event, no later than t date of Closing in order for the Underwriters to comply with S• tion (b)(4) of the Rule and the rules of the Municipal Securiti-. Rulemaking Board (the "MSRB"). The City hereby confirms at it does not object td the distribution of the Official Statemen n electronic form. (d) If, after the date of this Agreement to an. including the date the Underwriters are no longer required to pro ' ide an Official Statement to potential customers who request th- same pursuant to the Rule (the earlier of (i) 90 days from the "- d of the underwriting period" (as defined in the Rule) and (ii) th- ime when the Official Statement is available to any person from e MSRB, but in no case less than 25 days after the "end of th • nderwriting period" for the Bonds), the City becomes aware of . y fact or event which might or would cause the Official State r ent, as then supplemented or amended, to contain any untrue st. -ment of a material fact or to omit to state a material fact requir:.: to be stated therein or necessary to make the statements there' not misleading, or if it is necessary to amend or supplement th Official Statement to comply with law, the City will notify the R= .resentative (and for the purposes of this clause provide the Repre ntative with such information as it may from time to time request , and if, in the opinion of the Representative, such fact or even requires preparation and publication of a supplement or a , ndment to the Official Statement, the City will forthwith prepare d furnish, at the City's own expense (in a form and manner approved by the Representative), a reasonable number of copies of either amendments or supplements to the Official Statement so that the statements in the Official Statement as so amended and supplemented will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or so that the Official Statement will comply with law. If such notification shall be subsequent to the Closing, the City shall furnish such legal opinions, certificates, instruments and other documents as the Representative may deem necessary to evidence the truth and 4 SUBSTITUTED accuracy of such supplement or amendment to the Official Statement. (e) The Representative hereby agrees to file the Official Statement with the MSRB. Unless otherwise notified in writing by the Representative, the City can assume that the "end of the underwriting period" for purposes of the Rule is the date of the Closing. 4. Representations, Warranties, and Covenants of the City. The City h; eby represents and warrants to and covenants with the Underwriters that (a) The City is a municipal corporation duly created, o existing under the laws of the State of Florida (the City has full legal right, power and authority unde and laws of the State, including without limita as amended, Chapter 166, Part II, and the C City of Miami (the "Act") and the Bond Res the Closing will have full legal right, po Act and the Bond Resolution (i) to this Agreement, the Bond Resolu Undertaking (the "Undertaking hereof, the Interlocal Agreeme defined in Section 6(i)(4) hereunder and thereunde (this Agreement, the Bo documents referred t "City Documents" Underwriters as consummate t and the Off Closing and th nized and State"). The he Constitution Florida Statutes, er and Code of the ution and at the date of r and authority under the e er into, execute and deliver n, the Continuing Disclosure as defined in Section 6(i)(3) s (the "Interlocal Agreements") as ereof, and all documents required be executed and delivered by the City Resolution, the Undertaking and the other n this clause are hereinafter referred to as the (ii) to sell, issue and deliver the Bonds to the provided herein, and and (iii) to carry out and e transactions contemplated by the City Documents ial Statement, and the City has complied, and will at the in compliance in all respects, with the terms of the Act ty Documents as they pertain to such transactions; (b) By all necessary official action of the City prior to or concurrently ith the acceptance hereof, the City has duly authorized all necessary action to be taken by it for (i) the adoption of the Bond Resolution and the issuance and sale of the Bonds, (ii) the approval, execution and delivery of, and the performance by the City of the obligations on its part, contained in the Bonds and the City Documents and (iii) the consummation by itof all other transactions contemplated by the Official Statement, and the City Documents and any and all such other agreements and documents as may be required to be executed, delivered and/or received by the City in order to 5 SUBSTITUTED carry out, give effect to, and consummate the transactions contemplated herein and in the Official Statement; (c) The City Documents constitute legal, valid and binding obligations of the City, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; the Bonds, when issued, delivered and paid for, in accordance with the Bond Resolution and this Agreement, will constitute legal, valid and binding obligations of the City entitled to the benefits of the, Bond Resolution and enforceae in accordance with their terms, subject to bankruptcy, insoly: cy, reorganization, moratorium and other similar laws and princ .les of equity relating to or affecting the enforcement of credito ' ' rights; upon the issuance, authentication and delivery of t Bonds as aforesaid, the Bond Resolution will provide, for the .enefit of the holders, from time to time, of the Bonds, the gaily valid and binding pledge of and lien it purports to creat- as set forth in the Bond Resolution; (d) The City is not in breach of or default in ny material respect under any applicable constitutional provis' •n, law or administrative regulation of the State or the U ' ed States or any applicable judgment or decree or any loan , _reement, indenture, bond, note, resolution, agreement or other i trument to which the City is a party or to which the City is or an of its property or assets are otherwise subject, and no event :s occurred and is continuing which constitutes or with the ' ssage of time or the giving of notice, or both, would constitut- . default or event of default by the City under any of the foregoi and the execution and delivery of the Bonds, the City Docum: is and the adoption of the Bond Resolution and compliance w' the provisions on the City's part contained therein, will not co ict with or constitute a breach of or default under any constituti• al provision, administrative regulation, judgment, decree, loan aa--ement, indenture, bond, note, resolution, agreement or other ins t ent to which the City is a party or to which the City is or to w ch any of its property or assets are otherwise subject nor will any ch execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City to be pledged to secure the Bonds or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Bond Resolution; 6 SUBSTITUTED (e) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the City of its obligations under t - e City Documents, and the Bonds have been duly obtained, exce for such approvals, consents and orders as may be required u • er the Blue Sky or securities laws of any jurisdiction in connectio, with the offering and sale of the Bonds;. (f) The Bonds conform to the descriptions thereof ntained in the Official Statement under the captions ; the Bond Resolution conforms to the description t reof contained in the Official Statement under the caption(s) ; the proceeds of the sale of the Bonds wil •e applied generally as described in the Official Statem; t under the caption(s) and the U. dertaking conforms to the description thereof contained in e Official Statement under the caption There is no legislation, action, suit, proceeding, inquiry or investigation, at law or i quity, before or by any court, government • body, pending or, to the best knowledge of wiry, threatened against the City, affecting the or the titles of its officers to their respective r seeking to prohibit, restrain or enjoin the sale, of the Bonds or the lien on and pledge of the e covenant to budget and appropriate Non -Ad ursuant to the Bond Resolution or in any way g the validity or enforceability of the Bonds, y or the Bond Resolution, or contesting the elusion from gross income of interest on the Bonds for federal income tax purposes, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the powers of the City or any authority for the issuance of the Bonds, the adoption of the Bond Resolution or the execution and delivery of the City Documents, nor, to the best knowledge of the City, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds or the City Documents; (g) agency, public board the City after due i existence of the arty offices, or affe mg o issuance or livery Pledged F ds and th Valore Revenues p conte- ing or • 7 • SUBSTITUTED (h) As of the date thereof, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; At the time of the City's acceptance hereof and (unless the Off ial Statement is amended or supplemented pursuant to paragraph d) of Section 3 of this Agreement) at all times subsequent there • during the period up to and including the date of Closing, ' e Official Statement does not and will not contain any untrue . tement of a material fact or omit to state any material fact requ ed to be stated therein or necessary to make the statements ther in, in light of the circumstances under which they were made, no isleading; (i) (j) If the Official Statement is supplemente• or amended pursuant to paragraph (d) of Section 3 of this Agreement, at the time of each supplement or amendment thereto a► • (unless subsequently again supplemented or amended pursua to such paragraph) at all times subsequent thereto during the pe- od up to and including the date of Closing, the Official Stateme ' as so supplemented or amended will not contain any untrue stat: ent of a material fact or omit to state any material fact require to be stated therein or necessary to make the statements therein in light of the circumstances under which made, not misleadin, (k) The City will a.•ly, or cause to be applied, the proceeds from the sale of the B ds as provided in and subject to all of the terms and provisions the Bond Resolution and not to take or omit to take any action w ich action or omission will adversely affect the exclusion from ,, oss income for federal income tax purposes of the interest on the : onds; (1) e City will furnish such information and execute such instruments and take such action in cooperation with the Underwriters as the Representative may reasonably request (A) to (y) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions in the United States as the Representative may designate and (z) determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions and (B) to continue such qualifications in effect so long as required for the distribution of the Bonds (provided, however, that the City will not be required to qualify as a foreign corporation or to file any general or special consents to service of process under the 8 (m) SUBSTITUTED laws of any jurisdiction) and will advise the Representative immediately of receipt by the City of any notification with respect to the suspension of the qualification of the Bonds for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose; The financial statements of and other financial information regarding the City in the Official Statement fairly present the financial positio and results of the City as of the dates and for the periods therein .et forth. Prior to the Closing, there will be no adverse chang- of a material nature in such financial position, results of operons or condition, financial or otherwise, of the City. The City is ' of a party to any litigation or other proceeding pending or, to it nowledge, threatened which, if decided adversely to the City would have a materially adverse effect on the financial condition •f the City; (n) Prior to the Closing the City will not offer or sue any bonds, notes or other obligations for borrowed mone or incur any material liabilities, direct or contingent, payable om or secured by any of the revenues or assets which will se re or otherwise support the payment of the Bonds without the prior approval of the Representative; (o) Any certificate, signed by an official of the City authorized to do so in connection with the tra : .ctions contemplated by this Agreement, shall be deemed a repr entation and warranty by the City to the Underwriters as to the tatements made therein; (p) Other than as de ribed in the Official Statement, since December 31, 1975, and . all times subsequent thereto up to and including the Date of Clo g, the City has not been and will not be in default with respect to sayment of the principal of, or interest on, any bonds or other d= .t obligations that it has issued or will issue or that it has guarteed or will guarantee (including bonds or other debt ob gations for which it has served as a conduit City, such as the onds); The City has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon; (r) The City will not take any action nor omit to take any action which would adversely affect the exclusion from gross income for federal 9 SUBSTITUTED income tax purposes of interest on the Note or Refunded Loans or the Bonds under the Code; and (s) The City is presently in compliance with its prior continuing disclosure undertakings entered into pursuant to the Rule over the past five years. 5. Closing. (a) At 12:00 p.m., Eastern time, on , 2011, or at such other time and date as shall have been mutually agreed upon by the Cit and the Representative (the "Closing"), the City will, subject to e terms and conditions hereof, deliver the Bonds to the Unde iters duly executed and authenticated, together with the other d• uments hereinafter mentioned, and the Underwriters will, subct to the terms and conditions hereof, accept such delivery . nd pay the purchase price of the Bonds as set forth in Se' ion 1 of this Agreement by a wire transfer payable in immediat y available funds to the order of the City. Payment for the Bond s aforesaid shall be made at the offices of Bond Counsel, or s other place as shall have been mutually agreed upon by the Ci and the Representative. (b) Delivery of the Bonds shall be m. . e to The Depository Trust Company, New York, New York. e Bonds shall be delivered in definitive fully registered form .earing CUSIP numbers without coupons, with one Bond for - ach maturity of each series of the Bonds, registered in the na ► of Cede & Co., all as provided in the Bond. Resolution, and.sh.. be made available to the Representative at least one business day before the Closing for purposes of inspection. 6. Closing Conditions. T Underwriters have entered into this Agreement in reliance upon the r- .resentations, warranties and agreements of the City contained herein, d in reliance upon the representations, warranties and agreements to .e contained in the documents and instruments to be delivered at e Closing and upon the performance by the City of its obligations ereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriters' obligations under this Agreement to pu ase, to accept delivery of and to pay for the Bonds shall be co . rtioned upon the performance by the City of its obligations to be formed hereunder and under such documents and instruments at or prior o the Closing, and shall also be subject to the following additional conditions, including the delivery by the City of such documents as are 10 SUBSTITUTED enumerated herein, in form and substance reasonably satisfactory to the Representative: (a) (b) (c). (d) (e) (f) (g) (h) The representations and warranties of the City contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; The City shall have performed and complied with all agreeme and conditions required by this Agreement to be performed or mplied with by it prior to or at the Closing; At thetime of the Closing, (i) .the. City Documents . nd the Bonds shall be in full force and effect in the foiin hereto ore approved by the Representative and shall not have been a , -nded, modified or supplemented, and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Representative; a (ii) all actions of the City required to be taken by the City shall • performed in order for Bond Counsel and Disclosure Counsel to . eliver their respective opinions referred to hereafter; At or prior to the Closing, t Bond Resolution shall have been duly adopted by the City an. the City shall have duly executed and delivered and the regist :r shall have duly authenticated the Bonds; [At or prior to the osing, the Bond Insurance Policy and [Reserve Account Insura ' e Policy/Reserve Account Letter of Credit] shall have been dul executed, issued and delivered by the Provider; At the ti of the Closing, there shall not have occurred any change or any e velopment involving a prospective change in the condition, fin 'al or otherwise, or in the revenues or operations of the City, fro that set forth in the Official Statement that in the judgment of e Representative, is material and adverse and that makes it, in the judgment of the Representative, impracticable to market the Bonds on the terms and in the manner contemplated in the Official Statement; The City shall not have failed to pay when due principal of or interest on any of its outstanding obligations for borrowed money; All steps to be taken and all instruments and other documents to be executed, and all other legal matters in connection with the 11 (i) SUBSTITUTED transactions contemplated by this Agreement shall be reasonably satisfactory in legal form and effect to the Representative; At or prior to the Closing, the Underwriters shall have received copies of each of the following documents: (1) The Official Statement, and each supplement or amendment thereto, if any, executed on behalf of the City by its Cit Manager, or such other official as may have been agree . o by the Representative, and the reports and audits refe , d to or appearing in the Official Statement; (2) A certified copy of the Bond Resolution with such supplements or amendments as may have bee agreed to by the Representative; (3) The Undertaking of the City which sati ies the requirements of section (b)(5)(i) of the Rule (the " dertaking"); (4) The Interlocal Agreement dated . s of , 2011, between the City and the Com r unity Redevelopment Agency for the Omni District (the "4mni CRA") and the [Amended and Restated Interlo .1 Agreement dated as of , 20 ,] among the City, the Omni CRA and Miami -Dade Cnty, Florida (together, the "Interlocal Agreements"); (5) the approvin: opinion of Bond Counsel with respect to the Bonds, in .ubstantially the form attached to the Official Stateme with a reliance opinion addressed to the Unde 'riters; (6) a : pplemental opinion of Bond Counsel addressed to the nderwriters, substantially to the effect that: (i) ( the Bond Resolution has been duly adopted and is in full force and effect; i) the Bonds are exempted securities under the Securities Act of 1933, as amended (the "1933 Act"), and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and it is not necessary, in connection with the offering and sale of the Bonds, to register the Bonds under. the 1933 Act or to qualify the Bond Resolution under the Trust Indenture Act; and 12 (7) SUBSTITUTED the statements and information contained in the Official Statement under the captions fairly and accurately summarized the matters purported to be summarized therein; the opinion of Disclosure Counsel addressed to the Underwriters, substantially to the effect that based on the examinations which they have made as Disclosure ounsel and their participation at conferences at which e Official Statement was discussed, but without having . ndertaken to determine independently the accuracy or co ' .leteness of the statements in the Official Statement, su . counsel has no reason to believe that the Official State , ent as of its date and as of the date hereof contains any untrue statement of a material fact or omits to state a - aterial fact necessary to make the statements therein, i . light of the circumstances under which they were made, of misleading (except for any financial, forecast, technicand statistical data included in the Official Statement . ' except for information regarding DTC and its book -en system [and information regarding the Provider] in e. case as to which no view need be expressed); [(8) An opinion, ..ted the date of the Closing and addressed to the Underwrit- s, of counsel for the Underwriters in form and substan satisfactory to the Underwriters;] (9) An (i) nion of the City Attorney of the City, addressed to the derwriters, to the effect that: The City is a municipal corporation duly created, organized and existing under the laws of the State. The City has full legal right, power and authority under the Act and the Bond Resolution (A) to enter into, execute and deliver the City Documents and all documents required hereunder and thereunder to be executed and delivered by the City, (B) to sell, issue and deliver the Bonds to the Underwriters as provided herein, (C) to pledge the Pledged Funds and covenant to budget and appropriate Non -Ad Valorem Revenues as provided in the Bond Resolution and (D) to carry out and consummate the transactions contemplated by the City Documents, and the Official Statement, and 13 SUBSTITUTED the City has complied, and will at the Closing be in compliance in all respects, with the terms of the Act and the City Documents as they pertain to such transactions; (ii) By all necessary official action of the City prior to or concurrently with the acceptance hereof, the City has duly authorized all necessary action to be taken by it for (A) the adoption of the Bond Resolution and the issuance and sale of the Bonds, (B) the approval execution and delivery of, and the performance by t- e City of the obligations on its part, contained i the Bonds, the City Documents and the Bond Res ution, (C) the pledge of the Pledged Funds and the ovenant to budget and appropriate Non -Ad ValoreRevenues as provided in the Bond Resolutio and (D) the consummation by it of all ot• r transactions contemplated by the Official S :tement, the City Documents, the Bond Resolutio and any and all such other agreements and docume s as may be required to be executed, delivered and/ .r received by the City in order to carry out, give e ect to, and consummate the transactions contempled herein and in the Official Statement; (iii) The Bond Re elution has been duly and validly adopted by t City and is in full force and effect; the Bond Reso tion and all other proceedings pertinent to the valia y and enforceability of the Bonds have been duly . d validly adopted or undertaken in compliance wit. all applicable procedural requirements of the City a ' d in compliance with the Constitution and laws of he State, including the Act; The City Documents have been duly authorized, executed and delivered by the City, and constitute legal, valid and binding obligations of the City enforceable against the City in accordance with their respective terms, except to the extent limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws and equitable principles of general application relating to or affecting the enforcement of creditors' rights; and the Bonds, when issued, 14 SUBSTITUTED delivered and paid for, in accordance with the Bond Resolution and this Agreement, will constitute legal, valid and binding obligations of the City entitled to the benefits of the Bond Resolution and enforceable in accordance with their terms, subject to bankruptcy insolvency, reorganization, moratorium and of similar laws and principles of equity relating or affecting the enforcement of creditors' rights; u.on the issuance, authentication and delivery of the : onds as aforesaid, the Bond Resolution will prov'de, for the benefit of the holders, from time to time of the Bonds, the legally valid and binding pledge • ' and lien on the Pledged Funds and the coven. ' to budget and appropriate Non -Ad Valorem R enues it purports to create as set forth in the Bond ' esolution; (v) The distribution of the P iminary Official Statement and the Official Statem t has been duly authorized by the City; (vi) All authorizat 'ns, approvals, licenses, permits, consents and orders of any governmental authority, legislative , •dy, board, agency or commission having jurisdiction of the matter which are required for the due . thorization of, which would constitute a con. tion precedent to, or the absence of which would terially adversely affect the due performance by the ity of its obligations under the City Documents and the Bonds have been obtained; vii) There is no legislation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of the City, after due inquiry threatened against the City, affecting the corporate existence of the City or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the lien on an pledge of the Pledged Funds and the covenant to budget and appropriate Non -Ad Valorem Revenues pursuant to the Bond Resolution or in any way contesting or affecting the validity or enforceability of the Bonds, 15 SUBSTITUTED the City Documents or the Bond Resolution, or contesting the exclusion from gross income of interest on the Bonds for federal income tax purposes, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, .r contesting the powers of the City or any authorit, for the issuance of the Bonds, the adoption of th Bond Resolution or the execution and delivery o the City Documents, nor, to the best knowledge o he City, is there any basis therefor, wherein a unfavorable decision, ruling or finding would ma rially adversely affect the validity or enforceability the Bonds, or the City Documents; (viii) The adoption of the B • d Resolution and the execution and delivery •.' the other City Documents and compliance by the ' ity with the provisions hereof and thereof, under e circumstances contemplated herein and there' will not conflict with or constitute on the part of City a material breach of or a default under any a_ , ement or instrument to which the City is a party, o violate any existing law, administrative regulati ., , court order, or consent decree to which the City i subject; and (ix) B . sed on the examination which such counsel has caused to be made and its participation at conferences at which the Preliminary Official Statement and the Official Statement were discussed, such counsel has no reason to believe that the Official Statement as of its date and as of the date hereof contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respect (except for any financial forecast, technical and statistical data included in the Official Statement and except for information regarding DTC and its book -entry system and information regarding the Provider, in each case as to which no view need be expressed; 16 SUBSTITUTED (10) A certificate, dated the date of Closing, of the City to the effect that. (i) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) no litigation or proceeding against it is pending or, to its knowledge, threatened in any court or administrative body nor is there a basis for litigation which would (a) contest the right of the members or officials of the City to hold a exercise their respective positions, (b) contest the organization and valid existence of the City, (c) con validity, due authorization and execution of the Bon City Documents or (d) attempt to limit, enjoin o restrict or prevent the City from functio collecting revenues, including payments .n pursuant to the Bond Resolution, and oth Bond Resolution has been duly adopted force and effect and has not been repealed, and (iv) to the best of affecting the City has occurred Statement which should be dis for the purpose for which necessary to disclose the and information there which made, not m Closing, and th Statement is co r c of the Offic Closing do fact or i there the ue the s or the otherwise g or from the Bonds, income; (iii) the y the City, is in full odified, amended or s knowledge, no event ce the date of the Official osed in the Official Statement s to be used or which it is n in order to make the statements in light of the circumstances under eading in any respect as of the time of information contained in the Official in all material respects and, as of the date Statement did not, and as of the date of the s not, contain any untrue statement of a material to state a material fact required to be stated or necessary to make the statements made therein, in ght of the circumstances under which they were made, t misleading; A certificate of the City in form and substance satisfactory to Bond Counsel and counsel to the Underwriters (a) setting forth the facts, estimates and circumstances in existence on the date of the Closing, which establish that it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and any applicable regulations (whether final, temporary or proposed), issued pursuant to the Code, and (b) certifying that to the best of the 17 SUBSTITUTED knowledge and belief of the City there are no other facts, estimates or circumstances that would materially change the conclusions, representations and expectations contained in such certificate; (12) Any other certificates and opinions required by the Bond Resolution for the issuance thereunder of the Bonds; (13) Evidence satisfactory to the Representative that the Bonds have been rated " ," " " and " " by Moody's, Standard & Poor's and Fitch Ratings, respectively, and tha such ratings are in effect as of the date of Closing; [(14) Copies of the Bond Insurance Policy and [Reserve ccount Insurance Policy/Reserve Account Letter of Cre.' together with an opinion of counsel to the Provider 'n form and substance satisfactory to the Representative; (15) A certificate of the Provider with respe to the accuracy of statements contained in the Official tement regarding the Bond Insurance Policy, the [Res rve Account Insurance Policy/Reserve Account Letter • Credit] and the Provider and the due authorization exec on issuance and delivery of the Bond Insurance Poli and the [Reserve Account Insurance Policy/Reserve r ccount Letter of Credit];] [(16) Evidence that the Not; and Refunded Loans have been paid at Closing; and] (17) Such additionlegal opinions, certificates, instruments and other docu ► nts as the Representative or counsel to the Underwri - rs may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Clos - g, of the City's representations and warranties co ► ained herein and of the statements and information ntained in the Official Statement and the due. performance or satisfaction by the City on or prior to the date of the Closing of all the respective agreements then to be performed and conditions then to be satisfied by the City: All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions 18 (7) SUBSTITUTED hereof if, but only if, they are in form and substance satisfactory to the Underwriters. If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the. Bonds contained in this Agreement, or if the obligations of the Underwriters purchase, to accept delivery of and to pay for the Bonds shall be termi .ted for any reason permitted by this Agreement, this Agreement shall to inate and neither the Underwriters nor the City shall be under further obligation hereunder, except that the respective obligations of . e City and the Underwriters set forth in Sections 4 and 8(c) hereof shcontinue in full force and effect. Termination. The Underwriters shall have the r. ht to cancel their obligation to purchase the Bonds if, between the da of this Agreement and the Closing, the market price or marketabilit, of the Bonds shall be materially adversely affected, in the sole jud ent of the Representative, by the occurrence of any of the following: (a) legislation shall be enacted by o introduced in the Congress of the United States or recommende • to the Congress for passage by the President of the United Stes, or the Treasury Department of the United States or the Inte al Revenue Service or any member of the Congress or the state l _islature or favorably reported for passage to either House of the " ongress by any committee of such House to which such legisl. on has been referred for consideration, a decision by a court of t. United States or of the State or the United States Tax Court s .11 be rendered, or an order, ruling, regulation (final, temporary •r proposed), press release, statement or other form of notice b - or on behalf of the Treasury Department of the United State the Internal Revenue Service or other governmental agency sha be made or proposed, the effect of any or all of which would be t� impose, directly or indirectly, federal income taxation or state ncome taxation upon interest received on obligations of the general character of the Bonds, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal income tax consequences or state income tax consequences of any of the transactions contemplated herein; (b) legislation is introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction is issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice is 19 SUBSTITUTED issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, including any or all underlying arrangements, are not exempt from registration under or othe requirements of the 1933 Act, or that the Bond Resolution is •t exempt from qualification under or other requirements of the rust Indenture Act, or that the issuance, offering, or sale of obliga ons of the general character of the Bonds, including any or all derlying arrangements, as contemplated hereby or by the Offici Statement or otherwise, is or would be in violation of the federa securities law as amended and then in effect; (c) any state Blue Sky or securities commission • other governmental agency or body shall have withheld re_' tration, exemption or clearance of the offering of the Bonds as ,escribed herein, or issued a stop order or similar ruling relating th; eto; (d) a general suspension of trading in -curities on the New York Stock Exchange or the American Sto Exchange is imposed, minimum prices on either such exchan�, are established, material restrictions (not in force as of the date ereof) upon trading securities generally by any governmental au ority or any national securities exchange are established, or a _eneral banking moratorium is declared by federal, State of Ne ork, or State officials authorized to do so; (e) the New York ock Exchange or other national securities exchange or any gove r, ental authority, shall impose, as to the Bonds or as to obligation of the general character of the Bonds, any material restricti• s not now in force, or increase materially those now in force, ith respect to the extension of credit by, or the charge to the net apital requirements of, Underwriters; (f) .ny amendment is made to the federal or state Constitution or action by any federal or state court, legislative body, regulatory body, or other authority is taken materially adversely affecting the tax status of the City, its property, income securities (or interest thereon); any event occurring, or information becoming known which, in the judgment of the Representative, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements (g) 20 SUBSTITUTED therein, in the light of the circumstances under which they were made, not misleading; (h) there shall have occurred any materially adverse change in the affairs or financial condition of the City, except for changes which the Official Statement discloses are expected to occur; (i) the United States shall have become engaged in hostilities w ich have resulted in a declaration of war or a national emerge- cy or there shall have occurred any other outbreak or esc..tion of hostilities or a national or international calamity or cris , financial or otherwise; (j) any fact or event shall exist or have ex i ed that, in the Representative's judgment, requires or has re..ired an amendment of or supplement to the Official Statement; (k) there shall have occurred or any notice all have been given of any intended review, downgrading, suspe ' sion, withdrawal, or negative change in credit watch status by an national rating service to any of the City's obligations or any rati _ of the Provider; (1) [(m) the purchase of and payme ' for the Bonds by the Underwriters, or the resale of the Bonds .y the Underwriters, on the terms and conditions herein provi. -d shall be prohibited by any applicable law, governmental author' ' , board, agency or commission; negative info ion relating to the financial condition of the Provider, its p.rent or any subsidiary of it, is made available to the Underwrite :, which, in the reasonable judgment of the Undenvr' -rs, could result in a downgrade of any of the ratings assign- to the Bonds, and which, in the opinion of the Underwriters mat- sally adversely affects the market price of the Bonds; or (n) e Provider shall inform the Underwriters or the City that it will not insure the Bonds.] 8. 'xpenses. (a) The Underwriters shall be under no obligation to pay, and the City shall pay, any expenses incident to the performance of the City's obligations hereunder, including, but not limited to (i) the cost of preparation and printing of the Bonds, (ii) the fees and disbursements of Bond Counsel, Disclosure Counsel and counsel to the City; (iii) the fees and disbursements of the Financial Advisor to 21 SUBSTITUTED the City; (iv) the fees and disbursements of any other engineers, accountants, and other experts, consultants or advisers retained by the City; and (v) the fees for bond ratings [and credit enhancement fees or premiums]. (b) The Underwriters shall pay (i) the cost of preparation and printing of this Agreement, the Blue Sky Survey and Legal Investment Memorandum; (ii) all advertising expenses in connection with the public offering of the Bonds; and (iii) all other expenses incurred by them in connection with the public offering of the Bonds, includin the fees and disbursements of counsel retained by the Underwriter (c) If this Agreement shall be terminated by the Underwriters bec se of any failure or refusal on the part of the City to comply with • e terms or to fulfill any of the conditions of this Agreement, o if for any reason the City shall be unable to perform its obligat' ' ns under this Agreement, the City will reimburse the Underwrit- for all out-of- pocket expenses (including the fees and disburse ► ents of counsel to the Underwriters) reasonably incurred by e Underwriters in connection with this Agreement or the offering contemplated hereunder. 9. Notices. Any notice or other communicatio - to be given to the City under this Agreement may be given by deliveri - g the same in writing at City of Miami, 444 Southwest 2" Avenue, ► iami, FL 33130-1910, Attention: Tony E. Crapp, Jr., City Manager, a any notice or other communication to be given to the Underwriters der this Agreement may be given by delivering the same in writing + RBC CM at RBC Capital Markets, 801 Brickell Avenue, 15th Floor iami, Florida 33131, Attention: Richard Montalbano, Managing Dir ctor. 10. Parties in Interest. T Agreement as heretofore specified shall constitute the entire agreemen . etween us and is made solely for the benefit of the City and the U. derwriters (including successors or assigns of the Underwriters) . d no other person shall acquire or have any right hereunder or by virtue reof. This Agreement may not be assigned by the City. All of the Cit s representations, warranties and agreements contained in this Agreem; t shall remain operative and in full force and effect, regardless of (i) an investigations made by or on behalf of any of the Underwriters; (ii) .elivery of and payment for the Bonds pursuant to this Agreement; and i) any termination of this Agreement. 22 SUBSTITUTED 11. Effectiveness. This Agreement shall become effective upon the acceptance hereof by the City and shall be .validand enforceable at the time of such acceptance. 12. Choice of Law. This Agreement shall be governed by and construed in accordance with the law of the State. 13. Severability. If any provision of this Agreement shall be held or dee ' ed to be or shall, in fact, be invalid, inoperative or unenforceable as .lied in any particular case in any jurisdiction or jurisdictions, or in all ' . isdictions because it conflicts with any provisions of any Constitution, atute, rule of public policy, or any other reason, such circumstances s : 1 not have the effect of rendering the provision in question inval'., inoperative or unenforceable in any other case or circumstance, or o rendering any other provision or provisions of this Agreement i r alid, inoperative or unenforceable to any extent whatever. 14. Business Day. For purposes of this Agree nt, "business day" means any day on which the New York Stock Excha _e is open for trading. 15. Section Headings. Section headings ave been inserted in this Agreement as a matter of convenience of re ence only, and it is agreed that such sectionheadingsare not a part o is Agreement and will not be used in the interpretation of any provisio of this Agreement. 16. Counterparts. This Agr: ment may be executed in several counterparts each of which shall be garded as an original (with the same effect as if the signatures thereto . hereto were upon the same document) and all of which shall consti .te one and the same document. 23 SUBSTITUTED If you agree with the foregoing, please sign the enclosed counterpart of this Agreement and return it to the Underwriters. This Agreement shall become a binding agreement between you and the Underwriters when at least the counterpart of this letter shall have been signed by or on behalf of each of the parties hereto. Respectfully submitted, RBC CAPITAL MARKETS, LLC By Name: Richard Montalbano Title: Managing Director Date: July , 2011 24 SUBSTITUTED ACCEPTANCE ACCEPTED at [a.m./p.m.], Eastern time, this _ day of July, 2011. By Name: Tony E. Crapp, Jr. Title: City Manager 25 SUBSTITUTED SCHEDULE I LIST OF UNDERWRITERS RBC Capital Markets, LLC Bank of America Merrill Lynch Morgan Keegan & Company, Inc. Goldman, Sachs & Co. Raymond James & Associates, Inc. SCHEDULE I-1 SUBSTITUTED SCHEDULE II MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS AND PRICES Maturity Date Principal Interest (October 1) Amount Rate Yield 'rice REDEMPTION PRO SIONS OME] SCHEDULE 11-1 SUBSTITUTED SCHEDULE III DISCLOSURE LETTER AND TRUTH -IN -BONDING STATEMENT July _, 2011 City of Miami, Florida 444 Southwest 2nd Avenue Miami, FL 33130-1910 Attention: Tony E. Crapp, Jr., City Manager RE: $ City % Miami, Florida Special Obligation Non -Ad Valorem Revenue Ref. ding Bonds, Series 2011A & B Ladies and Gentlemen: In connection with the proposed iss ce by the City of Miami, Florida (the "City") of its $ aggr-gate principal amount of City of Miami, Florida Special Obligation Non -Ad Valor • m Revenue Refunding Bonds, Series 2011A & B (the "Series 2011 Bonds"), RBC Ca tal Markets, LLC, as representative of itself, and the other Underwriters (collectively e "Underwriters") set forth in the Bond Purchase Agreement dated as of July _, ' 011 (the "Purchase Agreement"), is underwriting a public offering of the Series 21 Bonds. All capitalized terms used but not otherwise defined herein shall have the eanings ascribed to them in the Purchase Agreement. The purpose of t following paragraphs of this letter is to furnish, pursuant to the provisions of Sectio 218.385, Florida Statutes, certain information in respect of the arrangements cont plated for the purchase and sale of the Series 2011 Bonds, as follows: 1. The nature and estimated amount of expenses to be incurred by the Underwri -rs in connection with the purchase and offering of the Series 2011 Bonds are set fort- in Schedule A attached hereto. 2. There are no "finders," as defined in Section 218.386, Florida Statutes, onnected with the sale and purchase of the Series 2011 Bonds. 3. The underwriting spread, the difference between the price at which the Series 2011 Bonds will be initially offered to the public by the Underwriters and the price SCHEDULE III-1 SUBSTITUTED to be paid to the City for the Series 2011 Bonds, exclusive of accrued interest, will be approximately $ per $1,000 of Series 2011 Bonds issued. 4. As part of the estimated underwriting spread set forth in paragraph (3 above, the Underwriters will charge a management fee of $ per $1,000 of Ser'-s 2011 Bonds issued. 5. No other fee, bonus or other compensation is estimated to be p d by the Underwriters in connection with the issuance of the Series 2011 Bonds to a person not regularly employed or retained by the Underwriters (including any "finder as defined in Section 218.386, Florida Statutes), except as specifically enumerated expenses to be incurred by the Underwriters, as set forth in paragraph (1) above. 6. The names and addresses of the Underwriters are: RBC Capital Markets, LLC 3 World Financial Center - 200 Vesey Street, Suit- 1200 New York, NY 10281-8098 Bank of America Merrill Lynch [ADDRESS] Morgan Keegan & Company, Inc. [ADDRESS] Goldman, Sachs & Co. [ADDRESS] Raymond James & : ssociates, Inc. [ADDRESS] 7. Base representations of the City, it is our understanding that the City is proposing to issu- $ in aggregate principal amount of the Series 2011 Bonds for the purpos-: of refunding certain indebtedness, funding a reserve account and paying certain costs . nd expenses relating to the issuance of the Series 2011 Bonds. The Series 2011 Bo . s are expected to be repaid over a period of approximately years. At an interest ate of approximately %, total interest paid over the life of the Series 2011 Bon• . will be $ 8. Based on representations of the City, it is our understanding that the Series 2011 Bonds will be payable from the Pledged Funds and a covenant to budget and appropriate Non -Ad Valorem Revenues in the manner provided in the Bond Resolution. The Series 2011 Bonds carry an average annual debt service of approximately SCHEDULE III-2 SUBSTITUTED $ . Assuming the City pays debt service on the Series 2011 Bonds from the Non -Ad Valorem Revenues, such funds equal to $ will not be available to finance the other services of the City each year that the Series 2011 Bonds will be outstanding, which is approximately years. Notwithstanding the foregoing, we are not accountants or actuaries, nor are we engaged in the practice of law. Accordingly, while we believe the above -described calculations to be correct, we do not warrant them to be so. Yours very truly, RBC CAPITAL MARKETS, LC, as representative of the Underwriters By: Managing Director SCHEDULE III-3 SUBSTITUTED SCHEDULE A UNDERWRITER'S ESTIMATED EXPENSES (Per $1,000 of Bonds) Dalnet Wire Dalnet Wire Charges DTC Charges Order Monitor Day Loan CUSIP CUSIP Disclosure Fee Messengers/Travel/Miscellaneous Total SCHEDULE II1-4 SUBSTITUTED DISCLOSURE DISSEMINATION AGENT AGREEMENT This Disclosure Dissemination Agent Agreement (the "Disclosure Agreement"), dated as of 2011, is executed and delivered by the City of Miami, Florida (the "Issuer") and Digi Assurance Certification, L.L.C., as the initial exclusive Disclosure Dissemination Agent (the "Disclo:ure Dissemination Agent" or "DAC") for the benefit of the Holders (hereinafter defined) of the onds (hereinafter defined) and in order to provide certain continuing disclosure with respect to th • onds in accordance with Rule .15c2-12 of the United States Securities and Exchange Commissio ' under the Securities Exchange Act of 1934, as the same may be amended from time to time (the "Rul SECTION 1. Definitions. Capitalized terms not otherwise defined Agreement shall have the meaning assigned in the Rule or, to the extent not in co the Official Statement (hereinafter defined). The capitalized terms shall have th n this Disclosure ct with the Rule, in ollowing meanings: "Annual Report" means an Annual Report described in and co. istent with Section 3 of this Disclosure Agreement. "Annual Filing Date" means the date, set in Sections 2(a) a.: 2(f), by which the Annual Report is to be filed with the Repositories. "Annual Financial Information" means annual fi. •ncial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in S tion 3(a) of this Disclosure Agreement. "Audited Financial Statements" means the ancial statements (if any) of the Issuer for the prior fiscal year, certified by an independe auditor as prepared in accordance with generally accepted accounting principles or of wise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of is Disclosure Agreement. "Bonds" means the bonds as ted on the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto. "Certification" means Representative sta or Notice Even Audited Financ to the Repos document name of e a written certification of compliance signed by the Disclosure hat the Annual Report, Audited Financial Statements, Voluntary Report ice delivered to the Disclosure Dissemination Agent is the Annual Report, 1 Statements, Voluntary Report or Notice Event notice required to be submitted ries under this Disclosure Agreement. A Certification shall accompany each such ubmitted to the Disclosure Dissemination Agent by the Issuer and include the full Bonds and the 9-digit CUSIP numbers for all Bonds to which the document applies. sclosure Representative" means the Finance Director of the Issuer or his or her designee, or h other person as the Issuer shall designate in writing to the Disclosure Dissemination Agent from time to time as the person responsible for providing Information to the Disclosure Dissemination Agent. "Disclosure Dissemination Agent" means Digital Assurance Certification, L.L.C, acting in its achy— —Di-sz'Ibi-sure—Dissemination gent —hereunder, or any successor Disclosure Dissemination Agent designated in writing by the Issuer pursuant to Section 9 hereof. E -1 SUBSTITUTED "Holder" means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income tax purposes. "Information" means the Annual Financial Information, the Audited Financial Statements (if any) the Notice Event notices, and the Voluntary Reports. "Notice Event" means an event listed in Section 4(a) of this Disclosure Agreement. "MSRB" means the Municipal Securities Rulemaking Board established pursuant to Se on 15B(b)(1) of the Securities Exchange Act of 1934. "Official Statement" means that Official Statement prepared by the Issuer in connect n with the Bonds, as listed on Exhibit A. "Repository" means the MSRB. "Voluntary Report" means the information provided to the Disclosure Dissemination Agent by the Issuer pursuant to Section 7. SECTION 2. Provision of Annual Reports. (a) The Issuer shall provide, annually, an electrons copy of the Annual Report and Certification to the Disclosure Dissemination Agent, together wi a copy for the Trustee, not later than 30 days prior to the Annual Filing Date. Promptly upon re •ipt of an electronic copy of the Annual Report and the Certification, the Disclosure Dissemination :ent shall provide a copy Annual Report to each National Repository and the State Depository (i • any) not later than June 30 of each year, commencing with the fiscal year ending September 30 010. Such date and each anniversary thereof is the Annual Filing Date. The Annual Report may .e submitted as a single document or as separate documents comprising a package, and may cross- eference other information as provided in Section 3 of this Disclosure Agreement. (b) If on the fifteenth (15t- day prior to the Annual Filing Date, the Disclosure Dissemination Agent has not received copy of the Annual Report and Certification, the Disclosure Dissemination Agent shall contact the isclosure Representative by telephone and in writing (which may be by e-mail) to remind the Issuer .f its undertaking to provide the Annual Report pursuant to Section 2(a). Upon such reminder, t Disclosure Representative shall either (i) provide the Disclosure Dissemination Agent with an ectronic copy of the Annual Report and the Certification no later than two (2) business days prior to e Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the Issuer • ill not be able to file the Annual Report within the time required under this Disclosure Agreeme state the date by which the Annual Report for such year will be provided and instruct the Disclo re Dissemination_Agent_tfiat_a_Notice Event as described in Section 4(a)(12) has occurred and t+ immediately send a notice to each National Repository or the MSRB and the State Depository (i . ny) in substantially the form attached as Exhibit B. e Disclosure Dissemination Agent has not received an Annual —Report and Certif' ation by 12:00 noon on the first business day following the Annual Filing Date for the Annual Re..rt, a Notice Event described in Section 4(a)(12) shall have occurred and the Issuer irrevocably directs 2 SUBSTITUTED the Disclosure Dissemination Agent to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. (d) If Audited Financial Statements of the Issuer are prepared but not available prior to the Annual Filing Date, the Issuer shall, when the Audited Financial Statements are available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certificate, for filing with each National Repository and the State Depository (if any). (e) The Disclosure Dissemination Agent shall: (i) determine the name and address of each Repository each year p or to the Annual Filing Date; (ii) upon receipt, promptly file each Annual Report received and Section 2(a) with each National Repository, and the State Depository (if any); (iii) upon receipt, promptly file each Audited Financial atement received under Section 2(d) with each National Repository, and the ate Depository (if any); (iv) upon receipt, promptly file the text of each . sclosure to be made with each National Repository or the MSRB and the St. e Depository (if any) together with a completed copy of the MSRB Material 'vent Notice Cover Sheet in the form attached as Exhibit C, describing the e nt by checking the box indicated below when filing pursuant to the Section . this Disclosure Agreement indicated: 1. "Principal and interes payment delinquencies," pursuant to Sections 4(c) and 4(a)(1); 2. "Non -Payment - lated defaults," pursuant to Sections 4(c) and 4(a)(2); 3. "Unsched d draws on debt service reserves reflecting financial difficult s," pursuant to Sections 4(c) and 4(a)(3); 4. "U cheduled draws on credit enhancements reflecting financial ficulties," pursuant to Sections 4(c) and 4(a)(4); "Substitution of credit or liquidity providers, or their failure to perform," pursuant to Sections 4(c) and 4(a)(5); "Adverse tax opinions or events affecting the tax-exempt status of the security," pursuant to Sections 4(c) and 4(a)(6); 7. "Modifications to rights of securities holders," pursuant to Sections 4(c) and 4(a)(7); 8. "Bond calls," pursuant to Sections 4(c) and 4(a)(8); 9. "Defeasances," pursuant to Sections 4(c) and 4(a)(9); (v) SUBSTITUTED 10. "Release, substitution, or sale of property securing repayment of the securities," pursuant to Sections 4(c) and 4(a)(10); 11. "Ratings changes," pursuant to Sections 4(c) and 4(a)(11); 12. "Failure to provide annual financial information as required," pu to Section 2(b)(ii) or Section 2(c), together with a completed Exhibit B to this Disclosure Agreement; 13. "Other material event notice (specify)," pursuant to Agreement, together with the summary description Disclosure Representative. ant py of Seion 7 of this ovided by the provide the Issuer evidence of the filings of each of the . +ove when made, which shall be by means of the DAC system, for so lon• as DAC is the Disclosure Dissemination Agent under this Disclosure Agree ent. (f) The Issuer may adjust the Annual Filing Date upon cr .nge of its fiscal year by providing written notice of such change and the new Annual Filing Date to e Disclosure Dissemination Agent, Trustee (if any) and the Repositories, provided that the period tween the existing Annual Filing Date and new Annual Filing Date shall not exceed one year. SECTION 3. Content of Annual Reports. (a) Each Annual Report shall contai Annual Financial Information, with respect to the Issuer including the information in the tables pro ded in "APPENDIX A" to the Official Statement. (b) Audited Financial State accounting principles ("GAAP") as desc Report. If such Audited Financial S financial statements, prepared in ac Financial Statements (if any) will Any or all of the it including official stateme defined by the Rule), Securities and Exch statement, it must incorporated by nts prepared in accordance with generally accepted ed in the Official Statement will be included in the Annual tements are unavailable at the Annual Filing Date, unaudited rdance with GAAP will be included in the Annual Report. Audited provided pursuant to Section 2(d). listed above may be included by specific reference from other documents, s of debt issues with respect to which the Issuer is an "obligated person" (as ich have been previously filed with each of the National Repositories or the ge Commission. If the document incorporated by reference is a final official e available from the MSRB. The Issuer will clearly identify each such document so eterence. SE• ON 4. Reporting of Notice Events. (a) The occurrence of any of the following events, if material, with respect to the Bonds co itutes a Notice Event: Principal and interest payment delinquencies; 2. Non-payment related defaults; 4 SUBSTITUTED 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; 5.. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of Bond holders; 8. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayme of the Bonds; 11. Rating changes on the Bonds; and 12. Failure to provide annual financial information a equired. The Issuer shall promptly notify the Disclosure Disseminate+ Agent in writing upon the occurrence of a Notice Event. Such notice shall instruct the Disclosure ►issemination Agent to report the occurrence pursuant to subsection (c). Such notice shall be accompied with the text of the disclosure that the Issuer desires to make, the written authorization of the ssuer for the Disclosure Dissemination Agent to disseminate such information, and the date the Is er desires for the Disclosure Dissemination Agent to disseminate the information. (b) The Disclosure Dissemin. on Agent is under no obligation to notify the Issuer or the Disclosure Representative of an event at may constitute a Notice Event. In the event the Disclosure Dissemination Agent so notifies the P sclosure Representative, the Disclosure Representative will within five business days of receipt of su notice, instruct the Disclosure Dissemination Agent that (i) a Notice Event has not occurred and no ing is to be made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to re t rt the occurrence pursuant to subsection (c) of this Section 4, together with the text of the disclosure t'at the Issuer desires to make, the written authorization of the Issuer for the Disclosure DisseminatioAgent to disseminate such information, and the date the Issuer desires for the Disclosure Dissemin, on Agent to disseminate the information. (c) the Disclosure Dissemination Agent has been instructed by the Issuer as prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall promptly file a notice of such occurrence with the State Depository (if any) and (i) e. National Repository, or (ii) the MSRB. SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure Ina i011 Agent, Inc ding -but -not -limited -to -Annual -Reports, -documents -incorporated by reference o the Annual Reports, Audited Financial Statements, notices of Notice Events, and Voluntary Reports filed pursuant to Section 7(a), the Issuer shall indicate the full name of the Bonds and the 9-digit CUSIP numbers for the Bonds as to which the provided information relates. 5 SUBSTITUTED SECTION 6. Additional Disclosure Obligations. The Issuer acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of 1934,.may apply to the Issuer, and that the failure of the Disclosure Dissemination Agent to so advise the Issuer shall not constitute a breach by the Disclosure Dissemination Agent of any of its duties and responsibilities under this Disclosure Agreement. The Issuer acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution, of the mechanical tasks of disseminating information as described in th Disclosure Agreement. SECTION 7. Voluntary Reports. (a) The Issuer may instruct the Disclosure Dissemination Agent to file inform. ion with the Repositories, from time to time pursuant to a Certification of the Disclosure epresentative accompanying such information (a "Voluntary Report"). (b) Nothing in this Disclosure Agreement shall be deemed to • event the Issuer from disseminating any other information through the Disclosure Dissemination gent using the means of dissemination set forth in this Disclosure Agreement or including any oth information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event n. ce, in addition to that required by this Disclosure Agreement. If the Issuer chooses to include any i• ormation in any Annual Report, Annual Financial Statement, Voluntary Report or Notice Event otice in addition to that which is specifically required by this Disclosure Agreement, the Issue shall have no obligation under this Disclosure Agreement to update such information or includ it in any future Annual Report, Annual Financial Statement, Voluntary Report or Notice Event notic SECTION 8. Termination of Re.ortin• O. iation. The obligations of the Issuer and the Disclosure Dissemination Agent under this Disclo re Agreement shall terminate with respect to the Bonds upon the legal defeasance, prior redemptio • or payment in full of all of the Bonds, when the Issuer is no longer an obligated person with resp ct to the Bonds, or upon delivery by the Disclosure Representative to the Disclosure Dissemin , ion Agent of an opinion of nationally recognized bond counsel to the effect that continuing disclos re is no longer required. SECTION 9. Disclosure •issemination Agent. The Issuer has appointed Digital Assurance Certification, L.L.C. as the initi. exclusive Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer may, u•.n thirty days written notice to the Disclosure Dissemination Agent and the Trustee, replace or appoi r a successor Disclosure Dissemination Agent. Upon termination of DAC's services as Disclosure Dis ' mination Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint a successor Dis osure Dissemination Agent or, alternately, agrees to assume all responsibilities of Disclosure Dissem'. ation Agent under this Disclosure Agreement for the benefit of the Holders of the Bonds. Notwithst. ding any replacement or appointment of a successor, the Issuer shall remain liable until payment i ull for anyand all sums owed and payable to the Disclosure Dissemination Agent. The - Disclosure D' emination Agent may resign at any time by providing thirty days' prior written notice to the Issuer SECTION 10. Remedies in Event of Default. In the event of a failure of the Issuer or the Dis • osure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Holders' hts to enforce the provisions of this Agreement shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the parties' obligation under this 6 SUBSTITUTED Disclosure Agreement. Any failure by a party to perform in accordance with this Disclosure Agreement shall not constitute a default on the Bonds or under any other document relating to the Bonds, and all rights and remedies shall be limited to those expressly stated herein. SECTION 11. Duties, Immunities and Liabilities of Disclosure Dissemination Agent. (a) The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent's obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Issuer has provided such information to the Disclosure Dissemination Agent as required by this Disclosu Agreement. The Disclosure Dissemination Agent shall have no duty with respect to the content of .ny disclosures or notice made pursuant to the terms hereof. The Disclosure Dissemination Agent shhave no duty or obligation to review or verify any information or any other information, disclosures %r notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity f. the Issuer, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent all have no responsibility for the Issuer's failure to report to the Disclosure Dissemination Agent a notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent s . 1 have no duty to determine, or liability for failing to determine, whether the Issuer has complies with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon rtifications of the Issuer at all times. TO THE EXTENT PERMITTED BY LAW, THE ISSUER AGRE. TO INDEMNIFY AND SAVE THE DISCLOSURE DISSEMINATION AGENT AND ITS RESP - TIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, HARMLESS AGAINST ANY LOSS, ' PENSE AND LIABILITIES WHICH THEY MAY INCUR ARISING OUT OF OR IN THE EXE ' ISE OR PERFORMANCE OF THEIR POWERS AND DUTIES HEREUNDER, INCLUDING TH COSTS AND EXPENSES (INCLUDING ATTORNEYS FEES) OF DEFENDING AGAINST ANY LAIM OF LIABILITY, BUT EXCLUDING LIABILITIES DUE TO THE DISCLOSURE DISSEMIN " ION AGENT'S NEGLIGENCE OR WILLFUL MISCONDUCT. The obligations of the Issuer under t Section shall survive resignation or removal of the Disclosure Dissemination Agent and defeasan. , redemption or payment of the Bonds. (b) The Disclosure Dissemii : ion Agent may, from time to time, consult with legal counsel (either in-house or external) of its o choosing in the event of any disagreement or controversy, or question or doubt as to the construc 'on of any of the provisions hereof or its respective duties hereunder, and the Disclosure Disseminatio • gent shall not incur any liability and shall be fully protected in acting in good faith upon the advic• of such legal counsel. The fees and expenses of such counsel shall be payable by the Issuer. SECTION 12. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issu and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provisio - of this Disclosure Agreement may be waived, if such amendment or waiver is supported by. . opinion of counsel expert in federal securities laws acceptable to both the Issuer and the Disclosure D. semination Agent to the effect that such amendment or waiver does not materially impair the intere of Holders of the Bonds and would not, in and of itself, cause the undertakings herein to violate e Rule if such amendment or waiver had been effective on the date hereof but taking into acco t any subsequent change in or official interpretation of the Rule; provided neither the Issuer nor 7 SUBSTITUTED the Disclosure Dissemination Agent shall be obligated to agree to any amendment modifying their respective duties or obligations without their consent thereto. Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to a interpretations of the provisions of the Rule as announced by the Securities and Exchange Comm ion from time to time by giving not less than 20 days written notice of the intent to do so together wit a copy of the proposed amendment to the Issuer. No such amendment shall become effective if the I : er shall, within 10 days following the giving of such notice, send a notice to the Disclosure Dissemina on Agent in writing that it objects to such amendment. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solel to the benefit of the Issuer, the Trustee of the Bonds, the Disclosure Dissemination Agent, the Under hers, and the Holders from time to time of the Bonds, and shall create no rights in any other person or ntity. SECTION 14. Governing Law. This Disclosure Agreemen the State of New York (other than with respect to conflicts of laws). 1 be governed by the laws of SECTION 15. Counterparts. This Disclosure Agr • - ent may be executed in several counterparts, each of which shall be an original and all of whishall constitute but one and the same instrument. [Remainder of page ' tentionally left blank.] 8 SUBSTITUTED The Disclosure Dissemination Agent and the Issuer have caused this Continuing Disclosure Agreement to be executed, on the date first written above, by their respective officers duly authorized. DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Disclosure Dissemination Agent By: Name: Title: THE CITY OF MIAMI, FLORID as Issuer By: Name: To ' E. Crapp, Jr Title: ty Manager 9 Name of Issuer: Obligated Person(s): Name of Bond Issue: SUBSTITUTED EXHIBIT A NAME AND CUSIP. NUMBERS OF BONDS City of Miami, Florida City of Miami, Florida Special Obligation Non -Ad Valorem Refunding Bonds Series 2011A; and Special Obligation Non -Ad Valorem Refunding Bonds Series 2011B Date of Issuance: , 2011 Date of Official Statement: , 2011 Maturity Initial CUSIP (February 1) Principal Amount Interest Rate Yield Price Number 10 SUBSTITUTED EXHIBIT B NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Obligated Person(s): Name of Bond Issue: City of Miami, Florida City of Miami, Florida Special Obligation Non -Ad Valorem Refunding Bonds Series 2011A; and Special Obligation Non -Ad Valorem Refunding Bonds Series 2011B Date of Issuance: , 2011 NOTICE IS HEREBY GIVEN that the Issuer has not provided a Annual Report with respect to the above -named Bonds as required by the Disclosure Agreement, ated as of between the Issuer and Digital Assurance Certification, L.L.C., as sclosure Dissemination Agent. The Issuer has notified the Disclosure Dissemination Agent that it an cipates that the Annual Report will be filed by Dated: cc: Issuer Obligated Person D. tal Assurance Certification, L.L.C., as Disclosure ssemination Agent, on behalf of the Issuer 11 SUBSTITUTED EXHIBIT C EVENT NOTICE COVER SHEET This cover sheet and material event notice will be sent to all Nationally Recognized Municipal Securitie Information Repositories, and any State Information Depository, if applicable, pursuant to Securities . d Exchange Commission Rule 15c2-12(b)(5)(i)(C) and (D). Issuer's and/or Other Obligated Person's Name: Issuer's Six -Digit CUSIP Number: or Nine -Digit CUSIP Number(s) of the bonds to which this material event .tice relates: Number of pages of attached: Description of Material Event Notice (Check One): 1. _Principal and interest paymentdelinqu Gies 2. _Non -Payment related defaults 3. _Unscheduled draws on debt servic reserves reflecting financial difficulties 4. _Unscheduled draws on credit e . ancements reflecting financial difficulties 5. _Substitution of credit or liqui. ty providers, or their failure to perform 6. _Adverse tax opinions or ev nts affecting the tax-exempt status of the security 7. Modifications to rights • " securities holders 8. Bond calls 9. Defeasances 10. Release, substit ion, or sale of property securing repayment of the securities 11. _Rating chan 12. Failure to rovide annual financial information as required 13. Other erial event notice (specify) I hereby represent that am authorized by the issuer or its agent to distribute this information publicly: Signature: Name: Title: Employer •igital Assurance Certification, L.L.C. Addres City, state, Zip Code: V ce Telephone Number: lease print the material event notice attached to this cover sheet in 10-point type or larger. The cover sheet and notice may be faxed to the MSRB at (703) 683-1930 or sent to CDINet, Municipal Securities Rulemaking Board, 1900 Duke Street, Suite 600, Alexandria, VA 22314. Contact the MSRB at (703) 797- 6600 with questions regarding this form or the dissemination of this notice. 12