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HomeMy WebLinkAbout2001 04 09 Regular F NEW Bond Resolution 2001-10 ~;.,., , COMMISSION AGENDA ITEM F CONSENT INFORMATIONAL PUBLIC HEARING REGULAR XX April 9,2001 Meeting MGR 0~EPT ~ A IlthorizMion REQUEST: The City Manager requesting the Commission to: . Adopt Bond Resolution #200 I-I 0 authorizing the issue by the City of a Water and Sewer Refunding Revenue Bond Series 2001 not to exceed $22,500,000, and . Authorize the City Manager subject to the provisions of said resolution to award the sale of the bonds to: . Hanifen, Imhoff Inc. as the lead underwriter (60%) with Gardnyr Michael and William Hough as co-managers (20% each), if the refunding of the Water and Sewer Refunding Revenue bonds 1991 and 1992 occur concurrently. . Hanifen, Imhoff Inc. as the lead underwriter (60%) with Gardnyr Michael and William Hough as co-managers (20% each) for the refunding of the Water and Sewer Refunding Revenue bonds 1991 and William R. Hough & Co. as the lead underwriter (60%) with Gardnyr Michael and Hanifen Imhoff as co-managers (20% each) for the refunding of the Water and Sewer Refunding Revenue bonds 1992, if the refunding occurs at different times. PURPOSE: The purpose of this Agenda Item is to approve a bond resolution related to the Water and Sewer Refunding Revenue Bond Series 200 I in one or more series and authorize the City Manager to award the sale of the bonds to underwriters. CONSIDERATIONS: At the February 12,2001 commission meeting the City Commission approved Regular Item D which authorized the City Manager to refinance, as soon as possible, the Water and Sewer Refunding Revenue Bonds 1991 and refinance, when the percent savings reaches 6% or more, the Water and Sewer Refunding Revenue Bonds 1992. At the February 12,2001 commission ~ ': meeting the City Commission also approved the underwriter arrangement for the Refunding Issue. ATTACHMENTS: 1. Resolution No. 2001-10 2. Preliminary Official Statement 3. February 12,2001 Agenda Item D RECOMMENDATION: Approval of Resolution No. 2001-10 and authorize the City Manager to award the sale of the bonds to the underwriters as described above. .~ "'" "!f .0" COMMISSION AGENDA ITEM D REGULAR XX CONSENT INFORMATIONAL Fehm~ry I?, 'lOOI Meeting MGR IDEPT AllthorizMion REQ UEST: The City Manager requests that the City Commission authorize the City Manager to: I) Issue, as soon as possible, no more that $2.5 million in bonds for the Tuscawilla Lighting and Beautification District Special Assessment District and, 2) Refinance, as soon as possible, the Water and Sewer Revenue Bonds Series 1991 and, 3) Refinance, when the percent savings reaches 6% or more, the Water and Sewer Revenue Bonds Series 1992 PURPOSE: Authorization to move forward now with financing will allow the City and its Citizens to take advantage of the current interest rates by: l) obtaining permanent funding for the TLBD construction and, 2) the refinancing of the Water and Sewer System Series 1991 debt. Authorization to move forward with refinancing for the Water and Sewer System Series 1992 debt when the percent savings reaches 6% or more will allow the City and its Citizens to take advantage of the favorable interest rates at that time as evidenced by the percent savings criteria. CONSIDERATIONS: TLBD Financing . Originally, the TLBD financing was going to consist of a 5 year bond anticipation note (BAN), and then bonds for the remaining period to be issued at a later point in time. However, due to the decrease in interest rates, it now appears favorable to forego the BAN and issue long bonds instead. . Two potential options exist for the TLBD Financing - we can either fund a "Cash Reserve Account" or obtain a "Surety Bond" for the reserve. The Surety Bond would be the more favorable choice; however, we may not be able to obtain one. Therefore; two TLBD scenarios are presented for the Commission's review: . TLBD Long Term Bonds-Cash For Reserve Account ~ Par Amount of Bonds $2,445,000. ~ Level Payments of approximately $160,000 per year through 2029. ~ True Interest Cost of approximately 5.20%. :'; . TLBD Long Term Bonds-Surety Bond for Reserve Account )> Par Amount of Bonds $2,275,000. )> Level Payments of approximately $152,000 per year through 2029. )> True Interest Cost of approximately 5.20%. Water and Sewer Revenue Bonds - Series 1991 . The call date of the Series 1991 W &S bonds is not until July 2001; however, through the use of a "forward refunding" we can proceed now with the refinancing and obtain a present value savings of $604,000 or a percent savings of 10.45%. This equates to an annual savings of $45,368. . Par Amount of Bonds $5,780,000. . Interest rates on Series 1991 bonds is 6.3%-6.75% -- Interest rates on the refinancing would be 3.87%-5.0%. . Maturity date not extended. Water and Sewer Revenue Bonds - Series 1992 . The call date of the Series 1992 W &S bonds is not until January 2002. This issue could be refinanced now through the use of a forward refunding; however, the present value savings of $665,691 is only a percent savings of 4.94%. This equates to an annual savings of$35,161. Because this refunding is so far out, the cost of the forward premium draws down the potential interest savings. . Par amount of bonds $13,475,000. . Interest rates on Series 1992 bonds is 5.4%-6. 1 25%--Interest rates on the refinancing would be 3.97%-5.25%. . Maturity date not extended. FUNDING: Costs of issuance paid from bond proceeds. Debt service paid from assessments and Water and Sewer System Revenues, respectively. See attachment for sources and uses. RECOMMENDATION: TLBD Financing It is recommended that the Commission authorize the City Manager to proceed with the TLBD financing using a team of: . Gardnyr Michael (senior manager), Hanifen Imhoff and William R. Hough & Co. . Allocation will be 60% (senior manager) and 20% for each co-manager. Water and Sewer Refinancing - Series 1991 and 1992 Note that if the W&S 1991 and 1992 refinancings are able to go at the same time (ie. the 1992 refinancing meets the threshold of the 6% or greater criteria) then we would be able to issue one Official Statement for both instead of two separate ones. If this is the case then we would only need only one team as recommended below in the Series 1991 and 1992 option. Hanifen Imhoff is recommended as the senior manager for both issues if they go together at the same time. If this is the case then William R. Hough & Co. would be up next for any future issue as senior manager. ; . Series 1991 and 1992 It is recommended that the Commission authorize the City Manager to proceed with the Water and Sewer refinancing using a team of: . Hanifen Imhoff (senior manager), Gardnyr Michael and William R. Hough & Co.. Allocation will be 60% (senior manager) and 20% for each co-manager. Series 1991 Alone It is recommended that the Commission authorize the City Manager to proceed with the Water and Sewer 1991 refinancing using a team of: . Hanifen Imhoff (senior manager), Gardnyr Michael and William R. Hough & Co.. Allocation will be 60% (senior manager) and 20% for each co-manager. Series 1992 Alone It is recommended that the Commission authorize the City Manager to proceed with the Water and Sewer 1992 refinancing using a team of: . William R. Hough & Co, (senior manager), Hanifen Imhoff and Gardnyr Michael. Allocation will be 60% (senior manager) and 20% for each co-manager. ATTACHMENTS: Book - TLBD Financing Alternatives and W &S Refunding Opportunities COMMISSION ACTION: RESOLUTION NO. 2001~ A RESOLUTION OF THE CITY OF WINlER SPRINGS, FLORIDA SUPPLEMENTING CITY RESOLUTION 665 AS PREVIOUSLY AMENDED AND SUPPLEMENTED BY AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $ WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2001, OF THE CITY OF WINTER SPRINGS, FLORIDA TO BE APPLIED TO PROVIDE FUNDS TO REFUND THE CITY'S OUTSTANDING WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 1991 OTHER THAN SUCH SERIES 1991 BOND MATURING OCTOBER 1. 2001. AND THE CITY'S OUTSTANDING WATER AND REFUNDING REVENUE BONDS, SERIES 1992; PLEDGING ON A PARITY WITH TIlE LIEN THEREON OF THE CITY'S OUTSTANDING WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2000, THE NET REVENUES OF THE COMBINED WATER AND SEWER SYSTEM OF THE CITY FOR THE PAYMENT OF SAID BONDS; DELEGATING TO THE {CITY MANAGER J SUBJECT TO COMPLIANCE WITH THE APPLICABLE PROVISION HEREOF;,!, THE AUTHORITY TO AWARD THE SALE OF SUCH BONDS BY EXECUTING AND DELIVERING TO THE UNDERWRITERS OF SUCH BONDS A BOND PURCHASE CONTRACT; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS; MAKING OTHER COVENANTS AND AGREEMENfS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY OF WINTER SPRINGS, FLORIDA AS FOLLOWS: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the Constitution of the State of Florida; Chapter 166, Part II, Florida Statutes, as amended and supplemented, Chapter 72-718, Laws of Florida, Special Act of 1972, being the Charter of the City of Winter Springs, Florida as amended and supplemented, Section 19(N) of City Resolution No. 665, as amended and supplemented (the "Original Resolution") and other applicable provisions of law. SECTION 2. DEFINITIONS. All terms used herein that are defined in the Origiml Resolution are used within the same meaning herein unless the context otherwise requires or they are expressly given a different meaning. In addition, the following terms used herein shall have the fonowing meaning. Words importing singular number shall ioclude the plural number in each case and vice versa, and words importing ~rsons shall include firms and corporations. (A) "ACCRETED V ALUE" means as of any date of calculation the amount owed on a Capital Appreciation Bond prior to maturity or at maturity taking into consideration the initial offering price plus accrued interest compounded semiannually on April 1 and October 1 of each year, with interest commencing the date of delivery of the Capital Appreciation Bonds. The Accreted Value for a day of a month other than an April 1 or October 1 shan be calculated by straight line interpolation using for purposes of such calculation an assumed period of six months of thirty day months intervening between the then next succeeding April 1 or October 1, as the case may be. (B) "ACQUIRED OBLIGATIONS" shall mean and include any of the following securities, if an to the extent the same are at the time legal for investment of funds of the Issuer: 0R378039;1 (1) Direct Obligations (as hereinafter defined) provided such obligations are non-callable and (2) CATS, STRPS, Refcorp interest strips, TIGRS or defeased municipal bonds rated AAA by S&P or Aaa by Moody's (or any combination of the foregoing).] (C) "ADDITIONAL PARITY OBLIGATIONS" shall mean additional obligations issued in compliance with the terms, conditions and limitations contained in the Original Resolution and which (i) shall have a lien on the Net Revenues equal to that of the Series 2001 Bonds and the Parity Bonds,(ii) shall be payable from the Net Revenues on a parity with the Series 2001 Bonds and the Parity Bonds, and (iii) rank equally in all other respects with the Series 2001 Bonds and the Parity Bonds. (D) "AGREEMENT" or "ESCROW DEPOSIT AGREEMENT" shall mean that certain Escrow Deposit Agreement by and between the Issuer and a trust company or bank with trust powers selected by subsequent resolution of the Issuer for the purpose of providing for the payment of the Refunded Bonds hereinafter mentioned. (E) "AUTHORIZED DENOMINATIONS" shall mean $5,000 or any integral muhiple thereof or maturity amounts of $5,000 as to Capital Appreciation Bonds or any integral multiple thereof. (F) "BOND INSURANCE POLICY" shan mean as to the Series 2001 Bonds the municipal bond new issue insurance policy issued by the Bond Insurer that guarantees the payment of principal and interest on the Series 2001 Bonds. (G) "BOND INSURER" shall mean as to the Series 2001 Bonds, or any successor thereto. (H) "BONDS" shall meanthe Parity Bonds, the Series 2001 Bonds issued hereunder, together with any Additional Parity Obligations hereafter issued under the terms, conditions and limitations contained in the Original Resolution. (I) "BOND YEAR" shall mean as to the Series 2001 Bonds the Fiscal Year of the Issuer. (1) "CONTINUING DISCLOSURE CERTIFICATE" shall mean that certain certificate related to the Series 2001 Bonds to be executed by the Issuer prior to the time the Issuer delivers the Series 2001 Bonds to the participating underwriter or underwriters, as it may' be amended from time to time in accordance with the terms thereof, whereby the Issuer undertakes to comply with the secondary disclosure requirements of the Rule. (K) "INVESTMENT SECURITIES" shall mean in regard to investments pursuant to this Resolution, any investment permitted under applicable State and federal law including units of participation in the Local Government Surplus Trust Fund established pursuant to Part IV, Chapter 218, Florida Statutes, and [TO BE PROVIDED] 0R378039;1 2 (L) "PARITY BONDS" shall mean the City's Outstanding Water and Sewer Refunding Revenue Bonds, Series 2000 (the 2001 maturity of theCity's Water and Sewer Refurning Revenue Bonds. Series 1991) and the City's Outstanding Water and Sewer Refunding Revenue Bonds, Series 1992 until such Series 1992 bonds have been defeased. (M) "PERSON" shall mean an individual, a corporation, a partnership, an association, ajoint stock company, a trust, any unincorporated organization or governmental entity. (N) "REFUNDED BONDS" shall mean the oU5tanding bonds of the City of Winter Springs, Florida, Water and Sewer Refunding Revenue Bonds, Series 1991 other than such Series 1991 bond maturing October 1. 2001 ("Series 1991 Refunded Bonds") and the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 1992 ("Series 1992 Refunded Bonds "). (0) "RESERVE REQUIREMENT" shall mean the lesser of (i) the Maximum Bond Service Requirement for the Series 2001 Bonds, (ii) 125% oftre Average Annual Bond Service Requirement for the Series 2001 Bonds, or (iii) 10% of the proceeds of the Series 2001 Bonds. (P) "RULE" shall mean Rule 15c2-12 of the United States Securities and Exchange Commission, as amended. (Q) "SERIES 2001 BONDS" shall mean the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 2001, authorized pursuant to this Resolution, Such Series 2001 Bond may be issued in separate Series to effect the refurning of each Series of the Refunded Bonds if the issues pursuant to the Resolution or a Supplemental Resolution determines the same to be in its best interest. SECTION 3. FINDINGS. It is hereby ascertained, determined and declared: (A) The Issuer now owns, operates and maintains the System and derives Revenues from rates, fees rentals and other charges made and collected for the services of the System. (B) The Issuer deems it necessary, beneficial and in its best interest to issue the Series 2001 Bonds to refund the Refunded Bonds. (C) The principal of and interest on the Series 2001 Bonds and all other required payments hereunder shall be payable solely from the Net Revenues as provided herein. The Issuer shall never be required to levy ad valorem taxes on any real or personal property therein to pay the principal of and interest on the Series 2001 Bonds herein authorized or to make any other payments provided for herein. The Series 2001 Bonds shall not constitute a lien upon any properties owned by or located within the boundaries of the Issuer. (D) The Net Revenues are estimated to be sufficient to pay all principal of and interest on the Series 2001 Bonds and the Parity Bonds, as the same become due, and to make all other required payments required by this Resolution and the resolutions of the Issuer pursuant to which the Parity Bonds were issued including the Original Resolution. 0R378039;1 3 (E) The Net Revenues are not pledged or encumbered in any manner, except for the payment of the princiIXil and interest on the Parity Bonds and the other deposits provided for in the resolutions of the Issuer pursuant to which the Parity Bonds were issued including the Original Resolution and the Refunded Bonds which lien of the Refunded Bonds on the Net Revenues pledged thereto shall be released simultaneously with the issuance of the Series 2001 Bonds. (F) The Original Resolution, in Section 19(N) thereof, provides for the issuance of Additional Parity Obligations under the terms, limitations and conditions provided therein. The terms, limitations and conditions of said Section 19(N) have been complied with. (G) The Series 2001 Bonds herein authorized shall be on a parity and rank equally, as to lien on and source and security for payment from the Net Revenues and in all other respects except as provided in Sections -lQ and 2.8. hereof, with the Parity Bonds. SECTION 4. AUTHORIZA TION OF REFUNDING OF REFUNDED BONDS. There is hereby authorized the refunding of the Refunded Bonds in the manner provided herein. SECTION 5. THIS RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Series 2001 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 and contract between the Issuer and such owners. The covenants and agreements herein set forth to be performed by the Issuer shall be for the equal benefit, protection and security of the legal owners of any and all of the Series 2001 Bonds, all of which shall be of equal rank without preference, priority or distinction of any of the Series 2001 Bonds over any other thereof, except as expressly provided therein and herein. SECTION 6. AUTHORIZATION OF SERIES 2001 BONDS. Subject and pursuant to the provisions hereof, obligations of the Issuerto be known as "Water and Sewer Revenue Refunding Bonds, Series 2001", are authorized to be issued in the original aggregate principal amount of not exceeding $ SECTION 7. DESCRIPTION OF SERIES 2001 BONDS. The Series 2001 Bonds shall be issued in fully registered form as Capital Appreciation Bonds and Current Interest Bonds; shall be dated; shall be numbered consecutively from one upward in order of maturity preceded by the letter "R" or such other lettering as the Issuer shall approve; shall be issued in Authorized Denomination;; shall bear interest or yields at such rate or rates or yields not exceeding the maximum rate allowed by State law, the actual rate or rates or yields to be approved by the governing body of the Issuer prior to or upon the sale of the Series 2001 Bonds; such interest to be payable semiannually at such times as are fixed by supplemental resolution of the Issuer as to the Current Interest Bonds and shall mature annually on such date in such years and in such amounts as will be fixed by supplemental resolution of the Issuer prior to or upon the sale of the Series 2001 Bonds; and may be issued with variable, adjustable, convertible or other rates and with original issue discounts; all as the Issuer shall provide by supplemental resolution. Each Series 2001 Current Interest Bond shall bear interest from the interest payment date next preceding the date on which it is authenticated, unless authenticated on an interest payment date, in which case it shall bear interest from such interest payment date, or, unless authenticated prior to the first interest payment date, in which case it shall bear interest from its date; provided, however, that if at the time of 0R378039;1 4 authentication payment of any interest which is due and payable has not been made, such Series 2001 Bond shall bear interest from the date to which interest shall have been paid. The Capital Appreciation Bonds shall bear interest only at maturity or upon redemption prior to maturity in the amount determined by reference to the Accreted Value. The principal of, the Accreted Value, the interest and redemption premium, if any, on the Series 2001 Bonds shall be payable in any coin or currency of the United States of America which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The interest on the Series 2001 Current Interest Bonds shall be payable by the Paying Agent on each interest payment date to the person appearing on the registration books of the Issuer hereinafter provided for as the registered Owner thereof on the 15th day of the calendar month innnediately preceding the applicable interest payment date, by check or draft mailed to such registered Owner at his address as it appears on such registration books or by wire transfer to Owners of $1,000,000 or more in principal amount of the Series 2001 Bonds. Payment of the principal of all Series 2001 Current Interest Bonds and the Accreted Value with respect to the Series 2001 Capital Appreciation Bonds shall be made upon the presentation and surrender of such Series 2001 Bonds as the same shall become due and payable. Notwithstanding any other provisions of this section, the Issuer may, at its option, priorto the date of issuance of tre Series 2001 Bonds, elect to use an immobilization system or book-entry system with respect to issuance of such Series 2001 Bonds. As long as any Series 2001 Bonds are outstanding in book-entry form the provisions of this Resolution inconsistent with such system of book-entry registration shaH not be applicable to such Series 2001 Bonds. The details of any ahernative system of issuance, as described in this paragraph, shall be set forth in a resolution of the Issuer duly adopted prior to the delivery of the Series 2001 Bonds. SECTION 8. EXECUTION OF SERIES 2001 BONDS. The Series 2001 Bonds shall be signed by, or bear the facsimile signature of the Mayor or Deputy Mayor of the City and shall be signed by, or bear the facsimile signature of the Clerk or any Deputy City Clerk and a facsimile of the official seal of the Issuer shall be imprinted on the Series 2001 Bonds. In case any officer whose signature or a facsimile of whose signature shall appear on any Series 2001 Bonds shall cease to be such offi:er before the delivery of soch Series 2001 Bonds, such signature or such facsimile shall nevertheless be vaIn and sufficient for all purposes the same as if he had remained in office until such delivery, and also any Series 2001 Bond may bear the facsimile signature of or may be signed by such persons who, as at the actual time of the execution of such Series 2001 Bond, shall be the proper officers to sign such Series 2001 Bonds although at the date of such Series 2001 Bond such persons may not have been such officers. SECTION 9. AUTHENTICATION OF SERIES 2001 BONDS. Only such of tre Series 2001 Bonds as shall have endorsed thereon a certificate of authentication duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security under this Resolution and the Original Resolution. No Series 2001 Bond shaH be valid or obligatory for any purpose unless and until such certificates of authentication shall have been duly executed by the Registrar, and such certificate of the Registrar upon any such Series 2001 Bonds shaH be conclusive evidence that such Series 2001 Bonds has been duly authenticated and delivered under this Resolution. The Registrar's certificate of authenti:ation 0R378039;1 5 on any Series 2001 Bond shall be deemed to have been duly executed if signed by an autoorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Series 2001 Bonds that may be issued hereunder at anyone time. SECTION 10. EXCHANGE OF SERIES 2001 BONDS. Any Series 2001 Bond, upon surrender thereof at the office of the Registrar, together with an assignment duly executed by the Owner or his attorney or legal representative in such fonn shall be satisfactory to the Registrar, may, at the option of the owner, be exchanged for a Series 2001 Bond in Authorized Denominations in an aggregate principal amount or Accreted Value of Series 2001 Bonds equal to the principal amount or Accreted Value of the Series 2001 Bonds or Series 2001 Bonds so surrendered. The Registrar shall make provisions for the exchange of Series 2001 Bonds at the principal corporate trust office of the Registrar. The Issuer and Registrar shall not be obligated to make any exchange of Series 2001 Bonds during the fifteen (15) days next preceding an interest payment date or in the case of any proposed redemption of Series 2001 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 2001 Bonds. SECTION 11. NEGOTIABILITY, REGISTRATION AND TRANSFER OF SERIES 2001 BONDS. The Registrar shall keep books for the registration of and for the registration of transfers of Series 2001 Bonds as provided in this Resolution. The transfer of any Series 2001 Bonds may be registered only upon such books upon surrender thereof to the Registrar together with an assignment duly executed by the owner or his attorney or legal representative in such form as shall be satisfactory to the Registrar. Upon any such registration of transfer the Issuer shall execute and the Registrar shall authenticate and deliver in exchange for such Series 2001 Bond, a new Series 2001 Bond or Series 2001 Bonds in Authorized Denominations and registered in the name of the transferee, and in an aggregate principal amount or Accreted Value equal to the principal amount or Accreted Value of such Series 200l Bond or Series 2001 Bonds so surrendered. In all cases in which Series 2001 Bonds shall be exchanged, the Issuer shall execute and the Registrar shall authenticate and deliver, at the earliest practicable time, Series 2001 Bonds in accordance with provisions of this Resolution. All Series 2001 Bonds surrendered in any such exchange or registration of transfer shall forthwith be canceled by the Registrar. The Issuer or the Registrar may make a charge for every such exchange or registra tion of transfer of Series 2001 Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge shall be made to any owner for the privilege of exchanging or registering the transfer of Series 2001 Bonds under the provisions of this Resolution. Neither the Issuer nor the Registrar shall be required to make any such exchange or registration of transfer of Series 2001 Bonds during the fifteen (15) days immediately preceding any interest payment date or, in the case of any proposed redemption of Series 2001 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 2001 Bonds. SECTION 12. OWNERSHIP OF SERIES 2001 BONDS. The person in whose name any Series 2001 Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of or on account of the principal or redemption price or Accreted Value of any such Series 2001 Bond, and the interest on any such Series 2001 Bonds, shall be made only to or upon the order of the registered Owner thereof or his legal representative. All such payments shall be valid and effectual to 0R378039; 1 6 satisfy and discharge the liability upon such Series 2001 Bond including the premium, if any, and interest thereon to the extent of the sum or sums so paid. SECTION 13. SERIES 2001 BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Series 2001 Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion cause to be executed, and the Registrar shall authenticate and deliver, a new Series 2001 Bond of like date as the Series 2001 Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Series 2001 Bond upon surren:ler and cancellation of such mutilated Series 2001 Bond or in lieu of and substitution for the Series 2001 Bond destroyed, stolen or lost, and upon the owner furnishing the Issuer and the Registrar proof of h~ ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer and the Reg~trar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Series 2001 Bonds so surrendered shall be canceled by the Issuer. If any of the Series 2001 Bonds shall have matured, or be about to mature, instead of issuing a suootitute Series 2001 Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Series 2001 Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Series 2001 Bond issued pursuant to this section shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lait, stolen or destroyed Series 200l Bonds be at any time found by anyone, and such duplicate Series 2001 Bonds shall re entitled to equal and proportionate benefits and rights as to len on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Series 2001 Bonds issued hereunder. SECTION 14. PROVISIONS FOR REDEMPTION. The Series 2001 Bonds shall be subject to redemption prior to their maturity at such times and in such manner as shall be fixed by resolution of the Issuer prior to the delivery of the Seres 2001 Bonds. Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registrar, and mailed, first class mail, postage prepaid, to all Owners of Series 2001 Bonds to be redeemed at their addresses as they appear on the registration books hereinbefore provided for, but failure to mail such nctice to one or more Owners of Series 2001 Bonds shall not affect the validity of the proceedings for such redemlXion with respect to Owners of Series 2001 Bonds to which notice was duly mailed hereunder. Each such notice shall set forth tre date fixed for redemption, the redemption price to be paid and, if less than all of the Series 2001 Bonds of one maturity are to be called, the distinctive numbers of such Series 200 1 Bonds to be redeemed and in the case of Series 2001 Bonds to be redeemed in part only, the portion of the principal amount or Accreted Value thereof to be redeemed. Any notice of optional redemption, other than with respect to an advance refunding, shall be circulated only if sufficient funds have been deposited in the Debt Service Fund to pay the redemption price of the Series 2001 Bonds to be redeemed. Any notice of olXional redemption with respect to an advance refunding shall explicitly state that the proposed redemption is conditioned on sufficient moneys being available to effect the full amoont of the proposed redemption. Official notice of redemption having been given as aforesaid, the Series 2001 Bonds or portions of Series 2001 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Issuer shall default in the OR378039;! 7 payment of the redemption price) such Series 2001 Bonds or portions of Series 2001 Bonds shall cease to bear interest. Upon surrender of such Series 2001 Bonds for redemption in accordance with said notice, such Series 2001 Bonds shall be paid by the Registrar at the redemption price. InstallmenlS of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest Upon surrender for any partial redemption of any Series 200 1 Bond, there shall be prepared for the Owner a new Series 2001 Bond or Series 2001 Bonds of the same mauuity in the amount of the unpaid principal or Accreted Value of such partially redeemed Series 2001 Bond. All Series 2001 Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued, In addition to the foregoing notice, further notice shall be given by the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. (A) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Series 2001 Bonds being redeemed; (ii) the date of issue of the Series 2001 Bonds as originally issued; (iii) the rate of interest borne by each Series 2001 Bond being redeemed; (iv) the maturity date of each Series 2001 Bond being redeemed; and (v) any otrer descriptive information needed to klentify accurately the Series 2001 Bonds being redeemed. (B) Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding suh>tantial amounts of obligations of types similar to the type of which the Series 2001 Bonds consist and to one or more national information services that disseminates notices of redemption of obligation; such as the Series 2001 Bonds. SECTION 15. FORM OF SERIES 2001 BONDS. The form of the Series 2001 Bond shall be approved by resolution of the Issuer adopted prior to the issuance trereof. SECTION l6. APPLICATION OF PROVISIONS OF ORIGINAL RESOLUTION. The Series 2001 Bonds, herein authorized, shall for all purposes (except as herein expressly provided) be considered to be Additional Parity Obligations issued under the authority of the Original Resolution, and shall be entitled to all the protection and security provided therein for Additional Parity Obligations, and shall be in all respects entitled to the same security, rights and privileges enjoyed by the Parity Bonds. The covenants and pledges contained in the Original Resolution shall be applicable to the Series 2001 Bonds herein authorized in like manner as applicable to the Parity Bonds. The principal of, Amortization Installments, Accreted Value and interest on the Series 2001 Bonds shall be payable from the amounts in the Interest Account, Principal Account and Redemption Account within the Debt Service Fund, as applicable, established in the Original Resolution on a parity with the Parity Bonds, and payments shall be made into such accounts in the Debt Service Fund by the Issuer in amounts fully sufficient to pay the principal of, Amortization Instalhnents, Accreted Value and interest on tre Parity Bonds and the Series 2001 Bonds as such principal, Amortization Installments, Accreted Value and interest become dte. Notwithstanding the provisions of the immediately preceding paragraphs, no funds or other amounts on deposit in a subaccount in the Reserve Account establi<;hed for the benefit of the Parity Bonds 0R378039;1 8 shall be available for the Series 2001 Bonds and no funds or other amounts on deposit in the subaccount in the Reserve Account established for the benefit of the Series 2001 Bonds shall be available for any of the Parity Bonds. The Net Revenues shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer. SECTION 17. APPLICATION OF SERIES 2001 BOND PROCEEDS. The proceeds, including accrued interest and premium, if any, received from the sale of the Series 2001 Bonds shall be applied by the Issuer simultaneously with the delivery of such Series 2001 Bonds to the underwriters thereof, as follows: (A) The accrued interest shall be deposited in the Interest Account and shall be used only for the purpose of paying interest becoming due on the Series 2001 Current Interest Bonds. (B) Unless provided from other funds of the Issuer on the date of issuaoce of the Series 2001 Bonds, or unless provided for through the purchase of a guaranty or an insurance policy, an irre vocable letter of credit, or surety bond, as set forth below, the Issuer shall deposit to the special subaccount in the Reserve Account hereby established for the benefit of the Series 2001 Bonds, a sum equal to the Reserve Requirement on the Series 2001 Bonds. Amotmts on deposit in such subaccount in the Reserve Account shall be invested in Investment Securities which mature not more than five (5) years from the date of their acquisition. Investment Securities on deposit in such subaccount in the Reserve Account shall be valued by the Paying Agent as frequently as deemed necessary by the Bond Insurer but not less often than annually, at the market value thereof, exclusive of accrued interest The Issuer may satisfy the Reserve Requirement by the deposit of a surety bond, insurance policy or letter of credit as set forth below. Any such credit instrument (other than a credit instrument issued by the Bond Insurer) shall comply with the following provisions: (C) A sum as specified by a supplemental resolution of the Issuer shall, together with other legally available funds of the Issuer, if any, as detennined by subsequent resolution of the Issuer, be used to defease the Refunded Bonds by depositing such sums of money for investment in acquired obligations (as defined in the resolution pursuant to which such Refunded Bonds were issued) pursuant to the Escrow Deposit Agreement so as to produce sufficient funds to make all the payments described in such Escrow Deposit Agreement. At the time of execution of such Escrow Depos it Agreement, the Issuer shall furnish to the escrow agent named therein appropriate documentation to demonstrate that the sums being deposited and the investment to be made will be sufficient for such purposes. Simultaneously with the issuance of the Series 2001 Bonds, the Issuer shall enter into the Agreement. Such escrowed funds shall be kept separate and apart from all other funds of the Issuer and the money s on deposit under the Agreement shall be withdrawn, used and applied by the Issuer solely for the purposes set forth in the Agreements. (D) The balance of the proceeds of the Series 2001 Bond shall be deposited to the City of Winter Springs Water and Sewer Cost of Issuance Fund hereby created and such amount shall be applied to the payment of costs and expenses relating to the issuance of the Series 2001 Bonds. One hundred and eighty (180) days following the initial delivery of the Series 200 I Bonds any amount remaining in the cost 0R378039;1 9 of Issuance Fund shall be transferred to any other account or fund of the Issuer and the Cost of Issuance Fund shall be closed. SECTION 18. SPECIAL OBLIGATIONS OF ISSUER. The Series 2001 Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of the Constitution of Florida, but shall be payable solely from and secured by a lien upon and a pledge of the Net Revenues as herein provided. No Owner or Owners of any Series 2001 Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form of any real or personal property therein to pay such principal and interest from any other funds of the Issuer except from the special funds in the manner provided herein. The payment of the principal of and interest on the Series 2001 Bonds shall be secured forthwith equally and ratably by an irrevocable lien on the Net Revenues on a parity with the lien thereon of the Parity Bonds, and the Issuer does irrevocably pledge such Net Revenues to the payment of the principal of and interest on the Series 2001 Bonds, for the reserves therefor and for all other required payments hereunder. Such amounts hereby pledged and assigned shall immediately be subject to the lien of this pledge withou\ any further physical delivery thereof or any further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or othelWise against the Issuer, irrespective of whether such parties have notice thereof. SECTION 19. COVENANTS OF THE ISSUER. The provisions of Section 19 of the Original Resolution (except as otherwise stated in Section 16 hereof) shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 20. TAX COVENANTS. The Issuer shall not use or permit the use of any proceeds of the Series 2001 Bonds or any other funds of the Issuer, directly or indirectly, to acquire any securities or obligations, and shall not use or permit the use of any amounts received by the Issuer with respect to the Series 2001 Bonds in any manner, and shall not take or permit to be taken any other action or actions, which would cause any such Series 2001 Bonds to be an "arbitrage bond" within the meaning of Section 148, or a "private activity bond" within the meaning of Section 141, of the Internal Revenue Code of 1986, as amended (in this Section called the "Code"), or otherwise cause interest on the such Series 2001 Bonds to become included in gross income for federal income tax purposes. The Issuer shall at all tirres do and perform all acts arxl things which are necessary in order to assure that interest paid on such Series 2001 Bonds will be excluded from gross income for purposes of federal income tax and shall take no action that would result in such interest not being so excluded. The Issuer shall payor cause to be paid to the United States Government any amounts required by Section 148 (f) of Code and the regulations thereunder (the "Regulations"). SECTION 21. MUNICIPAL BOND INSURANCE. In regard to the Series 2001 Bonds, the Issuer agrees with the Bond Irnurer for the Series 2001 Bonds as follows: [TO BE PROVIDED] 0R378039;1 10 SECTION 22. DEFAULTS; EVENTS OF DEFAULT AND REMEDIES. The provisions of Section 21 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. In determining whether there has been a payment default in regard to the Series 2001 Bonds no effect shall be given to payments made under the Bond Insurance Policy. Any acceleration of payments due on the Series 2001 Bonds shall be subject to the prior written consent of the Bond Insurer (if it has not failed to comply with its payment obligations lll1der the Bond Insurance Policy). The Bond Insurer shall receive immediate notice of any payment default and notice of any other default known to the Registrar or the Issuer within thirty (30) days of their knowledge trereof. Notwithstanding any provision of this Resolution to the contrary, for all purposes of this Section 20, except the giving of notice of any Event of Default to the Holder of the Bonds, the Bond Insurer shall be deemed to be the sole Holder of tre Bonds it has insured as long as it has not failed to comply with its payment obligations under the Bond Insurance Policy. The Bond Insurer shall be included as a party in interest and as a party entitled to (i) notify the Issuer or any Paying Agent or any applicable receiver of the occurrence of an Event of Default and (ii) request the Issuer or any Paying Agent or receiver to intervere in judicial proceedings that affect the Series 2001 Bonds or the security therefor. The Issuer and any Paying Agent and any receiver are requiroo to accept notice of default from the Bond Insurer. SECTION 23. AMENDING AND SUPPLEMENTING OF RESOLUTION WITHOUT CONSENT OF HOLDERS OF BONDS. The provisions of Section 22 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. No amendment or supplement pursuant to this Resolution shall be made without the consent of the Bond Insurer. SECTION 24. AMENDMENT OF RESOLUTION WITH CONSENT OF HOLDERS OF BONDS. The provisions of Section 23 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. No amendment or supplement pursuant to this Resolution shall be made without the consent of the Bond Insurer. Any rating agency rating the Series 200l Bonds must receive notice of each amendment to the Resolution and a copy thereof at least 15 days in advance of its execution or adoption. The Bond Insurer for the Series 2001 Bonds shall be provned with a full transcript of all proceedings relating to the execution of any such amendmen t or supplement. SECTION 25. DEFEASANCE. The provisions of Section 24 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this 0R378039; 1 11 Resolution as though fully restated herein. Notwithstanding the provisions of the immediately preceding sentence, any securities deposited with an escrow agent to effect a defeasance must be ReqtliIed ACQuired Obligatiorn . SECTION 26. GOVERNMENTAL REORGANIZATION. The provisions of Section 25 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 27. ADDITIONAL UTILITY FUNCTIONS. The provisions of Section 26 of the Original Resolution shall be deemed applicable to this Resolution and shan apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 28. ADDITIONAL SECURITY. Anything herein to the contrary notwithstanding, however, the Issuer may cause the Series 2001 Bonds to be payable from and secured by a bond insurance policy not applicable to anyone or more other Series of Bonds, as shall be provided by supplemental resolution of the governing body of the Issuer, in addition to the security of fue Net Revenues provided herein. SECTION 29. CONTINUING DISCLOSURE. The Issuer hereby covenants and agrees that, in order to provide for compliance with the secondary market disclosure requirements of the Rule with respect to the Series 2001 Bonds, fuat it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate to be executed by the Issuer prior to the time the Issuer delivers the Series 2001 Bonds to the participating underwriter or underwriters, as it may be amended from time to time in accordance with the terms thereof. Notwithstanding any other provision of this Resolution, failure of the Issuer to comply with such Continuing Disclosure Certificate shall not be considered an Event of Default hereunder. However, the Continuing Disclooure Certificate shall be enforceable by the Series 2001 Bondowners in the event that the Issuer fails to cure a breach thereunder within a reasonable time after written notice from a Series 2001 Bondowner to the Issuer that a breach exists. Any rights of the Series 2001 Bondowners to enforce the provisions of the covenant shall be on behalf of all Series 2001 Bondowners and shall be limited to a right to obtain specific performance of the Issuer's obligations thereunder. SECTION 30. NEGOTIATED SALE; DELEGATIONS OF AUTHORITY REGARDING SALE OF BONDS; BOND PURCHASE CONTACT. The complex character of the securityfu for the Series 2001 Bonds requires lengthy and detailed structuring with could be unreasonably restricted by the lack of flexibility at public sale. Based upon all available information and advice from the staff of the Issuer, a negotiated sale of the Series 2001 Bonds to the Underwriters listed in the Bond Purchase Contract attached hereto will resuh in the most favorable bond financing plan and is in the best interest of the Issuer. The City Manager of the Issuer is hereby authorized and directed to execute and deliver to the underwriters for the Series 2001 Bonds a purchase contact provided that the principal amount of the Series 2001 Donds does not exceed $ , 61at the tme ihtelcst eO'lt of the Series 2001 Donds does not exceed _ peIeent <_ %) pel annnm, that the present value savings to the Issuer resuhing from the refunding of each sel ics of the the Series 1991 Refunded Bonds is not less than % six percent (6 %) of the outstanding principal amount of eaeh stlch sClics such Series 1991 Refunded Bonds and that tre final maturity of the Series 2001 Bonds is not later than October. 2021. The Citv Manager of the Issues is herebv authorized to execute and deliver to the underwriters of the Series 2001 0R378039; 1 12 Bonds a ourchase contract which sets forth the terms and the orovisions aoolicable to Series 2001 Bonds which provide for the refunding of the Series 1992 Refunded Bonds orovided that the oresent value savings to the Issuer resulting from the refunding of such Series 1992 Refunded Bonds is not less than ten oercent (10 %) ofthe outstanding orincioal amount of such Series 1992 Refunded Bonds and that the Bond maturity of the Series 2001 Bonds is not later than October 1. 2021. Compliance with the provisions of the prior sentence shall be conclusively determined upon receipt by the City Manager ofa letter of Public Finarx:ial Management, Inc., financial advisor to the Issuer that such provisions have been complied with. The Bond Purchase Contract shall be in substantially the form attached hereto with such changes thereto as may be approved in accordance with the above paragraph. The negotiated sale of the Bonds to the Urxlerwriter is hereby approved. The City Manager is hereby authorized to execute the Bond Purchase Contract on behalf of the Issuer, upon satisfaction of the above conditions. SECTION 31. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution of a preliminary official statement in essentially the form attached hereto for the purpose of marketing the Series 2001 Bonds and delegates to the City Managerthe authority to deem such Preliminary Official Statement "final" except for "permitted omissions" within the contemplation of Rule 15c2-12 of the Securities and Exchange Commission. SECTION 32. GENERAL AUTHORITY. The members of the governing bexly of the Issuer and the Issuer's officers, attorneys and other agents and employees are hereby authorized to perform all acts and things required of them by this Resolution or desirable or consistent with the requirements hereof for the full, punctual and complete performance of all of the terms, covenants and agreements contained in the Series 2001 Bonds and this Resolution, and they are hereby authorized to execute and deliver all documents which shall be required by bond counselor the underwriter of the Series 2001 Bonds to effectuate the sale of the Series 2001 Bonds to said underwriter. SECTION 33. NO PERSONAL LIABILITY. Neither the members of the governing body of the Issuer nor any person executing the Series 2001 Bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. SECTION 34. SEVERABILITY. If anyone 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 JX>licy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalKl, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Resolution or of the Series 2001 Bonds issued hereunder. SECTION 35. INCONSISTENT RESOLUTIONS. All prior resolutions of the Issuer inconsistent with the provisions of this, Resolution are hereby modified, supplemented and amended to conform with the provisions herein contained. 0R378039; 1 13 SECTION 36. EFFECTIVE DATE. This Resolution shall become effective immediately upon its adoption. ADOPTED this day of , 2001. CITY OF WINTER SPRINGS, FLORIDA (SEAL) Paul P. Partyka, Mayor ATTEST: City Clerk Approved as to form: City Attorney 0R378039;1 14 RESOLUTION NO. 2001-10 A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA SUPPLEMENTING CITY RESOLUTION 665 AS PREVIOUSLY AMENDED AND SUPPLEMENTED BY AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $22,500,000 WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2001A and SERIES 2001B, OF THE CITY OF WINTER SPRINGS, FLORIDA TO BE APPLIED TO PROVIDE FUNDS, TOGETHER WITH OTHER LEGALLY AVAILABLE CITY MONEYS, TO DEFEASE THE CITY'S OUTSTANDING WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 1991, AND THE CITY' S OUTSTANDING WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 1992, PLEDGING ON A PARITY WITH THE LIEN THEREON OF THE CITY'S OUTSTANDING WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2000, THE NET REVENUES OF THE COMBINED WATER AND SEWER SYSTEM OF THE CITY FOR THE PAYMENT OF SAID BONDS; DELEGATING TO THE CITY MANAGER SUBJECT TO COMPLIANCE WITH THE APPLICABLE PROVISION HEREOF, THE AUTHORITY TO AWARD THE SALE OF SUCH BONDS BY EXECUTING AND DELIVERING TO THE UNDERWRITERS OF SUCH BONDS A BOND PURCHASE CONTRACT OR BOND PURCHASE CONTRACTS; AUTHORIZING THE EXECUTION AND DELIVERY OF AND APPROVING THE FORM OF AN ESCROW DEPOSIT AGREEMENT IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS; ACCEPTING THE COMMITMENT OF MBIA INSURANCE CORPORATION FOR THE ISSUANCE OF BOND INSURANCE POLICIES FOR EACH SERIES OF SUCH BONDS; AND THE COMMITMENT OF MBIA INSURANCE CORPORA TION FOR THE ISSUANCE OF A SURETY BOND FOR DEPOSIT TO THE SUBACCOUNT IN THE RESERVE ACCOUNT FOR THE SERIES 2001A BONDS; APPROVING FORM OF SAID BONDS; APPROVING THE FORM OF AND AUTHORIZING THE DISSEMINATION OF THE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE FINAL OFFICIAL STATEMENTS; AUTHORIZING CERTAIN OFFICIALS AND EMPLOYEES OF CITY OF WINTER SPRINGS, FLORIDA TO TAKE ALL ACTIONS REQUIRED IN CONNECTION WITH THE ISSUANCE, SALE AND DELIVERY OF SAID BONDS; DESIGNATING THE SERIES 2001A BONDS AS BANK QUALIFIED; APPOINTING THE PAYING AGENT AND REGISTRAR FOR THE BONDS; APPOINTING THE ESCROW TRUSTEE TO SERVE UNDER THE ESCROW DEPOSIT AGREEMENTS; APPROVING A BOOK-ENTRY SYSTEM OF REGISTRATION FOR THE BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS; MAKING OTHER COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY OF WINTER SPRINGS, FLORIDA AS FOLLOWS: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the Constitution of the State of Florida; Chapter 166, Part II, Florida Statutes, as amended and supplemented, Chapter 72-718, Laws of Florida, Special Act of 1972, being the Charter of the City of 0R315142;1O Winter Springs, Florida as amended and supplemented, Section 19(N) of City Resolution No. 665, as amended and supplemented (the "Original Resolution") and other applicable provisions of law. SECTION 2. DEFINITIONS. All terms used herein that are defined in the Original Resolution are used within the same meaning herein unless the context otherwise requires or they are expressly given a different meaning. In addition, the following terms used herein shall have the following meaning. Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporations. (A) "ACCRETED VALUE" means as of any date of calculation the amount owed on a Capital Appreciation Bond prior to maturity or at maturity taking into consideration the initial offering price plus accrued interest compounded semiannually on April 1 and October 1 of each year, with interest commencing the date of delivery of the Capital Appreciation Bonds. The Accreted Value for a day of a month other than an April 1 or October 1 shall be calculated by straight line interpolation using for purposes of such calculation an assumed period of six months of thirty day months intervening between the then next succeeding April 1 or October l, as the case may be. (B) "ACQUIRED OBLIGATIONS" shall mean and include any of the following securities, if and to the extent the same are ,at the time legal for investment of funds of the Issuer: (l) ,U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Securities - "SLGS") (2) Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities (3) Resolution Refunding C<;>rp. (REFCORP) Only the interest component of REF CORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable. (4) Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If however, the issue is only rated by S&P (i.e., there is no Moody's rating), then the pre-refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded municipals to satisfy this condition. (5) Obligations issued by the following agencies which are backed by the full faith and credit of the U.S.: a. U.S, Export-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership b. Farmers Home Administration (FmHA) Certificate of beneficial ownership c. Federal Financing Bank 0R315142;1O 2 d. General Services Administration Participation certificates e, U ,S. Maritime Administration Guaranteed Title XI financing f. U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S, government guaranteed public housing notes and bonds (C) "ADDITIONAL PARITY OBLIGATIONS" shall mean additional obligations issued in compliance with the terms, conditions and limitations contained in the Original Resolution and which (i) shall have a lien on the Net Revenues equal to that of the Series 2001 Bonds and the Parity Bonds,(ii) shall be payable from the Net Revenues on a parity with the Series 2001 Bonds and the Parity Bonds, and (iii) rank equally in all other respects with the Series 2001 Bonds and the Parity Bonds. (D) "AGREEMENT' or "ESCROW DEPOSIT AGREEMENT" shall mean that certain Escrow Deposit Agreement by and between the Issuer and a trust company or bank with trust powers selected by subsequent resolution of the Issuer for the purpose of providing for the payment of the Refunded Bonds hereinafter mentioned. (E) "AUTHORIZED DENOMINATIONS" shall mean $5,000 or any integral multiple thereof or maturity amounts of $5,000 as to Capital Appreciation Bonds or any integral multiple thereof. (F) "BOND INSURANCE POLICY" shaH mean as to the Series 2001 Bonds the municipal bond new issue insurance policy issued by the Bond Insurer that guarantees the payment of principal and interest on the Series 200l Bonds. (G) "BOND INSURER" shall mean as to the Series 2001 Bonds, MBIA Insurance Corporation, a stock insurance company incorporated under the laws of the State of New York or any successor thereto. (H) "BONDS" shall mean the Parity Bonds, the Series 2001 Bonds issued hereunder, together with any Additional Parity Obligations hereafter issued under the terms, conditions and limitations contained in the Original Resolution. (I) "BOND YEAR" shall mean as to the Series 200l Bonds the Fiscal Year of the Issuer. 0R315142;10 3 (1) "CONTINUING DISCLOSURE CERTIFICATE" shall mean that certain certificate related to the Series 200l Bonds to be executed by the Issuer prior to the time the Issuer delivers the Series 2001 Bonds to the participating underwriter or underwriters, as it may be amended from time to time in accordance with the terms thereof, whereby the Issuer undertakes to comply with the secondary disclosure requirements of the Rule. (K) "INVESTMENT SECURITIES" shall mean in regard to investments pursuant to this Resolution, any investment permitted under applicable State and federal law including units of participation in the Local Government Surplus Trust Fund established pursuant to Part IV, Chapter 218, Florida Statutes, and (3) (4) (5) 0R315142;1O (1) Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, provided, that the full faith and credit of the United States of America must be pledged to any such direct obligation or guarantee ("Direct Obligations"). (2) Direct obligations and fully guaranteed certificates of beneficial interest of the Export-Import Bank of the United States; consolidated debt obligations and letter of credit-backed issues of the Federal Home Loan Banks; participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation ("FHLMCs"); debentures of the Federal Housing Administration; mortgage-backed securities (except striped mortgage securities which are valued greater than par on the portion of unpaid principal) and senior debt obligations of the Federal National Mortgage Association ("FNMAs"); participation certificates of the General Services Administration; guaranteed mortgage-backed securities and guaranteed participation certificates of the Government National Mortgage Association ("GNMAs"); guaranteed participation certificates and guaranteed pool certificates of the Small Business Administration; debt obligations and letter of credit-backed issues of the Student Loan Marketing Association; local authority bonds of the U.S. Department of Housing & Urban Development; guaranteed Title XI financings of the U.S. Maritime Administration; guaranteed transit bonds of the Washington Metropolitan Area Transit Authority; Resolution Funding Corporation securities. Direct obligations of any state of the United States of America or any subdivision or agency thereof whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service and "A" or better by Standard & Poor's Corporation, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service and "A" or better by Standard & Poor's Corporation. Commercial papers (having original maturities of not more than 270 days) rated, at the time of purchase "P-l" by Moody's Investors Service ("Moody's") and "A-I" or better by Standard & Poor's Corporation ("S&P"). Federal funds, unsecured certificates of deposit, time deposits or bankers acceptances (in each case having maturities of not more than 365 days) of any domestic bank including a branch office of a foreign bank which branch office is located in the United States, 4 provided legal opinions are received to the effect that full and timely payment of such deposit or similar obligation is enforceable against the principal office of any branch of such bank, which, at the time of purchase, has a short-term "Bank Deposit" rating of "P-I" by Moody's and a "Short-Term CD" rating of "A-l" or better by S&P. (6) Deposits of any bank: or savings and loan association which has combined capital, surplus and undivided profits of no less than $3 million, provided such deposits are continuously and fully insured by the Bank lnsurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation. (7) Investments in money-market funds rated "AAAm" or "AAAm-G" by S&P. (8) Repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs or FHLMCs with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank: insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated "P-l" or "A3" or better by Moody's and "A-I" or "A-" or better by S&P, provided: a) A master repurchase agreement or specific written repurchase agreement governs the transaction; b) The securities are held free and clear of any lien by the Paying Agent or an independent third party acting solely as agent ("Agent") for the Paying Agent, and such third party is (i) a Federal Reserve Bank:, (ii) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $50 million, or (iii) a bank approved in writing for such purpose by Financial Guaranty Insurance Company, and the Paying Agent shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the Paying Agent; c) A perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306 et seq. or 31 C.F.R. 350 et seq. in such securities is created for the benefit of the Paying Agent; d) The repurchase agreement has a term of 180 days or less, and the Paying Agent or the Agent will value the collateral securities no less frequently than weekly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two business days of such valuation; and e) The fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 103 % . (9) Investment agreements, the issuer, form and substance of which are specifically approved by the Bond Insurer. 0R315142; 10 5 (L) "PARITY BONDS" shall mean the City's Outstanding Water and Sewer Refunding Revenue Bonds, Series 2000, and the City's Outstanding Water and Sewer Refunding Revenue Bonds, Series 1992 until such Series 1992 Refunded Bonds (as hereinafter defined) have been defeased. (M) "PERSON" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity. (N) "REFUNDED BONDS" shall mean the outstanding bonds of the City of Winter Springs, Florida, Water and Sewer Refunding Revenue Bonds, Series 1991 other than such Series 1991 bond maturing October 1, 2001 ("Series 1991 Refunded Bonds") and the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 1992 ("Series 1992 Refunded Bonds"). (0) "RESERVE REQUIREMENT" shall mean the lesser of (i) the Maximum Bond Service Requirement for the Series 2001 Bonds, (ii) l25 % of the Average Annual Bond Service Requirement for the Series 2001 Bonds, or (iii) 10% of the proceeds of the Series 2001 Bonds. (P) "RULE" shall mean Rule 15c2-12 of the United States Securities and Exchange Commission, as amended. (Q) "SERIES 2001 BONDS" shall mean collectively the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 200lA (the Series 2001A Bonds") and Series 200lB (the "Series 200lB Bonds"), authorized pursuant to this Resolution. Such Series 2001A Bonds shall be issued for the primary purpose of defeasing the Series 1991 Refunded Bonds and the Series 200lB Bonds shall be issued for the primary purpose of defeasing the Series 1992 Refunded Bonds. (R) "SURETY BOND" means the surety bond issued by the Bond Insurer guaranteeing certain payments into the subaccount in the Reserve Account with respect to the Series 2001A Bonds as provided therein. SECTION 3. FINDINGS. It is hereby ascertained, determined and declared: (A) The Issuer now owns, operates and maintains the System and derives Revenues from rates, fees rentals and other charges made and collected for the services of the System. (B) The Issuer deems it necessary, beneficial and in its best interest to issue the Series 2001 Bonds to refund the Refunded Bonds. (C) The principal of and interest on the Series 2001 Bonds and all other required payments hereunder shall be payable solely from the Net Revenues as provided herein. The Issuer shall never be required to levy ad valorem taxes on any real or personal property therein to pay the principal of and interest on the Series 2001 Bonds herein authorized or to make any other payments provided for herein. The Series 200l Bonds shall not constitute a lien upon any properties owned by or located within the boundaries of the Issuer. (D) The Net Revenues are estimated to be sufficient to pay all principal of and interest on the Series 200l Bonds and the Parity Bonds, as the same become due, and to make all other required payments required by this Resolution and the resolutions of the Issuer pursuant to which the Parity Bonds were issued including the Original Resolution. 0R315142;10 6 (E) The Net Revenues are not pledged or encumbered in any manner, except for the payment of the principal and interest on the Parity Bonds and the other deposits provided for in the resolutions of the Issuer pursuant to which the Parity Bonds were issued including the Original Resolution and the Refunded Bonds which lien of the Refunded Bonds on the Net Revenues pledged thereto shall be released simultaneously with the issuance of the Series 200l Bonds. (F) The Original Resolution, in Section 19(N) thereof, provides for the issuance of Additional Parity Obligations under the terms, limitations and conditions provided therein. The terms, limitations and conditions of said Section 19(N) will be complied with prior to the issuance of any of the Series 2001 Bonds. (G) The Series 2001 Bonds herein authorized shall be on a parity and rank equally, as to lien on and source and security for payment from the Net Revenues and in all other respects except as provided in Sections l6 and 28 hereof, with the Parity Bonds. SECTION 4. AUTHORIZATION OF REFUNDING OF REFUNDED BONDS. There is hereby authorized the refunding of the Refunded Bonds in the manner provided herein. SECTION 5. THIS RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Series 2001 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 and contract between the Issuer and such owners. The covenants and agreements herein set forth to be performed by the Issuer shall be for the equal benefit, protection and security of the legal owners of any and all of the Series 2001 Bonds, all of which shall be of equal rank without preference, priority or distinction of any of the Series 2001 Bonds over any other thereof, except as expressly provided therein and herein. SECTION 6. AUTHORIZATION OF SERIES 2001 BONDS, Subject and pursuant to the provisions hereof, obligations of the Issuer to be known as "Water and Sewer Revenue Refunding Bonds, Series 2001A and Series 200 lB " , are authorized to be issued in the original aggregate principal amount of not exceeding $22,500,000. Should either Series of Bonds not be issued in calendar year 2001 the Issuer may' prior to the issuance of such Series of Bonds designate such Series of 2001 Bonds with the appropriate particular designation such designation to be conclusively approved upon execution of each Series 2001 Bond by the proper officers of the Issuer. SECTION 7. DESCRIPTION OF SERIES 2001 BONDS. The Series 2001 Bonds shall be issued in fully registered form as Capital Appreciation Bonds and/or Current Interest Bonds; shall be numbered consecutively from one upward in order of maturity preceded by the letter lOR" or such other lettering as the Issuer shall approve by execution of such Series 2001 Bonds; shall be issued in Authorized Denominations; shall be dated, shall bear interest or yields at such rate or rates or yields not exceeding the maximum rate allowed by State law, the actual rate or rates or yields to be as set forth in the Bond Purchase Contract referred to in Section 36 hereof; such interest to be payable semiannually at such times and such Series 2001 Bonds shall mature annually on such date in such years and in such amounts and have such other terms all as set forth in the Bond Purchase Contract referred to in Section 36 hereof. Each Series 2001 Bond shall bear interest from the interest payment date next preceding the date on which it is authenticated, unless authenticated on an interest payment date, in which case it shall bear interest from such interest payment date, or, unless authenticated prior to the first interest payment date, 0R315142; 10 7 in which case it shall bear interest from its date; provided, however, that if at the time of authentication payment of any interest which is due and payable has not been made, such Series 2001 Bond shall bear interest from the date to which interest shall have been paid. The Capital Appreciation Bonds shall bear interest only at maturity or upon redemption prior to maturity in the amount determined by reference to the Accreted Value. The principal of, the Accreted Value, the interest and redemption premium, if any, on the Series 2001 Bonds shall be payable in any coin or currency of the United States of America which on the respective dates of payment thereof is legal tender for the payment of public and private debts, The interest on the Series 2001 Current Interest Bonds shall be payable by the Paying Agent on each interest payment date to the person appearing on the registration books of the Issuer hereinafter provided for as the registered Owner thereof on the l5th day of the calendar month immediately preceding the applicable interest payment date, by check or draft mailed to such registered Owner at his address as it appears on such registration books or by wire transfer to Owners of $1,000,000 or more in principal amount of the Series 2001 Bonds. Payment of the principal of all Series 200l Current Interest Bonds and the Accreted Value with respect to the Series 2001 Capital Appreciation Bonds shall be made upon the presentation and surrender of such Series 2001 Bonds as the same shall become due and payable. Notwithstanding any other provisions of this section, the Issuer may, at its option, prior to the date of issuance of the Series 200l Bonds, elect to use an immobilization system or book-entry system with respect to issuance of such Series 2001 Bonds. Such election shall be conclusively evidenced by execution by the proper officers of the Issuer of Series 200l Bonds reflecting use of a bond-entry system. As long as any Series 2001 Bonds are outstanding in book-entry form the provisions of this Resolution inconsistent with such system of book-entry registration shall not be applicable to such Series 2001 Bonds. SECTION 8. EXECUTION OF SERIES 2001 BONDS. The Series 2001 Bonds shall be signed by, or bear the facsimile signature of the Mayor or Deputy Mayor of the City and shall be signed by, or bear the facsimile signature of the Clerk or any Deputy City Clerk and a facsimile of the official seal of the Issuer shall be imprinted on the Series 2001 Bonds. In case any officer whose signature or a facsimile of whose signature shall appear on any Series 2001 Bonds shall cease to be such officer before the delivery of such Series 2001 Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery, and also any Series 2001 Bond may bear the facsimile signature of or may be signed by such persons who, as at the actual time of the execution of such Series 2001 Bond, shall be the proper officers to sign such Series 2001 Bonds although at the date of such Series 2001 Bond such persons may not have been such officers. SECTION 9. AUTHENTICATION OF SERIES 2001 BONDS. Only such of the Series 200l Bonds as shall have endorsed thereon a certificate of authentication duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security under this Resolution and the Original Resolution. No Series 200l Bond shall be valid or obligatory for any purpose unless and until such certificates of authentication shall have been duly executed by the Registrar, and such certificate of the Registrar upon any such Series 2001 Bonds shall be conclusive evidence that such Series 2001 Bonds has been duly authenticated and delivered under this Resolution. The Registrar's certificate of authentication on any Series 2001 Bond shall be deemed to have been duly executed if signed by an authorized officer ORJ15142;1O 8 of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Series 2001 Bonds that may be issued hereunder at anyone time. SECTION 10. EXCHANGE OF SERIES 2001 BONDS. Any Series 2001 Bond, upon surrender thereof at the office of the Registrar, together with an assignment duly executed by the Owner or his attorney or legal representative in such form shall be satisfactory to the Registrar, may, at the option of the Owner, be exchanged for a Series 2001 Bond in Authorized Denominations in an aggregate principal amount or Accreted Value of Series 2001 Bonds equal to the principal amount or Accreted Value of the Series 2001 Bonds or Series 2001 Bonds so surrendered. The Registrar shall make provisions for the exchange of Series 2001 Bonds at the principal corporate trust office of the Registrar. The Issuer and Registrar shall not be obligated to make any exchange of Series 2001 Bonds during the fifteen (I5) days next preceding an interest payment date or in the case of any proposed redemption of Series 2001 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 2001 Bonds. SECTION 11. NEGOTIABILITY, REGISTRATION AND TRANSFER OF SERIES 2001 BONDS. The Registrar shall keep books for the registration of and for the registration of transfers of Series 2001 Bonds as provided in this Resolution. The transfer of any Series 2001 Bonds may be registered only upon such books upon surrender thereof to the Registrar together with an assignment duly executed by the Owner or his attorney or legal representative in such form as shall be satisfactory to the Registrar. Upon any such registration of transfer the Issuer shall execute and the Registrar shall authenticate and deliver in exchange for such Series 2001 Bond, a new Series 2001 Bond or Series 2001 Bonds in Authorized Denominations and registered in the name of the transferee, and in an aggregate principal amount or Accreted Value equal to the principal amount or Accreted Value of such Series 2001 Bond or Series 2001 Bonds so surrendered. In all cases in which Series 2001 Bonds shall be exchanged, the Issuer shall execute and the Registrar shall authenticate and deliver, at the earliest practicable time, Series 2001 Bonds in accordance with provisions of this Resolution. All Series 2001 Bonds surrendered in any such exchange or registration of transfer shall forthwith be canceled by the Registrar. The Issuer or the Registrar may make a charge for every such exchange or registration of transfer of Series 2001 Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge shall be made to any owner for the privilege of exchanging or registering the transfer of Series 2001 Bonds under the provisions of this Resolution. Neither the Issuer nor the Registrar shall be required to make any such exchange or registration of transfer of Series 2001 Bonds during the fifteen (15) days immediately preceding any interest payment date or, in the case of any proposed redemption of Series 2001 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 2001 Bonds. SECTION 12. OWNERSHIP OF SERIES 2001 BONDS. The person in whose name any Series 2001 Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of or on account of the principal or redemption price or Accreted Value of any such Series 2001 Bond, and the interest on any such Series 2001 Bonds, shall be made only to or upon the order of the registered Owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 2001 Bond including the premium, if any, and interest thereon to the extent of the sum or sums so paid. 0R315142;10 9 SECTION 13. SERIES 2001 BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Series 2001 Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion cause to be executed, and the Registrar shall authenticate and deliver, a new Series 2001 Bond of like date as the Series 2001 Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Series 2001 Bond upon surrender and cancellation of such mutilated Series 2001 Bond or in lieu of and substitution for the Series 2001 Bond destroyed, stolen or lost, and upon the Owner furnishing the Issuer and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer and the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Series 2001 Bonds so surrendered shall be canceled by the Issuer. If any of the Series 2001 Bonds shall have matured, or be about to mature, instead of issuing a substitute Series 2001 Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Series 2001 Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Series 2001 Bond issued pursuant to this section shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Series 2001 Bonds be at anytime found by anyone, and such duplicate Series 2001 Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Series 2001 Bonds issued hereunder. SECTION 14. PROVISIONS FOR REDEMPTION. The Series 2001 Bonds shall be subject to redemption prior to their maturity at such times and in such manner as shall be set forth in the Bond Purchase Contract referred to in Section 36 hereof. Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registrar, and mailed, first class mail, postage prepaid, to all Owners of Series 2001 Bonds to be redeemed at their addresses as they appear on the registration books hereinbefore provided for, but failure to mail such notice to one or more Owners of Series 2001 Bonds shall not affect the validity of the proceedings for such redemption with respect to Owners of Series 2001 Bonds to which notice was duly mailed hereunder. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, if less than all of the Series 2001 Bonds of one maturity are to be called, the distinctive numbers of such Series 2001 Bonds to be redeemed and in the case of Series 2001 Bonds to be redeemed in part only, the portion of the principal amount or Accreted Value thereof to be redeemed. Any notice of optional redemption, other than with respect to an advance refunding, shall be circulated only if sufficient funds have been deposited in the Debt Service Fund to pay the redemption price of the Series 2001 Bonds to be redeemed. Any notice of optional redemption with respect to an advance. refunding shall explicitly state that the proposed redemption is conditioned on sufficient moneys being available to effect the full amount of the proposed redemption. Official notice of redemption having been given as aforesaid, the Series 2001 Bonds or portions of Series 2001 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Issuer shall default in the payment of the redemption price) such Series 2001 Bonds or portions of Series 2001 Bonds shall cease to bear interest. Upon surrender of such Series 2001 Bonds for redemption in accordance with said notice, such Series 2001 Bonds shall be paid by the Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Series 2001 Bond, there shall be prepared for the Owner a new 0R315142;10 10 Series 2001 Bond or Series 2001 Bonds of the same maturity in the amount of the unpaid principal or Accreted Value of such partially redeemed Series 2001 Bond. All Series 2001 Bonds which have been redeemed shall be canceled and destroyed by the Registrar' and shall not be reissued. In addition to the foregoing notice, further notice shall be given by the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. (A) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Series 2001 Bonds being redeemed~ (ii) the date of issue of the Series 2001 Bonds as originally issued; (iii) the rate of interest borne by each Series 2001 Bond being redeemed; (iv) the maturity date of each Series 2001 Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Series 2001 Bonds being redeemed. (B) Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types similar to the type of which the Series 2001 Bonds consist and to one or more national information services that disseminates notices of redemption of obligations such as the Series 2001 Bonds. SECTION 15. FORM OF SERIES 2001 BONDS. The form of the Series 2001 Bond shall be in substantially the form attached hereto with such omissions, insertions and variations may be necessary and/or desirable and approved by the executing officers of the City prior to the issuance thereof (which necessity and/or desirability and approval shall be evidenced conclusively by the Issuer's delivery of the Bonds to the purchaser or purchasers thereof). SECTION 16. APPLICATION OF PROVISIONS OF ORIGINAL RESOLUTION. The Series 2001 Bonds, herein authorized, shall for all purposes (except as herein expressly provided) be considered to be Additional Parity Obligations issued under the authority of the Original Resolution, and shall be entitled to all the protection and security provided therein for Additional Parity Obligations, and shall be in all respects entitled to the same security, rights and privileges enjoyed by the Parity Bonds. The covenants and pledges contained in the Original Resolution shall be applicable to the Series 2001 Bonds herein authorized in like manner as applicable to the Parity Bonds. The principal of, Amortization Installments, Accreted Value and interest on the Series 2001 Bonds shall be payable from the amounts in the Interest Account, Principal Account and Redemption Account within the Debt Service Fund, as applicable, established in the Original Resolution on a parity with the Parity Bonds, and payments shall be made into such accounts in the Debt Service Fund by the Issuer in amounts fully sufficient to pay the principal of, Amortization Installments, Accreted Value and interest on the Parity Bonds and the Series 2001 Bonds as such principal, Amortization Installments, Accreted Value and interest become due. Notwithstanding the provisions of tile immediately preceding paragraphs, no funds or other amounts on deposit in a subaccount in the Reserve Account established for the benefit of the Parity Bonds shall be available for the Series 2001 Bonds and no funds or other amounts on deposit in the subaccounts in the Reserve Account established for the benefit of the Series 2001 Bonds shall be available for any of the Parity Bonds. 0R315142;1O 11 The Net Revenues shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer. SECTION 17 . APPLICATION OF SERIES 2001 BOND PROCEEDS. The proceeds, including accrued interest and premium, if any, received from the sale of each Series of the Series 2001 Bonds shall be applied by.the Issuer simultaneously with the delivery of such Series of Series 2001 Bonds to the underwriters thereof, as follows: (A) The accrued interest shall be deposited in the Interest Account and shall be used only for the purpose of paying interest becoming due on the applicable Series of Series 2001 Current Interest Bonds. (B) The Issuer shall deposit to the special subaccount in the Reserve Account hereby established for the benefit of the Series 2001A Bonds, the Surety Bond in a sum equal to the Reserve Requirement for such bonds and shall deposit to the special subaccount in the Reserve Account created for the benefit of the Series 2001B bonds an amount equal to the Reserve Requirement on such bonds. The Surety Bond shall be payable to the Paying Agent for the Series 2001A Bonds on any interest payment or redemption date on which a deficiency exists which cannot be cured by funds in any other fund or account within the Debt Service Fund and available for such purpose. If at any time the Reserve Fund contains both a Surety Bond and cash, the cash shall be drawn down completely before any demand is made on the Surety Bond. Any moneys on deposit in a subaccount in the Reserve Account shall be invested in Investment Securities which mature not more than five (5) years from the date of their acquisition. Investment Securities on deposit in such subaccount in the Reserve Account shall be valued by the Paying Agent as frequently as deemed necessary by the Bond Insurer but not less often than annually, at the market value thereof, exclusive of accrued interest. The Paying Agent shall deliver a Demand for Payment in the form attached to the Surety Bond at least three (3) days prior to the date on which funds are required from the Surety Bond, or as soon thereafter as the Paying Agent is aware that funds are required from the Surety Bond. If a disbursement is made from the Surety Bond, the Issuer shaH reimburse the Bond Insurer as soon as possible, but in any case within one year of any disbursement the amount of such disbursement before replenishing any cash withdrawn from such subaccount: The Paying Agent shall maintain adequate records verified with the Bond Insurer as to the amount available to be drawn at any given time under the Surety Bond on the Series 2001A Bonds and the Issuer shall maintain adequate records verified with the Bond Insurer as to the amounts paid and owing to the Bond Insurer under the terms of the financial guaranty agreement entered into by the Issuer in connection with the issuance of the Surety Bond. Notwithstanding any other provisions of the Resolution to the contrary as long as the Surety Bond for the Series 2001A Bonds shall be in full force and effect, the Issuer and Paying Agent agree that there may be no optional redemption of Series 2001A Bonds or defeasance of Series 2001A Bonds or distribution of moneys held under the Resolution to the Issuer unless all amounts then owed to the Bond Insurer by the Issuer under the terms of the financial guaranty agreement entered into in connection with the delivery of the Surety Bond or any other documents related to the Series 2001A Bonds have been paid in full. 0R315142;1O 12 (C) A sum as specified by a supplemental resolution of the Issuer shall, together with other legally available funds of the Issuer, ifany, as determined by subsequent resolution of the Issuer, be used to defease the Refunded Bonds by depositing such sums of money for investment in acquired obligations (as defined in the resolution pursuant to which such Refunded Bonds were issued) pursuant to the Escrow Deposit Agreement for the applicable series of Series 2001 Bonds so as to produce sufficient funds to make all the payments described in such Escrow Deposit Agreement. At the time of execution of such Escrow Deposit Agreement, the Issuer shall furnish to the escrow agent named therein appropriate documentation to demonstrate that the sums being deposited and the investment to be made will be sufficient for such purposes. Simultaneously with the issuance of each Series of the Series 2001 Bonds, the Issuer shall enter into the Agreement. Such escrowed funds shall be kept separate and apart from all other funds of the Issuer and the moneys on deposit under the Agreement shall be withdrawn, used and applied by the Issuer solely for the purposes set forth in the Agreements. (D) The balance of the proceeds of each Series of the Series 2001 Bond shall be deposited to the City of Winter Springs Water and Sewer Cost of Issuance Fund hereby created and such amount shall be applied to the payment of costs and expenses relating to the issuance of the Series 2001 Bonds. One hundred and eighty (180) days following the initial delivery of the Series 2001 Bonds any amount remaining in the cost of Issuance Fund shall be transferred to any other account or fund of the Issuer and the Cost of Issuance Fund shall be closed. SECTION 18. SPECIAL OBLIGATIONS OF ISSUER. The Series 2001 Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of the Constitution of Florida, but shall be payable solely from and secured by a lien upon and a pledge of the Net Revenues as herein provided. No Owner or Owners of any Series 2001 Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form of any real or personal property therein to pay such principal and interest from any other funds of the Issuer except from the special funds in the manner provided herein. The payment of the principal of and interest on the Series 2001 Bonds shall be secured forthwith equally and ratably by an irrevocable lien on the Net Revenues on a parity with the lien thereon of the Parity Bonds, and the Issuer does irrevocably pledge such Net Revenues to the payment of the principal of and interest on the Series 2001 Bonds, for the reserves therefor and for all other required payments hereunder. Such amounts hereby pledged and assigned shall immediately be subject to the lien of this pledge without any further physical delivery thereof or any further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer, irrespective of whether such parties have notice thereof. SECTION 19. COVENANTS OF THE ISSUER. The provisions of Section 19 of the Original Resolution (except as otherwise stated in Section 16 hereof) shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 20. TAX COVENANTS. The Issuer shall not use or permit the use of any proceeds of the Series 2001 Bonds or any other funds of the Issuer, directly or indirectly, to acquire any securities or obligations, and shall not use or permit the use of any amounts received by the Issuer with respect to the Series 2001 Bonds in any manner, and shall not take or permit to be taken any other action or actions, which would cause any such Series 2001 Bonds to be an "arbitrage bond" within the meaning of Section 148, or a "private activity bond" within the meaning of Section 141, of the Internal Revenue Code of 1986, 0R315142;1O 13 as amended (in this Section called the "Code "), or otherwise cause interest on the such Series 200 I Bonds to become included in gross income for federal income tax purposes. The Issuer shall at all times do and perform all acts and things which are necessary in order to assure that interest paid on such Series 200 I Bonds will be excluded from gross income for purposes of federal income tax and shall take no action that would result in such interest not being so excluded. The Issuer shall payor cause to be paid to the United States Government any amounts required by Section 148 (f) of Code and the regulations thereunder (the "Regulations"). SECTION 21. MUNICIPAL BOND INSURANCE. In regard to the Series 2001 Bonds, the Issuer agrees with the Bond Insurer for the Series 2001 Bonds as follows: The Issuer shall give the Bond Insurer notice required to be given any other party under the Resolution to the Attention of Insured Portfolio Management. SECTION 22. DEFAULTS; EVENTS OF DEFAULT AND REMEDIES. The provisions of Section 21 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. In determining whether there has been a payment default in regard to the Series 2001 Bonds no effect shall be given to payments made under the Bond Insurance Policy. Any acceleration of payments due on the Series 2001 Bonds shall be subject to the prior written consent of the Bond Insurer (if it has not failed to comply with its payment obligations under the Bond Insurance Policy). The Bond Insurer shall receive immediate notice of any payment default and notice of any other default known to the Registrar or the Issuer within thirty (30) days of their knowledge thereof. Notwithstanding any provision of this Resolution to the contrary, for all purposes of this . Section 20, except the giving of notice of any Event of Default to the Holder of the Bonds, the Bond Insurer shall be deemed to be the sole Holder of the Bonds it has insured as long as it has not failed to comply with its payment obligations under the Bond Insurance Policy and shall have the right to direct all remedies upon the occurrence of an Event of Default. Any acceleration of the Series 2001 Bonds shall be subject to the Bond Issuer's prior written consent. The Bond Insurer shall be included as a party in interest and as a party entitled to (i) notify the Issuer or any Paying Agent or any applicable receiver of the occurrence of an Event of Default and (ii) request the Issuer or any Paying Agent or receiver to intervene in judicial proceedings that affect the Series 2001 Bonds or the security therefor. The Issuer and any Paying Agent and any receiver are required to accept notice of default from the Bond Insurer. SECTION 23. AMENDING AND SUPPLEMENTING OF RESOLUTION WITHOUT CONSENT OF HOLDERS OF BONDS. The provisions of Section 22 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. No amendment or supplement pursuant to this Resolution shall be made without the consent of the Bond Insurer. 0R315142;IO 14 SECTION 24. AMENDMENT OF RESOLUTION WITH CONSENT OF HOLDERS OF BONDS. The provisions of Section 23 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. No amendment or supplement pursuant to this Resolution shall be made without the consent of the Bond Insurer. Any rating agency rating the Series 2001 Bonds and S&P even if it is not rating the Series 2001 Bonds must receive notice of each amendment to the Resolution and a copy thereof at least 15 days in advance of its execution or adoption. The Bond Insurer for the Series 2001 Bonds shall be provided with a full transcript of all proceedings relating to the execution of any such amendment or supplement. SECTION 25. DEFEASANCE. The provisions of Section 24 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. Notwithstanding the provisions of the immediately preceding sentence, any securities deposited with an escrow agent to effect a defeasance must be Acquired Obligations. SECTION 26. GOVERNMENTAL REORGANIZATION. The provisions of Section 25 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 27. ADDITIONAL UTILITY FUNCTIONS. The provisions of Section 26 of the Original Resolution shall be deemed applicable to this Resolution a"nd shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 28. BOND INSURANCE. Insurance to insure the holder of any Series 2001 Bond, the scheduled payment of principal and interest on behalf of the Issuer is hereby authorized to be purchased from the Bon Insurer and payment for such insurance is hereby authorized from Series 2001 Bond proceeds or from other City moneys. In accordance with the Commitment for Municipal Bond Insurance attached hereto as an exhibit, a statement of insurance is hereby authorized to be printed on or attached to each Series of the Series 2001 Bonds for the benefit and information of the Series 2001 Bondholders. In accordance with the commitment of the Bond Insurer attached hereto as an exhibit, the purchase of a surety bond for deposit to the subaccount in the Reserve Account for the Series 2001A Bonds is hereby authorized, and payment of the premium for such surety bond from proceeds of the Series 2001A Bonds or other legally available moneys of the City is hereby authorized. SECTION 29. ESCROW DEPOSIT AGREEMENT. The form and content of the Escrow Deposit Agreement (the "Escrow Agreement") pursuant to which certain proceeds of each Series of the Series 2001 Bonds will be deposited together with other legally available moneys to defease the Refunded Bonds in the form attached hereto as an exhibit is hereby approved. The Mayor or Deputy Mayor and the City Clerk or Deputy City Clerk are hereby authorized to execute on behalf of the Issuer the Escrow Deposit Agreement in substantially the form attached hereto, with such additions, deletions, and other changes as may be necessitated by applicable law, the Resolution and the Bond Purchase Contracts as such officers may approve (such approval to be conclusively evidenced by their execution of the Escrow Agreement). OR315142; 10 15 SECTION 30. PAYING AGENT AND REGISTRAR AND ESCROW TRUSTEE. First Union National Bank, is hereby appointed to serve as Registrar and Paying Agent for the Series 2001 Bonds and as Escrow Trustee pursuant to each Escrow Agreement. SECTION 31. BANK QUALIFIED. The Issuer designates each Series of the Series 2001A Bonds as a "qualified tax-exempt obligation" within the meaning of Section 265(b )(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The Issuer does not reasonably anticipate that the Issuer, any subordinate entities of the Issuer, and issuers of debt that issue "on behalf" of the Issuer, will during calendar year 2001 issue more than $10,000,000 of "tax-exempt" obligations, exclusive of those obligations described in Section 265(b)(3)(C)(ii) of the Code. SECTION 32. EARL Y REDEMPTION OF PRIOR BONDS. The Series 1991 Refunded Bonds maturing after October I, 2001 are upon issuance of the Series 2001A Bonds hereby irrevocably called for redemption on October 1, 2001 at the redemption price of 102 % of the principal amount thereof plus accrued interest to the redemption date. The Series 1992 Refunded Bonds maturing after April 1, 2002 are upon issuance of the Series 200lB Bonds hereby irrevocably called for redemption on April 1, 2002 at the redemption price of 102 % of the principal amount thereof plus accrued interest to the redemption date. SECTION 33. TRANSFER OF REFUNDED BONDS FUNDS AND ACCOUNTS AND LIQUIDA TION OF SAME. The amount on deposit in the funds and accounts established under the resolutions securing the Refunded Bonds are hereby authorized to be transferred to the escrow account created pursuant to the Escrow Agreements and as otherwise provided in certificates of the Issuer delivered at the time of issuance of each Series of the Series 2001 Bonds and the securities in such funds and accounts are hereby authorized to be liquidated in such manner as recommended by the Issuer's Financial Advisor to best accomplish the refunding of the Refunded Bonds. SECTION 34. OTHER ACTIONS. The Mayor, the Deputy Mayor/Commissioner, the City Manager, the City Attorney, the City Clerk including any Deputy City Clerk and the Finance Director (collectively the "Issuer Officers"), Akerman, Senterfitt & Eidson, P.A. as Bond Counsel, and Public Financial Management, Inc., as the Issuer's Financial Advisor, are hereby authorized and directed to take all actions necessary or desirable in connection with the issuance and delivery of the Series 2001 Bonds and the consummation of all transactions in connection therewith. The Issuer Officers are hereby authorized and directed to execute all necessary or desirable certificates, documents, papers, and agreements for the undertaking and fulfillment of all transactions referred to in or contemplated by the Resolution, the Official Statement, this Resolution, and the Bond Purchase Contract. SECTION 35. CONTINUING DISCLOSURE. The Issuer hereby covenants and agrees that, in order to provide for compliance with the secondary market disclosure requirements of the Rule with respect to the Series 2001 Bonds, that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate to be executed by the Issuer prior to the time the Issuer delivers the Series 2001 Bonds to the participating underwriter or underwriters, as it may be amended from time to time in accordance with the terms thereof. Notwithstanding any other provision of this Resolution, failure of the Issuer to comply with such Continuing Disclosure Certificate shall not be considered an Event of Default hereunder. However, the Continuing Disclosure Certificate shall be enforceable by the Series 2001 Bondowners in the event that the Issuer fails to cure a breach thereunder within a reasonable time after written notice from a Series 2001 Bondowner to the Issuer that a breach exists. Any rights of the Series 2001 Bondowners to enforce the provisions of the covenant shall be on behalf of all Series 2001 0R315142;1O 16 Bondowners and shall be limited to a right to obtain specific performance of the Issuer's obligations thereunder. SECTION 36. NEGOTlA TED SALE; DELEGATIONS OF AUTHORITY REGARDING SALE OF BONDS; BOND PURCHASE CONTACT. The complex character of the security for the Series 2001 Bonds requires lengthy and detailed structuring with could be unreasonably restricted by the lack of flexibility at public sale. Based upon all available information and advice from the staff of the Issuer, a negotiated sale of the Series 2001 Bonds to the Underwriters listed in the Bond Purchase Contract(s) (the "Bond Purchase Contract") attached hereto will result in the most favorable bond financing plan and is in the best interest of the Issuer. The City Manager of the Issuer is hereby authorized and directed to execute and deliver to the underwriters for the Series 2001A Bonds such Bond Purchase Contact(s) provided that the present value savings to the Issuer resulting from the refunding of the Series 1991 Refunded Bonds is not less than ten percent (10 %) of the outstanding principal amount of such Series 1991 Refunded Bonds and that the final maturity of such Series 2001A Bonds is not later than October, 2021. The City Manager of the Issuer is hereby authorized to execute and deliver to the underwriters of the Series 200m Bonds a purchase contract which sets forth the terms and the provisions applicable to Series 2001B Bonds which provides for the refunding of the Series 1992 Refunded Bonds provided that the present value savings to the Issuer resulting from the refunding of such Series 1992 Refunded Bonds is not less than six percent (6%) of the outstanding principal amount of such Series 1992 Refunded Bonds and that the maturity of such Series 2001 B Bonds is not later than October 1, 2021. Compliance with the provisions of the prior sentence shall be conclusively determined upon receipt by the City Manager of a letter of Public financial Management, Inc., financial advisor to the Issuer that such provisions have been complied with. The Bond Purchase Contract(s) shall be in substantially the form attached hereto with such changes thereto as may be approved in accordance with the above paragraph. The negotiated sale of the Bonds to the Underwriter is hereby approved. The City Manager is hereby autllOrized to execute the Bond Purchase Contract(s) on behalf of the Issuer, upon satisfaction of the above conditions. SECTION 37. PRELIMINARY OfFICIAL STATEMENT. The Issuer hereby authorizes the distribution of a preliminary official statements in essentially the forms attached hereto for the purpose of marketing the Series 2001 Bonds and delegates to the City Manager the authority to deem such Preliminary Official Statements "final" except for "permitted omissions" within the contemplation of Rule 15c2-12 of the Securities and Exchange Commission. The proper officers of the City are hereby authorized to execute on behalf of the Issuer the Official Statements relating to each Series of the Series 2001 Bonds, in substantially the form and content as the Preliminary Official Statements, with such additions, deletions, and changes thereto, including such additions, deletions and other changes as may be necessitated by this Resolution and the approved Bond Purchase Contract as such officers may approve (such approval to be conclusively evidenced by their execution of said Official Statement), and to deliver such Official Statements to the underwriters. SECTION 38. NO PERSONAL LIABILITY. Neither the members of tile governing body of the Issuer nor any person executing the Series 2001 Bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. SECTION 39. SEVERABILITY. If anyone 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 0R315142;1Q 17 ... ' " ;, separate from the remaining covenants, agreements or provisions of this Resolution or of the Series 2001 Bonds issued hereunder. SECTION 40. INCONSISTENT RESOLUTIONS. All prior resolutions of the Issuer inconsistent with the provisions of this, Resolution are hereby modified, supplemented and amended to conform with the provisions herein contained. SECTION 41. EFFECTIVE DATE. This Resolution shall become effective immediately upon its adoption. ADOPTED this 9th day of April, 2001. (SEAL; ~1Tm: _ " I I u,dL4{~ City Clerk /" ,. !/o I - 0R315142;1O 18 - >. G .0 tE3] ~ ~ ~ ~.;~ .~ := e u 0 c. " C N .:!3.g "';" = S ~ e]~ u 0 u s :. ~ ~~'- .! 0 0 E ~ ,g o ; ;; 0"=0. -S:E~ E II Ci .:: .: 8 u 0 u ~:~ ~ ...~-s l:[ 'i " >. l!! u 0 0 ~.S :; u 0 8 GOO U !l " .0 U U >. Co " .E ~.~ o G U - >. Co ~ ~.!:! ~ -g t! o 0 u >.Ol u G M Sor.2 M 0 _ ON Co o ~ u ~.~ ~ ~ '" , .8~] _-t:: 0'" , 00_ >. u 0 S ~ E >.:1 ~ :; S ~ u ~ ="OCii e .- 0,815 ~=o .~ ~ i u ... ._ ~g~ ~ 10: E s .~ U M '" ~~8 o 0 u 6 :; ~ ~~.i g.g .~ .'" s u -a.:~ .8 Soi- o ~ U M C U ~.~ 1!' ~ ._ ~:] 9 ~..... - 0 '" .~ ~ ~ -: s ~ ; .~ ~ .5 8 ; e _ G .. c- '" .. ~ '"0 8 .~ ,~ ; 'g ~ ~ ~ ~ ~ ~ .:: 0 u 8 ~-g M G 0 ]:~ .g .. - G :~~_: d ... .S ~ ~ ~.; Ci :::: 1.0 E e ~ ~ g 2 ::.g u s ~ e u ~ ; -;;; ~ .~ ~ .~~ IE :I ~ I< Oe9tU ~.~ ,g] .~ ~ c. :i 8 u "3 '= ~ -g ~ '; a.. ~ -2 ~ :a~=~ E-..E.8-s First draft 03/26/0 1 ,2001 Ratings: Standard & Poor's: " _" Fitch: "_" ( Insured) (See Ratings and Municipal Bond Insurance herei n) In the opinion of Bond Counsd, assuming compliance with existing stltutes. regulations. published rulings and court decisions. ani assuming continuing compliance ~ the City with certain tax covenants, intu-est on the Series 2001 Bonds is excludablefrom gross income for federal income tax purposes and is not an item of tax preferencefor ptrposes ofthefederol alternative minimum tax imposed on individuals and corporations. However, see "TAX EXEMPTION" hu-einfor a description of the federal altln/ative minimum tlX on corporations and rertain other federal tax consequences of ownership of the Series 2001 Bonlk. Bond Counsel isjJrther of the opinion that the Series 2001 Bonds are exempt from all present intangible personal property taxes imposedpursuant to Chapter 199. Florida Statutes. {Furthermore. in the opinion of Bond Counsel. based on representations of the City. the Series 2001 Bonds are "qualified tax-exempt obligations" within the meaning of Section 265 (b) (3)ofthe Internal RelK!nue Code of 1986, as amended.) (See "TAX EXEMPTION" herein). PRELIMINARY OFFICIAL STATEMENT DATED NEW ISSUE - BOOK-ENTRY ONLY Dated: $ * CITY OF WINTER SPRINGS, FLORIDA Water and Sewer Refunding Revenue Bonds, Series 2001 ,12001 Due: October 1, as Indicated below The City of Winter Springs, Horida (the "City")is issuing its Water and Se\\er RefundingRevenue Bends, Series200 I (the "Saies 200 I Bonds") only in the form offully registered bonds in the denomination of$5,000 principal amount or any integral multip Ie thereof. The Series 2001 Bonds will bear interest at the fixed rates set forth on the inside cover payable semi-annually on each April I and October I, ccmmencing Octcber I, 200 I. The Series 200 I Bonds, when issued, will be registered in the name of CllIe & Co., as nominee for The Depos itory Trust Compa ny, New York, New York COTC") which will act as securities depository for the Series 2001 Bonds. Purchases of beneficial intlrests in the Series 200 I Bonds wil be made in book-entry firm. Purchasers of the Series 2001 Bonds ("Baleficial Owners") will not receive physical delivery of Saies 200 I Bonds. Accordingly, principal of and interest on the Series2001 Bonds win be paid by -' as paying agent directly to DTC as the registered owner thereof. Disbursements of such payments to the DTC Particip ants is the responsibility of DTC and disburg::ments of 9lch paymentsto the Beneficial Owners is the responsibifity of Direct Participanl'l and Indirect Participants, as more liilly described herein. See "DESCRIPTION OF THE SERIES 200 I BONDS - Book-Entry Only Sy.;tem" herein. Certain of the Series 2001 Brnds are subject to optional and mandatory redemption frior to maturity as set ilrth herein The Series 2001 Bends are being issued by the City pursuantto Chapter 166,Part I~ Florida Statutes, the Ciy Charter and Resolutim No. 665 of the City as amended and supplemerted and particubrly as suwlemented by Resolution No. of the City as supplemalted (colk:ctivelythe "Resolution") to (i) currendy refund all of the City's out!tanding Waterand Sewer Refunding Rewnue Bonds, Series 1991 ober than the 200 lrmturity (the "Refunded Bonds"); and 6i) finance the costs of iS9lance of the Series 200 I Bends including the municipal bond in9lrance premium and the Reserve Account surety bond premium. The Series 2001 Bonds are secured by a pledge of and are payable sdely from the Net Re.oenues (as defined herein) on a parity and equal !tatus with the City of Winter Sprilgs, Florida Water and Sewer Reliinding Revenue Bond, Series 1991 maturing O:tober 1,2001, Ihe City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 1992 (the" 19 92 Bonds") and the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 2000 (the "2000 Bonds", collectively with the 1992 Bonds, the "Parity Bonds") The City has authorized th e issuance of a Series of bonds (the "2002 Bonds") to be securlll by and payabli: solely from tbe Na Revenues" currently refund and dei:ase the 1992 Bonds. The 2002 Bonds will not be issued unless the City's fmancial advisor certifies that such issuance result in a reduction in debt service secured by the Net Revenues. Should the 2002 Bonds be issued the Parity Bonds wwld be such 2002 Bonds and the 2000 Bonds. The 2002 Bonds if issued wiD not be issulll prior to Janwry 2, 2002. The Series 2001 Bonds sballoot be or constitute general obl~ations or Indebtedness of the City or tbe State of Florida or any political subdivision thereof within the meaning of any constltudonal, statutory or charter, provision or limitation, and no bolder sball ever have the rigbt to compel the exercise ofthe ad valorem taxing power ofthe City or taxatlo n of any real or persona I property therein for the payment ofthe Series 2001 Bonds or the making of deposits into the bond service fund, reserve account or otber payments provided for In the Resolution. The Series 2001 Bonds shall not constitute a lien upon the System, or any part thereof, or on any other property of or In the City, but shall constitute a lien only upon the Net Revenues derived from the operation of the System all In the matter provided In the Resolution. Payment of the principal of and interest on the Series 200 I Bonds when due will be guaranteed by a municip al bond insurance policy to be issued simultaneou!iy with the delivery of the Series 2001 Bonds by [INSURER's LOGO] For a discussion of the terms and provisions of such policy, including the Iimitatims thereof, see "MUNK;lPAL BOND INSURANCE" herein and Appendix C hereto. This cover page contains cerlain information for quick reference only. It is not a summary of the Series 200 I Bonds. Investors must read the entire Official Statement to obtain information essential to the making of an informed ilVestment docision. The Sene; 200 I Bonds are offered Wlen, as and if issued by the City and accepted by the Underwriters subject to the approving legal opini on of Akerman, Salterfltt & Eidson, P.A., Orlando, Florida, Bond Counsel. Certain legal matters will be passed on for the City by its counsel, Anthony A. Garganese of Brown, Ward, Sal2Illan & Weiss, P.A., Orbndo, Florida and by Akerman, Senterfltt & Edson, P.A., Disclosure Cwnsel. Public Financial Management, Inc., Orlando, Horida is acting as Financial Advisor to the City in cmnection with the issuance oflhe Series2001 Bonds. The Series 2001 Bonds are expected to bedeliverlll through the mcilities of The Depository Trust Company inNew York, New YOlk on or about ,2001. Hanifen, Imhoff Division ofSti fel, Nicolaus & Company, Incorporated GARDNYR MICHAEL CAPIT AL, INC. Dated: _ _, ))01 WILLIAM R. HOUGH & CO. .Preliminary, subject to Change First draft 03/26/0 1 CITY OF WINTER SPRINGS, FLORIDA OFFICIALS CITY COMMISSION PaulP.Partyka David McLeod Robert S. Miller Michael S. BI ake Edward Martinez:, Jr. David McLeod Mayor Deputy Mayor/Commissioner Commissioner Commissioner Commissioner Commissioner CITY MANAGER Ronald McLemore CITY ATTORNEY Anthony A. Garganese Brown, Ward, Salzman & Weiss, P.A. Orlando, Florida FINANCE DIRECTOR Louise Frangoul CITY CLERK Andrea Lorenzo-Luaces PUBLIC WORKS/UTILITY DIRECTOR Kipton Lockcuff FINANCIAL ADVISOR Public Financial Management, Inc. Orlando, Florida BOND COUNSEL Akerman, Senterfitt & Eidson, P.A. Orlando, Florida AUDITORS McDirmit, Davis, Puckett & Co., P.A. Orlando, Florida OR378176;1 First draft 03/26/0 1 No dealer, broker, salesman or other person has been authorized by the City, the In&lrer or the Underwriters to give any information or to make any representation with respect to the Series 2001 Bonds other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. 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 2001 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, the Insurer, and other sources which are believed to be reliable. The Underwriters have rev iewed the information in this 0 fficial Statement in accordan ce with, and as a 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 herein is subject to change without notice and neither the delivery hereofnor any sale hereunder at any time implies that information herein is corre ct as of any time subsequent to its date. Any statements in this Official Statement involving estimates, as&lmptions and matte IS of opinion, whether or not so expressly stated, are intended as such and not as representations of fact. IN CONNECTION WITH THE OFFERING OF THE SERIES200 1 BONDS, THE UNDERWRITERS MA Y OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2001 BONDS AT A LEVEL ABOVE THA T WHICH MIGHT OTHERW ISE PREV AIL IN THE OPEN MARKET. SUCH ST ABILIZA TION, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. NO REGISTRATION STATEMENT RELATING TO THE SERIES 2001 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE ''COMMISSION'') OR WITH ANY ST A TE 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 2001 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY ST ATE 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. References herein to laws, roles, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qua Iifications of and exception s to statements made herein. Where full texts have not been included as appendices to this Official Statement, they maybe obtained from the City ofWinter Springs, Florida, City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2799, (407) 327-1800,Attention: City Clerk, upon prepayment of reproduction costs, postage and handling expenses. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] OR378176;1 ii First draft 03/26/0 1 TABLE OF CONTENTS ~ SUMMARY STATEMENT................................................................................................ v The City ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v The Series 2001 Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . v Purpose of the Series 200 I Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . v Security Dr the Series 200 I Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . v Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi Municipal Bond Insurance ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. vi Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi Additional Bmds ............................................................................................. vii Authorizing Resolution and Definitims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .. vii Continuing Disclosure ......................................................................................... vii Additional Information ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. vii Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. vii INTRODUCTION ....................................................................................................... I THE CITY ............................................................................................................. 2 PURPOSE OF THE SERIES 2001 BONDS ................................................................................... 2 PLAN OF REFUNDING .................................................................................................. 2 DESCRIPTION OF THE SERIES 200 I BONDS ............................................................................... 2 General Description ............................................................................................. 2 Book-Entry-On1y System ......................................................................................... 3 Redemption Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 5 SECURITY FOR THE SERIES 2000 BONDS .................................................. ~ . . . . . . . .. . . . . . . .. . . . . . . . . . . . . . 6 General .............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Rate CovenaJt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Renewalllld Replacement Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 7 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ADDITIONAL PARITY OBLIGATIONS ..................................................................................... 8 MUNICIPAL BOND INSURANCE. . . .. .. . . . . . . . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . .9 DEBT SERVICE REQUIREMENTS............. ......... ..... ... ........................ .......................... .........9 ESTIMATED SOURCES AND USES OF FUNDS. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . .. . . . II THE SYSTEM .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 History ...................................................................................................... 12 Service Area .................................................................................................. 12 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Administration Division.. . . . . . . . . . . . .. . . . . . . . . . . .. . . . . .. . . . . . . . . . ... . . . .. . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . 14 Water and Wastewater Treatment Plant Operations Division. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Water Distribution and Wastewater Collection Division ................................................................ 14 Existing Water System .......................................................................................... 15 The 2000 Project. .. . . . . . . . .. . . ... . .. .. . . . . . . . . .. . . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . . . . . .. . . . . . . ..15 Existing Sewer System .......................................................................................... 17 Rates and Charges ............................................................................................. 20 Monthly Residential and GenfJ1ll Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 20 LITIGATION .......................................................................................................... 24 LEGAL MATTERS ........................... ......................................................................... .24 TAX EXEMPTION.......... ................... . .......................................... ........ .......... . ...... ....24 General .............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 25 UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 FINANCIAL ADVISOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 INVESlMENT POLey ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 RATINGS. .... . . . . . . . . . . . . . . . . . . . .. . .. . . .. . . . .. . . . . . . . . . . . .. . . . . . . .... .. . . . .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 FINANCIAL STATEMENTS..... .... . ... ... .............. ... ...... .. . ... ... .. . . .... .... .. ... ........ ..... .. ......... .....27 CONTINUNG DISCLOSURE ............................................................................................ 27 VERIFICATION OF MATHEMATICAL COMPUTATIONS..... ......................... .................. ........... ..... .....27 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. 27 ENFORCEABiliTY OF REMEDIES ....................................................................................... 28 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 CERTIFICATE AS TO OFHCIAL STAlEMENT ............................................................................. 28 OR378176; 1 111 APPENDIX A APPENDrX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F OR378176;1 First dmft 03/26/0 I General Information Concerning the City City of Winter Springs, Aorida General PurpCEe Financial Stltements fer the Year Ended Septemba 30, 2000 Specimen Municipal Bond Insurance Poky Summary of the Resolution Form of Proposed Bond Counsel's Opinion Form of Cmtinuing DisclCEure Certificate iv First draft 03/26/0 1 SUMMARY STATEMENT This Summary Statement, being part of the Official Statement, is subject to the more complete information contained herein and should not be considered to be a complete statement of the facts material to making an investment decision. The offering by the City of Winter Springs, Florida, of its $ · Water and Sewer Refunding Revenue Bond s, Series 2001 (the "Series 2001 Bonds"), to potential investors is made on Iy by means of the entire Official Statement. No person is authorized to detach this Summary Statement from the Official Statement or otherwise use it withoutthe entire Official Statement. Capitalized terms used but not defined in this Summary Statement shall have the same meaning as in the Re solution (as he reinafter define d), unless the co ntext would clearly indicate otherwise. See ''Summary of the Resolution" - Appendix 0 hereto. The City The City of Winter Springs, Florida (the "City") was originally incorporated in 1959 under the name of the Village of North Orlando and became the City ofW inter Springs in 1972. T he City is located in southern Seminole County in central Florida. Adjacent municipalities are Longwood,Casselberry and Oviedo. The City's estimated 2000 population was31,088. The City is served by a City Commission- City Manager form of government consisting ofa Mayor, five commissioners anda City Manager. The Mayor and City Commissioners are elected for three-year terms. The Mayor votes on matters coming before the City Commissio n only if neede d to break a tie vote among the other City Commissioners. The City Manager is appointed by the City Commission. For additional infurmation concerning the City, see Appendices A and B hereto. The Series 2001 Bonds The Series 2001 Bonds are being issued in fully registered furm in the name of Cede & Co., as nominee for The Dep ository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Series 2001 Bonds. The Series 2001 Bonds will be available to purchasers in denom inations of $5 ,000 or in tegral multiples th ereof. Interest on the Series 2001 Bond s is payable on October 1,2001 and on each April 1 and October 1 thereafter until maturity or redemption. Amounts due on the Series 2001 Bonds will be paid to Cede & Co., as nominee for DT C, as registered owner 0 f the Series 2001 Bonds, to be su bsequen tly disbursed to DTC Participants and thereafter to the Beneficial Owners of the Series 2001 Bonds. See "DESCRIPTION OF THE SERIES 2001 BOND S" herein. Certain of the Series 2001 Bonds are subject to optional, mandatory sinking fund redemption prior to maturity as set forth herein. See "DESCRIPTION OF THE SERIES 2001 BONDS - Redemption Provisions" herein. Purpose of the Series 2001 Bonds The Series 2001 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. of the City adopted by the City Commission on ____, 2001 as supplemented (collectively the "Resolution") to (i) currently refund all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991 other than the bonds of such series maturing October 1,2001, (the "Refunded Bonds"); and (ii) finance the costs of issuance of the Series 200 1 Bonds including the municipal bond insurance premium and Reserve Account surety bond premium. See "PURPOSE OF THE SERIES 2001 BONDS," "PLAN OF REFUNDING," and "ESTIMA TED SOURCES AND USES OF FUNDS" herein. Security for the Series 2001 Bonds The Series 2001 Bonds are payable from and secured by a first lien upon and pledge of the Net Revenues of the City's combined water and sewer system (the "s ystem"). The lien of the Series 2001 Bond s on the Net Revenues is on a parity and equal status with the City of Winter Springs, Florida, Water and Sewer Refunding Revenue Bond, Series 1991, maturing October 1,2001, .Preliminary, subject to change v First drnft 03/26/0 1 the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 1992 (the" 1992 Bonds") and the City ofWinter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 2000 (the "2000 Bonds", collectively with the 1992 Bonds, the "Parity Bonds "). The City has authorized the issuance of a Series of Bonds (the "2002 Bonds", to be secured by and payab Ie solely from the Net Revenues to currently refund and defease the 1992 Bonds. The 2002 Bonds will not be issued unless the City's financial advisor certifies that such issuance result in a reduction in debt service secured by the Net Revenues. Should the 2002 Bonds be issued the Parity Bonds would be such 2002 Bond s and the 2000 Bo nds. The 2002 Bonds if issued will not be i&<;ued priorto Janua!)' 2, 2002. See "SECURITY FOR THE SERIES 2001 BONDS" herein. The Series 2001 Bonds shall not be or constitute general obligations or indebtedness of the City or the State of Florida or any political subdivision thereofwithin the meaning of any constitutiona~ statutory or charter, provision or limitation, and no bolder shall ever have the rightto compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the Series 2001 Bonds or tbe making of deposits into the debt service fund, reserve account or other payments provided for in the Resolution. The Series 2001 Bonds shall not constitute a lien upon the System or any pa rt thereo f, or on any othe r prope rty of or in the City, but shall co nstitute a lie n only upon the Net Revenues derived from the operation of the System all in the manner provided in the Resolution. The Resolution provides that a sum equal to the Reserve Requirement shall be deposited in the subaccount in the Reserve Account created forthe benefit of the Series 200 I Bonds at the time of delivery of the Series 2001 Bonds and shall be used only ror the purposes provided in the Resolution. The "Reserve Requirement" is defined as the lesser of (i) the Maximum Bond Service Requirement for the Series 2001 Bonds; (ii) 125% of the Average Annual Bond Service Requirement for the Series 200 I Bonds, or (iii) 10% of the proceeds of the Series 2001 Bonds. See "SECURITY FOR TH E SERIES 2001 BONDS - Reserve Fund. Redemption The Series 2001 Bonds maturing on or after October I, _ are subj ect to optional redemption on or after October I, _ at the redemption prices described herein. Certain of the Series 2001 Bonds are subject to mandatory sinking fund redemption as described herein. The Series 2001 Bonds are also subject to extraordinary mandatory redemption from prepayment principal. See "DESCRIPTION OF THE SERIES 2001 BONDS - Redemption Provisions" herein. Municipal Bond Insurance Payment of the principal of, accreted value and interest on the Series 2001 Bonds, when due, will be guaranteed by a municipal bond insurance policy to be issued simultaneously with the delivery of the Series 2001 Bondsby See "MUNICIPAL BOND INSURANCE" herein and Appendix C hereto. Professio nals , will serve as Re gistrar and Paying Agent pursuant to the Resolution and as Esc row Ho Ider pursua nt to the Escro w Agreem ent. Akerman, Senterfitt & Eidson, P.A., Orlando, Florida, is serving as Bond Counsel and Disclosure Counsel. Brown, Ward, Salzman & Weiss, P .A., Orlando, Florida, is the City Attorney. McDirmit, Davis, Puckett & Co., P.A., Orlando, Florida, is the City's auditor. Public Financial Management, Inc., Orlando, Florida, is the City's financial advisor. Some of the professionals will be compensated from a portion of the proceeds of the Series 200 I Bonds, identified as "Cost of Issuance" under the heading "ESTIMATED SOURCES AND USES OF FUND S" herein. Such compensation in some instances, but not in regard to the City's audito r, is contingent upon the issuance of the Series 2001 Bonds and the rece ipt of the pro ceeds there of. OR378176;1 vi First draft 03/26/0 1 Additional Bonds Subject to certain conditions set forth in the Resolution, the City may from time to time issue Add itional Parity Obligations, defined in the Resolution that are payable from and secured by a first lien on and pledge of the Net Revenues on a paritywith the Series 200 I Bonds and the Parity Bonds then Outstanding. See" ADDITION AL P ARIT Y OBLIG A T10NS " herein. Authorizing Resolution and Definitions A summary of the Resolution is set forth in Appendix D hereto. Definitions of certain capitalized words used in this Official Statement and not otherwise defined herein have the meaning ascribed to such terms in the Resolution. Continuing Disclosure The City has agreed and undertaken for the benefit of the Holders of Series 200 I Bonds, to provide certain financial information and operating data relating to the City and the Series 2001 Bonds and notice of certain enumerated events pursuant to Rule 15c2-12 of the Securities Exchange Act of 1934. See "CONTINUING DISCLOSU RE" herein. Additional Information This Official Statement speaks only as of its date and the information contained herein is subj ectto change. Descriptions of the Series 2001 Bonds, and other agreements and documents contained herein constitute summaries of certain provisions thereof and do not purport to be complete. Reference is made to the Resolution, and such other agreements and documents for a more complete description of such pro v isions. Investors should contact the City Clerk (407) 327-1800 at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2789, to obtain copies of the Re solution or other docum entation referred to herein or with questions concerning this Official Statement or the Series 2001 Bond s. Except to the extent othe rwise indicate d, informatio n contained in this Official Statem ent was com piled by the City. Misce lIaneous The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and rererence is directed to all such documents for full and complete statements of all matters of fact relating to the Series 200 I Bonds, the security for the payment of the Series 2001 Bonds, and the rights and obligations of holders thereo f. The information contained in the Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations offact, and no representation is made that any of the estimates will be realized. Neitherthis OffICial Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the holders of the Series 200 I Bonds. [END OF SUMMARY STATEMENT] OR378176; I vii First draft 03/26/0 1 OFFICIAL ST A TEMENT $ CITY OF WINTER SPRINGS, FLORIDA WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2001 INTRODUCTION The purpose of this Official Statement, which includes the cover page and all Appendices hereto, is to furnish certain information with respect to the issuance by the City of Winter Springs, Florida (the "City") of its Water and Sewer Refunding Revenue Bonds, Series 2001 (the "Series 2001 Bonds") in the aggregate principal amount of $ The Series 2001 Bonds are being issued pursuant to the Constitution of the State of Florida, Chapter 166, Part II, Florida Statutes, as amended and supplemented, Chapter 72-718, Laws of Florida, Special Act of 1972, as amended (the "City Charter") and other applicable provisions of law, and Resolution No. , as supplemenred (collectively, the "Resolution"). See Appendix D, "Summary of the Resolution". The Series 200 I Bonds are payab Ie from and secured by a first lien upon and pledge of the Net Revenue (as hereinafrer defined) derived from the operation of the City's combined Water and Sewer System (the "System"). The lien of the Series 2001 Bonds on the Net Revenues is on a parity and equal status with the City of Winter Springs, Florida, Water and Sewer Refunding Revenue Bonds, Series 1991 maturing October 1,2001, the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 1992 (the" 1992 Bonds") and the City of Winter Springs" Florida Water and Sewer Refunding Revenue Bonds,Series 2000 (the "2000 Bonds) to be secured byand payab Ie solely from the Net Revenues to currently refund and defease the 1992 Bonds. The 2002 Bonds will not be issued unless the City's financial advisor certifies that such issuance result in a reduction in debt service secured by the Net Revenues. Should the 2002 Bonds if issued will not be issued prior to January 2,2002. The current Parity Bonds are currently outstanding in the principal amountof$__________. See "SECURITYFOR THE SERIES2001 BONDS" herein. The Series 200 I Bonds are being issued in fully registered fOrm in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("D TC"), which will act as securities depository for the Series 200 I Bonds. The Series 200 I Bond s will be available to purchasers in denominations of $5,000 of integral multip les thereof. Interest on the Series 2001 Bonds is payable on October I, 2001 and on each April 1 and October I thereafter until maturity or red emption. A mounts due on the Series 200 I Bonds will be paid to Cede & Co., as nominee for DTC, as registered owner of the Series 2001 Bonds, to be subsequently disbursed to DTC Participants and thereafter to the Beneficial Owners of the Series 200 I Bonds. See "DESCR IPTION 0 F THE SE RIES 2001 BONDS" herein. This Official Statement speaks only as of its date and the information contained herein is subject to change. Capitalized terms used but not defined herein have the same meanings as when used in the Resolution unless the context clearly indicates otherwise. Complete descriptions of the terms and conditions of the Series 2001 Bonds are set forth in the Resolution, a summary 0 f which is attached to this Official Statement as Appendix D. The description of the Series 2001 Bonds, the documents authorizing and securing the same, and th e information from variou s reports and statements contained herein are not comprehensive or definitive. All references herein to such documents, reports and statements are qualified by the entire, actual content of such documents, reports and statements. Copies of such documents, reports and statements referred to herein that are not included in their entirety in this Official Statement may be obtained, afrer payment of applicable co pying and mailing costs, from the City of Win ter Springs, at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2797, Attention: City Clerk, (407) 327-1800. OR378l76;1 First draft 03/26/0 1 THE CITY The City was incorporated in 1959 under the name of the Village of North Orlando and became the City of Winter Springs in 1976. The City is located in Seminole County. which is a part of the greater Orlando metropolitan area in East Central Florida. This area is one of the fastest growing areas in the country. The City is primarily a retail, office and residential area with a small amount of light industry and commercial. The City currently has a land area of 14.6 square miles and a 2000 population of approximately 31,088. The City operates according to a Commission/Manager form of government, with an appointed City Manager, five elected City Commissioners and a separately elected Mayor. The Mayor votes on matters coming before the City Commission only if a vote by the other Commissions results in a tie. PURPOSE OF THE SERIES 2001 BONDS The Series 200 I Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. 665 of the City as amended and supplemented and particularly as supplemented by Resolution No. of the City ado pted by the a dopted by the City Co mmissio n on , 200 I as supplemented (collectively the "Resolution") to (i) currently refund all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991 other than the bonds of such series maturing October 1,2001 (the "Refunded Bonds"); and (ii) finance the costs of issuance of the Series 2001 Bonds including the municipal bond insurance premium and the Reserve Accowlt Surety bond premium See "THE PROJECT ,''''PLAN OF REFUNDING," and "ESTIMA TED SOURCES AND USES OF FUNDS" herein. PLAN OF REFUNDING The Refunded Bonds, as of the date 0 f delivery of the Series 200 I Bond s, will be outstand ing in the aggreg ate principal amount of $5,780,000. To effect the refunding of the Refunded Bonds, the City will enter into an escrow deposit agreement (the "Escrow Agreement") with as escrow holder (The "Escrow Holder"). Pursuant to the terms of the Escrow Agreement, the City will deposit with the Escrow Holder a portion of the proc eeds of the Series 200 I Bond s, as well as other available moneys of the City. Such moneys, other than beginning cash balances, will be applied on the date of delivery of the Series 2001 Bonds to the purchase of direct obligations of the United States of America (the "Federal Securities"). The Federal Securities shall mature at such times and in such amounts as shan be sufficient to pay the principal of applicable redemption premium and interest on such Refunded Bonds on the redemption dateofOctober 1,2001. The Refunded Bonds are subject to redemption on October 1,2001 at a redemption price of 102% of the principal amount thereof plus accrued interest to the redemption date. Upon deposit of such moneys into the escrow deposit account (the "Escrow AccOWlt") as provided in the Escrow Agreem ent, in the opinion of Bond Counse~ the lien of the holders of the Refunded Bonds on the Net Revenues pledged to such holders will no longer be in effect with respect to said Refunded Bonds. DESCRIPTION OF THE SERIES 2001 BONDS General Description The Series 200 1 Bonds are being issued in fullyregistered form in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), which will act as securities depositoI)' for the Series 200 I Bonds. The Series 200 I Bonds will be availab Ie to purchasers in denomin ations of $5,000 of integ ral multiples thereof. Interest on the Series 2001 Bonds is payable on October 1,2001 and on each April I and October 1 thereafter until maturity or redemption. Amounts due on the Series 2001 Bonds will be paid to Cede & Co., as nominee for DTC, as registered owner of the Series 2001 Bonds, to be subsequently disbursed to DTC Participants and thereafter to the Beneficial Owners of the Series 200 I Bonds. See "DESCR IPTION 0 F THE SE RIBS 200 I BONDS" herein. OR378176;1 2 First draft 03/26/0 1 Book-Entry-Only System The information set forth under this caption concerning DTC and DTC's book-entry system has been obtained from sources the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. The Series 2001 Bonds will be issued as fully registered bonds without coup ons. The Dep ository Trust Company ("DTC"), New York, New York, will aetas securities depositOlY for the Series 2001 Bonds. The Series 2001 Bonds will be i~ued as fully registered securities registered in the name of Cede & Co. (DT C's partnership nominee). One fully registered Series 200 I Bond will be issued for each maturity of the Series 2001 Bonds. Individual purchases will be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof. Beneficial owners of the Series 2001 Bonds will not receive physical delivery of Series 2001 Bonds. DTC 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 17 A 0 f the Securities Exchange Ac t of 1934. DT C holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need fur physical movement of securities certificates. Direct Participants include securities brokers and dea lers, banks, trust companies, clearing corp orations, and certain other orga nizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial rela tionship with a Direct Participant, either directly or indirec tly ("Indirect Pa rticipants"). T he rules app licable to D TC and its Participants are on file with the Securities and Exchange Commission. Purchases of Series 2001 Bonds under theDTC system must be made by or through Direct Participants, which will receive a credit fur the Series 200 I Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2001 Bond ("Beneficial Owner'') is in turn to be recorded on the Direct and Indirect Participant's records. Beneficial Owners will not receive written confirmation from DTC of their transaction, but Beneficial Owners are expected to receive written confirmation providing details of the transaction, as well as period ic 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 2001 Bonds are to be accomplished by entries made on the books of Participan ts acting on be half of Bene ticial Owners. Bene ticial Owners will not receive certificates repre senting their ownership interest in Series 2001 Bonds, except in the event that use of the book-entry system for the Series 2001 Bonds is discontinued. To facilitate subsequent transfers, all Series 200 I Bonds deposited by Participa nts with DT Care registe red in the name ofDTC's partnership nominee,Cede & Co. The deposit of Series 2001 Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2001 Bonds, DTC 's records reflect only the identity of the Direct Participants to whose accounts such Series 2001 Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on be half of their customers. Conveyance of notices and 0 ther comm unications by DTC to Direct Participants, by Direct Particip ants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor Cede & Co. will consent or vote with respect to Series 2001 Bonds. Under its usual procedures, DTC will mail an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. 's conse nting or voting rights to those DirectParticipants to whose accounts in the Series200 I Bonds OR378176; Ii 3 First draft 03/26/0 1 are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 2001 Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on payment dates in accordance with their respective holdings shown on DTC's records unless DIC has reason to believe that it will not receive payment on such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with see urities held for the accounts 0 f customers in bearer form or registered in "street name," and will be the responsib ility of such Participant and not of DIC, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DIC is the responsibility of the City or the Paying Agent, disbursement of such pa yments to Direct Participants shall be the responsibility ofDIC, and disbursement of such payments to the Bene ficial Owners shall be the responsibility of Direct and Indirect Participants. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2001 BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE HOLDER OF THE SERIES 2001 BOND OR REGISTERED OWNERS OF THE SERIES 2001 BONDS SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 200 1 BONDS. The City shall provide for issuance of Series 2001 Bonds (the "Replacement Certificates") directly to owners of Series 2001 Bonds other than DTC, or its nominee, but only in the event that (i) DTC determines not to continu e to act as securities depository for the Series 2001 Bonds; or (ii) the City has advised DTC of its determination that DTC is incapable of discharging ils duties as a securities deposito ry of immobilized securities; 0 r (iii) the City has determined in its sole discretion notto continue the book-entrysystem of transfer. Upon the occurrence of (i), (ii) or (iii) above, the City may attempt to locate another qualified securities depository. If the City does not locate another qualified securities depository to replace DTC, the City shall have authenticated and delivered Replacement Certificates. In the event the City makes the determination to issue Replacement Certificates, and has made provision to notify the Beneficial Owners of Series 200 1 Bond s by mailing an appropriate notice to DTC, it shall issue Replacement Certificates at the address of such owner as it appears in the registration books maintained by the Registrar and principal on the Series 2001 Bonds will be payable when due upon presentation and surrender of such Series 200 1 Bond s at the office of the Paying Agent. Interest payable 0 n any Series 2001 Bond on a ny Interest Da te will (except fo r the final payme nt of interest which shall be paid only up on presen tation and surrender of the Series 200 I Bond s at the office of the Paying Agent) be paid by check or draft of the Paying Agent to the Holder in whose name such Bond shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Interest Date, or by wire transfer to owners of $1,000,000 or more is principal amount of Series 200 I Bo nds. Replacement Certificates will be transferable only by presentation and surrender to the Registrar, together with an assignment duly execute d by the owner of the Re placeme nt Certificate, or by his attorney or legal representative, in form satisfactory to the Registrar and subject to the other conditions set forth in the Resolution. The City can make no assurances that DTC will distribute payments of principal of, redemption price, ifany, or interest on the Series 2001 Bond s to the DI C Particip ants, or that D IC Participants wiII distribute payments of principal of, redemption price, if any, or interest on the Series 2001 Bonds or redemp tion notice (re ferred to be low) to the Beneficial Owners of such Series 2001 Bonds or that they will do so on a timely basis, 0 r that DTC or any 0 fits Participan ts will act in a manner described in this Official Statement. The City is not responsible or liable for the failure ofDTC to make any payment to any DTC Participant or failure of any DTC Participant to give any notice or make any payment to a Beneficial Owner in respect to the Series 2001 Bonds or any error or delay relating thereto. In the event of an insolvency of DTC, or if DTC has insufficient securities to satisfy the claims of the DTC Participan ts with respect to deposited securities, DT C Particip ants may not be able to obtain all of their deposited securities. The rights ofho1de rs of beneficia I interests in the Series 200 I Bonds and the manner of transferring or pledging those interests is subjec t to applicab Ie state law. Holders of beneficial interests in the Series 200 I Bonds may want to discuss the manner of transferring or pled ging their interest in the Series 2001 Bo nds with their legal advisors. OR378176;1 4 First draft 03/26/0 1 Redemption Provisions Optional Redemption of Series 2001 Bonds The Series 200 I Bonds maturing on or prior to October I, __' are not redeemable prior to their respective maturities. The Series 2001 Bonds maturing on or after Octob er 1, __' are subject to optio nal redem ption prior to their'maturities on or after October I, __, at the op tion of the City in whole or in part at any time, in such manner as shall be determ ined by the City and by lot within a maturity if less than a full maturity from any legally available monies at a redemption price (expressed as a percentage of the principal amount to be redeemed) as set forth in the following table, together with accrued interest to the redemption date. Period During Which Redeemed (Both Dates Inclusive) Redemption Price October I, _ through September 30, __ October I, _ and thereafter 101% 100% Mandatory Redemption afSeries 2001 Bonds The Series 2001 Bonds maturing on October I, _ are subject to mandatory redemption in part prior to maturity by lot on October I, _ and on each 0 ctober I thereafter, at a redemption price equal to the principal amount thereof and accru ed interest there on to the da te fixed for red emption, without prem ium from A mortization Installments through operation 0 f the Redemption A ccount, as follows: October 1 of Year Principal Amount The Series 200lBonds maturing on October I __ are subject to mandatory redemption in part prior to maturity by lot on October I, _ and on each October 1 thereafter, at a redemption price equal to the principal amount thereofand accru ed interest there on to the da te fixed for red emption, without prem ium from A mortization Installments through operation 0 f the Redemption A ccount, as follows: October 1 of Year Principal Amount Notice of Redemption Notice of such rede mption sha 11, at least thirty (30) days prior to the redemp tion date, be filed with the Registrar, and mailed, first class mail, postage prepaid, to all Owners of Series 2001 Bonds to be redeeme d at their addresses as they appear on the registration books, but failure to mail such no tice to one 0 r more 0 wners of Se ries 200 I Bonds shall not affect the validity of the proceedings for such redemption with respect to Owners of Series 2001 Bonds to which notice was duly mailed. Each such notice shall set furth the date fixed for redem ption, the red emption p rice to be paid and, ifless than all of the Series 2001 Bonds of one maturity are to be called, the distinctive numbers of such Series 2001 OR378176; 1 5 First dmft 03/26/0 1 Bonds to be redeemed and in the case 0 f Series 2001 Bond s to be rede emed in part only, the portion of the principal amount thereof to be redeemed. Any notice of optional redemption, other than with respect to an advanc e refunding, sh all be circulate d only if sufficient funds have been deposited in the Bond Service Fund to pay dIe redemption price of the Series 2001 Bonds to be redeemed. Official notice of redemption having been given as aforesaid, the Series 200 I Bonds or portions of Series 2001 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall delimit in the payment of dIe redemption price) such Series 200 I Bonds or portions of Series 2001 Bonds shall cease to bear interest. Upon surrender of such Series 2001 Bonds for redemption in accordance with said notice, such Series200 1 Bonds shall be paid by the Registrar at the redemption price. Installments of interest due 0 n or prior to the redem ption date shall be payable as provided in the Resolution for payment of interest. Upon surrender fur any partial redemption of any Series 2001 Bond, there shall be prepared for the Owner a new Series 2001 Bond or Series 2001 Bonds of the same maturity in the amount of the unpaid principal of such partially redeemed Series 2001 Bond. All Series 2001 Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued. In addition to the foregoing notice, further notice shall be given by dIe City as set out below, but no defect in said further notice nor any fuilure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice dIereof is given as above prescribed. a. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Series 2001 Bonds being redeemed; (ii) the date of issue of the Series 2001 Bonds as originally issued; (iii) the rate of interest borne by each Series 200 I Bond being redeemed; (iv) the maturity date of each Series 200 I Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Series 200 I Bonds being redeemed. b. Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types similar to dIe type of which the Series 200 1 Bonds con sist and to one or more national information services that disseminates notices of redemption of obligations such as the Series200 1 Bonds. SECURITY FOR THE SERIES 2000 BONDS General The Series 2001 Bonds are being issued as Additional Parity Ob ligations unde r the Resolution and are payable solely from and secured by a prior lien upon and pledge of the Net Revenues derived from the operation of the System on a parity and equal status with dIe Parity Bonds, and any Additional Parity Obligations hereafter issued pursuant to the Resolution. The Series 2001 Bonds, the Parity Bonds, and any Additional Parity Obligations.issued pursuant to dIe Resolutionare collectively referred to as the "Bonds. " In the Resolution, the City irrevocably pledges the Net Revenues to the payment of the principal of, redemption premium, if any, and interest on the Bonds, the reserves for the Bonds and all other payments required under the Resolution. The Bonds do not constitute a general obligation or indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and no holder of the Bonds shall ever have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any rea I or persona I property therein for the payment of the principal of and interest on the Bonds or the making of any debt servi:e fund, reserve account or the payments provided for in the Resolution. The Bonds and the indebtedness evidenced thereby do not 6 First draft 03/26/0 I constitute a lien upon the System, or any part the reof, or on any other property of 0 r in the City, but shall cons titute a lien only on the Net Revenues all in the manner provided in the Resolution. The Resolution establishes the Revenue Fund, the Debt Service Fund (which includes the Principal Accou nt, the Interest Account, the Redemption Account, and the Reserve Account) and the Renewal and Replacement Fund. All such funds and acc ounts will be held by the City as trust funds, but no independent trustee as been appointed to hold the monies in such funds for the benefit of the holders of the Bonds. For information on all funps and accounts and the disposition and flow of revenues, see" APPENDIX D - Summary of the Resolution" attached hereto. The establishment of the various funds by the Resolution doe s not require the establishm ent of any completely independent, self-balancing funds as such is commonly defined and used in government accounting, but rather is intended solely to cons titute an earm arking of ce rtain revenues and assets of the System for certain purposes and to establish certain priorities for application of such revenues and assets as provided in the Resolution. Rate Covenant Pursuant to the Resolution, the City has covenanted to fix, establish, revise from time to time, whenever necessary, maintain and collect always such fees, rates, rentals ao:l other charges for the use of the products, services and facilities of the System which will always provide Revenues in each year sufficient to pay the aggregate of the amount needed to pay all Cost of Operation and Maintenance as the same shall become due in such year, plus one hundred ten percent (110%) of the Bond Service Requirement becoming due in such year on the Bonds Outstanding and one hundred percent (100%) of all other deposits to be made pursuant to the Resolution. Such rates, fees, rental or other charges shall not be reduced so as to render them insufficient to provide Revenues for such purposes. Reserve Account The Resolution provides for the establishment and maintenance of a Reserve Account in the Debt Service Fund. Upon delivery of the Series 2001 Bonds, the City shall deposit into the subaccount in the Reserve Account established for the benefit of the Series 2001 Bonds an amount equal to the Reserve Requirement. Pursuant to the . Resolution the "Reserve Requirement" is defined as the lesser of (i) the Maximum Bond Service Requirement for the Series 2001 Bonds, (i) 125 % of the Average Annual Bond Service Requirement for the Series 2001 Bonds, or (ii) 10% of the proceeds of th Series 2001 Bonds. Amounts on deposit in each subaccount in the Reserve Account shall be applied in accordaoce with the provisions of the Reso lution solely for the purpose of the payment of maturing principal of am ortization installments; and interest on the Bonds Outstanding for which such subaccowlt was established and for no other Series of Bonds. Therefore, amounts on deposit in the subaccount within the Reserve Account established for the benefit of the Series 2001 Bonds may be used for holders 0 f the Parity Bonds or any Additional Parity Ob ligations. To provide for the Reser ve Requ irement fo r the Series 2001 Bond s the Issuer sh all purchase from _____ for deposit to the subac count in the Reserve Account cre ated for the benefit of the Series 2001 Bonds a sure ty bond in the amount 0 f the Reve nue Req u iremen t. Renewal and Replacement Fund The Resolution creates a R enewa 1 and Rep laceme nt Fund into which the City is to deposit monthly from the monies remaining on deposit in the Revenue Fund, an amount equal to one-twelfth (l/12th) of five percent (5 %) of the Gross Revenues received during the immediately preceding Fiscal Year, such deposit to be continued to be made for the purpose of this fund; provided that no deposit shall be required to be made so long as there is an amount on deposit in the Renewal and Replacement Fund in the amount of 5 % of the Gross Revenues received during the immed iately preceding Fiscal Year. The monies in the Renewal and Replacement Fund shall be used only for the 7 First drnft 03/26/0 1 purpose of paying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System and emergency repairs thereto. Such monies on deposit in such account shall also be used to supplement the Reserve Account, if necessary, in order to prevent a default in the payment of the principal of and interest on the Bonds. Investments Monies in any fund or account created pursuant to the Resolution, with the exception of the Re serve Account, may be invested and reinvested in Investment Securities which mature not later than the dates on which the monies on deposit therein w ill be needed for the purpose of such fund or account. Monies in the subaccount in the Reserve Account may be invested and reinvested in Investment Securities maturing not later than five (5) years from the date of acquisition of such investment. All income on such investments, except as otherwise provided in the Resolution, shall be deposited in the respective funds and account from which such investments were made and be used for the purposes thereof unless and until the maximum required amount is on deposit and thereafter sh all be deposited in the Revenue Fund. ADDITIONAL PARITY OBLIGATIONS The City may issue additional obligations having an equal lien on the Net Revenues and ranking equally in all other aspects with the Series 2001 Bonds and the Parity Bonds subject to the following conditions as provided in the Resolution: 1. There shall have been obtained and filed with the City a certificate or other statement of an independent certified public accountant of suitable experience and responsibility stating: (a) that the books and records of the City relative to the System have been audited by him; (b) the amount of the Net Revenues of the System, derived for the Fiscal Year preceding the date of issuance of the proposed Additional Parity Obligations with respect to which such certificate is made, adjusted as provided in (2) through (5) below; (c) that the aggregate amount of such Net Revenues, as adjusted, from the System, for such preceding Fiscal Year is equal to not less than one hWldred ten percent (110 %) of the Maximum Bond Service Requirement on aU obligatvns issued under the Resolution if any, then outstanding and on the Additioml Parity Obligations with respect to which such certificate is made. 2. Upon recommendation of the Consulting Engineer, historical Net Revenues of the System may be adjusted by including 100% of the additional Net Revenues, which in the op inion of the Consulting Engineer would have been derived by the City from rate increases adopted and in effect before the Additional Parity Obligations are issued. 3. Upon recommendation of the Consulting Engineers if the Additional Parity Obligations are to be issued for the purpose of acquiring an existing water and/or sewer system the Net Revenues maybe adjusted by including: 100% of the additional estimated Net Revenues which in the written opinion of the Consulting Engineers will be derived from the acquired facility during the first complete Fiscal Year after the issuance of such Additional Parity Obligations (the Consulting Engineers' report shall be based on the actual operating revenues of the acquired utility for a recent 12-month period adjusted to reflect the City's ownership and the City's rate structure in effect with respect to the System at the time of the issuance of the Additional Parity Obligations). 4. Upon recommendation of the Consulting Engineers, if the number of connections as of the first day of the month in which the proposed Additvnal Parity Obligations are to be issued exceeds the average number of such connections during such Fiscal Year, then the Net Revenues shall be adjusted to include the Net Revenues which would have been received in such Fiscal Year as if those additional connections had also been connected to the System during all of such Fiscal Year. 8 First draft 03/26/0 1 5. Upon recommendation of the Consulting Engineer, if the City shall have entered into a contract, which contract shall be for a duration of not les s than the final maturity of the proposed Additional Parity Obligations, with any public body, whereby the City shall have agreed to furnish services for the collection, treatment or disposal of sewage or agreed to furnish services in connection with any water system, then the Net Revenues during the Fiscal Year shall be increased (to the extent such amounts were not reflected in such Revenues) by the minimum amount which the public body shall guarantee to pay in anyone year for the furnishing of services by the City, after deducting from such payment the estimated Cost of Operation and Maintenance attributable in such year to such services. 6. The City need not comply with the provisions of paragraph 1 above if and to the extent the Bonds to be issued are Refunding Bonds, if the City shall cause to be delivered a certificate of an independent certified public accountant setting forth the Average Annual Debt Service Requirement (i) for the Bonds then Outstanding and (ii) for all Series of Bonds to be im mediately Outstandin g thereafte r and stating that the Average Annual Debt Service Requirement pursuant to (ii) above is not greater than that set furth pursuant to (i) above. 7. The City shall not be in default in carrying out of any of the obligations assumed under the Resolution, and all paym ents required by the Resolution to be made into the funds and accounts established thereunder shall have been made to the full extent required 8. The resolution authorizing the issuance of the Additional Parity Obligations shall recite that all of the covenants contained in the Resolution will be applicable to such Additional Parity Obligations, unless in the opinvn of Bond Counsel the failure to make any cove nant applica ble to such Ad ditional Parity Obligation s will not adversely affect the rights of the Holders of any Outstanding Bonds. MUNICIPAL BOND INSURANCE [To Be Provided] DEBT SERVICE REQUIREMENTS The following table show s the scheduled annua I principal and interest requirements on too Series 2001 Bonds, total annual debt service on the Series 2001 Bonds, total debt service for the Parity Bonds and combined debt service for all such Bonds. Series 2001 Bonds Year Ending (October 1) Principal Interest Aggregate Series 2001 Bonds Debt Service Parity Bonds Debt Service Total Series 2001 Bond and Parity Bonds Debt Service 2001 2002 2003 2004 200S 2006 2007 2008 2009 2010 2011 2012 2013 9 First draft 03/26/0 1 ESTIMA TED SOURCES AND USES OF FUNDS Sources of Funds: Series 2001 Bond Proceeds Less Original Issue Discount Other Available Moneys( 1) Accrued Interest $ - ($_-_._) $---,- $--.- Total Estimated Sources of Funds $ Uses of Funds Deposit of Accrued Interest to Interest Account Deposit to Construction Fund Underwriter's Discount Cost of Issuance(2) $ $ $---- Total Estimated Uses of Funds $ (.1) Includes costs of issuance, and other fees and expenses including the municipal bond insurance premium and Reserve Account surety bo nd premium asso ciated with the issuance of the Series 2001 Bonds. CITY OF WINTER SPRINGS, FLORIDA WATER AND SEWER SYSTEM HISfORICAL Sf A TEMENT OF PRO-FORMA DEBT SERVICE COVERAGE FOR YEARS ENDED SEPTEMBER 30, 1996 THROUGH 2000 1996 1997 1998 1999 2000 Operating Revenues $5,021,899 5,098,941 $5,302,148 $5,652,715 $5,697,412 - User Charges Connection Fees 327,903 305,914 376,942 1,088,862 432,808 Interest 197,526 212,264 244,022 252,455 352,152 Miscellaneous 26,421 Q 1.000 5.660 34.389 Total Income $5,573,749 $5,617,119 $5,924,112 $6,999,692 $6,516,761 Direct Operating Expenses' $2,569.791 $2.517 ,191 $2.696.506 $3.312.000 $3.191.228 Total Net Revenues $3,003,958 $3,099,928 $3,227,606 $3,687,692 $3,325,533 Available for Debt Servi:e Maximum Bond Requirement for Series 2001 Bonds and Parity Bonds2 Coverage Series 2001 "Direct Operating Expenses" exclude depreciation, interest expense and capital expenditures. Assumes 2002 Bonds are not issued. Source: 1996-2000 information derived from City of Winter Springs Comprehensive Annual Financial Reports. 11 First drnft 03/26/0 I THE SYSTEM The Resolution defines the "System" as all properties and assets, real and personal, tangible and intangible, owned or operated by the City which properties and assets include those properties and assets described as the Seminole System and the City System in the resolution of the Issuer adopted September 28, 1992 merging the City System and the Seminole System, used or useful fur the collection, transmission, treatment, and disposal of sewage, and for the supply, storage, treatment, transmission and distribution of water, and all properties and assets hereafter constructed or acquired as additions, improvements, betterments or replacements thereto and extensions thereof. History The Syste m is the resu It of the com bination of tw 0 private utilities acquired by the City. Although for debt purposes the System is a single utility, the City from an operational and permitting perspective treats its sewage facilities as consisting of the East System and the West System as hereina fter describ ed. Win ter Springs was previous Iy known as the Village of North Orla ndo. This area was originally a planned development by Florida Land Company. In the 1950's, Florida Land Company commenced development and a utility called North Orlando Water and Sewer Company was formed. This utility company was acquired by the City in 1984 and serves the western half of the current City limits. In the 1970's, Winter Springs Land and Development started a plalUled unit development currently known as Tuscawilla. The utility company serving this area was Seminole Utilities. Seminole Utilities was acquired by the City in 1990. This utility served the eastern half of the City. Over the last ten years the City has interconnected both systems physically and administratively to provide a cost effective and effi:iem utility system. Service Area The service area oftbe System is defined as the Winter Springs city limits plus a small commercial area in the neighboring City of Oviedo (sewer only). In connection with the issuance of its 1992 Bonds, the City consolidated for bonding purposes the East and West Systems. All new water and sewer customers in the service area are, to the extent permitted by the law, required to connect to the System. The City has a policy that to obtain service, the area must be incorporated into the City. All areas within the City limits are served with the exception of the Ranchland area, which are large country estate type lots served by septic systems and private wells. As improvements (such as paving projects) are performed, City water service is extended into the Ranchland area. It is estimated that this area represents [approximately 150 single-family units]. The projections contained in the table below are based on certain assmnptions and estimates and no representation is made that any of the assumptions or estimates are valid or that any of such projections will be realized. 12 Fiscal Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 First draft 03/26/0 1 Historical and Projected Customer Growth (E RCs) Water Sewer West East West East ERCs Population ERCs Population ERCs Population ERCs Population 4,824 14,303 4,930 12,918 4,383 12,995 4,564 12,520 4,959 14,667 5,138 13,515 4,518 13,360 4,917 13,290 5,101 15,051 5,319 14,035 4,660 13,743 5,099 13,813 5,251 15,451 5,504 14,565 4,803 14,133 5,272 14,309 5,524 16,188 5,676 15,059 5,066 14,843 5,442 14,797 5,690 16,674 5,846 15,511 5,218 15,288 5,605 15,241 5,860 17,174 6,022 15,976 5,375 15,747 5,773 15,698 6,036 17,689 6,202 16,455 5,536 16,219 5,947 16,169 6,217 18,220 6,388 16,949 5,702 16,706 6,125 16,654 6,404 18,766 6,580 17,458 5,873 17,207 6,309 17,154 6,596 19,329 6,777 17,981 6,049 17,723 6,498 17,668 Fiscal year ending September 30. Historical data is based on the City files and the projected growth is based on the historical rate of 3 %. Organization The System has been 0 rganized a s a Utility En terprise Fu nd with management and administratvn provided through City staff. As such, the System is responsible for generating the revenues necessary to fund its activities and pay debt. The City does not have a policy or a practice of making discretionary transrers from the Utility Enterprise Fund to the General Fund. The Utility Enterprise Fund is charged by the General Fund for indirect costs based on an allocation plan to recover the System's share of administrative costs of services rendered such as accounts payable, personne I and inform ation system s support. The City has an existing staff of managers and directors who have experien:e in utility management, financing and operations. The personnel strategically involved in System management include the following: Mr. Ronald McLemore has been the City Manager since 1996. Mr. McLemore has been in leadership positions in county and local government for 30 year s. Most re cendy, Mr. McL emore served as Assistant Cou nty Administrator for Martin County from 1993 to 1996. Mr. McLemore holds a M asters De gree in Public Administration from the University of Georgia. He is a member of the International City Mana gemen t Associatio n, Am erican Soc iety for Public Administration, and was past president of the Winter Springs Rotary Club. In his government positions, he has been responsible for the financing and constructvn of numerous water and wastewater systems, including acquisitions and systems integration. Ms. Louise Frangoul has joined the City as Finance Director in 2000. Ms. Frangoul has 10 years of experience in both the public and private accounting sector. Prior to her position with the City, she was employed at the Central Florida YMCA as the Corporate Controller. The "yo is a $30 million dollar organization with 20 bran:h locations. Prior to her employment with the Y, Ms. Frangoul spent a total of 7 years with Coopers & Lybrand, and 13 First draft 03/26/0 I a local CPA firm where she was responsible for auditing the financial records for Orange County. Marion County. Town of Medley, City of Hialeah and various other governmental and non-profit entities. She is a Certified Public Accountant in the State of Florida and holds a Master's of Business Administration from Rollins College. Ms. Frangoul is a member of both the American and Florida Institutes of Certified Publi: Accountants. Ms. Frangoul oversees 9 City employees and is responsible for all financial functions for the City including financial manage ment, accounting, payroll, budgeting, cash receip ts, utility billing, inve stments and debt functions. Ms. Frangoul reports directly to the City Manager. Mr. Kipton Lockcuff has been the Public Works/Utility Director for the City since 1991. Prior to that, Mr. Lockcuff worked as a consulting engineer for three years and also as Assistant Utility Director for the City of Mar gate for four years. Mr. Lockcuff is a registered professional engineer in the States of Florida and Pennsylvania and has a Bachelor's Degree in Environmental Engineering from Penn State University. He has significant past experience managing municipally and contract operating privately owned water and wastewater utilities, including administration, organization and training fur the construction, operation and maintenance of water and wastewater facilities. Mr. Lockcuff reports directly to the City Manager. Mr. Doug Taylor is the Utility Superintendent and has been with the City since 1984. Mr. Taylor has over 30 years experience in water and wastewater treatment plant operations, wastewater collection system maintenance, water distribution system maintenance, training, and utility construction. Mr. Taylor reports directly to the Utility Director. Administration Division This Administrative Division of the System is one of three units comprising the System and consists of three personnel and is responsible for the supervision of the three divisions of the Utilities Department, as well as certain financial activities involved with the System. The administrative personnel coordinate and supeIVise the operation and construction of improvements and expansion to the water and wastewater facilities. Regular reporting requirements of the various local, state and federal regulatory agencies involved in water and wastewater issues are the responsibilities of the Administration Division, as well as the continued monitoring and analysis of the infrastructure required for System operation. Water and Wastewater Treatment Plant Operations Division The Water and Wastewater Treatment Plant Operations Division consists of 10 water and wastewater treatment plant operators, all of which are state certified. The water plant operations division oversees the supply, treatmen t, and storage of potable water. In addition, the staff associated with water plant opera tions is also resp onsible for providing customers with a safe and reliable supply of drinking water which meets all loca~ state and federal standards for potable water quality. The wastewater treatment plant operators are responsible for the operation, maintenance and regulatory reporting of such operations of the wastewater treatment facilities. Water Distribution and Wastewater Collection Division The Water Distribution and Wastewater Collection Division co nsists offour certified maintena nce mecha nics, service workers and general laborers. This division is responsible for the maintenance of raw water mains, water transmission and distribution mains, gravity sewers and wastewater furce mains throughout the City. This division services over 800 fire hydrants and 34 wastewater lift stations located throughout the System. This division repairs leaks and majo r line break s, new main installation, lift station repairs, correction of wastewater backups and general routine preventive and emergency water and wastewater treatment plant maintenance. 14 First draft 03/26/0 1 Existing Water System The water system serves approximately 5,558 connections (approximately 15,223 people) on the former east system and 5,199 connections (approximately 16,409 people) on the former west system for a total of 10,757 connections (31,632 people). The systems are interconnected by the distribution system. The distribution system is supplied from three water treatment plants; one located in the eastern portion of the service area (Northern Way), one located in the northwest part of the service area (Clear Court), and one located in the southwest part of the service area (Bahama Road). The water treatment facilities use a total of 7 wells and 9 thigh service pumps. Water is stored in 4 (1 one million and 3 500,000-gallon) storage tanks. There are approximately 753,000 lineal feet of water lines in the system ranging in size from 4-inches to 18- inches, and ranging in material from steel to asbestos cement to PVC and ductile iro n. There are over 800 fire hydrants in the System. The oldest materials are the asbestos cement and steel installed from 1959 to around 1975. The PVC and ductile was installed from 1970 to present. Water treatment plants do not have "operations" permits. All plants are currently in full compliance with the regulations of the State of Florila and have excess capacity. Water supply is peffilitted by the St. Iohns River Water Management District("SIRWMD"). The Consumptive Use Permit (CUP), Permit Number 8238, expires on October 8, 2006 and is based on historical data and growth projections provided by the City to SIR WMD. The City exceeded permitted flows in 1998 and 1999 by 5.2 % and 7.8 % respectively. Since 1998, the Central Florida are a has been in a drought condition and higher than normal consumption is to be expected. If an entity such as the City consistently exceeds the allocated value or if they exceed the allocated value by over 10 % for anyone year, the entity will be required to appear before the SIRWMD staff to explain the reason(s) for the overage. If necessary, a new permit and/or modification may be required. There are no definitive rules governing overages. . The 2000 Project The project, financed from a portion of the net proceeds of the 2000 Bonds and other available funds will include the construction of extensions of the sewer and water system to the area of the City known as the Town Center area. The estimated cost of such project is set furth below. Improvement Estimated Co st Wastewater Force Main Improvements $1,150,000 Water Line Extensions and Improvements $770,000 Lift Station 1m provem ents $200,000 Gravity Sewer Extensions $50,000 Reclaimed Augmentation System $580,000 Utility Ope rations Fac ility $1,000,000 Well Number 4 at WTP 1 $250,000 TOTAL $4,000,000 The City expects this project to be complete in the next 2 years. 15 First drnft 03/26/0 I Historical and Projected Water Flows The projections conta ined in the !able below are based on cer!ain assumptions and estimates and no representation is made tha t any of the assumption s or estima tes are valid 0 r that any of such projections will be realized. Population Average Daily Flow Total Year Residential Commercial Residential Commercial ADF Actual ADF (MGD) (MGD) (MGD) (MGD) 1990 21,555 3.60 3.60 1991 22,292 3.06 3.06 1992 23,057 500 3.27 0.05 3.32 3.34 1993 23,848 608 3.22 0.06 3.28 3.64 1994 24,670 758 3.92 0.08 4.00 3.52 1995 25,521 897 3.18 0.09 3.27 3.60 1996 26,403 3,420 3.16 0.34 3.50 3.77 1997 27,317 3,845 3.14 0.38 3.52 3.81 1998 27,859 4,336 3.21 0.43 3.64 4.28 1999 28,415 4,905 3.28 0.5 3.78 4.31 2000 28,986 5,567 3.35 0.56 3.91 4.595 2001 29,574 6,339 3.42 0.64 4.06 2002 30,175 7,242 3.5 0.72 4.22 2003 30,794 8,301 3.58 0.83 4.41 2004 31,429 9,548 3.66 0.96 4.62 2005 32,623 ll,019 3.74 1.1 4.84 2006 32,753 12,758 3.82 1.27 5.09 2007 33,442 14,820 3.9 1.48 5.38 2008 34,151 17,269 3.99 1.73 5.72 2009 34,878 17,760 4.09 1.78 5.87 2010 35,625 18,290 4.18 1.83 6.01 Source - Amendment #4: Master Water and Wastewater Plans, 2/15/92. Available capacity is 6.7 MGD for all wastewater treatment plants combined. Water conservation goals were factored into 1995 and beyond in the plan. 16 First draft 03/26/0 I Existing Sewer System The wastewater system serves approximately 15,000 people on the West System and approximately 15,000 on the East System from two separate wastewater facilities for a total of approx imately 30,000 peop Ie. Each facility is permitted separately and sewage flow cannot be switched between facilities. However, the effluent/reclaimed distribution systems are interconnected to allow complete disposal flexibility between the facilities and maximize the utilization of reclaimed water for beneficial reuse. Both facilities provide reclaimed water to golf courses and also utilize restricted access spray irrigation sites and percolation ponds. Each wastewater treatment location has two circular, field erected, steel wa ste-activated sludge plants, two para lIel tertiary filters, a chlorine contact chamber, effluent holding ponds, and an effluent pumping station. The systems meet full Class 1 Reliability Criteria. The West facility, located in the northwest corner the City on a 19.1 acre tract, is capable of treating 2.5 MGD (design capacity) of wastewater per day with public access disposal capability, currently permitted for 2.07 MGD of disposal. The current three-month ADF average ending February, 2001, is 0.989. Seventeen (17) lift stations convey the wastewater to this facility. Improvements to the plant in the last 10 years are the addition of a 2.0 MG effluent storage tank, effluent transfer pump station, effluent distribution pump station, and the installation of a third blower. In the last five years, a larger auxiliaty generator was installed and the old generator was relocated to Lift Station 7-W. The East facility, located in the eastern portion of the city on an 11.88 acre tract, is capable of treating 2.24 MGD (design capacity) with an effluent disposal capacity of 2.012 MGD. The current three-month ADF ending, February 2001, is 0.930 MGD. Seventeen (17) lift stations convey the wastewater to this facility. Recent improve ments in the last five ye ars to this facility include digester addition, chlorine contact chamber, effluent transfer pump station, 3.0 million gallon reclaimed water storage tank, effluent distribution pump station, blowers were upgraded, and an auxiliary generator was installed to handle the entire facility. The collection and transmission system consists of 527,000 lineal feet of gravity sewer ranging in size from 6-inch to IS-inch with 2,365 manholes and 87,500 lineal feetof force main ranging in size from 4-inch to 20-inch. The system was first constructed on the west side in 1959 with additions occurring over the years by mostly residential development. The east side was constructed starting in 1974 as the Tuscawilla PUD and serves predominantly residential development. This original PUD area is close to its build-out capacity. As part of the wastewater system, a reclaimed distribution system was developed to dispose of the effluent from the wastewater reclamation facilities. The reclaimed distribution system serves percolation ponds, parks, golf courses, rights-of-way, and residential areas with public access quality water. There are currently 1,546 residential customers on this alternative water source. In addition, the system serves two golf courses, several schools, several parks and other public areas. There are approximately 177,000 lineal feet of reclaimed water lines in the system ranging in size from four (4)-inches to eighteen (18)-inches. These lines are predominantly pve with some DIP. The system is relatively new with construction starting in the 1980's and a major portion of the residential distribution occurring in the 1990' s. If reclaimed water is available, reclaimed distribution systems are required to be constructed by the land developer and dedicated to the City after construction. The City recently received design/build proposals for a telemetry system to monitor the operation of the water facilities (including wells), lift station facilities, and wastewater facilities. This project is a replacement of a very minimal telemetry system that monitors on-site treatment operations. Equipment will be installed to improve the reliability of the operations, decrease response time to changes in plant performance and provide additional record- keeping capabilities. These improvements are expected to be completed in fiscal year 2000/01 for a cost of approximately $400,000 and will not be financed with proceeds of the Series 2001 80 nds. 17 First draft 03/26/0 1 Winter Springs Historical an d Projected Sewer Flow s West Year Population A verage Daily Flow Residential Commercial Total ADF Actual ADF Residential Commercial (MGD) (MGD) (MGD) MGD) 1990 10,612 0.84 1991 10,900 0.92 1992 11 , 197 500 1.12 0.05 1.17 0.93 1993 11,50 I 608 1.15 0.06 1.21 0.93 1994 11,814 758 1.18 0.08 1.26 1.07 1995 12,135 897 1.21 0.09 1.30 1.08 1996 12,465 1,090 1.25 0.11 1.36 1.21 1997 12,804 1,324 1.28 0.13 1.41 1.11 1998 12,904 1,609 1.29 0.16 1.45 1.16 1999 13,004 1,955 1.30 0.20 1.50 1.09 2000 13,106 2,375 1.31 0.24 1.55 1.02 2001 13,209 2,886 1.32 0.29 1.61 2002 13,312 3,506 1.33 0.35 1.68 2003 13,416 4,260 1.34 0.43 1.77 2004 13,521 5,176 1.35 0.52 1.87 2005 13,627 6,289 1.36 0.63 1.99 2006 13,733 7,641 1.37 0.76 2.14 2007 13,840 9,284 1.38 0.93 2.31 2008 13,948 11,280 1.39 1.13 2.52 2009 14,057 11 ,280 1.41 1.13 2.53 2010 14,167 11 ,280 1.42 1.13 2.54 Source: Amendment #4: Master Water and Wastewater Plans, 2/15/92. Facility design capacity is 2.5 MGD. 18 First dmft 03/26/0 1 Historical and Projected Sewer Flows Ea st Population A verage Daily Flow Year Residential Commercial Residential Commercial Total ADF Actual ADF (MGD) (MGD) (MGD) (MGD) 1990 9,909 0.73 0.73 1991 10,349 0.74 0.74 1992 10,809 1.08 1.08 0.77 1993 11,208 1.12 1.12 0.94 1994 11,790 1.18 1.18 0.96 1995 12,313 1.23 1.23 0.96 1996 12,860 2,330 1.29 0.23 1.52 0.92 1997 13,431 2,521 1.34 0.25 1.60 1.07 1998 13,881 2,727 1.39 0.27 1.66 0.95 1999 14,345 2,950 1.43 0.30 1.73 0.98 2000 14,286 3,192 1.43 0.32 1. 75 0.94 2001 16,322 3,453 1.63 0.35 1.98 2002 15,385 3,736 1.58 0.37 1.96 2003 16,365 4,041 1.64 0.40 2.04 2004 16,913 4,372 1.69 0.44 2.13 2005 17,479 4,730 1. 75 0.47 2.22 2006 18,065 5,177 1.81 0.52 2.32 2007 18,669 5,536 1.87 0.55 2.42 2008 19,294 5,989 1.93 .060 2.53 2009 19,940 6,480 1.99 0.65 2.64 2010 20,608 7,010 2.06 0.70 2.76 Source: Amendment #4: Master Water and Wastewater Plans, 2/15/92. Facility design capacity is 2.24 MGD. 19 First draft 03/26/0 1 Rates and Charges The City has a camputer billing and callectian system in-hause. Each custamer is billed manth1y by the utility far services pravided. The utility utilizes a billing system .of a base charge, plus a usage charge per 1,000 gallans. Ta encaurage canservatian .of water re~urces, the City has implemented an incremental black fee system. The higher the usage, the higher the cast per 1,000 gallans. The tariff schedule is listed belaw. A residential custamer using 10,000 gallans per manth (typical custamer) wauld pay a water and sewer bill .of $45.23, excluding laxes. The rates shawn below are exc 1usive .of taxes, franchise fees, surcharges, .or ather rate adjustments. The utility has the autharity ta discantinue water and sewer service far nonpayment .of water and sewer service. In additian ta these charges, cannectian fees are al~ required as shawn in the tariff schedule. Monthly Residential and General Service Water Rates Meter Size Base Facility Charge 5/8" x * " (residentia I) 1 " 1 1h" 2" 3" 4" 6" $3.58 8.94 17.89 28.62 57.23 89.50 178.85 Gallanage charge per 1,000 gallans $0.91 Individually metered re sidential customers: Gallons Charge Per Thousand (1,000) Gallons o - 10,000 10,001 - 15,000 15,001 - 20,000 20,001 - 25,000 25,001 - 30,000 Over 30,000 $0.91 1.25 1.50 1.75 2.00 2.50 Irrigation Meters: 20 Gallons o - 5,000 5,001 - 10,000 10,001 - 15,000 15,001 - 20,000 Over 20,000 Meter Installation Fees Meter Size 5/8" x 3/4" 5/8" x 3/4", double check 5/8" x'/4", double check - remote read 1" plus backflow prevention device 1 "/z" plus backflow prevention devK:e 2" with separate double check valve Above 2" with backflow preventbn device Sewer Rates Meter Size 5/8" 1 " 1 'IA" 2" 3" 4" 6" Gallonage charge per 1,000 gallons Reclaimed Rates Non-metered Residential Per Month (No gallonage charge) Metered Commercial Per Month (includes 20,000 gallons) Over 20,000 Gallons - per 1 ,000 gallons [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 21 First drnft 03/26/0 1 Charge Per Thousand (].OOOI Gallons $1.25 1.50 1. 75 2.00 2.50 Charge $120.00 150.00 225.00 200.00 450.00 550.00 Actual Cost Charge $6.65 16.63 33.24 53.19 106.37 166.25 332.41 $2.59 $5.00 $5.00 0.25 First drnft 03/26/0 1 COMPARISON OF USER CHARGES Base Fee Consumption Fee Total Meter Size $/1000 gal Total WINTER SPRINGS Water 5/8" x 3/4" $3.58 $0.91 $9.10 $12.68 2" $28.62 $0.91 $9.10 $37.72 Sewer 5/8" x 3/4" $6.65 $2.59 $25.90 $32.55 2" $53.19 $2.59 $25.90 $79.09 CASSELBERRY Water 5/8" x 3/4" $4.50 $0.95 $9.50 $14.00 2" $35.97 $0.95 $9.50 $45.47 Sewer 5/8" x 3/4" $7.85 $2.66 $31.70 $39.55 2" $64.45 $2.66 $31.70 $96.15 OVIEDO Water 5/8" x 3/4" $5.30 $1.00 $7.00 $12.30 2" $5.30 $1.00 $7.00 $12.30 Sewer 5/8" x 3/4" $11.00 $2.63 $26.30 $37.30 2" $66.00 $2.63 $26.30 $92.30 LONGWOOD Water 5/8" x 3/4" $6.25 $1.05/$1.10 $8.50 $14.75 2" $6.25 $1.05/$1.10 $8.50 $14.75 Sewer 5/8" x 3/4" $26.70 $0.00 $0.00 $26.70 2" $26.70 $0.00 $0.00 $26.70 SANFORD Water 5/8" x 3/4" $3.14 $1.2/$1.45 $14.00 $17.14 2" $18.85 $1.2/$1.45 $14.00 $32.85 Sewer 5/8" x 3/4" $4.69 $2.2/$3.31 $30.88 $35.57 2" $28.17 $2.2/$3.31 $30.88 $59.05 22 First draft 03/26/0 I SEMINOLE COUNTY Water 5/8" x 3/4" $6.60 $0.65 $6.50 $13.10 2" $39.60 $0.65 $6.50 $46.10 Sewer 5/8" x 3/4" $11.35 $2.59 $25.90 $37.25 2" $11.35 $2.59 $25.90 $37.25 Notes: I. User charges are based on a total usage of 10,000 gallons. 2. Oviedo water base includes first 3,000 gallons. Sewer base is $11.00 per ERU. 3. Longwood base includes first 2,000 gallons. From 2k to 9k is at a rate of $1.05 and over 9k = $1.10. 4. Sanford base includ es first 2,000 gallons. 5. Seminole County charges base fees of $6.60 per ERC for water and $11.35 per ER C for sewer. 6. The 2" meter is assumed to have 6 ERU's. 7. In City rates only, where applicable. 23 First dmft 03/26/0 I LITIGA TION There is not now pending any litigation restraining or enjoining the issuance or delivery of the Series 2001 Bonds or questioning or affecting the validity of the Series 2001 Bonds or the proceedings and authorily under which they are to be issued. Neither the creation, organization or existence of the City, nor the title of the present City Commission members or other officials of the City to their respective offices is being contested. There is no litigation pending which in any manner questions the right of the City to issue the Series 2001 Bonds in accordance with the provisions of the Resolution and the laws of the State of Florida. The City experien ces routine litigatio n and cia ims incidenta I to the conduct of its affuirs. The City carries substantial insurance for these exposures, and pending claims are defended by and, if necessary, are anticipated to be paid by the insurance carriers. LEGAL MATTERS Certain legal matters incident to the validity of the Series 2001 Bonds and the issuance thereof by the City are subjectto the approving opinion of Akerma n, Senterfitt & Eidson, P .A., Orlando, Florida, Bond Counsel. Copies of such opinion will be available atthe time of the delivery of the Series 2001 Bonds and the proposed form of such opinion is set forth in Appendix E hereto and reference is made thereto for the terms thereof. The actual legal opinion to be delivered may vary from that text if necessary to reflect fac ts and law on the date of delivery. The opinion will speak only as of its date, and subsequent distribution 0 f its by recirculation of the Official Statement or otherwise shall create no implication that subsequent to the date of the opinion Bond Counsel has reviewed or expresses any opinion concerning any of the matters re ferenced in the opinion. Certain legal matters will be passed upon for the City by Anthony A. Garganese of Brown, Ward, Salzman & Weiss, P.A., City Attorney, Orlando, Florida and by Akerman, Senterfitt & Eidson, P .A., Disc10su re Counse I. TAX EXEMPTION General The Internal Revenue Code of 1986 (the "Code") establishes certain requirements which must be met subsequent to the issuance and delivery of the Series 2001 Bonds for interestthereon to be and remain excluded from gross income for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Series 2001 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issue of the Series 2001 Bonds. Those requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 200 I Bonds and other amounts are to be invested and require, under certa in circumstances, that certain excess investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. The City has covenanted in the Resolution to comply with each such requireme nt. In the opinion of Bond Counsel, assum ing continuous comp Iiance by the City with the Code and the covenants in the Resolution, under existing statutes, regulations, published rulings, and judicial decisions, and subject to the conditions described below, interest on the Series 2001 Bonds is excludable from gross income for federal tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although such interest is taken into account in determining adjusted current earning; for the purpose of computing the alternative minimum tax on corporations. Failure by the City to comply subsequent to the issuance of the Series 200 I Bonds with certain requirements of the Code regarding the use, expenditures and investment of Series 2001 Bond proceeds and the timely payment of certain investment earnings to the Treasury of the United States may cause interest on the Series200 1 Bonds to become included in gross income for federal income tax purposes retroactive to their date of issue. The City has covenanted in the Resolution to comply with all provisions of the Code necessary to, among 24 First draft 03/26/0 I other things, maintain the exclusion from gross income of interest on the Series 2001 Bonds. In rendering its opinion, Bond Co unsel has assumed con tinuing compliance with such covenants. The opinion 0 n federal tax matters will be based on and will assume the accuracy of certain representations and certifications and compliance with certain covenants of the City to be contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series 200 I Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax pUIposes. Bond Counsel will not independently verify the accuracy of the certifications and representations made by the City. Prospective purchasers of the Series 2 001 Bonds should be aware that ownership of the Series 2001 Bonds may result in other federal tax consequenc es to certain taxpayers. In the opinion of Bond Counse~ the Series 2001 Bonds are exempt from all present intang ible person al property taxes imposed pursu ant to Chapter 199, Florida Statutes. Interest on the Series 2001 Bonds may be subject to state or local income taxation under applicable state or local laws in other jurisdictions. Purchasers of the Series 200 I Bonds should consult their tax advisors as to the income tax status of interest on the Series 2001 Bonds, in their particular state or local jurisdictions. During recent years, leg islative proposals have been introdu ced in Congress, and in some cases, enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2001 Bonds. In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar in nature to the Series 2001 Bonds. Fro m time to time, legislative proposals may be introduced which could have an effect on both the federal tax consequences resulting from the ownership of the Series 2001 Bonds and their market value. No assurance can be given that any such legislative proposals, if enacted, would not apply to, or would not have an adverse effect upon, the Series 2001 Bonds. Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the Series 2001 Bonds may affect the tax status of interest on the Series 200 I Bonds. Moreover, except as stated above, Bond Counsel expresses no opinion regarding federal or state tax consequences arising with respect to the Series 200 I Bonds. Prospective purchasers of the Series 2001 Bonds are advised to consult their own tax advisors as to the applicability of other federal or state tax conseq uences. Assuming the City can rectify certain representations and findings made by the City in the Resolution upon the issuance of the Series 2001 Bonds, the Series 2001 Bonds are "qualified tax-exempt obligations" (within the meaning of Section 265(b )(3) of the Code), and, in the case of certain financial institutions (within the meaning of Section 265(b)(3) of the Code), a deduction is allowed for 80% of that portion of the interest expense of such financial institutions which shall be allocable to interest on the Series 2001 Bond s. TAX TREATMENT OF ORIGINAL ISSUEDISCOUNT Under the Code, the difference between the maturity amounts of the Series 2001 Bonds ma turing in the years _, _' _' _' _ and years _ through _ (the "Discount Bonds"), and the initial offering price to the public, excluding bond houses, brokers or similar persons or organizations acting in the capac ity of underwriters or wholesalers, at which price a substantial amount of the Discount Bo nds of the sam e maturity was sold is "original issue discount." Original issue discount will accrue over the term of such Discount Bonds on a compounded basis. A purchaser who acquires such Discount Bonds in the initial offering at a price equal to the initial offering price thereof to the public will be treated as receiving an amount of interest excludable from gross income for federal income tax purposes equal to the original issue discount accruing during the period he or she ho Ids such Discount Bo nds, and will increase his or her adjusted basis in such Discount Bonds by the amount of such accruing discount for pUIposes of 25 First draft 03/26/0 1 determining taxable gain or loss on the sale or other disposition of such Discount Bonds. The federal income tax consequences of the purchase, ownership and sale or other disposition of such Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those above. Owners of such Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, redemption or other disposition of Discount Bonds and with respect to the state and local tax conse quences of owning an d disposing of such Discount Bonds. UNDERWRITING The Underwriters shown on the cover page hereof have agreed, subject to certain conditions precedent to purchase the Series 2001 Bonds at a price of $ ($ original par amount, less underwriters' discountof$___ and less original issue discount of$____), plus ac crued intere st. The Underwriters have furnished the information on the cover page of this Official Statement pertaining to the public offering prices of the Series 2001 Bonds. The public offering prices of the Series200 1 Bonds may be changed from time to time by the Underwriters, and the Underwriters may allow a concession from the public offering prices to certain dealers. None of the Series 2001 Bonds will be delivered by the City to the Underwriters unless all of the Series 200 1 Bonds are so delivered. FINANCIAL ADVISOR Public Financial Management, Inc., Orlando, Florida, has served as financial advisor to the City in connection with the issuance of the Series 2001 Bonds. INVESTMENT POLICY The City considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. During the 1998 fiscal year, the City adopted GASB Statement No. 3l, Accountingand Financial RepOrlingforCertain Investmentsand Externa IInvestment Pools. As a result, all inves tments are presented at fair value. The City Charter authorizes the City to invest in direct obligations of or obligations guaranteed by the Department of the Treasury of the United States of America, obligations of specific federal agencies ofthe United States of America, bonds, notes, or other evidence of indebtedness issued by the Federal National Mortgage Association or Federal Home Loan Mortgage Corpo ration, secured repurchase agreements, bankers' acceptance, money market, commercial pape r, certificates of de posit, and the Lo cal Government Surplus Fund s Trust Fun d. All investments must be insured, registered, or held by the City or a trustee in the City's name. RA TINGS Standard & Poor's Ratings Services and Fitch IBCA, Inc., have assigned ratings of "__" and "_," respectively, to the Series 2001 Bonds, with the understanding that, upon delivery of the Series 200 1 Bonds a municipal bond insu rance po Iicy will be issued by Financial Guaranty. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same, at the following addresses: Fitch IBCA,Inc., One State Street Plaza, New York, New York 10004 and Standard & Poor's Ratings Services, 55 Water Street, New York, New York 10041. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies, ifin the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may ha ve an adverse effect on the ma rket price of the Series 2001 Bonds. 26 First dmft 03/26/0 1 FINANCIAL STATEMENTS The City's general purpose financial statements for its fiscal year ended September 30, 2000 appearing in Appendix "B" hereto have been audited by McD irmit, Davis, Puckett & Co., P.A., independen t auditors, as stated in their report appearing therein. CONTINUING DISCLOSURE The City has agreed and undertaken for the benefit of Series 200 I Bondholders and in order to assist the Underwriters in complying with the continuing disclosure requirements of Securities and Exchang e Comm ission Rule 15c2-12 (the "Rule"), to provide certain financial info rmation and operating data relating to the City and the Series 200 I Bonds in each year (the "Annual Report"), and to provide notices 0 f the occurrence of certain enumerated events, if material. Such undertaking shall only apply so long as the Series 200 1 Bonds remain outstanding under the Resolution. The Annual Report and audited financial statements will be filed annually by the City pursuant to the undertaking with each Nationally Recognized Municipal Securities Information Repository ("NRMSIRs") described in the Continuing Disclosure Certificate (Appendix G hereto), as well as any state information repository that is subseque ntly established in the State of Florida (the "SID"). The notices of material events will be filed by the City with the Municipal Securities Rulemak ing board or the NRMSIRs and with the SID. The specific nature of the information to be contained in the Annual Report and the notices of material events are described in the Appendix G. With respect to the Series 200 I Bonds, no party other than the City is obligated to provide, nor is expected to provide, any continuing disclosure info rmation with re spect to the afo remention ed Rule. T he City failed to tim ely provide its Annual Report due March 31, 2000 which it had agreed to provide in connection with the issuance of its Improvement Refunding Revenue Bonds, Series 1999. The City has now provided such Annual Report to the NRMSIRs. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of the arithmetic computations showing the adequacy of the maturing principal and interest on the securities to be acquired with a portion of the proceeds of the Series 2001 Bonds, together with other funds available described under "T HE PLAN 0 F REF UND lNG," have been verified by , independent certified public accountants. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULA nONS Section 517.051, Florida StabJtes, and the regulations promulgated thereunder (the "Disclosure Act") required that the City make a full and fair disclosure of any bonds or other debt obligations that it has i!~ued or guaranteed that are or have been in default as to principal or interest at any time after December 31,1975 (including bonds or other debt obligations for which it has served only as a conduit issuer such as industrial development or private activity bonds issued on behalf of private businesses). The City is not and has not since December 31,1975 been in default as to principal and interest on its bonds or 0 ther debt obligations. Although the City is not aware of any defaults with respect to bonds or other debt obligations as to which it has served only as a conduit issuer, it has not undertaken an independent review or investigation 0 f such bonds or other obligations. The City does not be lieve that any information about any default would be considered material be a reasonable investor in the Series 200 I Bo nds because the City was not liable to pay the principal of or interest on any such bonds except from payments made to it by the private companies on whose behalf such bonds were issued and no funds of the City were used to pay such bonds or the interest thereon. 27 First draft 03/26/0 1 ENFORCEABILITY OF REM EDIES The remedies available to the owners of the Series 200 I Bonds upon an event of default under the Resolution and any policy of insurance referred to herein are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, the remedies specified by the federal bankruptcy code, the Resolution, the Series 2001 Bonds and any policy of insurance referred to herein may not be readily available or may be limited. The various legal 0 pinions to be delivered concurre ntly with the delivery of the Series 200 I Bonds (including Bond Counsel's approving opinion) will be qualified, as to the enforceab i1ity of the remedies provided in the various leg al instruments, by limitations impo sed by ban kruptcy, reorganiza tion, insolvenc y or other simila r laws affecting the rights of credito rs enacted before or after such delivery. MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the owners of the Series 2001 Bonds. The information contained a bove is neithe r guaranteed as to accuracy or completeness nor 10 be construed as a representation by the City or the Underwriters. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this 0 fficial Statement n or any sale made hereu nder is to create, under any circumsta nces, any imp lication that there has been no change in the affairs of the City from the date here of. This Official Statement is submitted in connection with the sale ofthe securities referred to herein and may not be reproduced or used, as a whole or in part, for any other pu rpose. An y statements in this Official Statement involving matters of op inion, whether or not expressly so stated, are intended as such and not as repre sentations of fac t. CERTIFICATE AS TO OFFICIAL STATEMENT The execution and delivery of this Official Statement has been duly authorized by the City Commission of the City. At the time of delivery of the Series 200 I Bonds to the Underwriters, the City will provide to the Underwriters a certificate (which may be included in a conso1id ated closing certificate of the City), signed by those City officials who signed this Official Statem ent, relating to the accuracy and completeness of certain materials in this Official Statement and to its being a final official statement in the judgment of the undersigned for the purposes ofSEC Rule lSc2-l2(b)(3). CITY OF WINTER SPRINGS, FLORIDA By: Mayor By:____ City Manager 28 First drnft 03/26/0 1 APPENDIX B City of W inter Springs, Flo rida Gener al Purpose Financial Statements for the Year Ended September 30, 2000 RESOLUTION NO. 2001-10 A RESOLUTION OF THE CITY OF WINTER SPRINGS, FLORIDA SUPPLEMENTING CITY RESOLUTION 665 AS PREVIOUSLY AMENDED AND SUPPLEMENTED BY AUTHORIZING THE ISSUANCE OF NOT EXCEEDING $22,500,000 WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2001A and SERIES 2001B, OF THE CITY OF WINTER SPRINGS, FLORIDA TO BE APPLIED TO PROVIDE FUNDS, TOGETHER WITH OTHER LEGALLY A V AILABLE CITY MONEYS, TO DEFEASE THE CITY'S OUTSTANDING WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 1991, AND THE CITY' S OUTSTANDING WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 1992, PLEDGING ON A PARITY WITH THE LIEN THEREON OF THE CITY'S OUTSTANDING WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2000, THE NET REVENUES OF THE COMBINED WATER AND SEWER SYSTEM OF THE CITY FOR THE PAYMENT OF SAID BONDS; DELEGATING TO THE CITY MANAGER SUBJECT TO COMPLIANCE WITH THE APPLICABLE PROVISION HEREOF, THE AUTHORITY TO AWARD THE SALE OF SUCH BONDS BY EXECUTING AND DELIVERING TO THE UNDERWRITERS OF SUCH BONDS A BOND PURCHASE CONTRACT OR BOND PURCHASE CONTRACTS; AUTHORIZING THE EXECUTION AND DELIVERY OF AND APPROVING THE FORM OF AN ESCROW DEPOSIT AGREEMENT IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS; ACCEPTING THE COMMITMENT OF MBIA INSURANCE CORPORATION FOR THE ISSUANCE OF BOND INSURANCE POLICIES FOR EACH SERIES OF SUCH BONDS; AND THE COMMITMENT OF MBIA INSURANCE CORPORATION FOR THE ISSUANCE OFA SURETY BOND FOR DEPOSIT TO THE SUBACCOUNT IN THE RESERVE ACCOUNT FOR THE SERIES 2001A BONDS; APPROVING FORM OF SAID BONDS; APPROVING THE FORM OF AND AUTHORIZING THE DISSEMINATION OF THE PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE FINAL OFFICIAL STATEMENTS; AUTHORIZING CERTAIN OFFICIALS AND EMPLOYEES OF CITY OF WINTER SPRINGS, FLORIDA TO TAKE ALL ACTIONS REQUIRED IN CONNECTION WITH THE ISSUANCE, SALE AND DELIVERY OF SAID BONDS; DESIGNATING THE SERIES 2001A BONDS AS BANK QUALIFIED; APPOINTING THE PAYING AGENT AND REGISTRAR FOR THE BONDS; APPOINTING THE ESCROW TRUSTEE TO SERVE UNDER THE ESCROW DEPOSIT AGREEMENTS; APPROVING A BOOK-ENTRY SYSTEM OF REGISTRATION FOR THE BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS; MAKING OTHER COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY OF WINTER SPRINGS, FLORIDA AS FOLLOWS: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the Constitution of the State of Florida; Chapter 166, Part II, Florida Statutes, as amended and supplemented, Chapter 72-718, Laws of Florida, Special Act of 1972, being the Charter of the City of OR315142;10 Winter Springs, Florida as amended and supplemented, Section 19(N) of City Resolution No. 665, as amended and supplemented (the "Original Resolution") and other applicable provisions of law. SECTION 2. DEFINITIONS. All terms used herein that are defined in the Original Resolution are used within the same meaning herein unless the context otherwise requires or they are expressly given a different meaning. In addition, the following terms used herein shall have the following meaning. Words importing singular number shall include the plural number in each case and vice versa, and words " importing persons shall include firms and corporations. (A) " ACCRETED VALUE" means as of any date of calculation the amount owed on a Capital Appreciation Bond prior to maturity or at maturity taking into consideration the initial offering price plus accrued interest compounded semiannually on April 1 and October 1 of each year, with interest commencing the date of delivery of the Capital Appreciation Bonds. The Accreted Value for a day of a month other than an April 1 or October 1 shall be calculated by straight line interpolation using for purposes of such calculation an assumed period of six months of thirty day months intervening between the then next succeeding April 1 or October 1, as the case may be. (B) "ACQUIRED OBLIGATIONS" shall mean and include any of the following securities, if and to the extent the same are at the time legal for investment of funds of the Issuer: (1) . U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Securities - "SLGS") (2) Direct obligations of the Treasury which have been stripped.by the Treasury itself, CATS, TIGRS and similar securities (3) Resolution Refunding CQrp. (REFCORP) Only the interest component of REF CORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable. (4) Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If however, the issue is only rated by S&P (i.e., there is no Moody's rating), then the pre-refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded municipals to satisfy this condition. (5) Obligations issued by the following agencies which are backed by the full faith and credit of the U.S.: a. U.S. Export-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership b. Farmers Home Administration (FmHA) Certificate of beneficial ownership c. Federal Financing Bank 0R315142;1O 2 d. General Services Administration Participation certificates e. U.S. Maritime Administration Guaranteed Title XI financing . f. U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds (C) "ADDITIONAL PARITY OBLIGATIONS" shall mean additional obligations issued in compliance with the terms, conditions and limitations contained in the Original Resolution and which (i) shall have a lien on the Net Revenues equal to that of the Series 2001 Bonds and the Parity B6nds,(ii) shall be payable from the Net Revenues on a parity with the Series 2001 Bonds and the Parity Bonds, and (iii) rank equally in all other respects with the Series 2001 Bonds and the Parity Bonds. (D) "AGREEMENT" or "ESCROW DEPOSIT AGREEMENT" shall mean that certain Escrow Deposit Agreement by and between the Issuer and a trust company or bank with trust powers selected by subsequent resolution of the Issuer for the purpose of providing for the payment of the Refunded Bonds hereinafter mentioned. (E) "AUTHORIZED DENOMINA TlONS" shall mean $5,000 or any integral multiple thereof or maturity amounts of $5,000 as to Capital Appreciation Bonds or any integral multiple thereof. (F) "BOND INSURANCE POLICY" shall mean as to the Series 2001 Bonds the municipal bond new issue insurance policy issued by the Bond Insurer that guarantees the payment of principal and interest on the Series 2001 Bonds. (G) "BOND INSURER" shall mean as to the Series 2001 Bonds, MBIA Insurance Corporation, a stock insurance company incorporated under the laws of the State of New York or any successor thereto. (H) "BONDS" shall mean the Parity Bonds, the Series 2001 Bonds issued hereunder, together with any Additional Parity Obligations hereafter issued under the terms, conditions and limitations contained in the Original Resolution. (I) "BOND YEAR" shall mean as to the Series 2001 Bonds the Fiscal Year of the Issuer. 0R315142;10 3 (J) "CONTINUING DISCLOSURE CERTIFICATE" shall mean that certain certificate related to the Series 2001 Bonds to be executed by the Issuer prior to the time the Issuer delivers the Series 2001 Bonds to the participating underwriter or underwriters, as it may be amended from time to time in accordance with the terms thereof, whereby the Issuer undertakes to comply with the secondary disclosure requirements of the Rule. (K) "INVESTMENT SECURITIES" shall mean in regard to investments pursuant to this Resolution, any investment permitted under applicable State and federal law including units of participation in the Local Government Surplus Trust Fund established pursuant to Part IV, Chapter 218, Florida Statutes, and (3) (4) (5) 0R315142;1O (1) Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, provided, that the full faith and credit of the United States of America must be pledged to any such direct obligation or guarantee ("Direct Obligations"). (2) Direct obligations and fully guaranteed certificates of beneficial interest of the Export-Import Bank of the United States; consolidated debt obligations and letter of credit-backed issues of the Federal Home Loan Banks; participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation ("FHLMCs"); debentures of the Federal Housing Administration; mortgage-backed securities (except striped mortgage securities which are valued greater than par on the portion of unpaid principal) and senior debt obligations of the Federal National Mortgage Association (" FNMAs"); participation certificates of the General Services Administration; guaranteed mortgage-backed securities and guaranteed participation certificates of the Government National Mortgage Association ("GNMAs"); guaranteed participation certificates and guaranteed pool certificates of the Small Business Administration; debt obligations and letter of credit-backed issues of the Student Loan Marketing Association; local authority bonds of the U.S. Department of Housing & Urban Development; guaranteed Title XI financings of the U. S. Maritime Administration; guaranteed transit bonds of the Washington Metropolitan Area Transit Authority; Resolution Funding Corporation securities. Direct obligations of any state of the United States of America or any subdivision or agency thereof whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service and "A" or better by Standard & Poor's Corporation, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured, uninsured and unguaranteed general obligation debt is rated, at the time of purchase, "A" or better by Moody's Investors Service and "A" or better by Standard & Poor's Corporation. Commercial papers (having original maturities of not more than 270 days) rated, at the time of purchase "P-l" by Moody's Investors Service ("Moody's") and "A-I" or better by Standard & Poor's Corporation ("S&P"). Federal funds, unsecured certificates of deposit, time deposits or bankers acceptances (in each case having maturities of not more than 365 days) of any domestic bank including a branch office of a foreign bank which branch office is located in the United States, 4 provided legal opinions are received to the effect that full and timely payment of such deposit or similar obligation is enforceable against the principal office of any branch of such bank, which, at the time of purchase, has a short-term "Bank Deposit" rating of "P-l" by Moody's and a "Short-Term CD" rating of "A-I" or better by S&P. (6)' Deposits of any bank or savings and loan association which has combined capital, surplus and undivided profits of no less than $3 million, provided such deposits are continuously and fully insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation. (7) Investments in money-market funds rated "AAAm" or "AAAm-G" by S&P. (8) Repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs or FHLMCs with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank insured by the FDIC, if such broker/dealer 9r bank has an uninsured, unsecured and unguaranteed obligation rated "P-l" or "A3" or better by Moody's and "A-I" or "A-" or better by S&P, provided: a) A master repurchase agreement or specific written repurchase agreement governs the transaction; b) The securities are held free and clear of any lien by the Paying Agent or an independent third party acting solely as agent ("Agent") for the Paying Agent, and such third party is (i) a Federal Reserve Bank, (ii) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $50 million, or (iii) a bank approved in writing for such purpose by Financial Guaranty Insurance Company, and the Paying Agent shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the Paying Agent; c) A perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306 et seq. or 31 C.F.R. 350 et seq. in such securities is created for the benefit of the Paying Agent; d) The repurchase agreement has a term of 180 days or less, and the Paying Agent or the Agent will value the collateral securities no less frequently than weekly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two business days of such valuation; and e) The fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 103 %. (9) Investment agreements, the issuer, form and substance of which are specifically approved by the Bond Insurer. 0R315142;1O 5 (L) "PARITY BONDS" shall mean. the City's Outstanding Water and Sewer Refunding Revenue Bonds, Series 2000, and the City's Outstanding Water and Sewer Refunding Revenue Bonds, Series 1992 until such Series 1992 Refunded Bonds (as hereinafter defined) have been defeased. (M) "PERSON" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity. (N) "REFUNDED BONDS" shall mean the outstanding bonds of the City of Winter Springs, Florida, Water and Sewer Refunding Revenue Bonds, Series 1991 other than such Series 1991 bond maturing October 1,2001 ("Series 1991 Refunded Bonds") and the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 1992 ("Series 1992 Refunded Bonds"). (0) "RESERVE REQUIREMENT" shall mean the lesser of (i) the Maximum Bond Service Requirement for the Series 2001 Bonds, (ii) 125 % of the Average Annual Bond Service Requirement for the Series 2001 Bonds, or (iii) 10% of the proceeds of the Series 2001 Bonds. (P) "RULE" shall mean Rule 15c2-12 of the United States Securities and Exchange Commission, as amended. (Q) "SERIES 2001 BONDS" shall mean collectively the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 2001A (the Series 2001A Bonds") and Series 200lB (the "Series 200lB Bonds"), authorized pursuant to this Resolution. Such Series 2001A Bonds shall be issued for the primary purpose of defeasing the Series 1991 Refunded Bonds and the Series 200lB Bonds shall be issued for the primary purpose of defeasing the Series 1992 Refunded Bonds. (R) "SURETY BOND" means the surety bond issued by the Bond Insurer guaranteeing certain payments into the subaccount in the Reserve Account with respect to the Series 2001A Bonds as provided therein. SECTION 3. FINDINGS. It is hereby ascertained, determined and declared: (A) The Issuer now owns, operates and maintains the System and derives Revenues from rates, fees rentals and other charges made and collected for the services of the System. (B) The Issuer deems it necessary, beneficial and in its best interest to issue the Series 2001 Bonds to refund the Refunded Bonds. (C) The principal of and interest on the Series 2001 Bonds and all other required payments hereunder shall be payable solely from the Net Revenues as provided herein. The Issuer shall never be required to levy ad valorem taxes on any real or personal property therein tp pay the principal of and interest on the Series 2001 Bonds herein authorized or to make any other payments provided for herein. The Series 2001 Bonds shall not constitute a lien upon any properties owned by or located within the boundaries of the Issuer. . . (D) The Net Revenues are estimated to be sufficient to pay all principal of and interest on the Series 2001 Bonds and the Parity Bonds, as the same become due, and to make all other required payments required by this Resolution and the resolutions of the Issuer pursuant to which the Parity Bonds were issued including the Original Resolution. 0R315142; 10 6 (E) The Net Revenues are not pledged or encumbered in any manner, except for the payment of the principal and interest on the Parity Bonds and the other deposits provided for in the resolutions of the Issuer pursuant to which the Parity Bonds were issued including the Original Resolution and the Refunded Bonds which lien of the Refunded Bonds on the Net Revenues pledged thereto shall be released simultaneously with the issuance of the Series 2001 Bonds. (F) The Original Resolution, in Section 19(N) thereof, provides for the issuance of Additional Parity Obligations under the terms, limitations and conditions provided therein. The terms, limitations and conditions of said Section 19(N) will be complied with prior to the issuance of any of the Series 2001 Bonds. (G) The Series 2001 Bonds herein authorized shall be on a parity and rank equally, as to lien on and source and security for payment from the Net Revenues and in all other respects except as provided in Sections 16 and 28 hereof, with the Parity Bonds. SECTION 4. A UTHORIZA TION OF REFUNDING OF REFUNDED BONDS. There is hereby authorized the refunding of the Refunded Bonds in the manner provided herein. SECTION 5. THIS RESOLUTION TO CONSTITUTE CONTRACT. In consideration of the acceptance of the Series 2001 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 and contract between the Issuer and such owners. The covenants and agreements herein set forth to be performed by the Issuer shall be for the equal benefit, protection and security of the legal owners of any and all of the Series 2001 Bonds, all of which shall be of equal rank without preference, priority or distinction of any of the Series 2001 Bonds over any other thereof, except as expressly provided therein and herein. SECTION 6. AUTHORIZA TION OF SERIES 2001 BONDS. Subject and pursuant to the provisions hereof, obligations of the Issuer to be known as "Water and Sewer Revenue Refunding Bonds, Series 2001A and Series 20018", are authorized to be issued in the original aggregate principal amount of not exceeding $22,500,000. Should either Series of Bonds not be issued in calendar year 2001 the Issuer may prior to the issuance of such Series of Bonds designate such Series of 2001 Bonds with the appropriate particular designation such designation to be conclusively approved upon execution of each Series 2001 Bond by the proper officers of the Issuer. SECTION 7. DESCRIPTION OF SERIES 2001 BONDS. The Series 2001 Bonds shall be issued in fully registered form as Capital Appreciation Bonds and/or Current Interest Bonds; shall be numbered consecutively from one upward in order of maturity preceded by the letter "R" or such other lettering as the Issuer shall approve by execution of such Series 2001 Bonds; shall be issued in Authorized Denominations; shall be dated, shall bear interest or yields at such rate or rates or yields not exceeding the maximum rate allowed by State law, the actual rate or rates or yields to be as set forth in the Bond Purchase Contract referred to in Section 36 hereof; such interest to be payable semiannually at such times and such Series 2001 Bonds shall mature annually on such date in such years and in such amounts and have such other terms all as set forth in the Bond Purchase Contract referred to in Section 36 hereof. Each Series 2001 Bond shall bear interest from the interest payment date next preceding the date on which it is authenticated, unless authenticated on an interest payment date, in which case it shall bear interest from such interest payment date, or, unless authenticated prior to the first interest payment date, 0R315142;10 7 in which case it shall bear interest from its date; provided, however, that if at the time of authentication payment of any interest which is due and payable has not been made, such Series 2001 Bond shall bear interest from the date to which interest shall have been paid. The Capital Appreciation Bonds shall bear interest only at maturity or upon redemption prior to maturity in the amount determined by reference to the Accreted Value. The principal of, the Accreted Value, the interest and redemption premium, if any, on the Series 2001 Bonds shall be payable in any coin or currency of the United States of America which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The interest on the Series 2001 Current Interest Bonds shall be payable by the Paying Agent on each interest payment date to the person appearing on the registration books of the Issuer hereinafter provided for as the registered Owner thereof on the 15th day of the calendar month immediately preceding the applicable interest payment date, by check or draft mailed to such registered Owner at his address as it appears on such registration books or by wire transfer to Owners of $1,000,000 or more in principal amount of the Series 2001 Bonds. Payment of the principal of all Series 2001 Current Interest Bonds and the Accreted Value with respect to the Series 2001 Capital Appreciation Bonds shall be made upon the presentation and surrender of such Series 2001 Bonds as the same shall become due and payable. Notwithstanding any other provisions of this section, ti1e Issuer may, at its option, prior to the date of issuance of the Series 2001 Bonds, elect to use an immobilization system or book-entry system with respect to issuance of such Series 2001 Bonds. Such election shall be conclusively evidenced by execution by the proper officers of the Issuer of Series 2001 Bonds reflecting use of a bond-entry system. As long as any Series 2001 Bonds are outstanding in book-entry form the provisions of this Resolution inconsistent with such system of book-entry registration shall not be applicable to such Series 2001 Bonds. SECTION 8. EXECUTION OF SERIES 2001 BONDS. The Series 2001 Bonds shall be signed by, or bear the facsimile signature of the Mayor or Deputy Mayor of the City and shall be signed by, or bear the facsimile signature of the Clerk or any Deputy City Clerk and a facsimile of the official seal of the Issuer shall be imprinted on the Series 2001 Bonds. In case any officer whose signature or a facsimile of whose signature shall appear on any Series 2001 Bonds shaH cease to be such officer before the delivery of such Series 2001 Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery, and also any Series 2001 Bond may bear the facsimile signature of or may be signed by such persons who, as at the actual time of the execution of such Series 2001 Bond, shall be the proper officers to sign such Series 2001 Bonds although at the date of such Series 2001 Bond such persons may not have been such officers. SECTION 9. AUTHENTICATION OF SERIES 2001 BONDS. Only such of the Series 2001 Bonds as shall have endorsed thereon a certificate of authentication duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security under this Resolution and the Original Resolution. No Series 2001 Bond shall be valid or obligatory for any purpose unless and until such certificates of authentication shall have been duly executed by the Registrar, and such certificate of the Registrar upon any such Series 2001 Bonds shall be conclusive evidence that such Series 2001 Bonds has been duly authenticated and delivered under this Resolution. The Registrar's certificate of authentication on any Series 2001 Bond shall be deemed to have been duly executed if signed by an authorized officer 0R315142;1O 8 of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Series 2001 Bonds that may be issued hereunder at anyone time. SECTION 10. EXCHANGE OF SERIES 2001 BONDS. Any Series 2001 Bond, upon surrender thereof at the office of the Registrar, together with an assignment duly executed by the Owner or his attorney or legal representative in such form shall be satisfactory to the Registrar, may, at the option of the Owner, be exchanged for a Series 2001 Bond in Authorized Denominations in an aggregate principal amount or Accreted Value of Series 2001 Bonds equal to the principal amount or Accreted Value of the Series 2001 Bonds or Series 2001 Bonds so surrendered. The Registrar shall make provisions for the exchange of Series 2001 Bonds at the principal corporate trust office of the Registrar. The Issuer and Registrar shall not be obligated to make any . exchange of Series 2001 Bonds during the fifteen (15) days next preceding an interest payment date or in the case of any proposed redemption of Series 2001 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 2001 Bonds. SECTION 11. NEGOTIABILITY , REGISTRATION AND TRANSFER OF SERIES 2001 BONDS. The Registrar shall keep books for the registration of and for the registration of transfers of Series 2001 Bonds as provided in this Resolution. The transfer of any Series 2001 Bonds may be registered only upon such books upon surrender thereof to the Registrar together with an assignment duly executed by the Owner or his attorney or legal representative in such form as shall be satisfactory to the Registrar. Upon any such registration of transfer the Issuer shall execute and the Registrar shall authenticate and deliver in exchange for such Series 2001 Bond, a new Series 2001 Bond or Series 2001 Bonds in Authorized Denominations and registered in the name of the transferee, and in an aggregate principal amount or Accreted Value equal to the principal amount or Accreted Value of such Series 2001 Bond or Series 2001 Bonds so surrendered. In all cases in which Series 2001 Bonds shall be exchanged, the Issuer shall execute and the Registrar shall authenticate and deliver, at the earliest practicable time, Series 2001 Bonds in accordance with provisions of this Resolution. All Series 2001 Bonds surrendered in any such exchange or registration of transfer shall forthwith be canceled by the Registrar. The Issuer or the Registrar may make a charge for every such exchange or registration of transfer of Series 2001 Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge shall be made to any owner for the privilege of exchanging or registering the transfer of Series 2001 Bonds under the provisions of this Resolution. Neither the Issuer nor the Registrar shall be required to make any such exchange or registration of transfer of Series 2001 Bonds during the fifteen (15) days immediately preceding any interest payment date or, in the case of any proposed redemption of Series 2001 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 2001 Bonds. SECTION 12. OWNERSHIP OF SERIES 2001 BONDS. The person in whose name any Series 200 I Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and payment of or on account of the principal or redemption price or Accreted Value of any such Series 2001 Bond, and the interest on any such Series 2001 Bonds, shall be made only to or upon the order of the registered Owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 2001 Bond including the premium, if any, and interest thereon to the extent of the sum or sums so paid. 0R315142;1Q 9 SECTION 13. SERIES 2001 BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Series 2001 Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion cause to be executed, and the Registrar shall authenticate and deliver, a new Series 2001 Bond of like date as the Series 2001 Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Series 2001 Bond upon surrender and cancellation of such mutilated Series 2001 Bond or in lieu of and substitution for the Series 2001 Bond destroyed, stolen or lost, and upon the Owner furnishing the Issuer and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer and the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Series 2001 Bonds so surrendered shall be canceled by the Issuer. If any of the Series 2001 Bonds shall have matured, or be about to mature, instead of issuing a substitute Series 2001 Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Series 2001 Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Series 2001 Bond issued pursuant to this section shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Series 2001 Bonds be at anytime found by anyone, and such duplicate Series 2001 Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Series 2001 Bonds issued hereunder. SECTION 14. PROVISIONS FOR REDEMPTION. The Series 2001 Bonds shall be subject to redemption prior to their maturity at such times and in such manner as shall be set forth in the Bond Purchase Contract referred to in Section 36 hereof. Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registrar, and mailed, first class mail, postage prepaid, to all Owners of Series 2001 Bonds to be redeemed at their addresses as they appear on the registration books hereinbefore provided for, but failure to mail such notice to one or more Owners of Series 2001 Bonds shall not affect the validity of the proceedings for such redemption with respect to Owners of Series 2001 Bonds to which notice was duly mailed hereunder. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, if less than all of the Series 2001 Bonds of one maturity are to be called, the distinctive numbers of such Series 2001 Bonds to be redeemed and in the case of Series 2001 Bonds to be redeemed in part only, the portion of the principal amount or Accreted Value thereof to be redeemed. Any notice of optional redemption, other than with respect to an advance refunding, shall be circulated only if sufficient funds have been deposited in the Debt Service Fund to pay the redemption price of the Series 2001 Bonds to be redeemed. Any notice of optional redemption with respect to an advance. refunding shall explicitly state that the proposed redemption is conditioned on sufficient moneys being available to effect the full amount of the proposed redemption. Official notice of redemption having been given as aforesaid, the Series 2001 Bonds or portions of Series 2001 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Issuer shall default in the payment of the redemption price) such Series 2001 Bonds or portions of Series 2001 Bonds shall cease to bear interest. Upon surrender of such Series 2001 Bonds for redemption in accordance with said notice, such Series 2001 Bonds shall be paid by the Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Series 2001 Bond, there shall be prepared for the Owner a new 0R315142;1O 10 Series 2001 Bond or Series 2001 Bonds of the same maturity in the amount of the unpaid principal or Accreted Value of such partially redeemed Series 2001 Bond. All Series 2001 Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued. In addition to the foregoing notice, further notice shall be given by the Issuer as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. (A) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Series 2001 Bonds being redeemed; (ii) the date of issue of the Series 2001 Bonds as originally issued; (iii) the rate of interest borne by each Series 2001 Bond being redeemed; (iv) the maturity date of each Series 2001 Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Series 2001 Bonds being redeemed. (B) Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types similar to the type of which the Series 2001 Bonds consist and to one or more national information services that disseminates notices of redemption of obligations such as the Series 2001 Bonds. SECTION 15. FORM OF SERIES 2001 BONDS. The form of the Series 2001 Bond shall be in substantially the form attached hereto with such omissions, insertions and variations may be necessary and/or desirable and approved gy the executing officers of the City prior to the issuance thereof (which necessity and/or desirability and approval shall be evidenced conclusively by the Issuer's delivery of the Bonds to the purchaser or purchasers thereof). SECTION 16. APPLICATION OF PROVISIONS OF ORIGINAL RESOLUTION. The Series 2001 Bonds, herein authorized, shall for all purposes (except as herein expressly provided) be considered to be Additional Parity Obligations issued under the authority of the Original Resolution, and shall be entitled to all the protection and security provided therein for Additional Parity Obligations, and shall be in all respects entitled to the same security, rights and privileges enjoyed by the Parity Bonds. The covenants and pledges contained in the Original Resolution shall be applicable to the Series 2001 Bonds herein authorized in like manner as applicable to the Parity Bonds. The principal of, Amortization Installments, Accreted Value and interest on the Series 2001 Bonds shall be payable from the amounts in the Interest Account, Principal Account and Redemption Account within the Debt Service Fund, as applicable, established in the Original Resolution on a parity with the Parity Bonds, and payments shall be made into such accounts in the Debt Service Fund by the Issuer in amounts fully sufficient to pay the principal of, Amortization Installments, Accreted Value and interest on the Parity Bonds and the Series 2001 Bonds as such principal, Amortization Installments, Accreted Value and interest become due. Notwithstanding the provisions of the immediately preceding paragraphs, no funds or other amounts on deposit in a subaccount in the Reserve Account established for the benefit of the Parity Bonds shall be available for the Series 2001 Bonds and no funds or other amounts on deposit in the subaccounts in the Reserve Account established for the benefit of the Series 2001 Bonds shall be available for any of the Parity Bonds. 0R315142;10 11 The Net Revenues shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer. SECTION 17. APPLICATION OF SERIES 2001 BOND PROCEEDS. Theproceeds, including accrued interest and premium, if any, received from the sale of each Series of the Series 2001 Bonds shall be applied by.the Issuer simultaneously with the delivery of such Series of Series 2001 Bonds to the underwriters thereof, as follows: (A) The accrued interest shall be deposited in the Interest Account and shall be used only for the purpose of paying interest becoming due on the applicable Series of Series 2001 Current Interest Bonds. (B) The Issuer shall deposit to the special subaccount in the Reserve Account hereby established for the benefit of the Series 200lA Bonds, the Surety Bond in a sum equal to the Reserve Requirement for such bonds and shall deposit to the special subaccount in the Reserve Account created for the benefit of the Series 2001B bonds an amount equal to the Reserve Requirement on such bonds. The Surety Bond shall be payable to the Paying Agent for the Series 2001A Bonds on any interest payment or redemption date on which a deficiency exists which cannot be cured by funds in any other fund or account within the Debt Service Fund and available for such purpose. If at any time the Reserve Fund contains both a Surety Bond and cash, the cash shall be drawn down completely before any demand is made on the Surety Bond. Any moneys on deposit in a subaccount in the Reserve Account shall be invested in Investment Securities which mature not more than five (5) years from the date of their acquisition. Investment Securities on deposit in such subaccount in the Reserve Account shall be valued by the Paying Agent as frequently as deemed necessary by the Bond Insurer but not less often than annually, at the market value thereof, exclusive of accrued interest. The Paying Agent shall deliver a Demand for Payment in the form attached to the Surety Bond at least three (3) days prior to the date on which funds are required from the Surety Bond, or as soon thereafter as the Paying Agent is aware that funds are required from the Surety Bond. If a disbursement is made from the Surety Bond, the Issuer shall reimburse the Bond Insurer as soon as possible, but in any case within one year of any disbursement the amount of such disbursement before replenishing any cash withdrawn from such subaccount. The Paying Agent shall maintain adequate records verified with the Bond Insurer as to the amount available to be drawn at any given time under the Surety Bond on the Series 2001A Bonds and the Issuer shall maintain adequate records verified with the Bond Insurer as to the amounts paid and owing to the Bond Insurer under the terms of the financial guaranty agreement entered into by the Issuer in connection with the issuance of the Surety Bond. Notwithstanding any other provisions of the Resolution to the contrary as long as the Surety Bond for the Series 2001A Bonds shall be in full force and effect, the Issuer and Paying Agent agree that there may be no optional redemption of Series 200 I A Bonds or defeasance of Series 2001A Bonds or distribution of moneys held under the Resolution to the Issuer unless all amounts then owed to the Bond Insurer by the Issuer under the terms of the financial guaranty agreement entered into in connection with the delivery of the Surety Bond or any other documents related to the Series 2001A Bonds have been paid in full. 0R315142;1O 12 (C) A sum as specified by a supplemental resolution of the Issuer shall, together with other legally available funds of the Issuer, if any, as determined by subsequent resolution of the Issuer, be used to defease the Refunded Bonds by depositing such sums of money for investment in acquired obligations (as defined in the resolution pursuant to which such Refunded Bonds were issued) pursuant to the Escrow Deposit Agreement for the applicable series of Series 2001 Bonds so as to produce sufficient funds to make all the payments described in such Escrow Deposit Agreement. At the time of execution of such Escrow Deposit Agreement, the Issuer shall furnish to the escrow agent named therein appropriate documentation to demonstrate that the sums being deposited and the investment to be made will be sufficient for such purposes. Simultaneously with the issuance.of each Series of the Series 2001 Bonds, the Issuer shall enter into the Agreement. Such escrowed funds shall be kept separate and apart from all other funds of the Issuer and the moneys on deposit under the Agreement shall be withdrawn, used and applied by the Issuer solely for the purposes set forth in the Agreements. (D) The balance of the proceeds of each Series of the Series 2001 Bond shall be deposited to the City of Winter Springs Water and Sewer Cost of Issuance Fund hereby created and such amount shall be applied to the payment of costs and expenses relating to the issuance of the Series 2001 Bonds. One hundred and eighty (180) days following the initial delivery of the Series 2001 Bonds any amount remaining in the cost of Issuance Fund shall be transferred to any other account or fund of the Issuer and the Cost of Issuance Fund shall be closed. SECTION 18. SPECIAL OBLIGATIONS OF ISSUER. The Series 2001 Bonds shall not be or constitute general obligations or indebtedness of the Issuer as "bonds" within the meaning of the Constitution of Florida, but shall be payable solely from and secured by a lien upon and a pledge of the Net Revenues as herein provided. No Owner or Owners of any Series 2001 Bonds issued hereunder shall ever have the right to compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form of any real or personal property therein to pay such principal and interest from any other funds of the Issuer except from the special funds in the manner provided herein. The payment of the principal of and interest on the Series 2001 Bonds shall be secured forthwith equally and ratably by an irrevocable lien on the Net Revenues on a parity with the lien thereon of the Parity Bonds, and the Issuer does irrevocably pledge such Net Revenues to the payment of the principal of and interest on the Series 2001 Bonds, for the reserves therefor and for all other required payments hereunder. Such amounts hereby pledged and assigned shall immediately be subject to the lien of this pledge without any further physical delivery thereof or any further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer, irrespective of whether such parties have notice thereof. SECTION 19. COVENANTS OF THE ISSUER. The provisions of Section 19 of the Original Resolution (except as otherwise stated in Section 16 hereof) shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 20. TAX COVENANTS. The Issuer shall not use or permit the use of any proceeds of the Series 200 1 Bonds or any othe'r funds of the Issuer, directly or indirectly, to acquire any securities or obligations, and shall not use or permit the use of any amounts received by the Issuer with respect to the Series 2001 Bonds in any manner, and shall not take or permit to be taken any other action or actions, which would cause any such Series 2001 Bonds to be an "arbitrage bond" within the meaning of Section 148, or a "private activity bond" within the meaning of Section 141, of the Internal Revenue Code of 1986, 0R315142;10 13 as amended (in this Section called the "Code"), or otherwise cause interest on the such Series 2001 Bonds to become included in gross income for federal income tax purposes. The Issuer shall at all times do and perform all acts and things which are necessary in order to assure that interest paid on such Series 2001 Bonds will be excluded from gross income for purposes of federal income tax and shall take no action that would result in such interest not being so excluded. The Issuer shall payor cause to be paid to the United States Government any amounts required by Section 148 (f) of Code and the regulations thereunder (the "Regulations"). SECTION 21. MUNICIPAL BOND INSURANCE. In regard to the Series 2001 Bonds, the Issuer agrees with the Bond Insurer for the Series 2001 Bonds as follows: The Issuer shall give the Bond Insurer notice required to be given any other party under the Resolution to the Attention of Insured Portfolio Management. SECTION 22. DEFAULTS; EVENTS OF DEFAULT AND REMEDIES. The provisions of Section 21 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. In determining whether there has been a payment default in regard to the Seri.es 2001 Bonds no effect shall be given to payments made under the Bond Insurance Policy. Any acceleration of payments due on the Series 2001 Bonds shall be subject to the prior written consent of the Bond Insurer (if it has not failed to comply with its payment obligations under the Bond Insurance Policy). The Bond Insurer shall receive immediate notice of any payment default and notice of any other default known to the Registrar or the Issuer within thirty (30) days of their knowledge thereof. Notwithstanding any provision of this Resolution to the contrary, for all purposes of this . Section 20, except the giving of notice of any Event of Default to the Holder of the Bonds, the Bond Insurer shall be deemed to be the sole Holder of the Bonds it has insured as long as it has not failed to comply with its payment obligations under the Bond Insurance Policy and shall have the right to direct all remedies upon the occurrence of an Event of Default. Any acceleration of the Series 2001 Bonds shall be subject to the Bond Issuer's prior written consent. The Bond Insurer shall be included as a party in interest and as a party entitled to (i) notify the Issuer or any Paying Agent or any applicable receiver of the occurrence of an Event of Default and (ii) request the Issuer or any Paying Agent or receiver to intervene in judicial proceedings that affect the Series 2001 Bonds or the security therefor. The Issuer and any Paying Agent and any receiver are required to accept notice of default from the Bond Insurer. SECTION 23. AMENDING AND SUPPLEMENTING OF RESOLUTION WITHOUT CONSENT OF HOLDERS OF BONDS. The provisions of Section 22 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. No amendment or supplement pursuant to this Resolution shall be made without the consent of the Bond Insurer. 0R315142;1O 14 SECTION 24. AMENDMENT OF RESOLUTION WITH CONSENT OF HOLDERS OF BONDS. The provisions of Section 23 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. No amendment or supplement pursuant to this Resolution shall be made without the consent of the Bond Insurer. Any rating agency rating the Series 2001 Bonds and S&P even if it is not rating the Series 2001 Bonds must receive notice of each amendment to the Resolution and a copy thereof at least 15 days in advance of its execution or adoption. The Bond Insurer for the Series 2001 Bonds shall be provided with a full transcript of all proceedings relating to the execution of any such amendment or supplement. SECTION 25. DEFEASANCE. The provisions of Section 24 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. Notwithstanding the provisions of the immediately preceding sentence, any securities deposited with an escrow agent to effect a defeasance must be Acquired Obligations. SECTION 26. GOVERNMENTAL REORGANIZATION. The provisions of Section 25 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 27. ADDITIONAL UTILITY FUNCTIONS. The provisions of Section 26 of the Original Resolution shall be deemed applicable to this Resolution a'nd shall apply to the Series 2001 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 28. BOND INSURANCE. Insurance to insure the holder of any Series 2001 Bond, the scheduled payment of principal and interest on behalf of the Issuer is hereby authorized to be purchased from the Bon Insurer and payment for such insurance is hereby authorized from Series 2001 Bond proceeds or from other City moneys. In accordance with the Commitment for Municipal Bond Insurance attached hereto as an exhibit, a statement of insurance is hereby authorized to be printed on or attached to each Series of the Series 2001 Bonds for the benefit and information of the Series 2001 Bondholders. In accordance with the commitment of the Bond Insurer attached hereto as an exhibit, the purchase of a surety bond for deposit to the subaccount in the Reserve Account for the Series 2001A Bonds is hereby authorized, and payment of the premium for such surety bond from proceeds of the Series 2001A Bonds or other legally available moneys of the City is hereby authorized. SECTION 29. ESCROW DEPOSIT AGREEMENT. The form and content of the Escrow Deposit Agreement (the "Escrow Agreement") pursuant to which certain proceeds of each Series of the Series 2001 Bonds will be deposited together with other legally available moneys to defease the Refunded Bonds in the form attached hereto as an exhibit is hereby approved. The Mayor or Deputy Mayor and the City Clerk or Deputy City Clerk are hereby authorized to execute on behalf of the Issuer the Escrow Deposit Agreement in substantially the form attached hereto, with such additions, deletions, and other changes as may be necessitated by applicable law, the Resolution and the Bond Purchase Contracts as such officers may approve (such approval to be conclusively evidenced by their execution of the Escrow Agreement) . OR315142;1O 15 SECTION 30. PAYING AGENT AND REGISTRAR AND ESCROW TRUSTEE. First Union National Bank, is hereby appointed to serve as Registrar and Paying Agent for the Series 2001 Bonds and as Escrow Trustee pursuant to each Escrow Agreement. SECTION 31. BANK QUALIFIED. The Issuer designates each Series of the Series 2001A Bonds as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). The Issuer does not reasonably anticipate that the Issuer, any subordinate entities of the Issuer, and issuers of debt that issue "on behalf" of the Issuer, will during calendar year 2001 issue more than $10,000,000 of "tax-exempt" obligations, exclusive of those obligations described in Section 265(b)(3)(C)(ii) of the Code. SECTION 32. EARLY REDEMPTION OF PRIOR BONDS. The Series 1991 Refunded Bonds maturing after October 1, 2001 are upon issuance of the Series 2001A Bonds hereby irrevocably called for redemption on October 1, 2001 at the redemption price of 102 % of the principal amount thereof plus accrued interest to the redemption date. The Series 1992 Refunded Bonds maturing after April 1, 2002 are upon issuance of the Series 200lB Bonds hereby irrevocably called for redemption on April 1 , 2002 at the redemption price of 102 % of the principal amount thereof plus accrued interest to the redemption date. SECTION 33. TRANSFER OF REFUNDED BONDS FUNDS AND ACCOUNTS AND LIQUIDATION OF SAME. The amount on deposit in the funds and accounts established under the resolutions securing the Refunded Bonds are hereby authorized to be transferred to the escrow account created pursuant to the Escrow Agreements and as otherwise provided in certificates of the Issuer delivered at the time of issuance of each Series of the Series 2001 Bonds and the securities in such funds and accounts are hereby authorized to be liquidated in such manner as recommended by the Issuer's Financial Advisor to best accomplish the refunding of the Refunded Bonds. SECTION 34. OTHER ACTIONS. The Mayor, the Deputy Mayor/Commissioner, the City Manager, the City Attorney, the City Clerk including any Deputy City Clerk and the Finance Director (collectively the "Issuer Officers"), Akerman, Senterfitt & Eidson, P.A. as Bond Counsel, and Public Financial Management, Inc., as the Issuer's Financial Advisor, are hereby authorized and directed to take all actions necessary or desirable in connection with the issuance and delivery of the Series 2001 Bonds and the consummation of all transactions in connection therewith. The Issuer Officers are hereby authorized and directed to execute all necessary or desirable certificates, documents, papers, and agreements for the undertaking and fulfillment of all transactions referred to in or contemplated by the Resolution, the Official Statement, this Resolution, and the Bond Purchase Contract. SECTION 35. CONTINUING DISCLOSURE. The Issuer hereby covenants and agrees that, in order to provide for compliance with the secondary market disclosure requirements of the Rule with respect to the Series 2001 Bonds, that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate to be executed by the Issuer prior to the time the Issuer delivers the Series 2001 Bonds to the participating underwriter or underwriters, as it may be amended from time to time in accordance with the terms thereof. Notwithstanding any other provision of this Resolution, failure of the Issuer to comply with such Continuing Disclosure Certificate shall not be considered an Event of Default hereunder. However, the Continuing Disclosure Certificate shall be enforceable by the Series 2001 Bondowners in the event that the Issuer fails to cure a breach thereunder within a reasonable time after written notice from a Series 2001 Bondowner to the Issuer that a breach exists. Any rights of the Series 2001 Bondowners to enforce the provisions of the covenant shall be on behalf of all Series 2001 0R315142;1O 16 Bondowners and shall be limited to a right to obtain specific performance of the Issuer's obligations thereunder. SECTION 36. NEGOTIATED SALE; DELEGATIONS OF A UTHORITY REGARDING SALE OF BONDS; BOND PURCHASE CONTACT. The complex character of the security for the Series 2001 Bonds requires lengthy and detailed structuring with could be unreasonably restricted by the lack of flexibility at public sale. Based upon all available information and advice from the staff of the Issuer, a negotiated sale of the Series 2001 Bonds to the Underwriters listed in the Bond Purchase Contract(s) (the "Bond Purchase Contract") attached hereto will result in the most favorable bond financing plan and is in the best interest of the Issuer. The City Manager of the Issuer is hereby authorized and directed to execute and deliver to the underwriters for the Series 2001A Bonds such Bond Purchase Contact(s) provided that the present value savings to the Issuer resulting from the refunding of the Series 1991 Refunded Bonds is not less than ten percent (10 %) of the outstanding principal amount of such Series 1991 Refunded Bonds and that the final maturity of such Series 2001 A Bonds is not later than October, 2021. The City Manager of the Issuer is hereby authorized to execute and deliver to the underwriters of the Series 200lB Bonds a purchase contract which sets forth the terms and the provisions applicable to Series 2001B Bonds which provides for the refunding of the Series 1992 Refunded Bonds provided that the present value savings to . the Issuer resulting from the refunding of such Series 1992 Refunded Bonds is not less than six percent (6%) of the outstanding principal amount of such Series 1992 Refunded Bonds and that the maturity of such Series 2001B Bonds is not later than October 1, 2021. Compliance with the provisions of the prior sentence shall be conclusively determined upon receipt by the City Manager of a letter of Public Financial Management, Inc., financial advisor to the Issuer that such provisions have been complied with. The Bond Purchase Contract(s) shall be in substantially the form attached hereto with such changes thereto as may be approved in accordance with the above paragraph. The negotiated sale of the Bonds to the Underwriter is hereby approved. The City Manager is hereby authorized to execute the Bond Purchase Contract(s) on behalf of the Issuer, upon satisfaction of the above conditions. SECTION 37. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution of a preliminary official statements in essentially the forms attached hereto for the purpose of marketing the Series 2001 Bonds and delegates to the City Manager the authority to deem such Preliminary Official Statements "final" except for "permitted omissions" within the contemplation of Rule 15c2-12 of the Securities and Exchange Commission. The proper officers of the City are hereby authorized to execute on behalf of the Issuer the Official Statements relating to each Series of the Series 2001 Bonds, in substantially the form and content as the Preliminary Official Statements, with such additions, deletions, and changes thereto, including such additions, deletions and other changes as may be necessitated by this Resolution and the approved Bond Purchase Contract as such officers may approve (such approval to be conclusively evidenced by their execution of said Official Statement), and to deliver such Official Statements to the underwriters. SECTION 38. NO PERSONAL LIABILITY. Neither the members of the governing body of the Issuer nor any person executing the Series 2001 Bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. SECTION 39. SEVERABILITY. If anyone 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 0R315142;1O 17 separate from the remaining covenants, agreements or provisions of this Resolution or of the Series 2001 Bonds issued hereunder. SECTION 40. INCONSISTENT RESOLUTIONS. All prior resolutions of the Issuer inconsistent with the provisions of this, Resolution are hereby modified, supplemented and amended to conform with the provisions herein contained. SECTION 41. EFFECTIVE DATE. This Resolution shall become effective immediately upon its adoption. ADOPTED this 9th day of April, 2001. : (SEAL) ~TfEST: - r 1J I U.dLlk[A- City Clerk.../r / - 0R315142;1O 18 No. R- $ UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF SEMINOLE CITY OF WINTER SPRINGS WATER AND SEWER REFUNDING REVENUE BOND, SERIES 2001 MA TURITY DATE: INTEREST RATE: DA TED DATE: CUSIP: - October 1, Registered Owner: % 1, CEDE & CO. Principal Amount: MILLION DOLLARS HUNDRED THOUSAND AND NO/I00 KNOW ALL MEN BY THESE PRESENTS that the City .of Winter Springs, Florida (hereinafter called the "Issuer") for value received, hereby promises to pay to the order of the Registered Owner identified above or registered assigns, as herein provided, on the Maturity Date identified above, upon the presentation and surrender hereof at the principal corporate trust office of First Union National Bank, [Charlotte, North Carolina], solely from the revenues hereinafter mentioned, the Principal Amount identified above, .and to pay, solely from said sources, to the Registered Owner hereof by check or draft or by wire transfer if such Registered Owner owns $1,000,000 or more in principal amount of Series 2001 Bonds transmitted to the Registered Owner at his address as it appears on the bond registration books of the Issuer as it appears on the 15th day of the calendar month immediately preceding the applicable interest payment date, interest on said Principal Amount at the Interest Rate per annum identified above on each Apri!l and October 1 commencing 1, 200_ from the interest payment date next preceding the date of registration and authentication of this bond, unless this bond is registered and authenticated as of an interest payment date, in which case it shall bear interest from said interest payment date, or unless this bond is registered and authenticated prior to _ 1, 200_, in which event this bond shall bear interest from 1, 200_. Payments of principal and interest shall be made in any coin or currency of the United States of America which on the date of payment thereof is legal tender for the payment of public and private debts. This bond is one of an authorized issue of bonds originally issued in the aggregate original principal amount of $ (the "Series 2001 Bonds") of like tenor and effect, except as to number, principal amount, maturity, redemption provisions and interest rate, issued to refund certain outstanding water and sewer debt of the Issuer pursuant to and in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes, the Charter of the Issuer, other applicable provisions of law, Section 19(N) of Resolution No. 665 of the Issuer as amended and supplemented, and particularly as supplemented by.Resolution No. duly adopted by the City Commission on April 9, 2001, (hereinafter collectively call the "Resolution") and is subject to all the terms and conditions of such Resolution. All capitalized' undefined terms used herein shall have the meaning set forth in the Resolution. This bond is payable solely from and secured by a prior lien upon and pledge of the Net Revenues, as defined in the Resolution, derived and collected by the Issuer from the operation of the Issuer's water 0R329517;8 2 '1 and sewer system (the "System"), in the manner provided in the Resolution. The lien of the Series 2001 Bonds on the Net Revenues is on a parity with the lien thereon of the Issuer's outstanding Parity Bonds. Reference is made to the Resolution for more complete definition and description of Net Revenues and the System. Optional Redemption of Series 2001 Current Interest Bonds The Series 2001 Bonds maturing on or prior to October 1, _, are not redeemable prior to their respective maturities. The Series 2001 Bonds maturing on or after October 1,2001, are subject to optional redemption prior to their maturities on or after October 1,_, at the option of the City in whole or in part at any time, in such manner as shall be determined by the City and by lot within a maturity if less than a full maturity from any legally available monies at a redemption price (expressed as a percentage of the principal amount to be redeemed) as set forth in the following table, together with accrued interest to the redemption date. Period During Which Redeemed (Both Dates Inclusive) Redemption Price October 1, _ through September 30,_ October 1, and thereafter 101 % 100% Mandatory Redemption of Series 2001 Bonds The Series 2001 Bonds maturing on October 1, _ are subject to mandatory redemption in part prior to maturity by lot on October 1, _ and on each October 1 thereafter, at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium from Amortization Installments through operation of the Redemption Account, as follows: October 1 of Year Principal Amount The Series 2001 Bonds maturing on October 1, _ are subject to mandatory redemption in part prior to maturity by lot on October 1, _ and on each October 1 thereafter, at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium from Amortization Installments through operation of the Redemption Account, as follows: October 1 of Year Principal Amount Notice of such redemption shall be given in the manner required by the Resolution described below. This bond does not constitute a general indebtedness of the Issuer within the meaning of any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the Owner of this bond that such Owner shall never have the right to require or compel the exercise of the ad valorem taxing 0R329517;8 3 "i power of the Issuer or taxation of any real or personal property therein for the payment of the principal of and interest on this bond or the making of any Debt Service Fun~, or other payments provided in the Resolution. It is further agreed between the Issuer and the Owner of this bond that this bond and the indebtedness evidenced hereby shall not constitute a lien upon the System, or any part thereof, or on any other property of or in the Issuer, b~t shall constitute a lien only on the Net Revenues derived from the operation of the System all in the manner provided in the Resolution. The Issuer in the Resolution has covenanted and agreed with the Owners of the Series 2001 Bonds to fix, establish, revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for' the use of the products, services and facilities of the System which will always provide Revenues in each year sufficient to pay the aggregate of the amount needed to pay all Cost of Operation and Maintenance as the same shall become due in such year, plus one hundred ten percent (110%) of the Bond Service Requirement becoming due in such year on the Outstanding Bonds, and one hundred percent (100%) of all other d'eposits to be made pursuant to the Resolution, 'and that such rates, fees, rentals and other charges will not be reduced so as to be insufficient to provide Revenues for such purposes. The Issuer has reserved the right in the Resolution to issue in the future Additional Parity Obligations having a lien on the Net Revenues equal to the lien thereon of the Series 2001 Bonds and the Parity Bonds. The Issuer has entered into certain further covenants with the Owners of the bonds of this issue for the terms of which reference is made to the Resolution. Neither the members of the City Commission of the Issuer nor any person executing this bond shall be liable personally hereon or be subject liability or accountability by reason of the issuance hereof. It is certified that this bond is authorized by and is issued in conformity with the requirements of the Constitution and Statutes of the State of Florida. This bond is and has all the qualities and incidents of a negotiable instrument under Article 8 of the Uniform Commercial Code, the State of Florida, Chapter 678, Florida Statutes but may be transferred by the Bondowner hereof in person or by his attorney or legal representative at the principal corporate trust office of the Registrar but only in the manner and subject to the conditions provided in the Resolution and upon surrender and cancellation of this Bond. This bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Resolution until it shall have been authenticated by the execution by the Registrar of the certificate of authentication endorsed hereon. IN WITNESS WHEREOF, the City of Winter Springs, Florida, has issued this Bond and has caused the same to be signed by its Mayor, and countersigned and attested to by its City Clerk (the signatures of the Mayor, and the City Clerk being authorized to be facsimiles of such officers' signatures), and its seal or facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the 1st day of , 2001. 0R329517;8 4 'j CITY OF WINTER SPRINGS, FLORIDA Mayor (SEAL) ATTESTED AND COUNTERSIGNED: City Clerk CERTIFICATE OF AUTHENTICATION This bond is one of the Series 2001 Bonds issued under the provisions of the within mentioned Resolution. Date of Authentication: ,2001 FIRST UNION NATIONAL BANK, as Registrar By: Authorized Signatory 0R329517;8 5 -ASSIGNMENT AND TRANSFER For value received the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or other identifying number of transferee) the attached bond of the City of Winter Springs, Florida, and does hereby constitute and appoint , attorney, to transfer the said Bond on the books kept for registration thereof, with full power of substitution in the premises. Date Signature Guaranteed by (member firm of the New York Stock Exchange or a commercial bank or a trust company). NOTICE: No transfer will be registered and no new Series 2001 Bonds will be issued in the name of the Transferee, unless the signature to this assignment corresponds with the name as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. By: Title: 0R329517;8 6 FROM MBJA DAC (THU) 4. 5' 01. 17:51/ST. 17:50/NO. 4860056695 P 6 NlElIA COMMITMENT TO ISSUE A FINANCIAL GUARANTY INSURANCE POLICY Application No.: 2001-002589-01 Sale Date: April, 2001 (t) Program Type: Negotiated DP Re: $6,150,000 (est.) City of Winter Springs, Florida, Water and Sewer Refunding Revenue Bonds, Series 2001 A (the "Obligations") This commitment to issue a financial guaranty insurance policy (the "Commitment") dated April 5, 2001, constitutes an agreement between CITY OF WINTER SPRINGS, FLORIDA (the "Applicant") and MBIA Insurance Corporation (the "Insurer"), a stock insurance company incorporated under the laws of the State of New York. Based on' an approved application dated AprilS, 2001, the Insurer agrees, upon satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date or (ii) on the date of delivery of and payment for the Obligations, a financial guaranty insurance policy (the "Policy") for the Obligations, insuring the payment of principal of and interest on the Obligations when due. The issuance of the Policy shall be subject to the following terms and conditions: 1. Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of delivery of and payment for the Obligations, of a nonrefundable premium in the amount of .179% of total debt service, premium rounded to the nearest thousand. Please note: this is an all- or-nothing bid with application number 2001-002589-02. The premium set out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to this Commitment. 2, The Obligations shall have received the unqualified opinion of bond counsel with respect to the tax-exempt status of interest on the Obligations. ' 3. There shall have been no material adverse change in the Obligations or the Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance of the Obligations or in the final official statement or other similar document, including the financial statements included therein. 4. There. shall have been no material adverse change in any information submitted to the Insurer as a part of the application or subsequently submitted to be a part of the application to the Insurer. 5. No event shall have occurred which would allow any underwriter or any other PUICh~the Obligations not to be required to purchase the Obligations at closing. 6. A Statement of Insurance satisfactory to the Insurer shall be printed on the Obliga' ns. 7. Prior to the delivery of and payment for the Obligations, none of the information or documents submitted as a part of the application to the Insurer shall be determined to contain any untrue or misleading statement of a material fact or fail to state a material fact required to be stated therein or necessary in order to make the statements contained therein not misleading. FROM MBIA DAC (THU) 4. 5' 01 17:52/ST. 17:50/NO. 4860056695 P 7 MBIA 8. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of and payment for the Obligations. 9. This Commitment may be signed in counterpart by the parties hereto. ~ompliance with the Insurer's Criteria for Current Refundings (see attached). ~ompliance with the Insurer's General Document Provisions (see attached). Dated this 5th day of April, 2001. MBIA Insurance Corporation By CITY OF WINTER SPRINGS, FLORIDA By: Title: .. FROM MBIA DAC (THU) 4. 5' 01 17:53/ST. 17:50/NO. 4860056695 P 16 MBIA COMMITMENT TO ISSUE A DEBT SERVICE RESERVE SURETY BOND Application No.: 2001-002589-03 Sale Date: April, 2001 (t) Program Type: Negotiated DP RE: $485,000 (est.) Debt Service .Reserve Fund for the $6,150,000 (est.) City of Winter Springs, Florida, Water and Sewer Refundmg Revenue Bonds, Series 2001 A (the "Obligations") This commitment to issue a debt service reserve surety bond (the "Commitment") constitutes an agreement between CITY OF WINTER SPRlNGS, FLORIDA (the "Applicant"), and MBIA Insurance Corporatiop. (the "Insurer"), a stock insurance company incorporated under the laws of the State of New York. Based on an approved application dated April 5, 2001, the Insurer agrees, upon satisfaction of the conditions herein, to issue on the earlier of (i) 120 days of said approval date or (ii) on the date 'of delivery of and payment for the Obligations, a debt service reserve surety bond (the "Surety Bond"), for the Obligations, guaranteeing the payment to the issuer of up to $485,000 (est.) on the Obligations. The issuance of the Surety Bond shall be subject to the following terms and conditions: 1. Payment by the Applicant, or by the Trustee on behalf of the Applicant, on the date of delivery of arid payment for the Obligations, of a nonrefundable premium in the amount of 1.25% of total surety amount, premium rounded to the nearest thousand. The premium set out in this paragraph shall be the total premium required to be paid on the Policy issued pursuant to this Commitment. 2. The Obligations shall have received the unqualified opinion of bond counsel with respect to the tax-exempt status of interest on the Obligations. 3. There shall have been no material adverse change in the Obligations or the Resolution, Bond Ordinance, Trust Indenture or other official document authorizing the issuance of the Obligations or in the fmal official statement or other similar document, including the financial statements included therein. 4. There shall have been no material adverse change in any information submitted to the Insurer as a part of the Application or subsequently submitted to be a part of the Application to the Insurer. . 5. No event shall have occurred which would allow any underwriter or any other purchaser of the Obligations not to be required to purchase the Obligations at closing. 6. Prior to the delivery of and payment for the Obligations, none of the information or documents submitted as a part of the Application to the Insurer shall be determined to contain any untrue or misleading statement of a material fact or fail to state a material fact required to be stated therein or necessary in order to make the statements contained therein not misleading. 7. No material adverse change affecting any security for the Obligations shall have occurred prior to the delivery of , and paym~nt for the Obligations. 8. This Commitment may be signed in counterpart by the parties hereto. FROM MBIA DAC 1 (THU) 4. 5' 01 17: 53/ST. 17: 50/NO. 4860056695 p 17 JMBIA 9. Compliance with the Insurer's Tenn Sheet for Debt Service Reserve Fund Program (see Attachment A). Dated this 5th day of April, 2001.. MBIA Insurance Corporation By '~'F~ Assista Secretar - ..... CITY OF WINTER SPRINGS, FLORIDA By: Title: ESCROW DEPOSIT AGREEMENT ESCROW DEPOSIT AGREEMENT, dated as of ,2001, by and between the City of Winter Springs, Florida (the "City"), a duly constituted and existing municipal corporation of the State of Florida, and (the "Escrow Trustee"), a national banking association organized and existing under the laws of the United States of America, as escrow trustee hereunder. WHEREAS, the City has previously issued its Water and Sewer Refunding Revenue Bonds, Series _ (the "Refunded Bonds") pursuant to Resolution No. 665 of the City, as amep.ded and supplemented (collectively the "Prior Resolution"). WHEREAS, the Prior Resolution provides that the Refunded Bonds shall be deemed to have been paid within the meaning and with the effect expressed in the Prior Resolution upon compliance by the City with the provisions of Section 24 of the Prior Resolution, which provisions of the Prior Resolution the City hereby represents have not been amended or supplemented; and WHEREAS, the City has determined to issue, pursuant to Resolution No. adopted by the City on April 9, 2001, its $ aggregate principal amount of Water and Sewer Refunding Revenue Bonds, Series _ (the "Series 2001 Bonds"), a portion of the proceeds of which Series 2001 Bonds will be used to buy Defeasance Obligations (as defined in the Prior Resolution) in order to provide, together with any uninvested cash deposited in the Escrow Fund, payment for the Refunded Bonds and discharge and satisfy the pledges, liens and other obligations of the City under the Prior Resolution in regard to such Refunded Bonds; and WHEREAS, the issuance of the Series 2001 Bonds, the purchase by the Escrow Trustee of the hereinafter defined Escrow Securities from a portion of the proceeds thereof, the deposit of such Escrow Securities into an escrow deposit trust fund to be held by the Escrow Trustee and. the discharge and satisfaction ofthe pledges, liens and other obligations of the City under the Prior Resolution in regard to the Refunded Bonds shall occur as a simultaneous transaction; and WHEREAS, this Agreement is intended to effectuate such simultaneous transaction; NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows: 1. The recitals stated above are true and correct and incorporated herein. 2. Receipt of true and correct copies of the above-mentioned Prior Resolution is hereby acknowledged by the Escrow Trustee. The applicable and necessary provisions of the Prior Resolution, in particular Section 24 thereof, are incorporated herein by reference. The Escrow Trustee also acknowledges receipt of the verification report of dated , 2001 (the "Verification Report"). Reference herein to or citation herein of any o R326504; 1 provisions of the Prior Resolution or the Verification Report shall be deemed to incorporate the same as a part hereof in the same manner and with the same effect as if the same were fully set forth herein. 3. In accordance with the Prior Resolution, the City by this writing exercises the option to have the pledges, liens and obligations to the holders of the Refunded Bonds discharged .and satisfied. 4. There is hereby created and established with the Escrow Trustee a special, segregated and irrevocable escrow fund designated the "City of Winter Springs, Florida Water and Sewer Refunding Revenue Escrow Deposit Fund" (the "Escrow Fund ") which Escrow Fund to be held in the custody of the Escrow Trustee as a trust fund for the benefit of the holders of the Refunded Bonds, separate and apart from other funds of the City and the Escrow Trustee. The Escrow Trustee hereby accepts the Escrow Fund and acknowledges the receipt of and deposit to the credit ofthe Escrow Fund ofthe sum of$ in immediately available funds, $ of such funds being received by the City from the sale and delivery of the Series 2001 Bonds and $_ being amounts previously held in the _ fund for the Refunded Bonds (collectively, the "Escrow Proceeds"). 5. The Escrow Trustee represents and acknowledges that, concurrently with the deposit of the Escrow Proceeds, it has used $ of such Escrow Proceeds to purchase on behalf of and for the account of the City, from the United States Treasury, certain noncallable direct obligations of the United States of America guaranteed as to full and timely payment (the "Escrow Securities "), in the aggregate principal or par amount of $ which are described in Schedule "A" hereto, and the Escrow Trustee will deposit such obligations to the Escrow Fund. The Escrow Agent has retained $ of the Escrow Proceeds as uninvested cash to be applied to pay the difference between the principal amount and interest on maturing Escrow Securities and the debt service on the Refunded Bonds becoming due on the redemption date. In the event any of the Escrow Securities described in Schedule "A" hereto are not available for delivery on , 2001, the Escrow Trustee may, with the approval of Bond Counsel, substitute other United States Treasury obligations and shall credit such other obligations to the Escrow .Fund and hold such obligations until the aforementioned Escrow Securities have been delivered. The City will provide the Escrow Trustee and Bond Counsel with a revised Verification Report of in regard to the adequacy of the Escrow Securities, taking into account the substituted obligations to pay the Refunded Bonds in accordance with the terms hereof. 6. In reliance upon the Verification Report, the City represents that the principal amounts maturing on the Escrow Securities together with the interest to be earned thereon in accordance with their terms (without consideration of any reinvestment of such maturing principal and interest), are sufficient together with the uninvested cash available to the Escrow Trustee to 0R326504;1 2 pay the amounts of principal oJ, and interest due and to become due on the Refunded Bonds as described in Schedule "B" attached hereto. If the Escrow Securities shall be insufficient to make such redemption payments, the City shall timely deposit in the Escrow Fund, solely from legally available funds of the City, such additional amounts as may be required to pay the Refunded Bonds as described in Schedule "B" hereto. Notice of any insufficiency shall be given by the Escrow Trustee to the City as promptly as possible, but the Escrow Trustee shall in no manner be responsible for the City I S failure to make such deposits. 7. The deposit of the Escrow Securities in the Escrow Fund shall constitute an irrevocable deposit of Defeasance Obligations (as defined in the Prior Resolution) in irrevocable trust with the Escrow Trustee solely for the payment of the principal, redemption premium, if any, and interest on the Refunded Bonds at such times and amounts as set forth in Schedule "B" hereto, and subject to the provisions of Section 9 hereof, the principal of and interest earnings on such Escrow Securities shall be used solely for such purposes. 8. The City hereby directs, and the Escrow Trustee hereby agrees, that it will undertake the timely transfer of money to , the Paying Agent for the Refunded Bonds or any successors or assigns thereto (collectively, the "Refunded Paying Agent") in accordance with Schedule "B" attached hereto, in order to effectuate this Agreement and to pay the Refunded Bonds in the amounts and at the times provided in said Schedule "B". The liability of the Escrow Trustee to make such transfer for the payment of the principal of, redemption premium, if any, and interest on the Refunded Bonds pursuant to this Agreement shall be limited to the application of the Escrow Securities and the interest earnings thereon and cash available for such purposes in the Escrow Fund. 9. . Money deposited in the Escrow Fund shall be invested and reinvested only in the Escrow Securities listed in Schedule "A" hereto, and, except as provided in Section 5 hereof and this section, neither the City nor the Escrow Trustee shall otherwise invest or reinvest any money in the Escrow Fund. [The Escrow Trustee hereby agrees to purchase the zero-coupon SLGS as set forth on Schedule A hereto.] The Escrow Trustee may not sell or otherwise dispose of any or all of the Escrow Securities in the Escrow Fund and reinvest the proceeds thereof in other securities nor may it substitute securities for any of the Escrow Securities, except upon written direction of the City (which direction may be in the form of a City Resolution or written instructions from an authorized officer of the City) and where, prior to any such reinvestment or substitution, the Escrow Trustee has received from the City the following: (a) a written opinion by an independent certified public accountant or firm of independent certified public accountants, of recognized standing, appointed by the City and acceptable to the Escrow Trustee, to the effect that after such reinvestment or substitution the principal amount of Escrow Securities, 0R326504; 1 3 together with the interest thereon together with any cash, will be sufficient' to pay the Refunded Bonds as described in Schedule "B" hereto; and (b) a written opinion of nationally recognized bond counsel to the effect that (i) such investment will not cause the Refunded Bonds or the Series 2001 Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder or otherwise cause the interest on the Refunded Bonds or the Series 2001 Bonds to be subject to federal income tax, and (ii) such investment does not violate any resolution of the City relating to the Refunded Bonds or the Series 2001 Bonds; In the event the above-referenced verification concludes that there are surplus moneys in the Escrow Fund, such surplus moneys shaH be immediately released to the City. The Escrow Fund shall continue in effect until the date upon which the Escrow Trustee makes the final payment to the Refunded Bonds Paying Agent in an amount sufficient to pay the Refunded Bonds as described in Schedule "B" hereto, whereupon the Escrow Trustee shall sell or redeem any Escrow Securities remaining in the Escrow Fund, and shall remit to the City the proceeds thereof, together with all other money, if any, then remaining in the Escrow Fund. 10. The City hereby informs the Escrow Trustee that all of the then Outstanding Refunded Bonds maturing after , _ have been called for early redemption on 1, _ at 102.0% of the principal amount thereof, plus accrued interest to the redemption date. The City hereby irrevocably instructs the Escrow Trustee to notify the Refunded Bonds Holder of such redemption and provide notice of such redemption of the Refunded Bonds as provided in the Prior Resolution. The Issuer hereby notifies the Escrow Trustee that in accordance with the provisions of the Prior Resolution it will cause duplication of a notice of the defeasance of the Refunded Bonds in substantially the form of schedule C hereto in authorized newspapers (as defined in the Prior Resolution) . 11. Concurrently with the deposit of the Escrow Securities and cash set forth in Section 5 hereof, the Refunded Bonds are hereby deemed to have been paid within the meaning and with the effect expressed in the Prior Resolution. 12. The Escrow Fund hereby created shall be irrevocable and the holders of the Refunded Bonds shall have an express lien on all Escrow Securities and cash deposited in the Escrow Fund pursuant to the terms hereof and the interest earnings thereon until paid out, used and applied in accordance with this Agreement. Neither the City or the Escrow Trustee shall cause or permit any other lien or interest to be imposed upon the Escrow Funds. OR326504; 1 4 13. This Agreement is made for the benefit of the City and the holders from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such holders and the written consent of the Escrow Trustee and , the insurer for the Series 2001 Bonds provided, however, that the City and the Escrow Trustee may, without the consent of, or notice to, such holders, but with the consent of such insurer, enter into such agreements supplemental to this Agreement as shall not adversely affect the rights of such holders and as shall not be inconsistent with the terms and provisions of this Agreement, for anyone or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; (b) to grant, or confer upon, the Escrow Trustee for the benefit of the holders of the Refunded Bonds, any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Trustee; and , (c) to subject to this Agreement additional funds, securities or properties. The Escrow Trustee shall be entitled to rely exclusively upon an unqualified opinion of nationally recognized bond counsel with respect to compliance with this Section 13, including the extent, if any, to which any change, modification or addition affects the rights of the holders of the Refunded Bonds, or that any instrument executed hereunder complies with the conditions and provisions of this Section 13. 14. In consideration of the services rendered by the Escrow Trustee under this Agreement, the City is simultaneously paying to the Escrow Trustee $ ; provided, that such fee shall not include any expenses associated with the performance by the Escrow Trustee at the request of the City of any extraordinary services hereunder, which are payable by the City upon presentation of an invoice therefor from the Escrow Trustee. The Escrow Trustee shall have no lien whatsoever upon any of the Escrow Securities or cash in said Escrow Fund for the payment of such proper fees and expenses. The City further agrees to indemnify and save the Escrow Trustee harmless, to the extent allowed by law, against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder, and which are not due to its negligence or default. 15. The Escrow Trustee, at the time acting hereunder, may at any time resign and be discharged from the duties and obligations hereby created by giving not less th~n thirty (30) days' written notice to the City and mailing notice thereof, specifying the date when such resignation will take effect to the holders of all Refunded Bonds then outstanding, but no such resignation shall take effect unless a successor Escrow Trustee shall have been appointed by the holders of a majority in aggregate principal amount of the Refunded Bonds then outstanding or by the City as hereinafter provided and such successor Escrow Trustee shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Trustee. 0R326504;1 5 The Escrow Trustee may be removed at any time by an instrument or concurrent instruments in writing, delivered to the Escrow Trustee and to the City and signed by the holders of a majority in aggregate principal amount of the Refunded Bonds then outstanding. In the event the Escrow Trustee hereunder shall resign or be removed, or be dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case the Escrow Trustee shall be taken under the control of any public officer or officers, or of a receiver appointed by a court, a successor may be appointed by the holders of a majority in aggregate principal amount of the Refunded Bonds then outstanding by an instrument or concurrent instruments in writing, signed by such holders, or by their attorneys in fact, duly authorized in writing; provided, nevertheless, that in any such event, the City shall appoint a temporary Escrow Trustee to fill such vacancy until a successor Escrow Trustee shall be appointed by the holders of a majority in aggregate principal amount of the Refunded Bonds then outstanding in the manner above provided, and any such temporary Escrow Trustee so appointed by the City shall immediately and without further act be superseded by the Escrow Trustee so appointed by such holders. In the event that no appointment of a successor Escrow Trustee or a temporary successor Escrow Trustee shall have been made by such holders or the City pursuant to the foregoing provisions of this Section 15 within thirty (30) days after written notice of resignation of the Escrow Trustee has been given to the City, the holder of any of the Refunded, Bonds or any retiring Escrow Trustee may apply to any court of competent jurisdiction for the appointment of a successor Escrow Trustee, and such court may thereupon, after such notice, if any, as it shall deem proper, appoint a successor Escrow Trustee. No successor Escrow Trustee shall be appointed unless such successor Escrow Trustee shall be a corporation with trust powers organized under the banking laws of the United States or any State, and shall have at the time of appointment capital and surplus of not less than $20,000,000. Every successor Escrow Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the City an instrument in writing accepting such appointment hereunder and thereupon such successor Escrow Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, immunities, powers, trusts, duties and obligations of its predecessor; but such predecessor shall nevertheless, on the written request of such successor Escrow Trustee or the City execute and deliver an instrument transferring to such successor Escrow Trustee all the estates, properties, rights, powers and trust of such predecessor hereunder; and every predecessor Escrow Trustee shall deliver all securities and moneys held by it to its successor; provided, however, that before any such delivery is required to be made, all fees, advances and expenses of the retiring or removed Escrow Trustee shall be paid in full. Should any transfer, assignment or instrument in writing from the City be required by any successor Escrow Trustee for more fully and certainly vesting in such successor Escrow Trustee 0R326504; 1 6 the estates, rights, powers and duties hereby vested or intended to be vested in the predecessor Escrow Trustee, any such transfer, assignment and instruments in writing shall, on request, be executed, acknowledged and delivered by the City. Any corporation into which the Escrow Trustee, or any successor to it in the trusts created by this Agreement, may be merged or converted or with which it or any successor to it may be consolidated, or transfers all or substantially all of its corporate trust business to, or any corporation resulting from any merger, conversion, consolidation or tax-free reorganization to which the Escrow Trustee or any successor to it shall be a party, if satisfactory to the City, shall be the successor Escrow Trustee under this Agreement without the execution or filing of any paper or any other act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In the event the Escrow Trustee resigns or is removed pursuant to the provisions hereof, the total fee paid to the Escrow Trustee as provided in Section 14 hereof shall be prorated on a straight line basis from the date hereof until the final payment is scheduled to be made for the Refunded Bonds, and the unearned portion of such fee shall be rebated and returned to the City. 16. This Agreement, except for Section 14 hereof, shall terminate when all transfers and payments required to be made by the Escrow Trustee under the provisions hereof shall have been made. Upon such termination, all moneys remaining in the Escrow Fund shall be released to the City. 17. This Agreement shall be governed by the applicable laws of the State o(Florida. 18. If anyone or more of the covenants or agreements provided in this Agreement on the part of the City or the Escrow Trustee to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. 19. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. 20. The Issuer will not accelerate the maturity of any Refunded Bonds or exercise any option to redeem any Refunded Obligations before 21. Any notice, authorization, request or demand required or permitted to be given in accordance with the terms of this Agreement shall be in writing and sent by registered or certified mail addressed to: 0R326504; 1 7 City of Winter Springs, Florida 1126 East State Road 434 Winter Springs, Florida 32708 Attention: City Manager (Escrow Trustee) IN WITNESS WHEREOF, the parties hereto have each caused this Escrow Deposit Agreement to be executed by their duly authorized officers and appointed officials and their seals to be hereunder affixed and attested as o~ the date first above written. CITY OF WINTER SPRINGS, FLORIDA By: Mayor (SEAL) ATTEST: City Clerk Approved as to form: City Attorney By: Authorized Signatory 0R326504;1 8 Security (Purchase on .) 0R326504; 1 SCHEDULE A Maturity Date Par Amount a zero-coupon SLGS in the part amount of $ Coupon maturing SCHEDULE C FORM OF NOTICE OF DEFEASANCE Notice is hereby given pursuant to Section 24 of the Resolution No. 665 (the "Resolution") of the City of Winter Springs, Florida (the "Issuer"), that the Issuer's Water and Sewer Refunding Bonds, Series _ maturing on or after (the "Refunded Bonds") are deemed to be paid within the meaning of the Resolution and shall no longer be secured by the Net Revenues of the Issuer's Water and Sewer System and shall be secured solely from the irrevocable deposit of cash and [U. S. Treasury obligations] made by the Issuer with , as Escrow Trustee, in accordance with said Section 24. The Refunded Bonds maturing on or after shall be redeemed on at the offices of , the paying agent for the Refunded Bonds. 0R326504; 1 i1 $ CITY OF WINTER SPRINGS, FLORIDA Water and Sewer Refunding Revenue Bonds, Series 2001B BOND PURCHASE CONTRACT THIS IS A BOND PURCHASE CONTRACT, dated , 2001 (the "Purchase Contract"}, by and between HANIFEN, IMHOFF, a division of Stifel Nicolaus & Company, Inc., oR' behalf of itself and Gardnyr Michael Capital, Inc. and William R. Hough & Co. (collectively, the "Underwriter"), and the CITY OF WINTER SPRINGS, FL-ORIDA (the "City"). Upon execution and delivery of this Purchase Contract, it shall be binding upon the City and the Underwriter. Any capitalized term not conventionally capitalized and not defined herein shall have the meaning indicated in the hereinafter defined Bond Resolution or the Official Statement. SECTION 1. Purchase and Sale of Bonds. Upon the terms and conditions and upon the basis of the representations and agreements set forth herein, the Underwriter hereby agrees to purchase from the City for offering to the public, and the City hereby agrees to sell and deliver to the Underwriter for such purpose, all (but not less than all) of the City's $ aggregate principal amount of Water and Sewer Refunding Revenue Bonds, Series 2001B (the "Series 2091 B Bonds "). The Series 2001 B Bonds shall be issued in such principal amount, shall mature on such date, shall bear such rate of interest, and shall be subject to redemption, all as set forth in Exhibit A attached hereto and incorporated herein by this reference. The purchase price to be paid by the Underwriter to or for the account of the City upon delivery of the Series 2001B Bonds is $ (the aggregate principal amount of the Series 2001B Bonds, less original issue discount of $ and less Underwriter's discount of $ ), plus accrued interest on the Series 200lB Bonds from the dated date thereof to the date of the payment for and delivery of the Series 200m Bonds pursuant to Section 8 hereof. The payment, delivery and other actions contemplated hereby to take place at the time of such payment and delivery are referred to as the "Closing." SECTION 2. Official Statement. As soon as practicable after the date hereof, and, in any event, no later than , 2001, the City shall deliver to the Underwriter a sufficient number of printed copies (as reasonably requested by the Underwriter, but not to exceed 150 copies) of the final Official Statement (including the cover page and appendices contained therein, the "Official Statement"), dated the date hereof, with respect to the Series 200m Bonds, executed (manually or conformed) by the City in substantially the form of the Preliminary Official Statement (as hereinafter defined) with such changes thereto as may be approved by the Mayor Q:\43802\BP A2oo1 B#l. wpd NGN-DRAFT#l - April 4, 2001 l'i and City Manager (their execution thereat evidencing approval of any such changes) and the Underwriter. SECTION 3. The Series 2001B Bonds. The Series 2001B Bonds shall be as described in, and shall be issued and secured under the provisions of Resolution No. 2001- , adopted by the City Commission (the "City Commission") on April 9, 2001, as supplemented (the "Bond Resolution "). SECTION 4. Disclosure Statement; Security Deposit. The City acknowledges receipt from the Underwriter of the disclosure statement of the Underwriter required by Section 218.385(6), Florida Statutes, substantially in the form attached hereto as Exhibit B. The Underwriter has delivered to the City herewith a cashier's check in the amount of $ as a security deposit, payable to the City representing approximately 1 % of the par amount of the Series 200lB Bonds. In the event the City does not accept this offer, such check shall be immediately returned to the Underwriter uncashed. If this offer is accepted, the check will be held uncashed as security for the performance by the Underwriter of its obligations to purchase, to accept delivery of and to pay for the Series 2001B Bonds at the Closing. In the event of failure by the City to deliver the Series 200lB Bonds at the Closing, or if the City shall be unable to satisfy the conditions of the obligations of the Underwriter contained herein, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, the check shall be immediately returned to the Underwriter uncashed, and such return shall constitute a full release and discharge of all claims by the Underwriter arising out of the transactions contemplated hereby. In the event that the Underwriter fails (other than for reasons permitted hereunder) to accept delivery of and to pay for the Series 2001B Bonds at the Closing, the check shall be cashed and the proceeds thereof retained by the City as and for full liquidated damages for such failure and for any defaults hereunder on the part of the Underwriter, and such retention shall constitute a full release and discharge of all claims by the City against the Underwriter arising out of the transactions contemplated hereby. SECTION 5. Public Offering. It shall be a condition to the City's obligations to sell and- to deliver the Series 2001B Bonds to the Underwriter and to the Underwriter's obligations to accept delivery of and to pay for the Series 200lB Bonds that the entire aggregate principal amount of the Series 2001B Bonds be issued and delivered by the City at the Closing. The Underwriter agrees to make a bona fide initial public offering of all the Series 200lB Bonds, plus interest accrued thereon from the dated date of the Series 2001B Bonds. At the Closing, the Underwriter shall deliver to the City a certificate prepared by Bond Counsel to the City to the effect that (i) all of the Series 2001B Bonds have been the subject of an initial offering to the public as herein provided, provided, however, the Underwriter reserves the right to make concessions to dealers and to change the initial offering price as the Underwriter .shall deem necessary in connection with the marketing of the Series 200lB Bonds, and (ii) not less than ten percent (10%) of the Series 200lB Bonds were sold to the public (excluding bond houses, brokers 2 Q:\43802\BPA2001B#1. wpd NGN-DRAFT#l - April 4, 2001 i i or similar persons or organizations acting in the capacity of underwriter or wholesalers) at the initial offering price not greater than the price shown on the cover of the Official Statement. The Underwriter agrees to make such offering in compliance with all applicable federal and state laws and regulations. SECTION 6. Use of Documents. The City hereby authorizes the use by the Underwriter in connection with the public offering, sale, and distribution of the Series 2001B Bonds' of the following documents: (a) the Bond Resolution, as amended, (b) the Official Statement (including any supplements or amendments thereto) dated the date hereof, (c) the Preliminary Official Statement, dated ,2001 (including any supplements or amendments thereto) (the "Preliminary Official Statement"), and (d) any other documents requested by the Underwriter related to the transactions contemplated in the Official Statement in connection with the authorization, issuance, and delivery of the Series 200lB Bonds to the Underwriter, and the public offering and distribution of the Series 2001B Bonds by the Underwriter on behalf of the 'City. SECTION 7. Representations and Agreements. The City hereby represents and agrees, except as may be set forth otherwise in the Official Statement, as follows: (a) the City is, and will be at the date of Closing, duly organized and validly existing as a municipal corporation of the State of Florida (the "State") with the powers and authority set forth in Chapter 166, Part II, Florida Statutes, and other applicable provisions of law (herein collectively referred to as the "Act"); (b) the City has full legal right, power, and authority to: (1) issue the Series 2001B Bonds for the purpose of providing moneys to (i) refund on a current basis, all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991 other than the 2001 maturity (the "Refunded Bonds"), and (ii) pay certain expenses relating to the issuance and sale of the Series 2001B Bonds including the municipal bond insurance premium and the reserve account surety bond premium; (2) adopt the Bond Resolution and perfonn its obligations thereunder; 3 Q:\43802\BPA2oo1B#1.wpd NGN-DRAFT#l - April 4, 2001 .... ~ .1. (3) enter into and perform its obligations under this Purchase Contract, the Continuing. Disclosure Undertaking, the Escrow Deposit Agreement and the Bond Registrar and Paying Agent Agreement with , as Escrow Agent, Paying Agent and Registrar; (4) sell, issue and deliver the Series 20018 Bonds to the Underwriter as provided herein; and (5) carry out arid consummate the transactions contemplated by this Purchase Contract, Continuing Disclosure Undertaking, the Bond Resolution, the Escrow Deposit Agreement, the Bond Registrar and Paying Agent Agreement, and the Official Statement; (c) by all necessary official action taken at meetings of the City Commission duly called and held in accordance with applicable law, at which a quorum was present and acting at the relevant times, the City has: (1) approved and adopted, the Bond Resolution; (2) approved and authorized the Preliminary Official Statement and its distribution in connection with the offering of the Series 2001B Bonds and approved the execution, delivery and distribution of the Official Statement in connection with the delivery of the Series 20018 Bonds; (3) duly authorized and approved (A) the execution and delivery of; and the performance by the City of its obligations contained in the Series 20018 Bonds, the Bond Resolution, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and this Purchase Contract, in connection with the issuance of, the Series 2001B Bonds and (B) the consummation by it of all other transactions contemplated to be performed by the City under this Purchase Contract in connection with the issuance of the Series 20018 Bonds, including the execution of the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and the Bond Registrar and Paying Agent Agreement; (d) the City, at the time of Closing, will have performed all of its obligations required to be performed at or prior to Closing under this Purchase Contract, Bond Registrar and Paying Agent Agreement, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and the Bond Resolution; (e) the City has complied with, and at the Closing will be in compliance in all respects with, the terms of the Act, the Bond Resolution, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and this Purchase Contract; 4 Q:\43802\BP A2oo1B#1. wpd NGN-DRAFT#l - April 4, 2001 "'.' , , i (f) the Bond Resolution and this Purchase Contract constitute and the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and the Bond Registrar and Paying Agent Agreement will, when executed, constitute, the valid and binding obligations of the City, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and subject to the exercise of judicial discretion in appropriate cases; (g) the Series 2001B Bonds, when issued, authenticated and delivered to the Underwriter in accordance with the Bond Resolution and this Purchase Contract, will constitute valid and binding obligations of the City, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and subject to the exercise of judicial discretion in appropriate cases; (h) with regard to the issuance of the Series 2001B Bonds, and the transactions contemplated in the Official Statement, to the best knowledge of the undersigned, other than as disclosed in the Official Statement: (1) the City is not in breach of or default of any material provision of: (A) any applicable constitutional provision, law or administrative regulation of the City, the State of Florida, or the United States of America, or any board, commission or agency of any thereof; (B) any applicable judgment or decree of any court, board, commission or agency of the City, the State of Florida, or the United States of America; or (C) any loan agreement, indenture, bond, note, resolution, agreement or other material instrument to which the City is a party or to which the City or any of its property or assets is otherwise subject, including the Bond Resolution or this Purchase Contract; (2) no event has occurred or is continuing which, with the passage of time, the giving of notice, or both, would constitute a material breach of or event of default under any such provisions, laws, regulations, judgments, decrees, or instruments; (3) the execution and delivery of the Series 2001B Bonds, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement, this Purchase Contract and the Bond Registrar and Paying Agent Agreement, and the adoption of the Bond Resolution and compliance with the provisions on the City's part contained therein, will not: 5 Q:\43802\BPA2001B#1. wpd NGN-DRAFf#l - April 4, 2001 . ."0 . . I (A) materially conflict with or constitute a material breach of or default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other material instrument to which the City is a party or to which the City or any of its property or assets is otherwise subject, or (B) result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City or under the terms of any such law, regulation or instrument, except as provided in the Series 20018 Bonds, the Bond Resolution, and as set forth in the Official Statement; and (4) no event has occurred or is continuing which, with the passage of time or the giving of notice, or both, would constitute a default by the parties of any material provision under any agreement with regard to the issuance of the Series 20018 Bonds or the undertaking of the transactions contemplated in the Official Statement; (i) all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission, which are required for the due authorization by, or 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 in connection with the issuance of the Series 20018 Bonds under the Bond Resolution pursuant to this Purchase Contract (except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Series 2001B Bonds) have been duly obtained; G) the Series 200lB Bonds, when issued, executed and delivered in accordance with the Bond R~solution and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations of the City, entitled to the benefits of the Bond Resolution as Additional Parity Obligations; and upon such issuance, execution and delivery, the Bond Resolution will provide, for the benefit of the Holders from time to time of the Series 2001B Bonds, a valid and binding pledge of and lien on the, Net Revenues derived from the operation of the System on a parity and equal status with the Parity Bonds and any Additional Parity Obligations issued pursuant to the Bond Resolution, subject only to bankruptcy, insolvency or other laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and subject to the exercise of judicial discretion in appropriate cases; (k) the descriptions of the Series 20018 Bonds and the Bond Resolution, contained in the Official Statement conform in all material respects to the Series 20018 Bonds and the Bond Resolution; 6 Q:\43802\BPA2oo1 B#l. wpd NGN-DRAFT#l - April 4, 2001 ... -. . i (I) except as disclosed in the Official Statement, as of the date hereof, there is no , action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending against the City or, to the best knowledge of the City, threatened against the City: (1) affecting or seeking to prohibit, restrain or enjoin (A) the sale, issuance or delivery of the Series 2001B Bonds, (B) the collection of the Net Revenues of the System pledged to pay the principal of and interest on the Series 2001B Bonds or (C) the pledge of and lien on the Net Revenues of the System created by the Bond Resolution to secure payment of the Series 20018 Bonds; (2) contesting or affecting (A) the adoption, validity, or enforceability of the Bond Resolution, or (B) the execution, delivery and enforceability of this Purchase Contract, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement or the Bond Registrar and Paying Agent Agreement; (3) contesting the exclusion from gross income for federal income tax purposes of interest on the Series 20018 Bonds; (4) contesting the completeness or accuracy of the Official Statement or any supplement or amendment thereto; or (5) contesting the existence or powers of the City or its authority (A) to collect the Net Revenues(B) to adopt, enter into, execute and deliver, and perform its obligations under, as the case may be, the Bond Resolution, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and this Purchase Contract or (C) to issue the Series 20018 Bonds; (m) the City will furnish such information, execute such instruments and take such other action not inconsistent with law or the established policy of the City in cooperation with the Underwriter as the Underwriter may reasonably. request in order to: (1) determine the eligibility of the Series 2001B Bonds for investment under the Blue Sky or other securities laws and regulations of such states and other jurisdictions' of the United States as the Underwriter may designate, (2) qualify the Series 2001B Bonds for offer and sale under the laws of such states and other jurisdictions, and (3) use its best efforts to continue such qualifications in effect so long as required for the distribution of the Series 20018 Bonds; 7 Q:\43802\BPA2001B#I. wpd NGN-DRAFT#l - April 4, 2001 . _ . . i provided, however, that the City shall not be required to incur any costs or execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction; (n) [Reserved]; (0) at the time of the City's acceptance hereof and (unless an event of the nature described in paragraph (q) of this Section 7 occurs) at all times subsequent thereto up to and including the date of the Closing, other than as disclosed in the Official Statement: (1) the City will not have incurred any long-term debt obligations other than Parity Bonds secured by the Net Revenues of the System, (2) the City will not have suffered any material adverse change in its fmancial position, (3) the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except with respect to information supplied by the Underwriter, as to which no representation or agreement is made); (P) if the Official Statement is supplemented or amended, 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 up to and including the date of the Closing, the Official Statement as so supplemented or amended, will not contain any.untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except with respect to information supplied by the Underwriter, as to which no representation or agreement is made); (q) [Reserved];. (r) the City will prepare and submit the infornlation reports concerning the Series 2001B Bonds required by Section 149(e) of the Code and any then existing or proposed regulations thereunder, by registered mail, return receipt requested, to the Secretary of the Treasury within the time limit provided in the Code; and thereafter, the City will prepare and submit or cause to be submitted any supplement to the information reports which is deemed by Bond Counsel to be necessary or advisable in order to preserve or restore the status of the Series 2001B Bonds under the Code; and the information included in the information reports and any supplement thereto will be true and complete for the purposes for which intended; and 8 Q:\43802\BP A 200 1 B#l. wpd NGN-DRAFT#I - April 4. 2001 . i (s) when delivered to and paid for by the Underwriter at the Closing in accordance with the provisions of this Purchase Contract, the Series 2001B Bonds will have been duly executed, authenticated and delivered pursuant to the Bond Resolution and will be entitled to the benefit and security of the Bond Resolution. SECTION 8. Closing. Not later than at 1 :00 p.m., Eastern Time, on March 14, 2001, or at such other time as may be mutually agreed upon by the City and the Underwriter, the City will, subject to the terms and conditions hereof, deliver the Series 2001 B Bonds to The Depository Trust Company ("DTC") for the order of the Underwriter in defmitive form, in the form of a single certificate payable to "CEDE & Co." as nominee for DTC, duly executed and authenticated, together with the other documents hereinafter mentioned, and, subject to the terms and conditions hereof, the Underwriter will accept delivery of and pay the purchase price for the Series 200lB Bonds as set forth in Section 1 hereof in immediately available funds to the order of the City. Delivery and payment shall be made at such place as may be mutually agreed upon by the City and the Underwriter. The definitive Series 200 lB Bonds shall be typewritten on safety paper and shall be delivered to DTC at least 48 hours prior to the time set for Closing, or at such other time as may be mutually agreed to by the City and the Underwriter. SECTION 9. Closing Conditions. (a) The Underwriter has entered into this Purchase Contract in reliance upon: (1) the representations and agreements of the City contained herein, (2) the representations and agreements to be contained in the documents and instruments to be delivered at the Closing, and (3) the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of the Closing. (b) Accordingly, the Underwriter's obligation under this Purchase Contract to purchase, to accept delivery of, and to pay for the Series 2001B Bonds is: (1) 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 (2) subject to the following additional conditions, which must be satisfied at or prior to the Closing: 9 Q:\43802\BPA2oo1B#1. wpd NGN-DRAFT#l - April 4. 2001 . J' (A) the representations of the City contained herein shall be true, complete and correct (i) on the date hereof and (ii) on and as of the date of the Closing, as if made on the date of the Closing; (B) the Bond Resolution, this Purchase Contract, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and the Bond Registrar and Paying Agent Agreement shall be in full force and effect in accordance with their respective terms 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 Underwriter; (C) all official actions of the City relating to this Purchase Contract, the Series 200m Bonds and the Bond Resolution (i) shall be in full force and effect in accordance with their respective terms and (ii) shall not have been amended, modified or supplemented in any material respect, except in each case as may have been agreed to by the Underwriter; and (D) the Underwriter shall have received fully executed originals, or copies, certified under seal of the official custodian of the records in which such documents are filed, of each of the following documents: (i) this Purchase Contract; (ii) the Official Statement and each supplement, amendment or modification, if any, thereto; (iii) the Bond Resolution; (iv) a certificate, dated the date of closing, signed by the City Manager, the Mayor or other appropriate City officials satisfactory to the Underwriter and Bond Counsel, to the effect that, to the best of their . knowledge: (a) the representations of the City herein are true and correct in all material respects as of the date of Closing; (b) the City has performed all obligations to be performed hereunder as of the date of Closing; (c) proceeds from the sale of the Series 2001 B Bonds will be used as contemplated in the Official Statement and the Bond Resolution; 10 Q:\43802\BP A2DOI B#l. wpd NGN-DRAFT#I - April 4, 2001 "'. . ') (d) since September 30, 2000, no material adverse change has occurred in the [mancial position or results of operations of the City except as set forth in or contemplated by the Official Statement; (e) the City has not, since September 30,2000, incurred any material liabilities other than in the ordinary course of business, or as disclosed in the Official Statement; and (f) the Official Statement did not as of its date, and does not as of the date of Closing, contain any untrue statement of a material fact or omit to state a material fact which should be included therein for the purposes for which the Official Statement is to be used, or which is necessary in order to make the statements contained therein, in light of the circumstances in which they were made, not misleading (except with respect to information provided by the Underwriter, DTC or as to which no representation need be made); (v) a certificate (herein sometimes referred to as the "Tax Compliance Certificate ") of the City executed by the City Manager, the Mayor or other appropriate City official satisfactory to Bond Counsel, dated as of the date of Closing, setting forth facts, estimates and circumstances concerning the use or application of the proceeds of the Series 200m Bonds, and stating in effect that on the basis of such facts, estimates and circumstances in existence on the date of Closing, it is not expected that the proceeds of the Series 2001 B Bonds will be used in a manner that would cause such Bonds to be '.'arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the "Code"); (vi) a certificate executed by an authorized officer of The (the "Bank"), as Bond Registrar and Paying Agent to the effect that: (a) the Bank is a state bank duly organized, validly existing under the laws of the state of New York and is duly authorized to exercise trust powers in the State of Florida; (b) the Bank has all requisite authority, power, licenses, permits and franchises, and has full corporate power and legal II Q:\43802\BPA2001B#1.wpd NGN-DRAFT#l - April 4, 2001 'j authority to perform its functions under the Bond Resolution and the Bond Registrar and Paying Agent Agreement; (c) the performance by the Bank of its functions under the Bond Resolution and the Bond Registrar and Paying Agent . Agreement will not result in any violation of the Articles of Association or Bylaws of the Bank, any court order to which the Bank is subject or any agreement, indenture or other obligation or instrument to which the Bank is a party or by which the Bank is bound, and no approval or other action by any governmental authority or agency having supervisory authority over the Bank is required to be obtained by the Bank in order for the Bank to perform its functions under the Bond Resolution and the Bond Registrar and Paying Agent Agreement; and (d) to the best of such authorized representative's knowledge, there is no action, suit, proceeding or investigation at law or in equity before any court, public board or body pending or, to their knowledge, threatened against or affecting the Bank wherein an unfavorable decision, ruling or finding on an issue raised by any party thereto is likely to materially and adversely affect the ability of the Bank to perform its obligations under the Bond Resolution and the Bond Registrar and Paying Agent Agreement; (vii) an approving opinion relating to the Series 2001B Bonds, dated the date of the Closing and addressed to the City, of Akerman, Senterfitt & Eidson, P.A., Bond Counsel to the City, in substantially the form included in the Official Statement as Appendix E; (viii) an opinion, dated the date of the Closing and addressed to the City and Underwriter, of Akerman, Senterfitt & Eidson, P.A., Bond Counsel to the City, to the effect that (a) this Purchase Contract has been duly authorized, executed and delivered by, and assuming due authorization, execution and delivery thereof by the Underwriter, constitutes a valid and binding agreement of, the City, enforceable in accordance with its terms except that the binding effect and enforceability are subject to bankruptcy laws and other laws affecting creditors' rights and to the exercise of judicial discretion; 12 Q:\43802\BPA2001B#1. wpd NGN-DRAFT#l - April 4, 2001 oj (b) the Series 2001B Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Bond Resolution and the Bond Registrar and Paying Agent Agreement are exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (c) as Bond Counsel, they have reviewed the statements contained in the Official Statement under the captions "INTRODUCTION," "DESCRIPTION OF THE SERIES 200lB BONDS" (other than the information under the caption "Book-Entry Only System"), "SECURITY FOR THE SERIES 2001B BONDS," "ADDITIONAL PARITY OBLIGATIONS," and "APPENDIX D - SUMMARY OF THE RESOLUTION," and on the cover page thereof relating to their opinion and therein under the heading "TAX EXEMPTION" and "TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT;" (d) the Document Summaries (insofar as such statements constitute a summary of certain provisions of the Bond Resolution and the Series 200lB Bonds) and the information on the cover page and in "APPENDIX E - FORM OF BOND COUNSEL OPINION" relating to their opinion and under the caption "TAX EXEMPTION" and "TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT" fairly present the information purported to be summarized therein, provided, however that the Document Summaries referred to do not purport to summarize all of the provisions of, and are qualified in their entirety by, the complete documents which are surnnlarized; (ix) an opinion, date'd the date of Closing and addressed to the City of Akerman, Senterfitt & Eidson, P.A., Disclosure Counsel to the City, to the effect that: (a) as Disclosure Counsel, based upon their participation in the preparation of the Official Statement, and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, as of the date of the Closing, nothing has come to their attention causing them to believe that (A) the Official Statement as of its date contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under . which they I3 Q:\43802\BPA2oolB#1. wpd NGN-DRAFT#l - April 4, 2001 . i were made, not misleading (except for the financial information and statistical' data contained in the Official Statement or in the Appendices thereto, as to all of which no view need be expressed), or (B) the Official Statement (as supplemented or amended, if applicable) as of the date of the Closing contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except as aforesaid); and (b) the Official Statement has been duly authorized, executed and delivered by the City. (x) an opinion, dated the date of Closing and addressed to the Underwriter, of Akerman, Senterfitt & Eidson, P.A., to the effect that the foregoing opinions referred to in paragraph (vii) above and addressed to the City, may be relied upon by the Underwriter to the same extent as if such opinions were addressed to the Underwriter; (xi) an opinion of the City Attorney, dated the date of Closing, and addressed to the City, the Underwriter, Disclosure Counsel and Bond Counsel to the effect that: (a) the City is a duly existing municipal corporation of the State of Florida and has and had good right and lawful authority under the Constitution and laws of the State to enact the Bond Resolution and to authorize and issue the Series 200lB Bonds; (b) this Purchase Contract and the Escrow Deposit Agreement have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery thereof by the other parties thereto, each constitutes the binding agreement of the City, enforceable in accordance with its terms, except that the binding effect and enforceability are subject to bankruptcy laws and other laws affecting creditors' rights and to the exercise of judicial discretion; (c) to the best of his knowledge, the information in the Official Statement under the captions "LITlGA TION" and "LEGAL MATTERS", "THE CITY" and statements of fact under the caption "DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATION", is correct in all material respects and does not 14 Q:\43802\BPA2001B#1. wpd NGN-DRAFT#l - April 4, 2001 ;. '. omit any statement which, in his opinion, should be included or referred to therein in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; (d) based upon his review of the Official Statement and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, as of the date of the Closing, nothing has come to his attention which would lead him to believe that the Official Statement when taken as a whole, contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading (except for the financial information and statistical data contained in the Official Statement or in the Appendices thereto, as to all of which no view need be expressed) ; (e) to the best of his knowledge and except as disclosed in the Official Statement, the City is not in material breach of or material default under any applicable constitutional provision, law or administrative regulation of the State or the United States or any applicable judgment or dec,ree or any loan agreement, indenture, bond, note, resolution, agreement or other material instrument to which the City is a party or to which the City or any of its property or assets is otllerwise subject, including the Bond Resolution, which would have a material, adverse impact on the City's ability to perform its obligations under the Bond Resolution, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default on the part of the City or the other parties thereto under any such instruments; (f) to the best of his knowledge, adoption of the Bond Resolution, the execution and delivery of the Series 200lB Bonds and this Purchase Contract, and compliance with the provisions on the City's part contained therein and herein, will not conflict with or constitute a breach of or default under any judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or to which the City or any of its property or assets is otherwise subject, nor will any such execution, delivery, adoption or compliance result in the creation or 15 Q:\43802\BP A2DOl B#l. wpd NGN-DRAFT#l - April 4, 2001 imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City or under the terms of any such instrument, except as expressly provided in the Series 2001B Bonds and the Bond Resolution; (g) except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court, government agency, public board or body, pending or, to the best of his knowledge, threatened against or affecting the City, nor to the best of his knowledge is there any basis for such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would have a materially adverse effect upon the transactions contemplated by this Purchase Contract and the Official Statement or the validity of the Series 200m Bonds, and the Bond Resolution; (h) the Bond Resolution has been duly and lawfully enacted and is in full force and effect, and constitutes valid and binding obligation of the City, enforceable in accordance with its terms, except that the binding effect and enforceability are subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, readjustment of debt and other laws in effect from time to time affecting the rights of creditors generally and except to the extent that enforceability thereof may be limited by the application of principles of equity. (xii) evidence that the Series 2001B Bonds have been rated by Standard & Poor's and Fitch and insured by (xiii) conseht letter from the City's auditors regarding the use of the City's audited financial statements in the Preliminary and Official Statement; (xiv) such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the City's representations 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 Closing of all the agreements then to be performed and conditions then to be satisfied by it. 16 Q:\43802\BP A2001B#1. wpd NGN-DRAFT#l - April 4, 2001 '.. . All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance as set forth herein. Opinions concerning the validity, binding effect and enforceability of the various agreements referred to above will in each case be deemed to assume and be premised upon the fact that the validity, binding effect and enforceability of the agreement referred to therein may be limited or otherwise affected by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar statutes, rules, regulations or other laws affecting the enforcement of creditors' rights and remedies generally and (b) the unavailability of or limitation on the availability of, a particular right or remedy, (whether in a proceeding in equity or at law) because of an equitable principle. SECTION 10. Truth in Bonding Statement. The City is proposing to issue $ of debt or obligations to (i) refund on a current basis the Refunded Bonds and (ii) pay certain expenses relating to the issuance and sale of the Series 200 lB Bonds including the municipal bond insurance premium and the reserve account surety bond premium; This debt or obligation is expected to be repaid within years from proceeds of Net Revenues of the System. At the interest rates shown on the cover page of the Official Statement, dated , 2001, total interest paid over the life of the debt or obligation will be $ The primary source of repayment or security for the City's obligation consist of the Net Revenues of the System and until applied in accordance with the provisions of the Bond Resolution, all moneys, including investments thereof, in the accounts and subaccounts created under the Bond Resolution (excluding amounts in the Rebate Account and in any account to the extent such moneys are required to pay Operating Expenses). Authorizing this debt or obligation will result in $ of the Net Revenues of the System not being available to finance the other services of the City each year for _ years. SECTION 11. Termination. (a) If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Series 200lB Bonds contained in this Purchase Contract, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Series 200lB Bonds shall be terminated for any reason permitted by this Purchase Contract, then this Purchase Contract shall terminate and neither the Underwriter nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriter set forth in Section 12 hereof shall continue in full force and effect. 17 Q:\43802\BPA2001B#I. wpd NGN.DRAFT#! . April 4, 2001 (b) The Underwriter shall have the right to terminate its obligations under this Purchase Contract to purchase, to accept delivery of, and to pay for the Series 200lB Bonds by notifying the City of its election to do so if, after the execution hereof and prior to the Closing, (1) the marketability of the Series 2001 B Bonds or the market price thereof, in the opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation (A) adopted by the United States, (B) recommended to the Congress for passage by the President of the United States, or (C) favorably reported for passage to either house of the Congress by any committee of such house to which such legislation has been referred for consideration, or by any decision of any court of the United States or by any ruling or regulation (fmal, temporary or proposed) on behalf of the Treasury Department of the United States, the Internal Revenue Service or any other authority of the United States affecting the federal income tax status of the City, its property or income, or the interest on its bonds (including the Series 2001B Bonds); (2) the United States shall have become engaged in hostilities that have resulted in the declaration of war or a national emergency and such action will, in the opinion of the Underwriter, materially adversely affect the marketability of the Series 2001B Bonds or the market price thereof; (3) there shall have occurred the declaration of a general banking moratorium by any authority of the United States or the states of New York or Florida and such action will, in the opinion of the Underwriter, materially adversely affect the marketability of the Series 2001B Bonds or the market price thereof; (4) an event shall have occurred which, in the opinion of the Underwriter, requires the preparation and publication of a supplement or amendment to the Official Statement and such action will, in the opinion of the Underwriter, materially adversely affect the marketability of the Series 2001 B Bonds or the market price thereof; (5) there has been an adverse change of a material nature in the financial position, results of operations or condition, financial or otherwise, of the City, in either case other than in the ordinary course of its business and such action will, in the opinion of the Underwriter, materially adversely affect the marketability of the Series 200lB Bonds or the market price thereof; (6) between the date hereof and the Closing, legislation shall be adopted or any action shall be taken by the Securities and Exchange Commission which, in the opinion of the Underwriter, has the effect of requiring the contemplated distribution of the Series 2001B Bonds to be registered under the Securities Act of 1933, as amended, or of . requiring the Bond Resolution to be qualified under the Trust Indenture Act of 1939; 18 Q:\43802\BPA200IB#I.wpd NGN-DRAFT#I . April 4, 2001 " . (7) an order, decree or injunction of any court of competent jurisdiction, or any order, ruling, regulation or administrative proceeding by any governmental body or board, shall have been issued or commenced, or any legislation adopted, with the purpose or effect of prohibiting the issuance, offering or sale of the Series 200lB Bonds as contemplated hereby or by the Official Statement or prohibiting the performance by the City of its obligations under this Purchase Contract or the Bond Resolution; (8) the State of Florida shall take any action, or threaten to take any action, which shall question the existence or powers of the City to issue the Series 2001B Bonds. SECTION 12. Expenses. (a) The Underwriter shall be under no obligation to pay, and the City shall pay, all expenses incident to the performance of the City's obligations hereunder including, but not limited to: (i) the cost of preparation, printing and delivery of all of the documents referred to in Section 9 hereof including, but not limited to, the Preliminary Official Statement and the Official Statement, but excluding the items set forth in paragraph (b) below, (ii) the cost of preparation and printing of the Series 200lB Bonds; (iii) the fees and disbursements of Bond Counsel, Disclosure Counsel and Counsel to the City; (vi) the fees of the bond registrar and paying agent, escrow agent, verification agent, City's auditor and of any other experts, advisors or consultants retained to assist the City; and (vii) the fees of the bond insurer, the rating agencies, and the Underwriter's reasonable out-of-pocket, communications/shipping, and computer expenses related to obtaining bond insurance and ratings, and assisting with preclosing and closing, and (viii) the fees and expenses of any other engineers, accountants, attorneys, and other experts, consultants or advisors retained or utilized by the City in connection with the issuance of the Series 200lB Bonds, including the preparation thereof; (ix) the costs of reproducing all necessary copies of any of the Bond Documents and (x) all travel and other out-of-pocket expenses of the City's staff and officials as incurred in connection with the Closing; all such expenses to be paid by the City as issuance costs. (b) the Underwriter shall pay expenses related to the initial purchase and sale of the Series 2001B Bonds as follows: (i) all advertising expenses; (ii) the cost of preparation and printing the blue sky and legal investment surveys with respect to the Series 200lB Bonds, if any; and (iii) all other expenses incurred by them in connection with the public offering of the Series 2001B Bonds other than these noted in Section 12 (a)(vii) above. SECTION 13. Notices. Any notice or other communication to be given to the City under this Purchase Contract may be given by delivering the same in writing to the City Manager of the City of Winter Springs, Florida at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708 and any notice or other communication to be given to the Underwriter under this Purchase Contract may be given by delivering the same in writing to their representative: Hanifen, Imhoff, 19 Q:\43802\BPA2001B#I.wpd NGN-DRAFT#I - April 4, 2001 Division of Stifel, Nicolaus and Company, Inc., 1560 N. Orange Avenue, Suite 210, Winter Park, Florida 32789 Attention: Managing Director. SECTION 14. Parties in Interest. This Purchase Contract is made solely for the benefit of the City and the Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. All of the City's representations and agreements contained in Section 7 of this Purchase Contract shall remain operative and in full force and effect, regardless of: (a) any investigations made by or on behalf of the Underwriter; (b) delivery of and payment for the Series 200lB Bonds pursuant to this Purchase Contract; and (c) any termination of this Purchase Contract. SECTION 15. Effectiveness. This Purchase Contract shall become effective upon the acceptance hereof by the City and the execution by the appropriate representative of the Underwriter and the designated City officials and shall be valid and enforceable at the time of such execution. SECTION 16. Applicable Law. This Contract shall be construed under the laws of the State of Florida applicable thereto and venue in any action hereunder shall be in Seminole County, Florida. SECTION 17. Headings. The headings of the sections of this Purchase Contract are inserted for convenience only and shall not be deemed to be a part hereof. SECTION 18. Execution in Counterparts. This Purchase Contract may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. SECTION 19. Severability. The invalidity or unenforceability of any provision of this Purchase Contract shall not affect the validity or enforceability of the balance of this Purchase Contract. SECTION 20. Waiver or Modification. No waiver or modification of anyone or more of the terms and conditions of this Purchase Contract shall be valid unless in writing and signed by the party or parties making such waiver or agreeing to such modification. [SIGNATURE PAGE TO FOLLOW] 20 Q:\43802\BP A200IB#!. wpd NGN-DRAFT#1 . April 4. 2001 IN WITNESS WHEREOF, the undersigned hereby agree to the terms and provisions of this Bond Purchase Contract all as of the day and year first above written. HANIFEN, IMHOFF Division of Stifel, Nicolaus & Company, Inc. By: Managing Director Accepted as of the dated first mentioned above: CITY OF WINTER SPRINGS, Florida By: City Manager 21 Q:\43802\BPA2oo1B#I.wpd NGN-DRAFT#1 . April 4. 2001 EXHIBIT A NAME: City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 2001 B PRINCIPAL AMOUNT: $ DATE: ,2001 INTEREST RATES: See Attached Bond Pricing Schedule INTEREST PAY ABLE: $ DENOMINATIONS: $5,000.00 FINAL MATURITY DATE: REDEMPTION PROVISIONS: See Attached Redemption Schedule Q:\43802\BPA200IB#I. wpd A-I NGN.DRAFT#1 - April 4. 2001 EXHIBIT B ,2001 Mayor City of Winter Springs, Florida Re: City of Winter Springs, Florida $ Revenue Bonds, Series 2001 B Water and Sewer Refunding . In connection with the proposed issuance by the City of Winter Springs, Florida (the "City) of $ original aggregate principal amount of its Water and Sewer Refunding Revenue Bonds, Series 2001B, referred to above (the "Series 200lB Bonds"), Hanifen, Imhoff, a division of Stifel Nicolaus & Company, Inc., on behalf of itself and Gardnyr Michael Capital, Inc. and William R. Hough & Co. (collectively, the "Underwriter") is underwriting a public offering of the Series 2001B Bonds. Arrangements for underwriting the Series 2001B Bonds will include a Bond Purchase Contract (the "Purchase Contract") between the City and the Underwriter, which will embody the terms in respect thereof. The purpose of this letter is to furnish, pursuant to the provisions of Section 218.385(6), Florida Statutes, certain information with respect to the arrangements contemplated for the underwriting of the Series 200lB Bonds as follows: (A) The nature and estimated amounts of expenses to be incurred by the Underwriter in connection with the purchase and reoffering of the Series 2001B Bonds are as set forth in Schedule 1 attached hereto. (B) There are no "finders" as defined in Section 218.386, Florida Statutes, as amended, in connection with the issuance of the Series 200lB Bonds. (C) Subject to the outcome of negotiations of the terms of the Purchase Contract and to the successful sale by the Underwriter of all the Series 2001B Bonds at the initial public offering price, it is our expectation that based on current market conditions, the underwriting spread (i.e., the difference between the price at which the Series 2001B Bonds will be initially offered to the public by the Underwriter and the price to be paid to the City for the Series 200lB Bonds, exclusive of original issue discount and accrued interest in both cases) will be $ per $1,000 par value of the principal amount of the Series 2001B Bonds. B-1 Q:\43802\BPA200IB#I. wpd NGN.DRAFT#I . April 4. 2001 (D) Based on and as part of the estimated underwriting spread set forth in paragraph (C) above, the Underwriter will charg.e a management fee of % of the principal amount of the Series 200lB Bonds. (E) No other fee, bonus or other compensation is estimated to be paid by the Underwriter in connection with the issue of the Series 200lB Bonds, to any person not regularly employed or retained by the Underwriter (including any "fmder" as defined in Section 218.386(1)(a), Florida Statutes), except as specifically enumerated as expenses to be incurred by the Underwriter in the Purchase Contract, as set forth in Paragraph (A) above. (F) The name and address of the Underwriter is: Hanifen, Imhoff Division of Stifel Nicolaus & Company, Inc. 1560 North Orange Avenue, Suite 210 Winter Park, Florida 32789 We understand that you do not require any further disclosure from the Underwriter, pursuant to Section 218.385(6), Florida Statutes. Very truly yours, HANlFEN, IMHOFF Division of Stifel Nicolaus & Company, Inc. By: Managing Director B-2 City of Winter Springs, Florida Schedule 1 to Exhibit B Underwriter's Estimoled Expenses (I) Exuenses Day Loan CUSIP, DTC, PSA Dalcomp Underwriter's Counsel Computer Courier/ CommunicationlTelefax Travel & Misc. Total (1) Based on estimated issue size of $ Dollar Amount $ $ B-3 , ~ i $ CITY OF WINTER SPRINGS, FLORIDA Water and Sewer Refunding Revenue Bonds, Series 2001A BOND PURCHASE CONTRACT THIS IS A BOND PURCHASE CONTRACT, dated , 2001 (the "Purchase Contract"), by and between HANIFEN, IMHOFF, a division of Stifel Nicolaus & Company, Inc., on behalf of itself and Gardnyr Michael Capital, Inc. and William R. Hough & Co. (collectively, the "Underwriter"), and the CITY OF WINTER SPRINGS, FLORIDA (the "City"). Upon execution and delivery ofthis Purchase Contract, it shall be binding upon the City and the Underwriter. Any capitalized term not conventionally capitalized and not defined herein shall have the meaning indicated in the hereinafter defined Bond Resolution or the Official Statement. SECTION 1. Purchase and Sale of Bonds. Upon the terms and conditions and upon the basis of the representations and agreements set forth herein, the Underwriter hereby agrees to purchase from the City for offering to the public, and the City hereby agrees to sell and deliver to the Underwriter for such purpose, all (but not less than all) of the City's $ aggregate principal amount of Water and Sewer Refunding Revenue Bonds, Series 2001A (the "Series 2001A Bonds"). The Series 2001A Bonds shall be issued in such principal amount, shall mature on such date, shall bear such rate of interest, and shall be subject to redemption, all as set forth in Exhibit A attached hereto and incorporated herein by this reference. The purchase' price to be paid by the Underwriter to or for the account of the City upon delivery of the Series 2001A Bonds is $ (the aggregate principal amount of the Series 2001A Bonds, less original issue discount of $ and less Underwriter's discount of $ ), plus accrued interest on the Series 2001A Bonds from the dated date thereof to the date of the payment for and delivery of the Series 2001A Bonds pursuant to Section 8 hereof. The payment, delivery and other actions contemplated hereby to take place at the time of such payment and delivery are referred to as the "Closing." SECTION 2. Official Statement. As soon as practicable after the date hereof, and, in any event, no later than , 2001, the City shall deliver to the Underwriter a sufficient number of printed copies (as reasonably requested by the Underwriter, but not to exceed 150 copies) of the fmal Official Statement (including the cover page and appendices contained therein, the "Official Statement"), dated the date hereof, with respect to the Series 2001A Bonds, executed (manually or conformed) by the City in substantially the form of the Preliminary Official Statement (as hereinafter defined) with such changes thereto as may be approved by the Mayor Q:\43802\BPA2001A#1. wpd NGN-DRAFT#I - April 4. 2001 -; and City Manager (their execution thereof evidencing approval of any such changes) and the Underwriter. SECTION 3. The Series 2001A Bonds. The Series 2001A Bonds shall be as described in, and shall be issued and secured under the provisions of Resolution No. 2001- , adopted by the City Commission (the "City Commission") on April 9, 2001, as supplemented (the "Bond Resolution "). SECTION 4. Disclosure Statement; Security Deposit. The City acknowledges receipt from the Underwriter of the disclosure statement of the Underwriter required by Section 218.385(6), Florida Statutes, substantially in the form attached hereto as Exhibit B. The Underwriter has delivered to the City herewith a cashier's check in the amount of $ as a security deposit, payable to the City representing approximately 1 % of the par amount of the Series 2001A Bonds. In the event the City does not accept this offer, such check shall be immediately returned to the Underwriter uncashed. If this offer is accepted, . the check will be held uncashed as security for the performance by the Underwriter of its obligations to purchase, to accept delivery of and to pay for the Series 2001A Bonds at the Closing. In the event of failure by the City to deliver the Series 2001A Bonds at the Closing, or if the City shall be unable to satisfy the conditions of the obligations of the Underwriter contained herein, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, the check shall be immediately returned to the Underwriter uncashed, and such return shall constitute a full release and discharge of all claims by the Underwriter arising out of the transactions contemplated hereby. In the event that the Underwriter fails (other than for reasons permitted hereunder) to accept delivery of and to pay for the Series 2001A Bonds at the Closing, the check shall be cashed and the proceeds thereof retained by the City as and for full liquidated damages for such failure and for any defaults hereunder on the part of the Underwriter, and such retention shall constitute a full release and discharge of all claims by the City against the Underwriter arising out of the transactions contemplated hereby. SECTION 5. Public Offering. It shall be a condition to the City's obligations to sell and to deliver the Series 2001A Bonds to the Underwriter and to the Underwriter's obligations to . accept delivery of and to pay for the Series 2001A Bonds that the entire aggregate principal amount of the Series 2001A Bonds be issued and delivered by the City at the Closing. The Underwriter agrees to make a bona fide initial public offering of all the Series 2001A Bonds, plus interest accrued thereon from the dated date of the Series 2001A Bonds. At the Closing, the Underwriter shall deliver to the City a certificate prepared by Bond Counsel to the City to the effect that (i) all of the Series 2001A Bonds have been the subject of an initial offering to the public as herein provided, provided, however, the Underwriter reserves the right to make concessions to dealers and to change the initial offering price as the Underwriter shall deem necessary in connection with the marketing of the Series 2001A Bonds, and (ii) not less than ten percent (10 %) of the Series 2001 A Bonds were sold to the public (excluding bond houses, brokers 2 Q:\43802\BPA2oolA#l. wpd NGN-DRAFT#l . April 4. 2001 : or similar persons or organizations acting in the capacity of underwriter or wholesalers) at the initial offering price not greater than the price shown on the cover of the Official Statement. The Underwriter agrees to make such offering in compliance with all applicable federal and state laws and regulations. SECTION 6. Use of Documents. The City hereby authorizes the use by the Underwriter in connection with the public offering, sale, and distribution of the Series 2001A Bonds of the following documents: (a) the Bond Resolution, as amended, (b) the Official Statement (including any supplements or amendments thereto) dated the date hereof, (c) the Preliminary Official Statement, dated ,2001 (including any supplements or amendments thereto) (the "Preliminary Official Statement"), and (d) any other documents requested by the Underwriter related to the transactions contemplated in the Official Statement in connection with the authorization, issuance, and delivery of the Series 2001A Bonds to the Underwriter, and the public offering and distribution of the Series 2001A Bonds by the Underwriter on behalf of the City. SECTION 7. Representations and Agreements. The City hereby represents and agrees, except as may be set forth otherwise in the Official Statement, as follows: (a) the City is, and will be at the date of Closing, duly organized and validly existing as a municipal corporation of the State of Florida (the "State") with the powers and authority set forth in Chapter 166, Part II, Florida Statutes, and other applicable provisions of law (herein collectively referred to as the "Act"); (b) the City has full legal right, power, and authority to: (1) issue the Series 2001 A Bonds for the purpose of providing moneys to (i) refund on a current basis, all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991 other than the 2001 maturity (the "Refunded Bonds"), and (ii) pay certain expenses relating to the issuance and sale of the Series 2001A Bonds including the municipal bond insurance premium and the reserve account surety bond premium; (2) adopt the Bond Resolution and perform its obligations thereunder; 3 Q:\43802\BPA2001A#1. wpd NGN.DRAFT#I . April 4, 2001 ~ (3) enter into and perform its obligations under this Purchase Contract, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and the Bond Registrar and Paying Agent Agreement with , as Escrow Agent, Paying Agent and Registrar; (4) sell, issue and deliver the Series 2001A Bonds to the Underwriter as provided herein; and (5) carry out and consummate the transactions contemplated by this Purchase Contract, Continuing Disclosure Undertaking, the Bond Resolution, the Escrow Deposit Agreement, the Bond Registrar and Paying Agent Agreement, and the Official Statement; (c) by all necessary official action taken at meetings of the City Commission duly called and held in accordance with applicable law, at which a quorum was present and acting at the relevant times, the City has: (1) approved and adopted, the Bond Resolution; (2) approved and authorized the Preliminary Official Statement and its distribution in connection with the offering of the Series 2001A Bonds and approved the execution, delivery and distribution of the Official Statement in connection with the delivery of the Series 2001A Bonds; (3) duly authorized and approved (A) the execution and delivery of, and the performance by the City of its obligations contained in the Series 2001A Bonds, the Bond Resolution, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and this Purchase Contract, in connection with the issuance of, the Series 2001A Bonds and (B) the consummation by it of all other transactions contemplated to be performed by the City under this Purchase Contract in connection with the issuance of the Series 2001A Bonds, including the execution of the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and the Bond Registrar and Paying Agent Agreement; (d) the City, at the time of Closing, will have performed all of its obligations required to be performed at or prior to Closing under this Purchase Contract, Bond Registrar and Paying Agent Agreement, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and the Bond Resolution; (e) the City has complied with, and at the Closing will be in compliance in all respects with, the terms of the Act, the Bond Resolution, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and this Purchase Contract; 4 Q:\43802\BPA2001A#1. wpd NGN.DRAFT#1 - April 4, 2001 (1) the Bond Resolution and this Purchase Contract constitute and the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and the Bond Registrar and Paying Agent Agreement will, when executed, constitute, the valid and binding obligations of the City, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors I rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and subject to the exercise of judicial discretion in appropriate cases; (g) the Series 2001A Bonds, when issued, authenticated and delivered to the Underwriter in accordance with the Bond Resolution and this Purchase Contract, will constitute valid and binding obligations of the City, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and subject to the exercise of judicial discretion in appropriate cases; (h) with regard to the issuance of the Series 2001A Bonds, and the transactions contemplated in the Official Statement, to the best knowledge of the undersigned, other than as disclosed in the Official Statement: (1) the City is not in breach of or default of any material provision of: (A) any applicable constitutional provision, law or administrative regulation of the City, the State of Florida, or the United States of America, or any board, commission or agency of any thereof; (B) any applicable judgment or decree of any court, board, commission or agency of the City, the State of Florida, or the United States of America; or (C) any loan agreement, indenture, bond, note, resolution, agreement or other material instrument to which the City is a party or to which the City or any of its property or: assets is otherwise subject, including the Bond Resolution or this Purchase Contract; (2) no event has occurred or is continuing which, with the passage of time, the giving of notice, or both, would constitute a material breach of or event of default under any such provisions, laws, regulations, judgments, decrees, or instruments; (3) the execution and delivery of the Series 2001A Bonds, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement, this Purchase Contract and the Bond Registrar and Paying Agent Agreement, and the adoption of the Bond Resolution and compliance with the provisions on the City's part contained therein, will not: 5 Q:\43802\BPA2oo1A#1. wpd NGN-DRAFT#1 - April 4, 2001 (A) materially conflict with or constitute a material breach of or default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other material instrument to which the City is a party or to which the City or any of its property or assets is otherwise subject, or (B) result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City or under the terms of any such law, regulation or instrument, except as provided in the Series 2001A Bonds, the Bond Resolution, and as set forth in the Official Statement; and (4) no event has occurred or is continuing which, with the passage of time or the giving of notice, or both, would constitute a default by the parties of any material provision under any agreement with regard to the issuance of the Series 2001A Bonds or the undertaking of the transactions contemplated in the Official Statement; (i) all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission, which are required for the due authorization by, or which would constitute a condition precedent to (or the absence of which would material1y adversely affect), the due performance by, the City of its obligations in connection with the issuance of the Series 200lA Bonds under the Bond Resolution pursuant to this Purchase Contract (except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Series 2001A Bonds) have been duly obtained; U) the Series 2001A Bonds, when issued, executed and delivered in accordance with the Bond Resolution and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations of the City, entitled to the benefits of the Bond Resolution as Additional Parity Obligations; and upon such issuance, execution and delivery, the Bond Resolution will provide, for the benefit of the Holders from time to time of the Series 200lA Bonds, a valid and binding pledge of and lien on the Net Revenues derived from the operation of the System on a parity and equal status with the Parity Bonds and any Additional Parity Obligations issued pursuant to the Bond Resolution, subject only to bankruptcy, insolvency or other laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and subject to the exercise of judicial discretion in appropriate cases; (k) the descriptions of the Series 2001A Bonds and the Bond Resolution, contained in the Official Statement conform in all material respects to the Series 200 I A Bonds and the Bond Resolution; 6 Q:\43802\BPA2001A#1. wpd NGN.DRAFT#l . April 4. 2001 (1) except as disclosed in the Official Statement, as of the date hereof, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending against the City or, to the best knowledge of the City, threatened against the City: (1) affecting or seeking to prohibit, restrain or enjoin (A) the sale, issuance or delivery of the Series 2001A Bonds, (B) the collection of the Net Revenues of the System pledged to pay the principal of and interest on the Series 2001A Bonds or (C) the pledge of and lien on the Net Revenues of the System created by the Bond Resolution to secure payment of the Series 2001A Bonds; (2) contesting or affecting (A) the adoption, validity, or enforceability of the Bond Resolution, or (B) the execution, delivery and enforceability of this Purchase Contract, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement or the Bond Registrar and Paying Agent Agreement; '(3) contesting the exclusion from gross income for federal income tax purposes of interest on the Series 2001 A Bonds; (4) contesting the completeness or accuracy of the Official Statement or any supplement or amendment thereto; or (5) contesting the existence or powers of the City or its authority (A) to collect the Net Revenues(B) to adopt, enter into, execute and deliver, and perform its obligations under, as the case may be, the Bond Resolution, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and this Purchase Contract or (C) to issue the Series 2001A Bonds; (m). the City will furnish such information, execute such instruments and take such other action not inconsistent with law or the established policy of the City' in cooperation with the Underwriter as the Underwriter may reasonably request in order to: (1) determine the eligibility of the Series 2001A Bonds for investment under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate, (2) qualify the Series 200lA Bonds for offer and sale under the laws of such states and other jurisdictions, and (3) use its best efforts to continue such qualifications in effect so long as required for the distribution of the Series 2001A Bonds; 7 Q: \43802\BP A200 1 A# I. wpd NGN-DRAFT#I - April 4. 2001 provided, however, that the City shall not be required to incur any costs or execute a general or special consent to service of process or qualify to do business in connection with any such . qualification or determination in any jurisdiction; (n) [Reserved]; (0) at the time of the City's acceptance hereof and (unless an event of the nature described in paragraph (q) of this Section 7 occurs) at all times subsequent thereto up to and including the date of the Closing, other than as disclosed in the Official Statement: (1) the City will not have incurred any long-term debt obligations other than Parity Bonds secured by the Net Revenues of the System, (2) position, the City will not have suffered any material adverse change in its financial (3) the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except with respect to information supplied by the Underwriter, as to which no representation or agreement is made); (p) if the Official Statement is supplemented or amended, 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 up to and including the date of the Closing, the Official Statement as so supplemented or amended, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except with respect to information supplied by the Underwriter, as to which no representation or agreement is made); (q) [Reserved] ; (r)the City will prepare and submit the information reports concerning the Series 2001A Bonds required by Section 149(e) of the Code and any then existing or proposed regulations thereunder, by registered mail, return receipt requested, to the Secretary of the Treasury within the time limit provided in the Code; and thereafter, the City will prepare and submit or cause to be submitted any supplement to the information reports which is deemed by Bond Counsel to be necessary or advisable in order to preserve or restore the status of the Series 2001A Bonds under the Code; and the information included in the information reports and any supplement thereto will be true and complete for the purposes for which intended; and 8 Q:\43802\BPA2oolA#l. wpd NGN-DRAFT#I . April 4, 2001 (s) when delivered to and paid for by the Underwriter at the Closing in accordance with the provisions .of this Purchase Contract, the Series 2001A Bonds will have been duly executed, authenticated and delivered pursuant to the Bond Resolution and will be entitled to the benefit and security of the Bond Resolution. SECTION 8. Closing. Not later than at 1:00 p.m., Eastern Time, on March 14,2001, or at such other time as may be mutually agreed upon by the City and the Underwriter, the City will, subject to the terms and conditions hereof, deliver the Series 2001A Bonds to The Depository Trust Company ("DTC") for the order of the Underwriter in definitive form, in the form of a single certificate payable to "CEDE & Co." as nominee for DTC, duly executed and authenticated, together with the other documents hereinafter mentioned, and, subject to the terms and conditions hereof, the Underwriter will accept delivery of and pay the purchase price for the Series 2001A Bonds as set forth in Section 1 hereof in immediately available funds to the order of the City. Delivery and payment shall be made at such place as may be mutually agreed upon by the. City and the Underwriter. The definitive Series 2001A Bonds shall be typewritten on safety paper and shall be delivered to DTC at least 48 hours prior to the time set for Closing, or at such other time as may be mutually agreed to by the City and the Underwriter. SECTION 9. Closing Conditions. (a) The Underwriter has entered into this Purchase Contract in reliance upon: (1) the representations and agreements of the City contained herein, (2) the representations and agreements to be contained in the documents and instruments to be delivered at the Closing, and (3) the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of the Closing. (b) Accordingl y , tlle Underwriter's obligation under this Purchase Contract to purchase, to accept delivery of, and to pay for the Series 2001A Bonds is: (1) 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 (2) subject to the following additional conditions, which must be satisfied at or prior to the Closing: 9 Q:\43802\BPA2001A#1. wpd NGN-DRAFT#I - April 4. 2001 (A) the representations of the City contained herein shall be true, complete and correct (i) on the date hereof and (ii) on and' as of the date of the Closing, as if made on the date of the Closing; . (B) the Bond Resolution, this Purchase Contract, the Continuing Disclosure Undertaking, the Escrow Deposit Agreement and the Bond Registrar and Paying Agent Agreement shall be in full force and effect in accordance with their respective terms 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 Underwriter; (C) all official actions of the City relating to this Purchase Contract, the Series 2001A Bonds and the Bond Resolution (i) shall be in full force and effect in accordance with their respective terms and (ii) shall not have been amended, modified or supplemented in any material respect, except in each case as may have been agreed to by the Underwriter; and (D) the Underwriter shall have received fully executed originals, or copies, certified under seal of the official custodian of the records in which such documents are filed, of each of the following documents: (i) this Purchase Contract; (ii) the Official Statement and each supplement, amendment or modification, if any, thereto; (iii) the Bond Resolution; (iv) a certificate, dated the date of closing, signed by the City Manager, the Mayor or other appropriate City officials satisfactory to the Underwriter and Bond Counsel, to the effect that, to the best of their knowledge: (a) the representations of the City herein are true and correct in all material respects as of the date of Closing; (b) the City has performed all obligations to be performed hereunder as of the date of Closing; (c) proceeds from the sale of the Series 2001 A Bonds will be used as contemplated in the Official Statement and the Bond Resolution; 10 Q:\43802\BPA2001 MI. wpd NGN.DRAFT#I - April 4. 2001 (d) since September 30, 2000, no material adverse change has occurred in the financial position or results of operations of the City except as set forth in or contemplated by the Official Statement; (e) the City has not, since September 30,2000, incurred any material liabilities other than in the ordinary course of business, or as disclosed in the Offi~ial Statement; and (f) the Official Statement did not as of its date, and does not as of the date of Closing, contain any untrue statement of a material fact or omit to state a material fact which should be included therein for the purposes for which the Official Statement is to be used, or which is necessary in order to make the statements contained therein, in light of the circumstances in which they were made, not misleading (except with respect to information provided by the Underwriter, DTC or _ as to which no representation need be made); (v) a certificate (herein sometimes referred to as the "Tax Compliance Certificate ") of the City executed by the City Manager, the Mayor or other appropriate City official satisfactory to Bond Counsel, dated as of the date of Closing, setting forth facts, estimates and circumstances concerning the use or application of the proceeds of the Series 2001A Bonds, and stating in effect that on the basis of such facts, estimates and circumstances in existence on the date of Closing, it is not expected that the proceeds of the Series 2001 A Bonds will be used in a manner that would cause such Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the "Code"); (vi) a certificate executed by an authorized officer of (the "Bank"), as Bond Registrar and Paying Agent to the effect that: (a). the Bank is a state bank duly organized, validly existing under the laws of the state of New York and is duly authorized to exercise trust powers in the State of Florida; (b) the Bank has all requisite authority, power, licenses, permits and franchises, and has full corporate power and legal 11 Q:\43802\BPA2oo1A#1. wpd NGN-DRAFT#I - April 4. 2001 authority to perform its functions under the Bond Resolution and the Bond Registrar and Paying Agent Agreement; (c) the performance by the Bank of its functions under the Bond Resolution and the Bond Registrar and Paying Agent Agreement will not result in any violation of the Articles of Association or Bylaws of the Bank, any court order to which the Bank is subject or any agreement, indenture or other obligation or instrument to which the Bank is a party or by which the Bank is bound, and no approval or other action by any governmental authority or agency having supervisory authority over the Bank is required to be obtained by the Bank in order for the Bank to perform its functions under the Bond Resolution and the Bond Registrar and Paying Agent Agreement; and (d) to the best of such authorized representative's knowledge, there is no action, suit, proceeding or investigation at law or in equity before any court, public board or body pending or, to their knowledge, threatened against or affecting the Bank wherein an unfavorable decision, ruling or finding on an issue raised by any party thereto is likely to materially and adversely affect the ability of the Bank to perform its obligations under the Bond Resolution and the Bond Registrar and Paying Agent Agreement; (vii) an approving opinion relating to the Series 2001A Bonds, dated the date of the Closing and addressed to the City, of Akerman, Senterfitt & Eidson, P.A., Bond Counsel to the City, in substantially the. form included in the Official Statement as Appendix E; (viii) an opinion, dated the date of the Closing and addressed to the City and Underwriter, of Akerman, Senterfitt & Eidson, P.A., Bond Counsel to the City, to the effect that (a) this Purchase Contract has been duly authorized, executed and delivered by, and assuming due authorization, execution and delivery thereof by the Underwriter, constitutes a valid and binding agreement of, the City, enforceable in accordance with its terms except that the binding effect and enforceability are subject to bankruptcy laws and other laws affecting creditors' rights and to the exercise of judicial discretion; 12 Q:\43802\BPA2001A#I.wpd NGN.DRAFT#1 . April 4. 2001 (b) the Series 2001A Bonds are not subject to the registration requirements. of the Securities Act of 1933, as amended, and the Bond Resolution and the Bond Registrar and Paying Agent Agreement are exempt from qualification pursuant to the Trust lndenture Act of 1939, as an1ended; (c) as Bond Counsel, they have reviewed the statements contained in the Official Statement under the captions "INTRODUCTION," "DESCRIPTION OF THE SERIES 2001A . BONDS" (other than the information under the caption "Book-Entry Only System"), "SECURITY FOR THE SERIES 2001A BONDS," . "ADDITIONAL PARITY OBLIGATIONS," and "APPENDIX D - SUMMARY OF THE RESOLUTION," and on the cover page thereof relating to their opinion and therein under the heading "TAX EXEMPTION" and "TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT;" (d) the Document Summaries (insofar as such statements constitute a summary of certain provisions of the Bond Resolution and the Series 2001A Bonds) and the information on the cover page and in "APPENDIX E - FORM OF BOND COUNSEL OPINION" relating to their opinion and under the caption "T AX EXEMPTION" and "TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT" fairly present the information purported to be summarized therein, provided, however that the Document Summaries referred to do not purport to summarize all of the provisions of, and are qualified in their entirety by, the complete documents which are summarized; (ix) an opinion, dated the date of Closing and addressed to the City of Akerman, Senterfitt & Eidson, P.A., Disclosure Counsel to the City, to the effect that: (a) as Disclosure Counsel, based upon their participation in the preparation of the Official Statement, and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, as of the date of the Closing, nothing has come to their attention causing them to believe that (A) the Official Statement as of its date contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they 13 Q:\43802\BPA2oolA#1. wpdiNGN-DRAFT#l - April 4. 2001 were made, not misleading (except for the financial information and statistical data contained in the Official Statement or in the Appendices thereto, as to all of which no view need be expressed), or (B) the Official Statement (as supplemented or amended, if applicable) as of the date of the Closing contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except as aforesaid); and (b) the Official Statement has been duly authorized, executed and delivered by the City. (x) an opinion, dated the date of Closing and addressed to the Underwriter, of Akerman, Senterfitt & Eidson, P.A., to the effect that the foregoing opinions referred to in paragraph (vii) above and addressed to the City, may be relied upon by the Underwriter to the same extent as if such opinions were addressed to the Underwriter; (xi) an opinion of the City Attorney, dated the date of Closing, and addressed to the City, the Underwriter, Disclosure Counsel and Bond Counsel to the effect that: (a) the City is a duly existing municipal corporation of the State of Florida and has arid had good right and lawful authority under the Constitution and laws of the State to enact the Bond Resolution and to authorize and issue the Series 200lA Bonds; (b) this Purchase Contract and the Escrow Deposit Agreement have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery thereof by the other parties thereto, each constitutes the binding agreement of the City, enforceable in accordance with its terms, except that the binding effect and enforceability are subject to bankruptcy laws and other laws affecting creditors I rights and to the exercise of judicial discretion; (c) to the best of his knowledge, the information in the Official Statement under the captions "LITIGATION" and "LEGAL MA TTERS", "THE CITY" and statements of fact under the caption "DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATION", is correct in all material respects and does not 14 Q:\43802\BPA2oo1A#1. wpd NGN-DRAFT#l - April 4, 2001 omit any statement which, in his opinion, should be included or referred to therein in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; (d) based upon his review of the Official Statement and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, as of the date of the Closing, nothing has come to his . attention which would lead him to believe that the Official Statement when taken as a whole, contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading (except for the financial information and statistical data contained in the Official Statement or in the Appendices thereto, as to all of which no view need be expressed) ; (e) to the best of his knowledge and except as disclosed in the Official Statement, the City is not in material breach of or material default under any applicable constitutional provision, law or administ~ative regulation of the State or the United States or any applicable judgment or decree or any lpan agreement, indenture, bond, note, resolution, agreement or other material instrument to which the City is a party or to which the City or any of its property or assets is otherwise subject, including the Bond Resolution, which would have a material, adverse impact on the City's ability to perform its obligations under the Bond Resolution, and no event has occurred and is continuing which; with the passage of time or the giving of notice, or both, would constitute a default or event of default on the part of the City or the other parties thereto under any such instruments; (f) to the best of his knowledge, adoption of the Bond Resolution, the execution and delivery of the Series 2001A Bonds and this Purchase Contract, and compliance with the provisions on the City's part contained therein and herein, will not conflict with or constitute a breach of or default under any judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or to which the City or any of its property or assets is otherwise subject, nor will any such execution, delivery, adoption or compliance result in the creation or 15 Q:\43802\BP A200l A#I. wpd NGN-DRAFT#I - April 4. 2001 impOSitIOn of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City or under the terms of any such instrument, except as expressly provided in the Series 2.o01A Bonds and the Bond Resolution; (g) except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court, government agency, public board or body, pending or, to the best of his knowledge, threatened against or affecting the City, nor to the best of his knowledge is there any basis for such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would have a materially adverse effect upon the transactions contemplated by this Purchase Contract and the Official Statement or the validity of the Series 2001A Bonds, and the Bond Resolution; . (h) the Bond Resolution has been duly and lawfully enacted and is in full force and effect, and constitutes valid and binding obligation of the City, enforceable in accordance with its terms, except that the binding effect and enforceability are subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, readjustment of debt and other laws in effect from time to time affecting the rights of creditors generally and except to the extent that enforceability thereof may be limited by the application of principles of equity: - (xii) evidence that the Series 2001A Bonds have been rated by Standard & Poor's and Fitch and insured by (xiii) consent letter from the City's auditors regarding the use of the City's audited fmancial statements in the Preliminary and Official Statement; (xiv) such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the City's representations 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 Closing of all the agreements then to be performed and conditions then to be satisfied by it. 16 Q:\43802\BPA2001 A#l. wpd NGN-DRAFT#1 - April 4. 2001 All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance as set forth herein. Opinions concerning the validity, binding effect and enforceability of the various agreements referred to above will in each case be deemed to assume and be premised upon the fact that the validity, binding effect and enforceability of the agreement referred to therein may be limited or otherwise affected by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar statutes, rules, regulations or other laws affecting the enforcement of creditors' rights and remedies generally and (b) the unavailability of or limitation on the availability of, a particular right or remedy, (whether in a proceeding in equity or at law) because of an equitable principle. SECTION 10. Truth in Bonding Statement. The City is proposing to issue $ of debt or obligations to (i) refund on a current basis the Refunded Bonds and (ii) pay certain expenses relating to the issuance and sale of the Series 2001 A Bonds including the municipal bond insurance premium and the reserve account surety bond premium; This debt or obligation is expected to be repaid within years from proceeds of Net Revenues of the System. At the interest rates shown on the cover page of the Official Statement, dated , 2001, total interest paid over the life of the debt or obligation will be $ The primary source of repayment or security for the City's obligation consist of the Net Revenues of tb~ System and until applied in accordance with the provisions of the Bond Resolution, all moneys, including investments thereof, in the accounts and subaccounts created under the Bond Resolution (excluding amounts in the Rebate Account and in any account to the extent such moneys are required to pay Operating Expenses). Authorizing this debt or obligation will result in $ of the Net Revenues of the System not being available to fmance the other services of the City each year for _ years. SECTION 11. Termination. (a) If the City shall be unable to satisfy the conditions to the obligations. of the Underwriter to purchase, to accept delivery of and to pay for the Series 2001 A Bonds contained in this Purchase Contract, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Series 2001A Bonds shall be terminated for any reason permitted by this Purchase Contract, then this Purchase Contract shall terminate and neither the Underwriter nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriter set forth in Section 12 hereof shall continue in full force and effect. 17 Q:\43802\BPA200IA#I. wpd NGN-DRAFT#I - April 4. 2001 (b) The Underwriter shall have the right to terminate its obligations under this Purchase Contract to purchase, to accept delivery of, and to pay for the Series 2001A Bonds by notifying the City of its election to do so if, after the execution hereof and prior to the Closing, (1) the marketability of the Series 2001A Bonds or the market price thereof, in the opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation (A) a~opted by the United States, (B) recommended to the Congress for passage by the President of the United States, or (C) favorably reported for passage to either house of the Congress by any committee of such house to which such legislation has been referred for consideration, or by any decision of any court of the United States or by any ruling or regulation (final, temporary or proposed) on behalf of the Treasury Department of the United States, the Internal Revenue Service or any other authority of the United States affecting the federal income tax status of the City, its property or income, or the interest on its bonds (including the Series 2001A Bonds); (2) the United States shall have become engaged in hostilities that have resulted in the declaration of war or a national emergency and such action will, in the opinion of the Underwriter, materially adversely affect the marketability of the Series 2001A Bonds or the market price thereof; (3) there shall have occurred the declaration of a general banking moratorium by any authority of the United States or the states of New York or Florida and such action will, in the opinion of the Underwriter, materially adversely affect the marketability of the Series 2001A Bonds or the market price thereof; (4) an event shall have occurred which, in the opinion of the Underwriter, requires the preparation and publication of a supplement or amendment to the Official Statement and such action will, in the opinion of the Underwriter, materially adversely affect the marketability of the Series 2001A Bonds or the market price thereof; (5) there has been an adverse change of a material nature in the financial position, results of operations or condition, fmancial or otherwise, of the City, in either case other than in the ordinary course of its business and such action will, in the opinion of the Underwriter, materially adversely affect the marketability of the Series 2001j\ Bonds or the market prict:: thereof; (6) between the date hereof and the Closing, legislation shall be adopted or any action shall be taken by the Securities and Exchange Commission which, in the opinion of the Underwriter, has the effect of requiring the contemplated distribution of the Series 2001A Bonds to be registered under the Securities Act of 1933, as anlended, or of requiring the Bond Resolution to be qualified under the Trust Indenture Act of 1939;h 18 Q:\43802\BP A2001 A#I. wpd NGN-DRAFT#I . April 4, 2001 (7) an order, decree or injunction of any court of competent jurisdiction, or any order, ruling, regulation or administrative proceeding by any governmental body or board, shall have been issued or commenced, or any legislation adopted, with the purpose or effect of prohibiting the issuance, offering or sale of the Series 2001A Bonds as contemplated hereby or by the Official Statement or prohibiting the performance by the City of its obligations under this Purchase Contract or the Bond Resolution; (8) the State of Florida shall take any action, or threaten to take any action, which shall question the existence or powers of the City to issue the Series 2001A Bonds. SECTION 12. Expenses. (a) The Underwriter shall be under no obligation to pay, and the City shall pay, all expenses incident to the performance ofthe City's obligations hereunder including, but not limited to: (i) the cost of preparation, printing and delivery of all of the documents referred to in Section 9 hereof including, but not limited to, the Preliminary Official Statement and the Official Statement, but excluding the items set forth in paragraph (b) below, (ii) the cost of preparation and printing of the Series 2001A Bonds; (iii) the fees and disbursements of Bond Counsel, Disclosure Counsel and Counsel to the City; (vi) the fees of the bond registrar and paying agent, escrow agent, verification agent, City's auditor and of any other experts, advisors or consultants retained to assist the City; and (vii) the fees of the bond insurer, the rating agencies, and the Underwriter's reasonable out-of-pocket, communications/shipping, and computer expenses related to obtaining bond insurance and ratings, and assisting with preclosing and closing, and (viii) the fees and expenses of any other engineers, accountants, attorneys, and other experts, consultants or advisors retained or utilized by the City in connection with the issuance of the Series 2001A Bonds, including the preparation thereof; (ix) the costs of reproducing all necessary copies of any of the Bond Documents and (x) all travel and other out-of-pocket expenses of the City's staff and officials as incurred in connection with the Closing; all such expenses to be paid by the City as issuance costs. (b) the Underwriter shall pay expenses related to the initial purchase and sale of the Series 2001A Bonds as follows: (i) all advertising expenses; (ii) the cost of preparation and printing the blue sky and legal investment surveys with respect to the Series 2001A Bonds, if any; and (iii) all other expenses incurred by them in connection with the public offering of the Series 2001A Bonds other than these noted in Section 12 (a)(vii) above. SECTION 13. Notices. Any notice or other communication to be given to the City under . this Purchase Contract may be given by delivering the sanle in writing to the City Manager of the City of Winter Springs, Florida at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708 and any notice or other communication to be given to the Underwriter under this Purchase Contract may be given by delivering the same in writing to their representative: Hanifen, Imhoff, 19 Q:\43802\BPA2001A#1. wpd NGN-DRAFT#I - April 4. 2001 Division of Stifel, Nicolaus and Company, Inc., 1560 N. Orange Avenue, Suite 210, Winter . Park, Florida 32789 Attention: Managing Director. SECTION 14. Parties in Interest. This Purchase Contract is made solely for the benefit of the City and the Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. All of the City's representations and agreements contained in Section 7 of this Purchase Contract shall remain operative and in full force and effect, regardless of: (a) any investigations made by or on behalf of the Underwriter; (b) delivery of and payment for the Series 2001A Bonds pursuant to this Purchase Contract; and (c) any termination of this Purchase Contract. SECTION 15. Effectiveness. This Purchase Contract shall become effective upon the acceptance hereof by the City and the execution by the appropriate representative of the Underwriter and the designated City officials and shall be valid and enforceable at the time of such execution. SECTION 16. Applicable Law. This Contract shall be construed under the laws of the State of Florida applicable thereto and venue in any action hereunder shall be in Seminole County, Florida. SECTION 17. Headings. The headings of the sections' of this Purchase Contract are inserted for convenience only and shall not be deemed to be a part hereof. SECTION 18. Execution in Counterparts. This Purchase Contract may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. SECTION 19. Severability. The invalidity or unenforceability of any provision of this Purchase Contract shall not affect the validity or enforceability of the balance of this Purchase Contract. SECTION 20. Waiver or Modification. No waiver or modification of anyone or more of the terms and conditions of this Purchase Contract shall be valid unless in writing and signed by the party or parties making such waiver or agreeing to such modification. [SIGNATURE PAGE TO FOLLOW] 20 Q:\43802\BPA2001A#1. wpd NGN-DRAFT#I - April 4. 2001 IN WITNESS WHEREOF, the undersigned hereby agree to the terms and provisions of this Bond Purchase .Contract all as of the day and year first above written. HANlFEN, IMHOFF Division of Stifel, Nicolaus & Company, Inc. By: Managing Director Accepted as of the dated first mentioned above: CITY OF WINTER SPRINGS, Florida By: City Manager 21 Q:\43802\BPA2001A#1. wpd NGN.DRAFT#I - April 4, 2001 EXHIBIT A NAME: City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 2001A PRINCIPAL AMOUNT: $ DATE: ,2001 INTEREST RATES: See Attached Bond Pricing Schedule INTEREST PAYABLE: $ DENOMINATIONS: $5,000.00 FINAL MATURITY DATE: REDEMPTION PROVISIONS: See Attached Redemption Schedule Q:\43802\BPA2001A#1. wpd A-I NGN.DRAFT#I - April 4. 2001 EXHIBIT B ,2001 Mayor City of Winter Springs, Florida Re: City of Winter Springs, Florida $ Revenue Bonds, Series 2001A Water and Sewer Refunding In connection with the proposed issuance by the City of Winter Springs, Florida (the "City) of $ original aggregate principal amount of its Water and Sewer Refunding Revenue Bonds, Series 2001A, referred to above (the "Series 2001A Bonds"), Hanifen, Imhoff, a division of Stifel Nicolaus & Company, Inc., on behalf of itself and Gardnyr Michael Capital, Inc. and William R. Hough & Co. (collectively, the "Underwriter") is underwriting a public offering of the Series 2001A Bonds. Arrangements for underwriting the Series 2001A Bonds will indude a Bond Purchase Contract (the "Purchase Contract") between the City and the Underwriter, which will embody the terms in respect thereof. The purpose of this letter is to furnish, pursuant to the provisions of Section 218.385(6), Florida Statutes, certain information with respect to the arrangements contemplated for the underwriting of the Series 2001A Bonds as follows: (A) The nature and estimated amounts of expenses to be incurred by the Underwriter in connection with the purchase and reoffering of the Series 2001A Bonds are as set. forth in Schedule 1 attached hereto. (B) There are no "finders" as defmed in Section218.386, Florida Statutes, as amended, in connection with the issuance of the Series 2001 A Bonds. (C) Subject to the outcome of negotiations of the terms of the Purchase Contract and to the successful sale by the Underwriter of all the Series 2001A Bonds at the initial public offering price, it is our expectation that based on current market conditions, the underwriting spread (i.e., the difference between the price at which the Series 2001A Bonds will be initially offered to the public by the Underwriter and the price to be paid to the City for the Series 2001A Bonds, exclusive of original issue discount and accrued interest in both cases) will be $ per $1,000 par value of the principal amount of the Series 2001A Bonds. B-1 Q:\43802\BPA2001A#1. wpd NGN.DRAFT#I - April 4, 2001 (D) Based on and as part of the estimated underwriting spread set forth in paragraph (C) above, the Underwriter will charge a management fee of % of the principal amount of the Series 2001A Bonds. (E) No other fee, bonus or other compensation is estimated to be paid by the Underwriter in connection with the issue of the Series 2001A Bonds, to any person not regularly employed or retained by the Underwriter (including any "finder" as defined in Section 218.386(1)(a), Florida Statutes), except as specifically enumerated as expenses to be incurred by the Underwriter in the Purchase Contract, as set forth in Paragraph (A) above. (F) The name and address of the Underwriter is: Hanifen, Imhoff Division of Stifel Nicolaus & Company, Inc. 1560 North Orange Avenue, Suite 210 Winter Park, Florida 32789 We understand that you do not require any further disclosure from the Underwriter, pursuant to Section 218.385(6), Florida Statutes. Very truly yours, HANlFEN, IMHOFF Division of Stifel Nicolaus & Company, Inc. By: Managing Director B-2 City of Winter Springs, Florida Schedule 1 to Exhibit B Underwriter's Estimotetl Expenses (I) EXPenses Day Loan CUSIP, DTC, PSA Dalcomp Underwriter's Counsel Computer Courier / CommunicationlTelefax Travel & Misc. Total (1) Based on estimated issue size of $ Dollar Amount $ $ B-3 -'0>' 1! '3 "" 1.,::0"1::1 5 ~ B :.oJ:! ~ ~~'3 ... ... E .~ 0 e "ii' c C. "C.g N .!!.~ ;.1; c.Y <J 11'0'" 1:",_ ~ ..: u 13~'3 ~oe: . t::I .c Q ;gg" ~ U'J,g 0'::- u.l3 -!l:E ~ ~ .!l ~.5 " '.c g 8 -!l'B -!l 09 '6 " ....~ :s .g .i;!,.", Q,>'''' ",,;if!! a.5.S ... c l3 u o'~ g fa 0 .8 8. '0 >,>'.!l .s ~.~ 09 "" 8. ~ '8.5 15&l~ >,_ u ~g.s ...'" 8.~ ~ :g cu ~ o en ... "'in... .8':::2 -01..: 8 ... . >. c;; = ~~~ '8"~ &l.8en e:; g-!lijj "'=0 .~~ ~ ... ... 2 en 8'g ..!! >,.... E-o.s~ ...09 ~~:E -goE ~~~ ~g.2 ~.g b .g.~u .!!,g..!! f!5lE-o o ... u 0 d ~~.~ ..l'!,g:a B~l _0,:: .il.;i g ""jJ'" " >, '" c e'''' .. ..f!!'o .5 8 ~ ~t:.!! ..!!II.. '8 E.! .- l3's 5en" c_ ... 8'!! .. cijjJl .go ~ ~ ~1 ~.~ 5 '- '" 'fi JlJ:ss ] :E 11 .... _ - o"~ c = ... ~ ~..l'! ~ 0 !! ~.~ u b1~~~ :; 5 '6I,..l'! S ~ e ~ OI:!,gUl >-'u :; '8 ... 8'C .. 2 Q, .. 'g :; '3.,!j "'"8 ~'s J::J.fllj :E IP'" E-o.E.8Jl First draft 03/26/01 PRELIMINARY OFFICIAL STATEMENT DATED NEW ISSUE - BOOK-ENTRY ONLY , 2001 Ratings: Standard & Poor.'s:-"_" Fitch: "_" ( Insured) (See Ratings and Municipal Bond Insurance herein) In the opinion of Bond Counsel, assuming compliance with existing statutes, regulations, published rulings and court decisions, and assuming continuing compliance by the City with certain tax covenants. interest on the Series 2001 Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preferencefor purposes of the federal alternative minimum tax imposed on individuals and corporations. However, see "TAX EXEMPTiON" herein for a description oflhe federal alternative minimum tax on corporations and certain other federal tax consequences of ownership of the Series 2001 Bonds. Bond Counsel is further of the opinion that the Series 2001 Bonds are e:l.empt from all present intangible personal property tuxes imposed pursuant to Chapter 199, Florida Statutes. [Furthermore. in the opinion of Bond Counsel, based on representations of the City, the Series 2001 Bonds are "qualified tux-e:l.empt obligations" within the meaning of Section 265 (b) (3) o/the Internal Revenue Code of 1986, as amended.) (See "TAX EXEMPTION" herein). Dated: $ CITY OF WINTER SPRINGS, FLORIDA Water and Sewer Refunding Revenue Bonds, Series 2001 ,1 2001 Due: October 1, as indicated below * The City of Winter Springs, Florida (the "City") is issuing its Water and Sewer Refunding Revenue Bonds, Series 2001 (the "Series 2001 Bonds") only in theform of fully registered bonds in the denomination of$5,000principal amount or any integral multiple thereof. The Series 2001 Bonds will bear interest at the fixed rates set forth on the inside cover payable semi-annually on each April I and October I, commencing October 1,2001. The Series 2001 Bonds, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC") which will act as securities depository for the Series 2001 Bonds. Purchases of beneficial interests in the Series 2001 Bonds will be made in book-entry form. Purchasers of the Series 2001 Bonds ("Beneficial Owners") will not receive physical delivery of Series 200 I Bonds. Accordingly, principal of and interest on the Series 2001 Bonds will be paid by , as paying agent directly to DTC as the registered owner .thereof. Disbursements of such payments to the DTC Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of Direct Participants and Indirect Participants, as more fully described herein. See "DESCRIPTION OF THE SERlES 2001 BONDS- Book-Entry Only System" herein. Certain of the Series 200 I Bonds are subject to optional and mandatory redemption prior to maturity as set forth herein. The Series 2001 Bonds are being issued by the City pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. 665 of the City as amended and supplemented and particularly as supplemented by Resolution No. of the City as supplemented (collectively the "Resolution") to (i) currently refund all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991 other than the 2001 maturity (the "Refunded Bonds"); and (ii) finance the costs of issuance of the Series 200 I Bonds including the municipal bond insurance premium and the Reserve Account surety bond premium. The Series 2001 Bonds are secured by a pledge of and are payable solely from the Net Revenues (as defined herein) on a parity and equal status with the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bond, Series 1991 maturing October 1,2001, the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 1992 (the "1992 Bonds") and the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 2000 (the "2000 Bonds", collectively with the 1992 Bonds, the "Parity Bonds"). The City has authorized the issuance of a Series of bonds (the "2002 Bonds") to be secured by and payable solely from the Net Revenues to currently refund and defease the 1992 Bonds. The 2002 Bonds will not be issued unless the City's financial advisor certifies that such issuance result in a reduction in debt service secured by the Net Revenues. Should the 2002 Bonds be issued the Parity Bonds would be such 2002 Bonds and the 2000 Bonds. The 2002 Bonds ifissued will not be issued prior to January 2, 2002. The Series 2001' Bonds shall not be or constitute general obligations or indebtedness of the City or the State of Florida or any political subdivision thereof within the meaning of any constitutional, statutory or charter, provision or limitation, and no holder shall ever have the right to compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property tberein for the payment of the Series 2001 Bonds or the making of deposits Into the bond service fund, reserve account or other payments provided for In the Resolution. The Series 2001 Bonds shall not constitute a lien upon the System, or any part thereof, or on any other property of or in the City, but shall constitute a lien only upon the Net Revenues derived from the operation of the System all in the matter provided In the Resolution. Payment of the principal of and interest on the Series 2001 Bonds when due will be guaranteed bya municipal bond insurance policy to be issued simultaneously with the delivery of the Series 2001 Bonds by [INSURER's LOGO] For a discussion of the terms and provisions of such policy, including the limitations thereof, see "MUNICIPAL BOND INSURANCE" herein and Appendix C hereto. This cover page contains certain information for quick reference only. It is not a summary of the Series 2001 Bonds. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Series 2001 Bonds are offered when, as and if issued by the City and accepted by the Underwriters subject to the approving legal opinion of Akerman, Senterfitt & Eidson, PA, Orlando, Florida, Bond Counsel. Certain legal matters will be passed on for the City by its counsel, Anthony A. Garganese of Brown, Ward, Salzman & Weiss, P.A., Orlando, Florida and by Akerman, Senterfitt & Eidson, P.A., Disclosure Counsel. Public Financial Management, Inc., Orlando, Florida is acting as Financial Advisor to the City in connection with the issuance of the Series 2001 Bonds. The Series 2001 Bonds are expected to be delivered through the facilities of The Depository Trust Company in New York, New York on or about ,2001. Hanifen, Imhoff Division of Stifel, Nicolaus & Company, Incorporated GARDNYR MICHAEL CAPITAL, INC. Dated: _ -,2001 WILLIAM R. HOUGH & CO. .Preliminary, subject to Change ": . First draft 03/26/01 CITY OF WINTER SPRINGS, FLORIDA OFFICIALS CITY COMMISSION Paul P. Partyka David McLeod . Robert S. Miller Michael S. Blake Edward Martinez, Jr. David McLeod Mayor Deputy Mayor/Commissioner Commissioner Commissioner Commissioner Commissioner CITY MANAGER Ronald McLemore CITY ATTORNEY Anthony A. Garganese Brown, Ward, Salzman & Weiss, P.A. Orlando, Florida FINANCE DIRECTOR Louise Frangoul CITY CLERK Andrea Lorenzo-Luaces PUBLIC WORKSIUTILITY DIRECTOR Kipton Lockcuff FINANCIAL ADVISOR Public Financial Management, mc. Orlando, Florida BOND COUNSEL Akerman, Senterfitt & Eidson, P.A. Orlando, Florida AUDITORS McDirmit, Davis, Puckett & Co., P.A. Orlando, Florida 0R378176;1 . . First draft 03126/01 No dealer, broker, salesman or other person has been authorized by the City, the Insurer or the Underwriters to give any information or to make any representation with respect to the Series 2001 Bonds other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. 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 2001 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, the Insurer, and other sources which are believed to be reliable. The Underwriters have reviewed the information in this Official Statement in accordance with, and as a 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 herein is subject to change without notice and neither the delivery hereofnor any sale hereunder at any time implies that information herein is correct as of any time subsequent to its date. Any statements in this Official Statement involving estimates, assumptions and matters of opinion, whether or not so expressly stated, are intended as such and not as representations of fact. IN CONNECTION WITH THE OFFERING OF THE SERIES 2001 BONDS, THE UNDERWRlTERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2001 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZATION, IF COMMENCED, MAYBE DISCONTINUED AT ANY TIME. NO REGISTRATION STATEMENT RELATING TO THE SERIES 2001 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2001 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to this Official Statement, they may be obtained from the City ofW inter Springs, Florida, City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2799, (407) 327-1800, Attention: City Clerk, upon prepayment of reproduction costs, postage and handling expenses. [REMAINDER OF P AGE INTENTIONALLY LEFT BLANK] 0R378176;1 11 -: . First draft 03f26/01 TABLE OF CONTENTS Page SUMMARY STATEMENT................................................................................................ v The City ...................................................................................................... v The Series 2001 Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Purpose of the Series 200 I Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Security for the Series 2001 Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. vi Municipal Bond Insurance ....................................................................................... vi Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi Additional Bonds ............................................................................................. vii Authorizing Resolution and Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. vii Continuing Disclosure ......................................................................................... vii . Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . .. vii Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. vii INTRODUCTION ..................,.................................................................................... I THE CITY ............................................................................................................. 2 PURPOSE OF THE SERIES 2001 BONDS ................................................................................... 2 PLAN OF REFUNDING ......................................... .'. ... .... .. . .. . .. . ... .. .. . .. .... .. . . . . ...... . . . . .. . . . . .. .2 DESCRIPTION OF THE SERIES 2001 BONDS .........,.....................................,............................... 2 General Description ............................................................................................. 2 Book-Entry-Only System ......................................................................................... 3 Redemption Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECURITY FOR THE SERIES 2000 BONDS ................................................................................. 6 General ........................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . Rate Covenant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Renewal and Replacement Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ADDITIONAL PARITY OBLIGATIONS ..................................................................................... 8 MUNICIPAL BOND INSURANCE.......................................................................................... 9 DEBT SERVICE REQUIREMENTS. . . . . . . . . . . . . . . . . , . . . .'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .9 ESTIMATED SOURCES AND USES OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II THE SYSTEM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 History .............................................................................,........................ 12 Service Area ........................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Organization .. . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . 13 Administration Division. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Water and Wastewater Treatment Plant Operations Division . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .'. . . . 14 Water Distribution and Wastewater Collection Division ................................................................ 14 Existing Water System. . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15 The 2000 Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Existing Sewer System ......................... . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Rates and Charges ............................................................................................. 20 Monthly Residential and General Service. . . . . . . . . , . . . . . . . . . . . . . . . , . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . '. . . . . 20 LITIGATION. . .. . . .. . . .. .. . . . .. .. .. . .... .. . . . . . . . . . ,. . . . . . .. .... . . . .. .. .. . ... . .. . .. . . . . . ., . . . .... .., . . . . . . . .. . ... ... ..24 LEGAL MA TIERS ..................................................................................................... 24 TAX EXEMPTION ................................. I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 General ..............,.............................,......................................................... 24 TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT . . . . . . . . . . . . . . .: . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 UNDERWRITING . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 FINANCIAL ADVISOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 INVESTMENT POLICY ............................................................,...,...........................,..... 26 RATINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 FINANCIAL STATEMENTS .....................................................................................:...,.... 27 CONTINUING DISCLOSURE .......................................................,.................................... 27 VERIFICATION OF MA THEMA TICAL COMPUTATIONS. . .. . .. .. .. . . . . . .. . .. . . . . .. . . . . .. . . . . . . .. . . . . .. . . .. .. .. . . . .. .. . . . . . .. 27 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS. . . . . . .. . . . . . . . .. .. . . . . . . .. . . .. . . . .. . . . . . . .. . . . . . .. .. . . . . .. 27 ENFORCEABILITY OF REMEDIES ........,.............................................................................. 28 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 CERTIFICATE AS TO OFFICIAL STATEMENT ............................................................................. 28 0R378176;1 11l ~ APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F 0R378176; I , First draft 03f26/0 1 General Information Concerning the City City of Winter Springs, Florida General Purpose Financial Statements for the Year Ended September 30, 2000 Specimen Municipal Bond Insurance Policy Summary of the Resolution Form of Proposed Bond Counsel's Opinion Form of Continuing Disclosure Certificate IV ':: . First draft 03/26/01 SUMMARY STATEMENT This Summary Statement, being part of the Official Statement, is subject to the more complete information contained herein and should not be considered to be a complete statement of the facts material to making an investment decision. The offering by the City ofW inter Springs, Florida, of its $ * Water and Sewer Refunding Revenue Bonds, Series 2001 (the "Series 2001 Bonds"), to potential investors is made only by means of the entire Official Statement. No person is authorized to detach this Summary Statement from the Official Statement or otherwise use it without the entire Official Statement. Capitalized terms used but not defmed in this Summary Statement shall have the same meaning as in the Resolution (as hereinafter defmed), unless the context would clearly indicate otherwise. See "Summary of the Resolution" - Appendix D hereto. The City The City of Winter Springs, Florida (the "City") was originally incorporated in 1959 under the name of the Village of North Orlando and became the City of Winter Springs in 1972. The City is located in southern Seminole County in central Florida. Adjacent municipalities are Longwood, Casselberry and Oviedo. The City's estimated 2000 population was 31,088. The City is served by a City Commission - City Manager form of government consisting of a Mayor, five commissioners and a City Manager. The Mayor and City Commissioners are elected for three-year terms, The Mayor votes on matters coming before the City Commission only if needed to break a tie vote among the other City Commissioners. The City Manager is appointed by the City Commission. For additional information concerning the City, see Appendices A and B hereto. The Series 2001 Bonds The Series 2001 Bonds are being issued in fully registered form in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Series 2001 Bonds. The Series 2001 Bonds will be available to purchasers in denominations of$5,000 or integral multiples thereof, Interest on the Series 2001 Bonds is payable on October 1, 2001 and on each April 1 and October 1 thereafter until maturity or redemption. Amounts due on the Series 2001 Bonds will be paid to Cede & Co., as nominee for DTC, as registered owner of the Series 2001 Bonds, to be subsequently disbursed to DTC Participants and thereafter to the Beneficial Owners of the Series 2001 Bonds. See "DESCRIPTION OF THE SERIES 2001 BONDS" herein. Certain of the Series 2001 Bonds are subject to optional, mandatory sinking fund redemption prior to maturity as set forth herein. See "DESCRIPTION OF THE SERIES 2001 BONDS - Redemption Provisions" herein. Purpose of the Series 2001 Bonds The Series 2001 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. of the City adopted by the City Commission on , 2001 as supplemented (collectively the "Resolution") to (i) currently refund all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991 other than the bonds of such series maturing October 1, 2001, (the "Refunded Bonds"); and (ii) fmance the costs of issuance of the Series 2001 Bonds including the municipal bond insurance premium and Reserve Account surety bond premium. See "PURPOSE OF THE SERIES 2001 BONDS," "PLAN OF REFUNDING," and "ESTIMATED SOURCES AND USES OF FUNDS" herein. Security for the Series. 2001 Bonds The Series 2001 Bonds are payable from and secured by a first lien upon and pledge of the Net Revenues of the City's combined water and sewer system (the "System"). The lien of the Series 2001 Bonds on the Net Revenues is on a parity and equal status with the City of Winter Springs, Florida, Water and Sewer Refunding Revenue Bond, Series 1991, maturing October 1,2001, *Preliminary, subject to change 0R378176; 1 v . First draft 03126/01 the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 1992 (the" 1992 Bonds ") and the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 2000 (the "2000 Bonds", collectively with the 1992 Bonds, the "Parity Bonds"). The City has authorized the issuance ofa Series of Bonds (the "2002 Bonds", to be secured by and payable solely from the Net Revenues to currently refund and defease the 1992 Bonds. The 2002 Bonds will not be issued unless the City's fmancial advisor certifies that such issuance result in a reduction in debt service secured by the Net Revenues. Should the 2002 Bonds be issued the Parity Bonds would be such 2002 Bonds and the 2000 Bonds. The 2002 Bonds if issued will not be issued prior to January 2,2002. See "SECURITY FOR THE SERIES 2001 BONDS" herein. The Series 2001 Bonds shall not be or constitute general obligations or indebtedness of the City or the State of Florida .or any political subdivision thereof within the meaning ofany constitutional, statutory or charter, provision or limitation, and no holder shall ever have the right to compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for th,e payment of the Series 2001 Bonds or the making of deposits into the debt service fund, reserve account or other payments provided for in the Resolution. The Series 2001 Bonds shall not constitute a lien upon the System or any part thereof, or on any other property of or in the City, but shall constitute a lien only upon the Net Revenues derived from the operation of the System all in the manner provided in the Resolution. The Resolution provides that a sum equal to the Reserve Requirement shall be deposited in the subaccount in the Reserve Account created for the benefit of the Series 2001 Bonds at the time of delivery of the Series 2001 Bonds and shall be used only for the purposes provided in the Resolution. The "Reserve Requirement" is defmed as the lesser of (i) the Maximum Bond Service Requirement for the Series 2001 Bonds; (ii) 125% of the Average Annual Bond Service Requirement for the Series 2001 Bonds, or (iii) 10% of the proceeds of the Series 2001 Bonds. See "SECURITY FOR THE SERIES 2001 BONDS - Reserve Fund. Redemption The Series 2001 Bonds maturing on or after October 1, _ are subject to optional redemption on or after October 1,_ at the redemption prices described herein. Certain of the Series 2001 Bonds are subject to mandatory sinking fiuid redemption as described herein. The Series 2001 Bonds are also subject to extraordinary mandatory redemption from prepayment principal. See "DESCRlPTlON OF THE SERIES 2001 BONDS - Redemption Provisions" herein. Municipal Bond Insurance Payment of the principal of, accreted value and interest on the Series 2001 Bonds, when due, will be guaranteed by a municipal bond insurance policy to be issued simultaneously with the delivery of the Series 2001 Bonds by See "MUNICIPAL BOND INSURANCE" herein and Appendix C hereto. Professionals , will serve as Registrar and Paying Agentpursuantto the Resolution and as Escrow Holder pursuant to the Escrow Agreement. Akerman, Senterfitt & Eidson, P.A., Orlando, Florida, is serving as Bond Counsel and Disclosure Counsel. Brown, Ward, Salzman & Weiss, P .A., Orlando, Florida, is the City Attorney. McDirmit, Davis, Puckett & Co., P.A., Orlando, Florida, is the City's auditor. Public Financial Management, Inc., Orlando, Florida, is the City's financial advisor. Some of the professionals will be compensated from a portion of the proceeds of the Series 2001 Bonds, identified as "Cost ofIssuance" under' the heading "ESTIMATED SOURCES AND USES OF FUNDS" herein. Such compensation in some instances, but not in regard to the City's auditor, is contingent upon the issuance of the Series 2001 Bonds and the receipt of the proceeds thereof. 0R378176;1 vi . First draft 03/26/01 Additional Bonds Subject to certain conditions set forth in the Resolution, the City may from time to time issue Additional Parity Obligations, defined in the Resolution that are payable from and secured by a fIrst lien on and pledge of the Net Revenues on a parity with the Series 200 I Bonds and the Parity Bonds then Outstanding. See "ADDITIONAL P ARITY OBLIGATIONS" herein. Authorizing Resolution and Definitions A summary of the Resolution is set forth in Appendix D hereto. Definitions of certain capitalized words used in this Official Statement and not otherwise defmed herein have the meaning ascribed to such tenns in the Resolution. Continuing Disclosure The City has agreed and undertaken for the benefIt of the Holders of Series 2001 Bonds, to provide certain fInancial information and operating data relating to the City and the Series 2001 Bonds and notice of certain enumerated events pursuant to Rule 15c2-12 of the Securities Exchange Act of 1934. See "CONTINUING DISCLOSURE" herein. Additional Information This Official Statement speaks only as of its date and the information contained herein is subject to change. Descriptions of the Series 2001 Bonds, and other agreements and documents contained herein constitute summaries of certain provisions thereof and do not purport to be complete. Reference is made to the Resolution, and such other agreements and documents for a more complete description of such provisions. Investors should contact the City Clerk (407) 327-1800 at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2789, to obtain copies of the Resolution or other documentation referred to herein or with questions concerning this Official Statement or the Series 2001 Bonds. Except to the extent otherwise indicated, information contained in this Official Statement was compiled by the City. Miscellaneous The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference is directed to all such documents for full and complete statements of all matters of fact relating to the Series 2001 Bonds, the security for the payffient of the Series 2001 Bonds, and the rights and obligations of holders thereof. The information contained in the Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations off act, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the holders of the Series 2001 Bonds. ( [END OF SUMMARy STATEMENT] 0R378176;1 Vll . First draft 03/26/01 OFFICIAL STATEMENT $ CIT}' OF WINTER SPRINGS, FLORIDA WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2001 INTRODUCTION The purpose of this Official Statement, which includes the cover page and all Appendices hereto, is to furnish certain information with respectto the issuance by the City of Winter Springs, Florida (the "City") of its Water and Sewer Refunding Revenue Bonds, Series 2001 (the "Series 2001 Bonds") in the aggregate principal amount of $ The Series 2001 Bonds are being issued pursuant to the Constitution of the State of Florida, Chapter 166, Part II, Florida Statutes, as amended and supplemented, Chapter 72-718, Laws of Florida, Special Act of 1972, as amended (the "City Charter") and other applicable provisions oflaw, and Resolution No. , as supplemented (collectively, the "Resolution"). See Appendix D, "Summary of the Resolution". The Series 2001 Bonds are payable from and secured by a first lien upon and pledge of the Net Revenue (as hereinafter defined) derived from the operation of the City's combined Water and Sewer System (the "System"). The lien of the Series 2001 Bonds on the Net Revenues is on a parity and equal status with the City of Winter Springs, Florida, Water and Sewer Refunding Revenue Bonds, Series 1991 maturing October 1, 2001, the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 1992 (the "1992 Bonds") and the City of Winter Springs" Florida Water and Sewer Refunding Revenue Bonds, Series 2000 (the "2000 Bonds) to be secured by and payable solely from the Net Revenues to currently refund and defease the 1992 Bonds. The 2002 Bonds will notbe issued unless the City's financial advisor certifies that such issuance result in a reduction in debt service secured by the Net Revenues. Should the 2002 Bonds if issued will not be issued prior to January 2,2002. The current Parity Bonds are currently outstanding in the principal amount of$ . See "SECURITY FOR THE SERIES 2001 BONDS" herein. The Series 2001 Bonds are being issued in fully registered form in the name of Cede & Co., as nominee for The Depository Trust Company, New Yode, New York ("DTC"), which will act as securities depository for the Series 2001 Bonds. The Series 2001 Bonds will be available to purchasers in denominations of$5,000 of integral multiples thereof. Interest on the Series 2001 Bonds is payable on October 1, 2001 and on each April 1 and October 1 thereafter until maturity or redemption. Amounts due on the Series 2001 Bonds will be paid to Cede & Co., as nominee for DTC, as registered owner of the Series 2001 Bonds, to be subsequently disbursed to DTC Participants and thereafter to the Beneficial Owners of the Series 2001 Bonds. See "DESCRIPTION OF THE SERIES 2001 BONDS" herein. This Official Statement speaks only as of its date and the information contained herein is subject to change. Capitalized tenns used but not defmed herein have the same meanings as when used in the Resolution unless the context clearly indicates otherwise. Complete descriptions of the tenns and conditions of the Series 2001 Bonds are set forth in the Resolution, a summary of which is attached to this Official Statement as Appendix D. The description of the Series 200 I Bonds, the documents authorizing and securing the same, and the information from various reports and statements contained herein are not comprehensive or definitive. All references herein to such documents, reports and statements are qualified by the entire, actual content of such documents, reports and statements. Copies of such documents, reports and statements referred to herein that are not included in their entirety in this Official Statement may be obtained, after payment of applicable copying and mailing costs, from the City of Winter Springs, at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2797, Attention: City Clerk, (407) 327-1800. 0R378176;1 . First draft 03/26/01 THE CITY The City was incorporated in 1959 under the name of the Village ofNortb Orlando and became the City of Winter Springs in 1976. The City is located in Seminole County, which is a part of the greater Orlando metropolitan area in East Central Florida. This area is one of the fastest growing areas in the country. The City is primarily a retail, office and residential area with a small amount of light industry and commercial. The City currently has a land area of 14.6 square miles and a 2000 population of approximately 31,088. The City operates according to a CommissionlManager form of government, with an appointed City Manager, five elected City Commissioners and a separately elected Mayor. The Mayor votes on matters coming before the City Commission only if a vote by the other Commissions results in a tie. . PURPOSE OF THE SERIES 2001 BONDS The Series 2001 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. 665 of the City as amended and supplemented and particularly as supplemented by Resolution No. of the City adopted by the adopted by the City Commission on , 2001 as supplemented (collectively the "Resolution") to (i) currently refund all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991 other than the bonds of such series maturing October 1, 200I(the "Refunded Bon.ds"); and (ii) finance the costs of issuance of the Series 200 I Bonds including the municipal bond insurance premium and the Reserve Account Surety bond premium. See "THE PROJECT," "PLAN OF REFUNDING," and "ESTIMATED SOURCES AND USES OF FUNDS" herein. PLAN OF REFUNDING The Refunded Bonds, as of the date of delivery of the Series 2001 Bonds, will be outstanding in the aggregate principal amount of $5,780,000. To effect the refunding of the Refunded Bonds, the City will enter into an escrow deposit agreement (the "Escrow Agreement") with . as escrow holder (The "Escrow Holder"). Pursuant to the terms of the Escrow Agreement, the City will deposit with the Escrow Holder a portion of the proceeds of the Series 2001 Bonds, as well as other available moneys of the City. Such moneys, other than beginning cash balances, will be applied on the date of delivery of the Series 2001 Bonds to the purchase of direct obligations of the United States of America (the "Federal Securities"). The Federal Securities shall mature at such times and in such amounts as shall be sufficient to pay the principal of applicable redemption premium and interest on such Refunded Bonds on the redemption date of October 1,2001. The Refunded Bonds are subject to redemption on October 1,2001 at a redemption price of 102% of the principal amount thereof plus accrued interest to the redemption date. Upon deposit of such moneys into the escrow deposit account (the "Escrow Account") as provided in the Escrow Agreement, in the opinion of Bond Counsel, the lien of the holders of the Refunded Bonds on the Net Revenues pledged to such holders will no longer be in effect with respect to said Refunded Bonds. DESCRIPTION OF THE SERIES 2001 BONDS General Description The Series 2001 Bonds are being issued in fully registered form in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Series 2001 Bonds. The Series 2001 Bonds will be available to purchasers in denominations of$5,000 of integral multiples thereof. Interest on the Series 2001 Bonds is payable on October 1,2001 and on each April1 and October 1 thereafter until maturity or redemption, Amounts due on the Series 2001 Bonds will be paid to Cede & Co., as nominee for DTC, as registered owner of the Series 2001 Bonds, to be subsequently disbursed to DTC Participants and thereafter to the Beneficial Owners of the Series 2001 Bonds. See "DESCRIPTION OF THE SERIES 2001 BONDS" herein. 0R378176;1 2 'First draft 03/26/01 Book-Entry-OnIy System The information set forth under this caption concerning DTC and DTC's book-entry system has been obtained from sources the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. The Series 2001 Bonds will be issued as fully registered bonds without coupons. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2001 Bonds. The Series 2001 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered Series 2001 Bond will be issued for each maturity of the Series 2001 Bonds. Individual purchases will be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof. Beneficial owners of the Series 2001 Bonds will not receive physical delivery of Series 2001 Bonds. DTC is a limited purpose trust company organized under the New Y orkBanking 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 17 A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies; clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Series 200 I Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2001 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2001 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participant's records. Beneficial Owners will not receive written confirmation from DTC of their transaction, but Beneficial Owners are expected to receive written confirmation 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 200 I Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in Series 2001 Bonds, except in the event that use of the book-entry system for the Series 2001 Bonds is discontinued, To facilitate subsequent transfers, all Series 2001 Bonds deposited by Participants with DTC are registered in the name ofDTC's partnership nominee, Cede & Co. The deposit of Series 2001 Bonds with DTC and their registration in the name of Cede & Co. effect no change in benefici~lownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2001 Bonds, DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2001 Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor Cede & Co. will consent or vote with respect to Series 2001 Bonds. Under its usual procedures, DTC will mail an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy 0R378176; 1 3 . First draft 03/26/01 assigns Cede & Co. 's consenting or voting rights to those Direct Participants to whose accounts in the Series 2001 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). . Principal and interest payments on the Series 2001 Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on payment dates in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not ofDTC, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the City or the Paying- Agent, disbursement of such payments to Direct Participants shall be the responsibility ofDTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. SO LONG AS CEDE&CO. IS THE REGISTERED OWNER OF THE SERIES 2001 BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE HOLDER OF THE SERIES 2001 BOND OR REGISTERED OWNERS OF THE SERIES 2001 BONDS SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2001 BONDS, The City shall provide for issuance of Series 2001 Bonds (the "Replacement Certificates") directly to owners of Series 2001 Bonds other than DTC, or its nominee, but only in the event that (i) DTC determines not to continue to act as securities depository for the Series 2001 Bonds; or (ii) the City has advised DTC of its determination that DTC is incapable of discharging its duties as a securities depository of immobilized securities; or (iii) the City has determined in its sole discretion not to continue the book~entry system of transfer. Upon the occurrence of (i), (ii) or (iii) above, the City may attempt to locate another qualified securities depository. If the City does not locate another qualified securities depository to replace DTC, the City shall have authenticated and delivered Replacement Certificates. In the event the City makes the determination to issue Replacement Certificates, and has made provision to notify the Beneficial Owners of Series 2001 Bonds by mailing an appropriate notice to DTC, it shall issue Replacement Certificates at the address of such owner as it appears in the registration books maintained by the Registrar and principal on the Series 2001 Bonds will be payable when due upon presentation and surrender of such Series 2001 Bonds at the office of the Paying Agent. Interest payable on any Series 2001 Bond on any Interest Date will (except for the fmal payment of interest which shall be paid only upon presentation and surrender of the Series 2001 Bonds at the office of the Paying Agent) be paid by check or draft of the Paying Agent to the Holder in whose name such Bond shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Interest Date, or by wire transfer to owners of $1,000,000 or more is principal amount of Series 2001 Bonds. Replacement Certificates will be transferable only by presentation and surrender to the Registrar, together with an assignment duly executed by the owner of the Replacement Certificate, or by his attorney or legal representative, in form satisfactory to the Registrar and subject to the other conditions set forth in the Resolution. The City can make no assurances that DTC will distribute payments of principal of, redemption price, if any, or interest on the Series 2001 Bonds to the DTC Participants, or that DTC Participants will distribute payments of principal of, redemption price, if any, or interest on the Series 200 I Bonds or redemption notice (referred to below) to the Beneficial Owners of such Series 2001 Bonds or that they will do so on a timely basis, or that DTC or any of its Participants will act in a manner described in this Official Statement. The City is not responsible or liable for the failure ofDTC to make any payment to any DTC Participant or failure of any DTC Participant to give any notice or make any payment to a Beneficial Owner in respect to the Series 2001 Bonds or any error or delay relating thereto. In the event of an insolvency'of DTC, or if DTC has insufficient securities to satisfy the claims of the DTC Participants with respect to deposited securities, DTC Participants may not be able to obtain all of their deposited securities. The rights of holders of beneficial interests in the Series 2001 Bonds and the manner of transferring or pledging those interests is subject to applicable state law. Holders of beneficial interests in the Series 2001 Bonds may want to discuss the manner of transferring or pledging their interest in the Series 200 I Bonds with their legal advisors. 0R378176;1 4 , First draft 03f26/0 1 , Redemption Provisions Optional Redemption of Series 2001 Bonds The Series 2001 Bonds maturing on or prior to October 1, _, are not redeemable prior to their respective maturities. The Series 2001 Bonds maturing on or after October 1, _, are subject to optional redemption prior to their maturities on or after October 1, _, at the option of the City in whole or in part at any time, in such manner as shall be determined by the City and by lot within a maturity ifless than a full maturity from any legally available monies at a redemption price (expressed as a percentage of the principal amount to be redeemed) as set forth in the following table, together with accrued interest to the redemption date. Period During Which Redeemed (Both Dates Inclusive) Redemption Price October 1, _ through September 30, _ October 1, _ and thereafter 101% 100% Mandatory Redemption of Series 2001 Bonds The Series 2001 Bonds maturing on October 1, _ are subject to mandatory redemption in part prior to maturity by lot on October 1, _ and on each October 1 thereafter, at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium from Amortization Installments through operation of the Redemption Account, as follows: October 1 of Year Principal Amount The Series 2001Bonds maturing on October 1 _ are subject to mandatory redemption in part prior to maturity by lot on October 1, _ and on each October 1 thereafter, at 'a redemption price equal to the principal amount thereof and accrued interest thereon to 'the date fixed for redemption, without premium from Amortization Installments through operation of the Redemption Account, as follows: October I of Year Principal Amount Notice of Redemption Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registrar, and mailed, first class mail, postage prepaid, to all Owners of Series 2001 Bonds to be redeemed at their addresses as they appear on the registration books, but failure to mail such notice to one or more Owners of Series 2001 Bonds shall not affect the validity of the proceedings for such redemption with respect to Owners of Series 2001 Bonds to which notice was duly mailed. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, ifless than all of the Series 2001 Bonds of one maturity are to be called, the distinctive numbers of such Series 2001 0R378176;1 5 , First draft 03/26/01 Bonds to be redeemed and in the case of Series 2001 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. Any notice of optional redemption, other than with respect to an advance refunding, shall be circulated only if sufficient funds have been deposited in the Bond Service Fund to pay the redemption price of the Series 2001 Bonds to be redeemed. Official notice of redemption having been given as aforesaid, the Series 2001 Bonds or portions of Series 2001 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) such Series 2001 Bonds or portions of Series 2001 Bonds shall cease to bear interest. Upon surrender of such Series 2001 Bonds for redemption in accordance with said notice, such Series 2001 Bonds shall be paid by the Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as provided in the Resolution for payment of interest. Upon surrender for any partial redemption of any Series 2001 Bond, there shall be prepared for the Owner a new Series 2001 Bond or Series 2001 Bonds of the same maturity in the amount of the unpaid principal of such partially redeemed Series 2001 Bond. All Series 2001 Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued. In addition to the foregoing notice, further notice shall be given by the City as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. a. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Series 2001 Bonds being redeemed; (ii) the date of issue of the Series 2001 Bonds as originally issued; (iii) the rate of interest borne by each Series 2001 Bond being redeemed; (iv) the maturity date of each Series 2001 Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Series 2001 Bonds being redeemed. b. Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types similar to the type of which the Series 2001 Bonds consist and to one or more national information services that disseminates notices of redemption of obligations such as the Series 2001 Bonds. SECURITY FOR THE SERIES 2000 BONDS General The Series 2001 Bonds are being issued as Additional Parity Obligations under the Resolution and are payable solely from and secured by a prior lien upon and pledge pfthe Net Revenues derived from the operation of the System on a parity and equal status with the Parity Bonds, and any Additional Parity Obligations hereafter issued pursuant to the Resolution. The Series 2001 Bonds, the Parity Bonds, and any Additional Parity Obligations issued pursuant to the Resolution are collectively referred to as the "Bonds." In the Resolution, the City irrevocably pledges the Net Revenues to the payment of the principal of, redemption premium, if any, and interest on the Bonds, the reserves for the Bonds and all other payments required under the Resolution. ' The Bonds do not constitute a general obligation or indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and no holder of the Bonds shall ever have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the principal of and interest on the Bonds or the making of any debt service fund, reserve account or the payments provided for in the Resolution. The Bonds and the indebtedness evidenced thereby do not constitute a lien 0R378176;1 6 , First draft 03/26/01 upon the System, or any part thereof, or on any other property of or in the City, but shall constitute a lien only on the Net Revenues all in the manner provided in the Resolution. The Resolution establishes the Revenue Fund, the Debt Service Fund (which includes the Principal Account, the Interest Account, the Redemption Account, and the Reserve Account) and the Renewal and Replacement Fund. All such funds and accounts will be held by the City as trust funds, but no independent trustee as been appointed to hold the monies in such funds for the benefit of the holders of the Bonds. For information on all funds and accounts and the disposition and flow of revenues, see "APPENDIX D - Summary of the Resolution" attached hereto. The establishment of the various funds by the Resolution does not require the establishment of any completely independent, self-balancing funds as such is commonly defined and used in government accounting, but rather is intended solely to constitute an earmarking of certain revenues and assets of the System for certain purposes and to establish certain priorities for application of such revenues and assets as provided in the Resolution. Rate Covenant Pursuant to the Resolution, the City has covenanted to fix, establish, revise from time to time, whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the products, services and facilities of the System which will always provide Revenues in each year sufficient to pay the aggregate of the amount needed to pay all Cost-of Operation and Maintenance as the same shall become due in such year, plus one hundred ten percent (110%) of the Bond Service Requirement becoming due in such year on the Bonds Outstanding and one hundred percent (100%) of all other deposits to be made pursuant to the Resolution. Such rates, fees, rental or other charges shall not be reduced so as to render them insufficient to provide Revenues for such purposes. Reserve Account The Resolution provides for the establishment and maintenance of a Reserve Account in the Debt Service Fund. Upon delivery of the Series 2001 Bonds, the City shall deposit into the subaccount in the Reserve Account established for the benefit of the Series 2001 Bonds an amount equal to the Reserve Requirement. Pursuant to the Resolution the "Reserve Requirement" is defmed as the lesser of (i) the Maximum Bond Service Requirement for the Series 2001 Bonds, (i) 125% of the Average Annual Bond Service Requirement for the Series 2001 Bonds, or (ii) 10% of the proceeds of th Series 2001 Bonds. Amounts on deposit in each subaccount in the Reserve Account shall be applied in accordance with the provisions of the Resolution solely for the purpose of the payment of maturing principal of amortization installments; and interest on the Bonds Outstanding for which such subaccount was established and for no other Series of Bonds. Therefore, amounts on deposit in the subaccount within the Reserve Account established for the benefit of the Series 2001 Bonds may be used for holders of the Parity Bonds or any Additional Parity Obligations. To provide for the Reserve Requirement for the Series 2001 Bonds the Issuer shall purchase from _ for deposit to the subaccount in the Reserve Account created for the benefit of the Series 2001 Bonds a surety bond in the amount of the Revenue Requirement. Renewal and Replacement Fund The Resolution creates a Renewal and Replacement Fund into which the City is to deposit monthly from the monies remaining on deposit in the Revenue Fund, an amount equal to one-twelfth (l/12th) of five percent (5%) of the Gross Revenues received during the immediately preceding Fiscal Year, such deposit to be continued to be made for the purpose of this fund; provided that no deposit shall be required to be made so long as there is an amount on deposit in the Renewal and Replacement Fund in the amount of 5% of the Gross Revenues received during the immediately preceding Fiscal Year. The monies in the Renewal and Replacement Fund shall be used only for the purpose of paying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System and emergency 0R378176;1 7 , First draft 03/26/01 repairs thereto. Such monies on deposit in such account shall also be used to supplement the Reserve Account, if necessary, in order to prevent a default in the payment of the principal of and interest on the Bonds. Investments Monies in any fund or account created pursuant to the Resolution, with the exception of the Reserve Account, may be- invested and reinvested in Investment Securities which mature not later than the dates on which the monies on deposit therein will be needed for the purpose of such fund or account. Monies in the subaccount in the Reserve Account may be invested and reinvested in Investment Securities maturing not later than five (5) years from the date of acquisition of such investment. All income on such investments, except as otherwise provided in the Resolution, shall be deposited in the respective funds and account from which such investments were made and be used for the purposes thereof unless and until the maximum required amount is on deposit and thereafter shall be deposited in the Revenue Fund. ADDITIONAL PARITY OBLIGATIONS The City may issue additional obligations having an equal lien on the Net Revenues and ranking equally in all other aspects with the Series 2001 Bonds and the Parity Bonds subject to the following conditions as provided in the Resolution: 1. There shall have been obtained and filed with the City a certificate or other statement of an independent certified public accountant of suitable experience and responsibility stating: (a) that the books and records of the City relative to the System have been audited by him; (b) the amount of the Net Revenues of the System, derived for the Fiscal Year preceding the date of issuance of the proposed Additional Parity Obligations with respect to which such certificate is made, adjusted as provided in (2) through (5) below; (c) that the aggregate amount of such Net Revenues, as adjusted, from the System, for such preceding Fiscal Year is equal to not less than one hundred ten percent (110%) of the Maximum Bond Service Requirement on all obligations issued under the Resolution if any, then outstanding and on the Additional Parity Obligations with respect to which such certificate is made. 2. Upon recommendation of the Consulting Engineer, historical Net Revenues of the System may be adjusted by including 100% of the additional Net Revenues, which in the opinion of the Consulting Engineer would have been derived by the City from rate increases adopted and in effect before the Additional Parity Obligations are issued. 3. Upon recommendation of the Consulting Engineers if the Additional Parity Obligations are to be issued for the purpose of acquiring an existing water and/or sewer system the Net Revenues maybe adjusted by including: 100% of the additional estimated Net Revenues ~hich in the written opinion of the Consulting Engineers will be derived from the acquired facility during the first complete Fiscal Year after the issuance of such Additional Parity Obligations (the Consulting Engineers' report shall be based on the actual operating revenues of the acquired utility for a recent l2-month period adjusted to reflect the City's ownership and the City's rate structure in effect with respect to the System at the time of the issuance of the Additional Parity Obligations). 4. Upon recommendation of the Consulting Engineers, if the number of connections as of the first day of the month in which the proposed Additional Parity Obligations are to be issued exceeds the average number of such connections during such Fiscal Year, then the Net Revenues shall be adjusted to include the Net Revenues which would have been received in such Fiscal Year as if those additional connections had also been connected to the System during all of such Fiscal Year. 5. Uponrecommendation of the Consulting Engineer, if the City shall have entered into a contract, which contract shall be for a duration of not less than the fmal maturity of the proposed Additional Parity Obligations, with any public body, whereby the City shall have agreed to furnish services for the collection, treatment or disposal of sewage or agreed to furnish services in connection with any water system, then the Net Revenues during the Fiscal Year shall be increased (to the extent such amounts were not reflected in such Revenues) by the minimum amount which the public 0R378176; 1 8 . First draft 03/26/01 body shall guarantee to pay in anyone year for the furnishing of services by the City, after deducting from such payment the estimated Cost of Operation and Maintenance attributable in such year to such services. 6. The City need not comply with the provisions of paragraph 1 above if and to the extent the Bonds to be issued are Refunding Bonds, if the City shall cause to be delivered a certificate of an independent certified public accountant setting forth the Average Annual Debt Service Requirement (i) for the Bonds then Outstanding and (ii) for all Series of Bonds to be immediately Outstanding thereafter and stating that the Average Annual Debt Service Requirement pursu~t to (ii) above is not greater than that set forth pursuant to (i) above. 7. The City shall not be in default in carrying out of any of the obligations assumed under the Resolution, and all payments required by the Resolution to be made into the funds and accounts established thereunder shall have been made to the full extent required 8. The resolution authorizing the issuance of the Additional Parity Obligations shall recite that all of the covenants contained in the Resolution will be applicable to such Additional Parity Obligations, unless in the opinion of Bond Counsel the failure to make any covenant applicable to such Additional Parity Obligations will not adversely affect the rights of the Holders of any Outstanding Bonds. MUNICIPAL BOND INSURANCE [To Be Provided] DEBT SERVICE REQUIREMENTS The following table shows the scheduled annual principal and interest requirements on the Series 2001 Bonds, total annual debt service on the Series 2001 Bonds, total debt service for the Parity Bonds and combined debt service for all such Bonds. Series 2001 Bonds Year Ending (October 1) Principal Interest Aggregate Series 2001 Bonds Debt Service Parity Bonds Debt Service Total Series 2001 Bond and Parity Bonds Debt Service 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 0R378176;1 9 2020 2021 TOTAL * Includes accrued interest of $ 0R378176;1 , First draft 03/26/01 on the Series 2001 Bonds. r 10 , First draft 03126/01 ESTIMATED SOURCES AND USES OF FUNDS Sources of Funds: Series 2001 Bond Proceeds Less Original Issue Discount Other Available Moneys(l) Accrued Interest Total Estimated Sources of Funds $ - ($ .~ $ - $ $ Uses of Funds Deposit of Accrued Interest to Interest Account Deposit to CO,nstruction Fund Underwriter's Discount Cost oflssuance(2) $ $ $ Total Estimated Uses of Funds $ (1) Includes costs of issuance, and other fees and expenses including the municipal bond insurance premium and Reserve Account surety bond premium associated with the issuance of the Series 2001 Bonds. CITY OF WINTER SPRINGS, FLORIDA WATER AND SEWER SYSTEM mSTORICAL STATEMENT OF PRO-FORMA DEBT SERVICE COVERAGE FOR YEARS ENDED SEPTEMBER 30, 1996 THROUGH 2000 1996 1997 1998 1999 2000 Operating Revenues $5,021,899 5,098,941 $5,302,148 $5,652,715 $5,697,412 - User Charges Connection Fees 327,903 305,914 376,942 1,088,862 432,808 Interest 197,526 212,264 244,022 252,455 352,152 Miscellaneous 26,421 Q 1. 000 5.660 , 34.389 Total Income $5,573,749 $5,617,119 $5,924,112 $6,999,692 $6,516,761 Direct Operating Expensesl $2.569.791 $2,517.191 $2.696.506 $3.312.000 $3.191.228 Total Net Revenues $3,003,958 $3,099,928 $3,227,606 $3,687,692 $3,325,533 Available for Debt Service Maximum Bond Requirement for Series 2001 Bonds and Parity Bonds2 Coverage Series 2001 "Direct Operating Expenses" exclude depreciation, interest expense and capital expendi1!ITes. Assumes 2002 Bonds are not issued. Source: 1996-2000 information derived from City of Winter Springs Comprehensive Annual Financial Reports. 0R378176;1 11 , First draft 03126/01 THE SYSTEM The Resolution defines the "System" as all properties and assets, real and personal, tangible and intangible, owned or operated by the City which properties and assets include those properties and assets described as the Seminole System and the City System in the resolution of the Issuer adopted September 28, 1992 merging the City System and the Seminole System, used or useful for the collection, transmission, treatment, and disposal of sewage, and for the supply, storage, treatment, transmission and distribution of water, and all properties and assets hereafter constructed or acquired as additions, improvements, betterments or replacements thereto and extensions thereof. History , The System is the result of the combination of two private utilities acquired by the City. Although for debt purposes the System is a single utility, the City from an operational and permitting perspective treats its sewage facilities as consisting of the East System and the West System as hereinafter described. Winter Springs was previously known as the Village of North Orlando. This area was 'originally a planned development by Florida Land Company. In the 1950's, Florida Land Company commenced development and a utility called North Orlando Water and Sewer Company was formed. This utility company was acquired by the City in 1984 and serves the western half of the current City limits. In the 1970's, Winter Springs Land and Development started a planned unit development currently known as Tuscawilla. The utility company serving this area was Seminole Utilities. Seminole Utilities was acquired by the City in 1990. This utility served the eastern half of the City. Over the last ten years the City has interconnected both systems physically and administratively to provide a cost effective and efficient utility system. Service Area The service area of the System is defmed as the Winter Springs city limits plus a small commercial area in the neighboring City of Oviedo (sewer only). In connection with the issuance of its 1992 Bonds, the City consolidated for bonding purposes the East and West Systems. All new water and sewer customers in the service area are, to the extent permitted by the law, required to connect to the System. , The City has a policy that to obtain service, the area must be incorporated into the City. All areas within the City limits are served with the exception of the Ranchland area, which are large country estate type lots served by septic systems and private wells. As improvements (such as paving projects) are performed, City water service is extended into the Ranchland area. It is estimated that this area represents [approximately 150 single-family units]. The projections contained in the table below are based on certain assumptions and estimates and no representation is made that any of the assumptions or estimates are valid or that any of such projections will be realized. ' 0R378176;1 12 Fiscal Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 , First draft 03/26/01 Historical and Projected Customer Growth (ERCs) Water Sewer West East West East ERCs Population ERCs Population ERCs Population ERCs Population 4,824 14,303 4,930 12,918 4,383 12,995 4,564 12,520 4,959 14,667 5,138 13,515 4,518 13,360 4,917 13,290 5,101 15,051 5,319 14,035 4,660 13,743 5,099 13,813 5,251 15,451 5,504 '14,565 4,803 14,133 ,5,272 14,309 5,524 16,188 5,676 15,059 5,066 14,843 5,442 14,797 5,690 16,674 5,846 15,511 5,218 15,288 5,605 15,241 5,860 17,174 6,022 15,976 5,375 15,747 5,773 15,698 6,036 17,689 6,202 16,455 5,536 16,219 5,947 16,169 6,217 18,220 6,388 16,949 5,702 16,706 6,125 16,654 6,404 18,766 6,580 17,458 5,873 17,207 6,309 17,154 6,596 19,329 6,777 17,981 6,049 17,723 6,498 17,668 Fiscal year ending September 30. Historical data is based on the City fIles and the projected growth is based on the historical rate of 3 %. Organization The System has been organized as a Utility Enterprise Fund with management and administration provided through City staff. As such, the System is responsible for generating the revenues necessary to fund its activities and pay debt. The City does not have a policy or a practice of making discretionary transfers from the Utility Enterprise Fund to the General Fund. The Utility Enterprise Fund is charged by the General Fund for indirect costs based on an allocation plan to recover the System's share of administrative costs of services rendered such as accounts payable, personnel and information systems support. The City has an existing staff of managers and directors who have experience in utility management, fmancing and operations. The personnel strategically involved in System management include the following: Mr. Ronald McLemore has been the City Manager since 1996. Mr. McLemore has been in leadership positions in county and local government for 30 years. Most recently, Mr. McLemore served as Assistant County Administrator for Martin County from 1993 to 1996. Mr. McLemore holds a Masters Degree in Public Administration from the University of Georgia. He is a member of the International City Management Association, American Society for Public Administration, and was past president of the Winter Springs Rotary Club. In his government positions, he has been responsible for the financing and construction of numerous water and wastewater systems, including acquisitions and systems integration. Ms. Louise Frangoul has joined the City as Finance Director in 2000. Ms. Frangoul has 10 years of experience in both the public and private accounting sector. Prior to her position with the City, she was employed at the Central Florida YMCA as the Corporate Controller. The "Y" is a $30 million dollar organization with 20 branch locations. Prior to her employment with the Y, Ms. Frangoul spent a total of 7 years with Coopers & Lybrand, and 0R378176; 1 13 . First draft 03i26/0 1 a local CPA fIrm where she was responsible for auditing the fmancial records for Orange County, Marion County, Town of Medley, City of Hialeah and various other governmental and non-profIt entities. 'She is a Certified Public Accountant in the State of Florida and holds a Master's of Business Administration from Rollins College. Ms. Frangoul is a member of both the American and Florida Institutes of Certified Public Accountants. Ms. Frangoul oversees 9 City employees and is responsible for all fmancial functions for the City including fmancial management, accounting, payroll, budgeting, cash receipts, utility billing, investments and debt functions. Ms. Frangoul reports directly to the City Manager. Mr. Kipton Lockcuffhas been the Public Works/Utility Director for the City since 1991. Prior to that, Mr. Lockcuff worked as a consulting engineer for three years and also as Assistant Utility Director for the City of Margate for four years. Mr. Lockcuff is a registered professional engineer in the States of Florida and Pennsylvania and has a Bachelor's Degree in Environmental Engineering from Penn State University. He has significant past experience managing municipally and contract operating privately owned water and wastewater utilities, including administration, organization and training for the construction, operation and maintenance of water and wastewater facilities. Mr. Lockcuff reports directly to the City Manager. Mr. Doug Taylor is the Utility Superintendent and has been with the City since 1984. Mr. Taylor has over 30 years experience in water and wastewater treatment plant operations, wastewater collection system maintenance, water distribution system maintenance, training, and utility construction. Mr. Taylor reports directly to the Utility Director. Administration Division This Administrative Division of the System is one of three units comprising the System and consists of three personnel and is responsible for the supervision of the three divisions of the Utilities Department, as well as certain fmancial activities involved with the System. The administrative personnel coordinate and supervise the operation and construction of improvements and expansion to the water and wastewater facilities. Regular reporting requirements of the various local, state and federal regulatory agencies involved in water and wastewater issues are the responsibilities of the Administration Division, as well as the continued monitoring and analysis of the infrastructure required for System operation. Water and Wastewater Treatment Plant Operations Division The Water and Wastewater Treatment Plant Operations Division consists of 10 water and wastewater treatment plant operators, all of which are state certifIed. The water plant operations division oversees the supply, treatment, and storage of potable water. In addition, the staff associated with water plant operations is also responsible for providing customers with a safe and reliable supply of drinking water which meets all local, state and federal standards for potable water quality. The wastewater treatment plant operators are responsible for the operation, maintenance and regulatory reporting of such operations of the wastewater treatment facilities. Water Distribution and Wastewater Collection Division The Water Distribution and Wastewater Collection Division consists of foUr certifIed maintenance mechanics, service workers and general laborers. This division is responsible for the maintenance of raw water mains, water transmission and distribution mains, gravity sewers and wastewater force mains throughout the City. This division services over 800 fIre hydrants and 34 wastewater lift stations located throughout the System. This division repairs leaks and major line breaks, new main installation, lift station repairs, correction of wastewater backups and general routine preventive and emergency water and wastewater treatment plant maintenance. 0R378176;1 14 , First draft 03/26/0 I Existing Water System The water system serves approximately 5,558 connections (approximately 15,223 people) on the former east system and 5,199 connections (approximately 16,409 people) on the former west system for a total of 10,757 connections (31,632 people). The systems are interconnected by the distribution system. The distribution system is supplied from three water treatment plants; one located in the eastern portion of the service area (Northern Way), one located in the northwest part of the service area (Clear Court), and one located in the southwest part of the service area (Bahama Road). The water treatment facilities use a total of 7 wells and 9 thigh service pumps. Water is stored in 4 (1 one million and 3 500,000-galIon) storage tanks. There are approximately 753,000 lineal feet of water lines in the system ranging in size from 4-inches to 18- inches, and ranging in material from steel to asbestos cement to PVC and ductile iron. There are over 800 fire hydrants in the System. The oldest materials are the asbestos cement and steel installed from 1959 to around 1975. The PVC and ductile was installed from 1970 to present. Water treatment plants do not have "operations" permits. All plants are currently in full compliance with the regulations of the State of Florida and have excess capacity. Water supply is permitted by the St. Johns River Water Management District ("SJRWMD"). The Consumptive Use Permit (CUP), Permit Number 8238, expires on October 8,2006 and is based on historical data and growth projections provided by the City to SJRWMD. The City exceeded permitted flows in 1998 and 1999 by 5.2% and 7.8% respectively. Since 1998, the Central Florida area has been in a drought condition and higher than normal consumption is to be expected. If an entity such as the City consistently exceeds the allocated value or if they exceed the allocated value by over 10% for anyone year, the entity will be required to appear before the SJRWMD staff to explain the reason(s) for the overage. If necessary, a new permit and/or modification may be required. There are no,defmitive rules governing overages. The 2000 Project The project, financed from a portion of the net proceeds of the 2000 Bonds and other available funds will include the construction of extensions of the sewer and water system to the area of the City known as the Town Center area. The estimated cost of such project is set forth below. Improvement Estimated Cost Wastewater Force Main Improvements $1,150,000 Water Line Extensions and Improvements $770,000 Lift Station Improvements $200,000 Gravity Sewer Extensions $50,000 " Reclaimed Augmentation System $580,000 Utility Operations Facility $1,000,000 Well Number 4 at WTP 1 $250.000 TOTAL $4,000,000 The City expects this project to be complete in the next 2 years. 0R378176;1 15 . First draft 03/26/01 Historical and Projected Water Flows The projections contained in the table below are based on certain assumptions and estimates and no representation is made that any of the assumptions or estimates are valid or that any of such projections will be realized. Population Average Daily Flow Total Year Residential Commercial Residential Commercial ADF Actual ADF (MGD) (MGD) (MGD) (MGD) 1990 21,555 3.60 3.60 1991 22,292 3.06 3.06 1992 23,057 500 3.27 0.05 3.32 3.34 1993 23,848 608 3.22 0.06 3.28 3.64 1994 24,670 758 3.92 0.08 4.00 3.52 1995 25,521 897 3.18 0.09 3.27 3.60 1996 26,403 3,420 3.16 0.34 3.50 3.77 1997 27,317 3,845 3.14 0.38 3.52 3.81 1998 27,859 4,336 3.21 0.43 3.64 4.28 1999 28,415 4,905 3.28 0.5 3.78 4.31 2000 28,986 5,567 3.35 0.56 3.91 4.595 2001 29,574 6,339 3.42 0.64 4.06 2002 30,175 7,242 3.5 0.72 4.22 2003 ' 30,794 8,301 3.58 0.83 4.41 2004 31,429 9,548 3.66 0.96 4.62 2005 32,623 11 ,019 3.74 1.1 4.84 2006 32,753 12,758 3.82 1.27 5.09 2007 33,442 14,820 3.9 1.48 5.38 2008 34,151 17,269 3.99 1.73 5.72 2009 34,878 17,760 4.09 1.78 5.87 2010 35,625 18,290 4.18 r 1.83 6.01 Source - Amendment #4: Master Water and Wastewater Plans, 2/15/92. Available capacity is 6.7 MGD for all wastewater treatment plants combined. Water conservation goals were factored into 1995 and beyond in the plan. 0R378176; 1 16 . First draft 03/26/01 Existing Sewer System The wastewater system serves approximately 15,000 people on the West System and approximately 15,000 on the East System from two separate wastewater facilities for a total of approximately 30,000 people. Each facility is permitted separately and sewage flow cannot be switched between facilities. However, the effluent/reclaimed distribution systems are interconnected to allow complete disposal flexibility between the facilities and maximize the utilization of reclaimed water for beneficial reuse. Both facilities provide reclaimed water to golf courses and also utilize restricted access spray irrigation sites and percolation ponds. Each wastewater treatment location has two circular, field erected, steel waste-activated sludge plants, two parallel tertiary fllters, a cWorine contact chamber, effluent holding ponds, and an effluent pumping station. The systems meet full Class I Reliability Criteria. The West facility, located in the northwest comer the City on a 19.1 acre tract, is capable of treating 2.5 MGD (design capacity) of wastewater per day with public access disposal capability, currently permitted for 2.07 MGD of disposal. The current three-month ADF average ending February, 2001, is 0.989. Seventeen (17) lift stations convey the wastewater to this facility. Improvements to the plant in the last 10 years are the addition of a 2.0 MG effluent storage tank, effluent transfer pump station, effluent distribution pump station, and the installation of a third blower. In the last five years, a larger auxiliary generator was installed and the old generator was relocated to Lift Station 7-W. The East facility, located in the eastern portion of the city on an 11.88 acre tract, is capable of treating 2.24 MGD (design capacity) with an effluent disposal capacity of 2.012 MGD. The current three-month ADF ending, February 2001, is 0.930 MGD. Seventeen (17) lift stations convey the wastewater to this facility. Recent improvements in the last five years to this facility include digester addition, cWorine contact chamber, effluent transfer pump station, 3.0 million gallon reclaimed water storage tank, effluent distribution pump station, blowers were upgraded, and an auxiliary generator was installed to handle the entire facility. The collection and transmission system consists of 527,000 lineal feet of gravity sewer ranging in size from 6-inch to l5-inch with 2,365 manholes and 87,500 lineal feet of force main ranging in size from4-inch to 20-inch. The system was first constructed on the west side in 1959 with additions occurring over the years by mostly residential development. The east side was constructed starting in 1974 as the Tuscawilla PUD and serves predominantly residential development. This original PUD area is close to its build-out capacity. As part of the wastewater system, a reclaimed distribution system was developed to dispose of the effluent from the wastewater reclamation facilitie~. The reclaimed distribution system serves percolation ponds, parks, golf courses, rights-of-way, and residential areas with public access quality water. There are currently 1,546 residential customers on this alternative water source. In addition, the system serves two golf courses, several schools, several parks and other public areas. There are approximately 177,000 lineal feet of reclaimed water lines in the system ranging in size from four (4)-inches to eighteen (18)-inches. These lines are predominantly PVC with some DIP. The system is relatively new with construction starting in the 1980's and a major portion of the residential distribution occurring in the 1990' s. If reclaimed water is available, reclaimed distribution systems are required to be constructed by the land developer and dedicated to the City after construction. The City recently received designlbuild proposals for a telemetry system to monitor the operation of the water facilities (including wells), lift station facilities, and wastewater facilities. This project is a replacement of a very minimal telemetry system that monitors on-site treatment operations. Equipment will be installed to improve the reliability of the operations, decrease response time to changes in plant performance and provide additional record- keeping capabilities. These improvements are expected to be completed in fiscal year 2000/01 for a cost of approximately $400,000 and will not be fmanced with proceeds of the Series 2001 Bonds. 0R378176;1 17 . First draft 03/26/01 Winter Springs Historical and Projected Sewer Flows West Year Population Average Daily Flow Residential ' Commercial Total ADF Actual ADF Residential Commercial (MGD) (MGD) (MGD) MGD) 1990 10,612 0.84 1991 10,900 0.92 1992 11 , 197 500 1.12 0.05 1.17 0.93 1993 11 ,501 608 1.15 0.06 1.21 0.93 1994 11,814 758 1.18 0,08 1.26 1.07 1995 12,135 897 1.21 0.09 1.30 1.08 1996 12,465 1,090 1.25 0.11 1.36 1.21 1997 12,804 1,324 1.28 0.13 1.41 1.11 1998 12,904 1,609 1.29 0.16 1.45 1.16 1999 13 ,004 1,955 1.30 0.20 1.50 1.09 2000 13,106 2,375 1.31 0.24 1.55 1.02 2001 13,209 2,886 1.32 0.29 1.61 2002 13,312 3,506 1.33 0.35 1.68 2003 13,416 4,260 1.34 0.43 1.77 2004 13,521 5,176 1.35 0.52 1.87 2005 13,627 6,289 1.36 0.63 1.99 2006 13,733 7,641 1.37 0.76 2.14 2007 13,840 9,284 1.38 0.93 2.31 2008 13 ,948 11,280 1.39 1.13 2.52 2009 14,057 11 ,280 1.41 1.13 2.53 2010 14,167 11,280 1.42 .1.13 2.54 Source: Amendment #4: Master Water and Wastewater Plans, 2/15/92. Facility design capacity is 2.5 MGD. 0R378176; 1 18 , First draft 03/26/01 Historical and Projected Sewer Flows East Population Average Daily Flow Year Residential Commercial Residential Commercial Total ADF Actual ADF (MGD) (MGD) (MGD) (MGD) 1990 9,909 0.73 0.73 1991 10,349 0.74 0.74 1992 10,809 1.08 1.08 0.77 1993 11,208 1.12 1.12 0.94 1994 11,790 1.18 1.18 0.96 1995 12,313 1.23 1.23 0.96 1996 12,860 2,330 1.29 0.23 1.52 0.92 1997 13,431 2,521 1.34 0.25 1.60 1.07 1998 13,881 2,727 1.39 0.27 1.66 0.95 1999 14,345 2,950 1.43 0.30 1.73 0.98 2000 14,286 3,192 1.43 0.32 1.75 0.94 2001 16,322 3,453 1.63 0.35 1.98 2002 15,385 3,736 1.58 0.37 1.96 2003 16,365 4,041 1.64 0.40 2.04 2004 16,913 4,372 1.69 0.44 2.13 2005 17,479 4,730 1.75 0.47 2.22 2006 18,065 5,177 1.81 0.52 2.32 2007 18,669 5,536 1.87 0.55 2.42 , r 2008 19,294 5,~89 1.93 .060 2.53 2009 19,940 6,480 1.99 0.65 2.64 2010 20,608 7,010 2.06 0.70 2.76 Source: Amendment #4: Master Water and Wastewater Plans, 2/15/92. Facility design capacity is 2.24 MGD. 0R378176;1 19 . First draft 03/26/01 Rates and Charges The City has a computer billing and collection system in-house. Each customer is billed monthly by the utility for services provided. The utility utilizes a billing system of a base charge, plus a usage charge per 1,000 gallons. To encourage conservation of water resources, the City has implemented an incremental block fee system. The higher the usage, the higher the cost per 1,000 gallons. The tariff schedule is listed below. A residential customer using 10,000 gallons per month (typical customer) would pay a water and sewer bill of $45.23, excluding taxes. The rates shown below are exclusive of taxes, franchise fees, surcharges, or other rate adjustments. The utility has the authority to discontinue water and sewer service for rionpayment of water and sewer service. In addition to these charges, connection fees are also required as shown in the tariff schedule. Monthly Residential and General Service Water Rates Meter Size Base Facility Charge 5/8" x *" (residential) 1" 1 112" 2" 3" 4" 6" $3.58 8.94 17.89 28.62 57.23 89.50 178.85 Gallonage charge per 1 ,000 gallons $0.91 Individually metered residential customers: Gallons Charge Per Thousand (] . 000) Gallons 0- 10,000 10,001 - 15,000 15,001 - 20,000 20,001 - 25,000 25,001 - 30,000 Over 30,000 " $0.91 1.25 1.50 1.75 2.00 2.50 Irrigation Meters: 0R378176;1 20 Gallons o - 5,000 5,001 - 10,000 10,001 - 15,000 15,001 - 20,000 Over 20,000 Meter Installation Fees Meter Size 5/8" x 3/4" 5/8" x 3/4", double check 5/8" x' 14", double check - remote read 1" plus backflow prevention device 1 "Iz" plus backflow prevention device 2" with separate double check valve Above 2" with backflow prevention device Sewer Rates Meter Size 5/8" 1" 1 'Jf.I" 2" 3" 4" 6" Gallonage charge per 1,000 gallons Reclaimed Rates Non-metered Residential Per Month (No gallonage charge) Metered Commercial Per Month (includes 20,000 gallons) Over 20,000 Gallons - per 1,000 gallons [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 0R378176;1 21 . First draft 03/26/01 Charge Per Thousand (] . 000) Gallons $1. 25 1.50 1.75 2.00 2.50 Charge $120.00 150.00 225.00 200.00 450.00 550.00 Actual Cost Charge $6.65 16.63 33.24 53.19 106.37 166.25 332.41 $2.59 $5.00 $5.00 0.25 . First draft 03/26/01 COMPARISON OF USER CHARGES Base Fee Consumption Fee Total Meter Size $/1000 gal Total WINTER SPRINGS Water 5/8" x 3/4" $3.58 $0.91 $9.10 ' $12.68 2" $28.62 $0.91 $9.10 $37.72 Sewer 5/8" x 3/4" $6.65 $2.59 $25.90 $32.55 2" $53.19 $2.59 $25.90 $79.09 CASSELBERRY Water 5/8" x 3/4" $4.50 $0.95 $9.50 $14.00 2" $35.97 $0.95 $9.50 $45.47 Sewer 5/8" x 3/4" $7.85 $2.66 $31.70 $39.55 2" $64.45 $2.66 $31.70 $96.15 OVIEDO Water 5/8" x 3/4" $5.30 $1.00 $7.00 $12.30 2" $5.30 $1.00 $7.00 $12.30 Sewer 5/8" x 3/4" $11.00 $2.63 $26.30 $37.30 2" $66.00 $2.63 $26.30 $92.30 LONGWOOD Water 5/8" x 3/4" $6.25 $1.05/$1.10 $8.50 $14.75 2" $6.25 $1.05/$1.10 $8.50 $14.75 Sewer 5/8" x 3/4" $26.70 " $0.00 $0.00 $26.70 2" $26.70 $0.00 $0.00 $26.70 SANFORD Water 5/8" x 3/4" $3.14 $1.21$1.45 $14.00 $17.14 2" $18.85 $1.2/$1.45 $14.00 $32.85 Sewer 5/8" x3/4" $4.69 $2.21$3.31 $30.88 $35.57 2" $28.17 $2.2/$3.31 $30.88 $59.05 0R378176;1 22 , First draft 03/26/01 'SEMINOLE COUNTY Water 5/811 x 3/411 $6.60 $0.65 $6.50 $13.10 2" $39.60 $0.65 $6.50 $46.10 Sewer 5/8" x 3/4" $11.35 $2.59 $25.90 $37.25 2" $11.35 $2.59 $25.90 $37.25 Notes: 1. User charges are based on a total usage of 10,000 gallons. 2. Oviedo water base includes first 3,000 gallons. Sewer base is $11.00 per ERU. 3. Longwood base includes fIrst 2,000 gallons. From 2k to 9k is at a rate of $1.05 and over 9k = $1.10. 4. Sanford base includes first 2,000 gallons. 5. Seminole County charges'base fees of$6.60 per ERC for water and $11.35 per ERC for sewer. 6. The 2" meter is assumed to have 6 ERUs. 7. In City rates only, where applicable. (~ 0R378176;1 23 . First draft 03726/01 LITIGATION There is not now pending any litigation restraining or enjoining the issuance or delivery of the Series 2001 Bonds or questioning or affecting the validity of the Series 2001 Bonds or the proceedings and authority under which ' they are to be issued. Neither the creation, organization or existence of the City, nor the title of the present City COnmllssion members or other officials of the City to their respective offices is being contested. There is no litigation pending which in any manner questions the right of the City to issue the Series 2001 Bonds in accordance with the provisions of the Resolution and the laws of the State of Florida. The City experiences routine litigation and claims incidental to the conduct of its affairs. The City carries substantial insurance for these exposures, and pending claims are defended by and, if necessary, are anticipated to be paid by the insurance carriers. LEGAL MATTERS Certain legal matters incident to the validity of the Series 2001 Bonds and the issuance thereof by the City are subjectto the approving opinion of Akerman, Senterfitt & Eidson, P.A., Orlando, Florida, Bond Counsel. Copies of such opinion will be available at the time of the delivery of the Series 2001 Bonds and the proposed form of such opinion is set forth in Appendix E hereto and reference is made thereto for the terms thereof. The actual legal opinion to be delivered may vary from that text if necessary to reflect facts and law on the date of delivery. The opinion will speak only as of its date, and subsequent distribution of its by recirculation of the Official Statement or otherwise shall create no implication that subsequentto the date of the opinion Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in the opinion. Certain legal matters will be passed upon for the City by Anthony A. Garganese of Brown, Ward, Salzman & Weiss, P,A., City Attorney, Orlando, Florida and by Akerman, Senterfitt & Eidson, P.A., Disclosure Counsel. . TAX EXEMPTION General The Internal Revenue Code of 1986 (the "Code") establishes certain requirements which must be met subsequent to the issuance and delivery of the Series 2001 Bonds for interest thereon to be and remain excluded from gross income for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Series 2001 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issue of the Series 200 I Bonds. Those requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2001 Bonds and other amounts are to be invested and require, under certain circumstances, that certain excess investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. The City has covenanted in the Resolution to comply with each such requirement. .~ In the opinion of Bond Counsel, assuming continuous compliance by the City with the Code and the covenants in the Resolution, under existing statutes, regulations, published rulings, and judicial decisions, and subject to the conditions described below, interest on the Series 2001 Bonds is excludable from gross income for federal tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax on corporations. Failure by the City to comply subsequent to the issuance of the Series 2001 Bonds with certain requirements of the Code regarding the use, expenditures and investment of Series 2001 Bond proceeds and the timely payment of certain investment earnings to the Treasury of the United States may cause interest on the Series 2001 Bonds to become included in gross income for federal income tax purposes retroactive to their date of issue. The City has covenanted in the Resolution to comply with all provisions of the Code necessary to, among 0R378176;1 24 , First draft 03126/01 other things, maintain the exclusion from gross inc,ome of interest on the Series 2001 Bonds. In rendering its opinion, Bond Counsel has assumed continuing compliance with such covenants. The opinion on federal tax matters will be based on and will assume the accuracy of certain representations and certifications and compliance with. certain covenants of the City to be contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series 2001 Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the certifications and representations made by the City. Prospective purchasers of the Series 200 I Bonds should be aware that ownership of the Series 2001 Bonds may result in other federal tax consequences to certain taxpayers. In the opinion of Bond Counsel, the Series 200 1 Bonds are exempt from all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. Interest on the Series 2001 Bonds may be subject to state or local income taxation under applicable state or local laws in other jurisdictions. Purchasers of the Series 2001 Bonds should consult their tax advisors as to the income tax status of interest on the Series 2001 Bonds, in their particular state or local jurisdictions. During recent years, legislative proposals have been introduced in Congress, and in some cases, enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2001 Bonds. In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar in nature to the Series 2001 Bonds. From time to time, legislative proposals may be introduced which could have an effect on both the federal tax consequences resulting from the ownership of the Series 2001 Bonds and their market value. No assurance can be given that any such legislative proposals, if enacted, would not apply to, or would not have an adverse effect upon, the Series 2001 Bonds. Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the Series 2001 Bonds may affect the tax status of interest on the Series 2001 Bonds. Moreover, except as stated above, Bond Counsel expresses no opinion regarding federal or state tax consequences arising with respect to the Series 2001 Bonds. Prospective purchasers of the Series 2001 Bonds are advised to consult their own tax advisors as to the. applicability of other federal or state tax consequences. Assuming the City can rectify certain representations and fmdings made by the City in the Resolution upon the issuance of the Series 2001 Bonds, the Series 2001 Bonds are "qualified tax-exempt obligations" (within the meaning of Section 265(b)(3) of the Code), and, in the case of certain financial institutions (within the meaning of Section 265(b)(3) of the Code), a deduction is allowed for 80% of that portion of the interest expense of such fmancial institutions which shall be allocable to interest on the Series 2001 Bonds. (' TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT Under the Code, the difference between the maturity amounts of the Series 2001 Bonds maturing in the years _, _, _, _, _ and years _ through _ (the "Discount Bonds"), and the initial offering price to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers, at which price a substantial amount of the Discount Bonds of the same maturity was sold is "original issue discount." Original issue discount will accrue over the term of such Discount Bonds on a compounded basis. A purchaser who acquires such Discount Bonds in the initial offering at a price equal to the initial offering price thereof to the public will be treated as receiving an amount of interest excludable from gross income for federal income tax purposes equal to the original issue discount accruing during the period he or she holds such Discount Bonds, and will increase his or her adjusted basis in such Discount Bonds by the amount of such accruing discount for purposes of 0R378176;1 25 , First draft 03726/01 determining taxable gain or loss on the sale or other disposition of such Discount Bonds. The federal income tax consequences of the purchase, ownership and sale or other disposition of such Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those above. Owners of such Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, redemption or other disposition of Discount Bonds and with respect to the state and local tax consequences of owning and disposing of such Discount Bonds.' UNDERWRITING The Underwriters shown on the cover page hereof have agreed, subject to certain conditions precedent to purchase the Series 200 I Bonds at a price of $ ($ original par amount, less underwriters' discount of$ and less original issue discount of$ ), plus accrued interest. The Underwriters have furnished the information on the cover page of this Official Statement pertaining to the public offering prices of the Series 2001 Bonds. The public offering prices of the Series 2001 Bonds may be changed from time to time by the Underwriters, and the Underwriters may allow a concession from the public offering prices to certain dealers. None of the Series 2001 Bonds will be delivered by the City to the Underwriters unless all of the Series 2001 Bonds are so delivered. FINANCIAL ADVISOR Public Financial Management, Inc., Orlando, Florida, has served as financial advisor to the City in connection with the issuance of the Series 4001 Bonds. INVESTMENT POLICY The City considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. During the 1998 fiscal year, the City adopted GASB Statement No. 31, Accounting and Financial Reporting/or Certain Investments and External Investment Pools. As a result, all investments are presented at fair value. The City Charter authorizes the City to invest in direct obligations of or obligations guaranteed by the Department of the Treasury of the United States of America, obligations of specific federal agencies of the United States of America, bondS, notes, or other evidence of indebtedness issued by the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, secured repurchase agreements, bankers' acceptance, money market, commercial paper, certificates of deposit, and the Local Government Surplus Funds Trust Fund. All investments must be insured, registered, or held by the City or a trustee in the City's name. RATINGS Standard & Poor's Ratings Services and Fitch mCA, Inc., have assigned ratings of "_" and "_," respectively, to the Series 2001 Bonds, with the understanding that, upon delivery of the Series 2001 Bonds a municipal bond insurance policy will be issued by Financial Guaranty. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same, at the following addresses: Fitch mCA, Inc., One State Street Plaza, New York, New York 10004 and Standard & Poor's Ratings Services, 55 Water Street, New York, New York 10041. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agenCies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Series 2001 Bonds. 0R378176;1 26 . First draft 03726/01 FINANCIAL STATEMENTS The City's general purpose fmancial statements for its fiscal year ended September 30, 2000 appearing in Appendix "B" hereto have been audited by McDirmit, Davis, Puckett & Co., P .A., independent auditors, as stated in their report appearing therein. CONTINUING DISCLOSURE The City has agreed and undertaken for the benefit of Series 2001 Bondholders and in order to assist the Underwriters in complying with the continuing disclosure requirements of Securities and Exchange Commission Rule 15c2-12 (the "Rule"), to provide certain fmanciaI information and operating data relating to the City and the Series 2001 Bonds in each year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events, if material. Such undertaking shall only apply so long as the Series 2001 Bonds remain outstanding under the Resolution. The Annual Report and audited fmancial statements will be filed annually by the City pursuant to the undertaking with each Nationally Recognized Municipal Securities Information Repository ("NRMSIRs") described in the Continuing Disclosure Certificate (Appendix G hereto), as well as any state information repository that is subsequently established in the State of Florida (the "SID"). The notices of material events will be filed by the City with the Municipal Securities Rulemaking board or the NRMSIRs and with the SID. The specific nature of the information to be contained in the Annual Report and the notices of material events are described in the Appendix G. With respect to the Series 2001 Bonds, no party other than the City is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the aforementioned Rule. The City failed to timely provide its Annual Report due March 31,2000 which it had agreed to provide in connection with the issuance of its Improvement Refunding Revenue Bonds, Series 1999. The City has now provided such Annual Report to the NRMSIRs. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of the arithmetic computations showing the adequacy of the maturing principal and interest on the securities to be acquired with a portion of the proceeds of the Series 2001 Bonds, together with other funds available described under "THE PLAN OF REFUNDING," have been verified by , independent certified public accountants. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Section 517.051, Florida Statutes, and the regulations promulgated thereunder (the "Disclosure Act") required that the City make a full and fair disclosure of any bonds or other debt obligations that it has issued or guaranteed that are or have been in default as to principal or interest at anytime after December 31,1975 (including bonds or other debt obligations for which it has served only as a conduit issuer.such as industrial development or private activity bonds issued on behalf of private buSinesses). The City is not and has not since December 31, 1975 been in default as to principal and interest on its bonds or other debt obligations. Although the City is not aware of any defaults with respect to bonds or other debt obligations as to which it has served only as a conduit issuer, it has not undertaken an independent review or investigation of such bonds or other obligations. The City does not believe that any information about any default would be considered material be a reasonable investor in the Series 2001 Bonds because the City was not liable to pay the principal of or interest on any such bonds except from payments made to it by the private companies on whose behalf such bonds were issued and no funds of the City were used to pay such bonds or the interest thereon. 0R378176;1 27 , First draft 03126/01 ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 2001 Bonds upon an event of default under the Resolution and any policy of insurance referred to herein are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, the remedies specified by the federal bankruptcy code, the Resolution, the Series 2001 Bonds and any policy Of insurance referred to herein may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2001 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. MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations offact, 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 2001 Bonds. The information contained above is neither guaranteed as to accuracy or completeness nor to be construed as a representation by the City or the Underwriters. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder is to create, under any circumstances, any implication that there has been no change in the affairs of the City from the date hereof. This Official Statement is submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, as a whole or in part, for any other purpose. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. CERTIFICATE AS TO OFFICIAL STATEMENT The execution and delivery of this Official Statement has been duly authorized by the City Commission of the City. At the time of delivery of the Series 2001 Bonds to the Underwriters, the City will provide to the Underwriters a certificate (which may be included in a consolidated closing certificate of the City), signed by those City officials who signed this Official Statement, relating to the accuracy and completeness of certain materials in this Official Statement and to its being a final official statement in the judgment of the undersigned for the purposes of SEC Rule 15c2-12(b )(3). CITY OF WINTER SPRINGS, FLORIDA By: Mayor By: City Manager 0R378176; 1 28 First draft 03726/01 APPENDIX B City of Winter Springs, Florida General Purpose Financial Statements for the Year Ended September 30, 2000 :~. 0R378176;1 :\. -"'''' l! "3.!! t.;:OC'J ,5 ~ ~ -a.!!e ~' ~ So > 0 :'::cN ~.g ~ ,~.l'l " _'_ It'''I c:.2 - ~g-3 .!! ...."" ~~~ _ 0 " .~ ii,~ t.::: " "' <;:;"'- O.::Elo Ill! ~ -:; ~ " ~.5 8 .., .g Jl Jl ".~ 0'6"" -::: .l:l'~ l.i;!,a ~ ~.g a.s'~ 8 g 0 g ~] l! !!.'S >.~t: ]~!!. s'" " 12 $l'~ ~ l!.. o &5 ~ >.- ~ g g a ...N.. 8 .~ ~ ~~:... .8Jl~ -'oi: ~ '* ~ III '" .!! c ~.l'l ]"'''' Ql!:ii 1Il~8 -Jlo ~= ~ '" .2 i! .8 ~.~ c'l8:: ~]J: s~ c! ... ~t1ji "8~.. ~~ ~ ~~.! ~.g ~ .~.~u -.- ..!! ~g... o ... " 0 d o.r~ "fl gp",= .2S'" .9~l _0':: .il, l; ~ ~~~ e 'J:J~ '" a 0 .5 8 ~ ~=.!S ..!! !II ~ ';! c.., .~ B'9 .l'l"," c _" 8'~ ~ .g8 ~ ~ ~] i! ~'El :5 '-:.::'~ d JlJ: g.~ ]~l~ = = .... 0 Ill.!! ou C (II = U .!! ~.~ gp c51IL~.!! :ii .l'l.~~ 8~~'8 o.g ~ "' ~ 8".g ~ l! l:l,'''' ]~~.~ ~::> '" ~ e'~ Jl ....s.BE First draft 04/09/01 PRELIMINARY OFFICIAL STATEMENT DATED NEW ISSUE - BOOK-ENTRY ONLY DELAYED DELIVERY ,2001 Ratings: Standard & Poor!s: ~'_" Fitch: "_" ( Insured) (See Ratings and Municipal Bond Insurance herein) In the opinion of Bond Counsel, assuming compliance, with existing statutes, regulations, published rulings and court decisions, and assuming continuing compliance by the City with certain tax covenants, interest on the Series 200 J Bonds is excludable 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. However, see "TAX EXEMPTION" herein for a description of the federal alternative minimum tax on corporations and certain other federal tax consequences of ownership of the Series 2001 Bonds. Bond Counsel isfurther of the opinion that the Series 2001 Bonds are exempt from all present intangible personal property taxes imposed pursuant to Chapter J 99. Florida Statutes. (Furthermore, in the opinion of Bond Counsel, based on representations of the City, the Series 2001 Bonds are "qualified tax-exempt obligations" within the meaning of Section 265 (b) (3) of the Internal Revenue Code of 1986, as amended.) (See "TAX EXEMPTION" herein). Dated: $ CITY OF WINTER SPRINGS, FLORIDA Water and Sewer Refunding Revenue Bonds, Series 2001B .1 2001 Due: October 1, as indicated below * The City of Winter Springs, Florida (the "City") is issuing its Water and Sewer Refunding Revenue Bonds, Series 2001 B (the "Series 200 I Bonds") only in the form offully registered bonds in the denomination of$5,000 principal amount or any integral multiple thereof. The Series 2001 Bonds will bear interest at the fixed rates set forth on the inside cover payable semi-annually on each April I and October I, commencing October 1,2002. The , Series 2001 Bonds, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York , (nDTC") which will act as securities depository for the Series 200 I Bonds. Purchases of beneficial interests in the Series 200 I Bonds will be made in book- entry form. Purchasers of the Series 2001 Bonds ("Beneficial Owners") Will not receive physical delivery of Series 2001 Bonds. Accordingly, principal of and interest on the Series 2001 Bonds will be paid by , as paying agent directly to DTC as the registered owner thereof. Disbursements of such payments to the DTC Participants is the responsibility ofDTC and disbursements of such payments to the Beneficial Owners is the responsibility of Direct Participants and Indirect Participants, as more fully described herein. See "DESCRIPTION OF THE SERIES 2001 BONDS - Book-Entry Only System" herein. Certain of the Series 2001 Bonds are subject to optional and mandatory redemption prior to maturity as set forth herein. The Series 2001 Bonds are being issued by the City pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. 665 of the City as amended and supplemented and particularly as supplemented by Resolution No. of the City as supplemented (collectively the "Resolution") to, together with other legally available monies of the City, (i) currently refund all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1992 (the "Refunded Bonds"); (ii) to make a deposit to the subaccount in the reserve account created for the benefit of the Series 2001 Bonds, and (iii) finance the costs of issuance of the Series 2001 Bonds including the municipal bond insurance premium. The Series 200 I Bonds are secured by a pledge of and are payable solely from the Net Revenues (as defined herein) on a parity and equal status with the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 200lA (the "200 I A Bonds"), and the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 2000 (the "2000 Bonds" collectively with the 200lA Bonds, the "Parity Bonds"). The Series 2001 Bonds shall not be or constitute general obligations or indebtedness of the City or the State of Florida or any political subdivision thereof within the meaning of any constitutional, statutory or charter, provision or limitation, and no holder shall ever have the right , to compel the exercise of the ad valorem taxing power ofthe City or taxation of any real or personal property therein for the payment of the Series 2001 Bonds or the making of deposits into the bond service fund, reserve account or other payments provided for in the Resolution. The Series 2001 Bonds shall not constitute a lien upon the System, or any part thereof, or on any other property of or in the City, but shall constitute a lien only upon the Net Revenues derived from the operation of the System all in the matter provided in the Resolution. Payment of the principal of and interest on the Series 2001 Bonds when due will be guaranteed by a municipal bond insurance policy to be issued simultaneously with the delivery of the Series 2001 Bonds by [INSURER's LOGO] For a discussion of the terms and provisions of such policy, including the limitations thereof, see "MUNICIPAL BOND INSURANCE" herein and Appendix C hereto. This cover page contains certain information for quick reference only. It is not a summary of the Series 200 I Bonds. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Series 2001 Bonds are offered when, as and if issued by the City and accepted by the Underwriters subject to the approving legal opinion of Akerman, Senterfitt & Eidson, P.A., Orlando, Florida, Bond Counsel. Certain legal matters will be passed on for the City by its counsel, Anthony A. Garganese of Brown, Ward, Salzman & Weiss, P.A., Orlando, Florida and by Akerman, Sentertitt & Eidson, P.A., Disclosure Counsel. Public financial Management, Inc., Orlando, Florida is acting as Financial Advisor to the City in connection with the issuance of the Series 2001 Bonds. The Series 2001 Bonds are expected to be delivered through the facilities of The Depository Trust Company in New York, New York on or about ,2002. Hanifen, Imhoff Division of Stifel, Nicolaus & Company, Incorporated GARDNYR MICHAEL CAPITAL, INC. Dated:__, 2001 WILLIAM R. HOUGH & CO. .Preliminary, subject to Change ~ ~ , First draft 04109/01 CITY OF WINTER SPRINGS, FLORIDA OFFICIALS CITY COMMISSION PaulP.Partyka David McLeod Robert S. Miller Michael S. Blake Edward Martinez, Jr. David McLeod Mayor Deputy Mayor/Commissioner Commissioner Commissioner Commissioner Commissioner CITY MANAGER Ronald McLemore CITY ATTORNEY Anthony A. Garganese Brown, Ward, Salzman & Weiss, P.A. Orlando, Florida FINANCE DIRECTOR Louise Frangoul CITY CLERK Andrea Lorenzo-Luaces PUBLIC WORKSfUTILITY DIRECTOR Kipton Lockcuff FINANCIAL ADVISOR Public Financial Management, Inc. Orlando, Florida BOND COUNSEL Akerman, Senterfitt & Eidson, P.A. Orlando, Florida AUDITORS McDirmit, Davis, Puckett & Co., P.A. Orlando, Florida 0R378176;1 '; 'First draft 04/09/01 No dealer, broker, salesman or other person has been authorized by the City, the Insurer or the Underwriters to give any information or to make any representation with respect to the Series 2001 Bonds other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. 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 2001 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, the Insurer, and other sources which are believed to be reliable. The Underwriters have reviewed the information in this Official Statement in accordance with, and as a 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 herein is subject to change without notice and neither the delivery hereof nor any sale hereunder at any time implies that information herein is correct as of any time subsequent to its date. Any statements in this Official Statement involving estimates, assumptions and matters of opinion, whether or not so expressly stated, are intended as such and not as representations of fact. IN CONNECTION WITH THE OFFERING OF THE SERIES 2001 BONDS, THEUNDERWRITERSMA Y OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2001 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. NO REGISTRATION STATEMENT RELATING TO T~E SERIES 2001 BONDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR WITH ANY STATE SECURITIES COMMISSION. IN MAKING ANY INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE CITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SERIES 2001 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to this Official Statement, they may be obtained from the City of Winter Springs, Florida, City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2799, (407) 327-1800, Attention: City Clerk, upon prepayment of reproduction costs, postage and handling expenses. [REMAINDER OF P AGE INTENTIONALLY LEFT BLANK] i" 0R378176;1 11 '; , Firs.t draft 04109/0 I TABLE OF CONTENTS Page SUMMARY STATEMENT. . . .. . .. . .. . . .. . .. .. .. . .. . . .. . .. . ... . .. . .. ..; .. . . . . . .. . . . . .. ... . . . . . .. ... .. . . . .. . . . . . . . . . . . . . . .. v The City ...................................................................................................... v 'The Series 2001 Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , v Purpose of the Series 2001 Bonds.. . . . . .'.. . . . . . .. .. . .. .... .. . . . . . .. ... . . . .. . . . . . . . . . . . . . . . . . . . .. . .. .. .. . . . . .. . . . .... v Security for the Series 2001 Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ,'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi Municipal Bond Insurance ....................................................................................... vi Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi Additional Bonds ............................................................................................. vii Authorizing Resolution and Definitions .. . ',' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. vii Continuing Disclosure ......................................................................................... vii Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. vii Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. vii INTRODUCTION ....................................................................................................... 1 THE CITY ............................................................................................................. 2 PURPOSE OF THE SERIES 2001 BONDS ..................................................;................................ 2 PLAN OF REFUNDING ......................,.........................,................................................. 2 DESCRIPTION OF THE SERIES 2001 BONDS ............................................................................... 2 General Description ............................................................................................. 2 Book-Entry-Only System ......................................................................................... 3 Redemption Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 SECURITY FOR THE SERIES 2000 BONDS ................................................................................. 6 General ..........................................................................,............................ 6 Rate Covenant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Renewal and Replacement Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . '. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ADDITIONAL PARITY OBUGA TIONS ..................................................................................... 8 MUNICIPAL BOND INSURANCE. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 DEBT SERVICE REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 ESTIMATED SOURCES AND USES OF FUNDS .. .. . . . . . .. . . . . . . .. . . . . . .. . .. . .. . . . . . . . . . . . .. . . . . . .. . .. . . . .. . .. . . . .. . .. . .. .. . II THE SYSTEM ........................................................................................... . . . . . . . . . . . . . . 12 History ...................................................................................................... 12 Service Area .................................................................................................. 12 Organization ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Administration Division ........................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Water and Wastewater Treatment Plant Operations Division. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Water Distribution and Wastewater Collection Division ................................................................ 14 Existing Water System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 The 2000 Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Existing Sewer System .................... . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . , ' . . ' . . . . . . . . . . . . , , . . . . . . . 17 Rates and Charges ............................................................................................. 20 Monthly Residential and General Service. . . , . . . . . . . . , . , . . , . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 LITIGATION .......................................................................................................... 24 LEGAL MA TIERS ..................................................................................................... 24 TAX EXEMPTION ...................................................................................................... 24 General .......................,..............,........,...................................................... 24 TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT . . . . . . . . . . . . . . .; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 25 UNDERWRITING. . . . . . . . . . . , ; . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . :. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , , . . .26 FINANCIAL ADVISOR ..................................... .'............................................................ 26 INVESTMENT POLICY ..............,..................,.................................................,............. 26 RATINGS. . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 CONTINUING DISCLOSURE ............................................................................................ 27 VERIFICATION OF MA THEMA TICAL COMPUTATIONS. .. . .. .. .. . . . , . .. .. . .. .. .. . . .. . . . .. .. . . . . . .. . . . . . . . , . .. . .. . . . . . . . . .. . 27 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS. . . . . . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 ENFORCEABILITY OF REMEDIES ............".........................,.......................,....................... 28 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 CERTIFICATE AS TO OFFICIAL STATEMENT ............................................................................. 28 0R378176;1 111 ~ APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F 0R378l76;1 First draft 04109/01 General Information Concerning the City City of Winter Springs, Florida General Purpose Financial Statements for the Year Ended September 30, 2000 Specimen Municipal Bond Insurance Policy Summary of the Resolution Form of Proposed Bond Counsel's Opinion Form of Continuing Disclosure Certificate / iv '; First draft 04109/01 S~ARYSTATEMENT This Summary Statement, being part of the Official Statement, is subject to the more complete information contained herein and should not be considered to be a complete statement of the facts material to making an investment decision. The offering by the City of Winter Springs, Florida, of its $ * Water and Sewer Refunding Revenue Bonds, Series 200 1B (the "Series 200 I Bonds"), to potential investors is made only by means of the entire Official Statement. No person is authorized to detach this Summary Statement from the Official Statement or otherwise use it without the entire Official Statement. Capitalized terms used but not defined ' in this Summary Statement shall have the same meaning as in the Resolution (as hereinafter defmed), unless the context would clearly indicate otherwise. See "Summary of the Resolution" - Appendix D hereto. The City The City of Winter Springs, Florida (the "City") was originally incorporated in 1959 under the name of the Village of North Orlando and became the City of Winter Springs in 1972. The City is located in southern Seminole County in central Florida. Adjacent municipalities are Longwood, Casselberry and Oviedo. The City's estimated 2000 population was 3 I ,088. The City is served by a City Commission - City Manager form of government consisting of a Mayor, five commissioners and a City Manager. The Mayor and City Commissioners are elected for three-year terms. The Mayor votes on matters coming before the City Commission only if needed to break a tie vote among the other City Commissioners. The City Manager is appointed by the City Commission. For additional information concerning the City, see Appendices A and B hereto. The Series 2001 Bonds The Series 2001 Bonds are being issued in fully registered form in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Series 2001 Bonds. The Series 2001 Bonds will be available to purchasers in denominations of$5,000 or integral multiples thereof. Interest on the Series 2001 Bonds is payable on October 1,2002 and on each April I and October 1 thereafter until maturity or redemption. Amounts due on the Series 2001 Bonds will be paid to Cede & Co., as nominee for DTC, as registered owner of the Series 2001 Bonds, to be subsequently disbursed to DTC Participants and thereafter to the Beneficial Owners of the Series 2001 Bonds. See "DESCRIPTION OF THE SERIES 2001 BONDS" herein. Certain of the Series 2001 Bonds are subject to optional, mandatory sinking fund redemption prior to maturity as set forth herein. See "DESCRIPTION OF THE SERlES 2001 BONDS - Redemption Provisions" herein. Purpose of the Series 2001 Bonds The Series 2001 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter, Resolution No. 665 of the City as amended and supplemented and particularly as' supplemented by Resolution No. of the City adopted by the City Commission on April 9, 2001 (collectively the "Resolution") to (i) currently refund all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1992, (the "Refunded Bonds"); (ii) to make a depositto the subaccount in the Reserve Account established for the benefit of such Series 2001 Bonds; and (iii) fmance the costs of issuance of the Series 2001 Bonds including the municipal bond insurance premium. See "PURPOSE OF THE SERlES 2001 BONDS," "PLAN OF REFUNDING," and "ESTIMATED SOURCES AND USES OF FUNDS" herein. Security for the Series 2001 Bonds The Series 2001 Bonds are payable from and secured by a first lien upon and pledge of the Net Revenues of the City's combined water and sewer system (the "System"). The lien of the Series 2001 Bonds on the Net Revenues is on a parity and equal *Preliminary, subject to change 0R378176;1 v . First draft 04/09/01 status with the and the City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 2000 (the "2000 Bonds"), and the City of Winter Springs, Florida Water and Sewer Refunding Reveneu Bonds, Series 2001A (the "2001A Bonds" collectively with the 2000 Bonds, the "Parity Bonds"). See "SECURITY FOR THE SERIES 2001 BONDS" herein. The Series 2001 Bonds shall not be or constitute general obligations or indebtedness of the City or the State of Florida or any political subdivision tbereofwithin the meaning of any constitutional, statutory or charter,'provision or limitation, and no holder shall ever have the right to compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property therein for the payment of the Series 2001 Bonds or the making of deposits into the debt service fund, reserve account or other payments provided for in the Resolution. The Series 2001 Bonds shall not constitute a lien upon the System or any part thereof, or on any other property of or in the City, but shall constitute a lien only upon the Net Revenues derived from the operation of the System all in the manner provided in the Resolution. The Resolution provides that a sum equal to the Reserve Requirement shall be deposited in the subaccount in the Reserve Account created for the benefit of the Series 2001 Bonds at the time of delivery of the Series 2001 Bonds and shall be used only for the purposes provided in the Resolution. The "Reserve Requirement" is defined as the lesser of (i) the Maximum Bond Service Requirement for the Series 2001 Bonds; (ii) 125% of the Average Annual Bond Service Requirement for the Series 2001 Bonds, or (iii) 10% of the proceeds of the Series 2001 Bonds. See "SECURITY FOR THE SERIES 2001 BONDS - Reserve Account. Redemption The Series 2001 Bonds maturing on or after October 1, _ are subject to optional redemption on or after October 1,_ at the redemption prices described herein. Certain of the Series 2001 Bonds are subject to mandatory sinking fund redemption as described herein. The Series 2001 Bonds are also subject to extraordinary mandatory redemption from prepayment principal. See "DESCRIPTION OF THE SERIES 2001 BONDS - Redemption Provisions" herein. Municipal Bond Insurance Payment of the principal of, accreted value and interest on the Series 2001 Bonds, when due, will be guaranteed by a municipal bond insurance policy to be issued simultaneously with the delivery of the Series 2001 Bonds by See "MUNICIPAL BOND INSURANCE" herein and Appendix C hereto. , Professionals , will serve as Registrar and Paying Agent pursuant to the Resolution and as Escrow Holder pursuant to the Escrow Agreement. Akerman, Senterfitt & Eid.son, P.A., Orlando, Florida, is serving as Bond Counsel and Disclosure Counsel. Anthony A. Gargarese, Esquire of Brown, Ward, Salzman & Weiss, P.A., Orlando, Florida, is the City Attorney. McDinnit, Davis, Puckett & Co., P.A., Orlando, Florida, is the City's auditor. Public Financial Management, Inc., Orlando, Florida, is the City's [mancial advisor. Some of the professionals will be compensated from a portion of the proceeds of the Series 2001 Bonds, identified as "Cost ofIssuance" under the heading "ESTTh1A TED SOURCES AND USES OF FUNDS" herein. Such compensation in some instances, but not in regard to the City's auditor, is contingent upon the issuance of the Series 2001 Bonds and the receipt of the proceeds thereof. 0R378176;1 vi ~ , First draft 04/09/01 Additional Bonds Subject to certain conditions set forth in the Resolution, the City may from time to time issue Additional Parity Obligations, defmed in the Resolution that are payable from and secured by a fust lien on and pledge of the Net Revenues on a parity with the Series 2001 Bonds and the Parity Bonds then Outstanding. See "ADDITIONAL PARITY OBLIGATIONS" herein. Authorizing Resolution and Definitions A summary of the Resolution is set forth in Appendix D hereto. DefInitions of certain capitalized words used in this Official Statement and not otherwise defmed herein have the meaning ascribed to such terms in the Resolution. Continuing Disclosure The City has agreed and undertaken for the benefit of the Holders of Series 2001 Bonds, to provide certain financial information and operating data relating to the City and the Series 2001 Bonds and notice of certain enumerated events pursuant to Rule l5c2-l2 of the Securities Exchange Act of 1934. See "CONTINUING DISCLOSURE" herein. Additional Information This Official Statement speaks only as of its date and the information contained herein is subject to change. Descriptions of the Series 2001 Bonds, and other agreements and documents contained herein constitute summaries of certain provisions thereof and do not purport to be complete. Reference is made to the Resolution, and such other agreements and documents for a more complete description of such provisions. Investors should contact the City Clerk (407) 327-1800 at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2789, to obtain copies of the Resolution or other documentation referred to herein or with questions concerning this Official Statement or the Series 2001 Bonds. Except to the extent otherwise indicated, information contained in this Official Statement was compiled by the City. Miscellaneous The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of the provisions of such documents, and reference is directed to all such documents for full and complete statements of all matters of fact relating to the Series 2001 Bonds, the security for the payment of the Series 2001 Bonds, and the rights and obligations of holders thereof. The information contained in the 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, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the holders of the Series 2001 Bonds. " [END OF SUMMARY STATEMENT] 0R378176;1 Vll , First draft 04/09/01 - OFFICIAL STATEMENT $ * CITY OF WINTER SPRINGS, FLORIDA WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 2001B INTRODUCTION The purpose of this Official Statement, which includes the cover page and all Appendices hereto, is to furnish certain information with respect to the issuance by the City of Winter Springs, Florida (the "City") of its Water and Sewer Refunding Revenue Bonds, Serie!; 200lB (the "Series 2001 Bonds") in the aggregate principal amount of $ * The Series 2001 Bonds are being issued pursuant to the Constitution of the State of Florida, Chapter 166, Part II, Florida Statutes, as amended and supplemented, Chapter 72-718, Laws of Florida, Special Act of 1972, as amended (the "City Charter") and other applicable provisions oflaw, Resolution No. 665 of the City as amended and supplemented particularly as supplemented by Resolution No. , (collectively, the "Resolution"). See Appendix D,"Summary of the Resolution". The Series 200 I Bonds are payable from and secured by a fIrst lien upon and pledge of the Net Revenue (as hereinafter defined) derived from the operation of the City's combined Water and Sewer System (the "System"). The lien of the Series 2001 Bonds on the Net Revenues is on a parity and equal status with the City of Winter Springs" Florida Water and Sewer Refunding Revenue Bonds, Series 2000 (the "2000 Bonds) and the City of Winter Springs, , Florida Water and Sewer Refunding Revenue Bonds, Series 200lA (the "2001A Bonds", collectively with the 2000 Bond, the "Parity Bonds"). The Parity Bonds are currently outstanding in the principal amount of$ See "SECURITY FOR THE SERIES 2001 BONDS" herein. The Series 2001 Bonds are being issued in fully registered form in the name of Cede & Co., as nominee for The Depository Trust Company, New Yode, New York ("DTC"), which will act as securities depository for the Series 200 I Bonds. The Series 2001 Bonds will be available to purchasers in denominations of$5,000 of integral multiples thereof. Interest on the Series 2001 Bonds is payable on October 1, 2002 and on each April 1 and October I thereafter until maturity or redemption. Amounts due on the Series 2001 Bonds will be paid to Cede & Co., as nominee for DTC, as registered owner of the Series 2001 Bonds, to be subsequently disbursed to DTC Participants and thereafter to the Beneficia] Owners of the Series 200] Bonds. See "DESCRIPTION OF THE SERIES 2001 BONDS" herein. This Official Statement speaks only as of its date and the information contained herein is subject to change. Capitalized tenns used but not defmed herein have the same meanings as when used in the Resolution unless the context clearly indicates otherwise. Complete descriptions of the tenns and conditions of the Series 2001 Bonds are set forth in the Resolution, a summary of which is attac~ed to this Official Statement as Appendix D. The description of the Series 2001 Bonds, the documents authorizing and securing the same, and the information from various reports and statements contained herein are not comprehensive or defInitive. All references herein to such documents, reports and statements are qualifIed by the entire, actual content of such documents, reports and statements. Copies of such documents, reports and statements referred to herein that are not included in their entirety in this Official Statement may be obtained, after payment of applicable copying and mailing costs, from the City of Winter Springs, at City Hall, 1126 East State Road 434, Winter Springs, Florida 32708-2797, Attention: City Clerk, (407) 327-1800. * Preliminary, subject to change 0R378176;1 . First draft 04/09/01 , THE CITY The City was incorporated in 1959 under the name of the Village of North Orlando and became the City of Winter Springs in 1976. The City is located in Seminole County, which is a part of the greater Orlando metropolitan area in East Central Florida. This area is one of the fastest growing areas in the country. The City is primarily a retail, office and residential area with a small amount of light industry and commercial. The City currently has a land area of 14.6 square miles and a 2000 population of approximately 31,088. The City operates according to a Commission/Manager form of government, with an appointed City Manager, five elected City Commissioners and a separately elected Mayor. The Mayor votes on matters coming before the City Commission only if a vote by the other Commissions results in a tie. PURPOSE OF THE SERIES 2001 BONDS The Series 2001 Bonds are being issued pursuant to Chapter 166, Part II, Florida Statutes, the City Charter and Resolution No. 665 of the City as amended and supplemented, particularly as supplemented by Resolution No. of the City adopted by the adopted by the City Commission on April 9, 2001 as supplemented (collectively the "Resolution") to (i) currently refund all of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1992 (the "Refunded Bonds"); (ii) to make a deposit to the subaccount in the Reserve Account created for the benefit of the Series 2001 Bond; and (iii) fmance the costs of issuance of the Series 2001 Bonds including the 'municipal bond insurance premiwn. See"PLAN OF REFUNDING," and "ESTIMATED SOURCES AND USES OF FUNDS" herein. PLAN OF REFUNDING The Refunded Bonds, as of the date of delivery of the Series 2001 Bonds, will be outstanding in the aggregate principal amount of $ . To effect the refunding of the Refunded Bonds, the City will enter into an escrow deposit agreement (the "Escrow Agreement") with First Union National Bank as escrow holder (The "Escrow Holder"). Pursuant to the terms of the Escrow Agreement, the City will deposit with the Escrow Holder a portion of the proceeds of the Series 2001 Bonds, as well as other available moneys of the City. Such moneys, other than beginning cash balances, will be applied on the date of delivery of the Series 2001 Bonds to the purchase of direct obligations of the United States of America (the "Federal Securities"). The Federal Securities shall mature at such times and in'such amounts as shall be sufficient to pay the principal of applicable redemption premium and interest on such Refunded Bonds on the redemption date of April 1, 2002. The Refunded Bonds maturing after April 1, 2002 are subject to redemption on April 1, 2002 at a redemption price of 102% of the principal amount thereof plus accrued interest to the redemption date. Upon deposit of such moneys into the escrow deposit account (the "Escrow Account") as provided in the Escrow Agreement, in the opinion of Bond Counsel, the lien of the holders of the Refunded Bonds on the Net Revenues pledged to such holders will no longer be in effect with respect to said Refunded Bonds. ; DESCRIPTION OF THE SERIES 2001 BONDS General Description The Series 2001 Bonds are being issued in fully registered form in the name of Cede & Co" as nominee for The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Series 2001 Bonds. The Series 2001 Bonds will be available to purchasers in denominations of$5,000 of integral multiples thereof. Interest on the Series 2001 Bonds is payable on October 1, 2002 and on each April 1 and October 1 thereafter until maturity or redemption. Amounts due on the Series 2001 Bonds will be paid to Cede & Co., as nominee for DTC, as registered owner of the Series 200 I Bonds, to be subsequently disbursed to DTC Participants and thereafter to the Beneficial Owners of the Series 2001 Bonds. See "DESCRIPTION OF THE SERlES 2001 BONDS" herein. 0R378176;1 2 First draft 04/09/01 Book-Entry-OnIy System The information set forth under this caption concerning DTC and DTC's book-entry system has been obtained from sources the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. The Series 2001 Bonds will be issued as fully registered bonds without coupons. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2001 Bonds. The Series 2001 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered Series 2001 Bond will be issued for each maturity of the Series 2001 Bonds. Individual purchases will be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof. Beneficial owners of the Series 2001 Bonds will not receive physical delivery of Series 2001 Bonds. DTC 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 17 A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc; Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Series 2001 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2001 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2001 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participant's records. Beneficial Owners will not receive written confirmation from DTC of their transaction, but Beneficial Owners are expected to receive written confirmation 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 2001 Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in Series 2001 Bonds, except in the event that use of the book-entry system for the Series 2001 Bonds is discontinued. To facilitate subsequent transfers, all Series 2001 Bonds deposited by Participants with DTC are registered in the name ofDTC's partnership nominee, Cede & Co. The deposit of Series 2001 Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2001 Bonds, DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2001 Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor Cede & Co. will consent or vote with respect to Series 2001 Bonds. Under its usual procedures, DTC will mail an Onmibus Proxy to the City as soon as possible after the record date. The Onmibus Proxy 0R378176;1 3 . First draft 04109/01 assigns Cede & Co. 's consenting or voting rights to those Direct Participants to whose accounts in the Series 2001 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 2001 Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on payment dates in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such payment date, Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not ofDTC, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time, Payment of principal and interest to DTC is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility ofDTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2001 BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE HOLDER OF THE SERIES 2001 BOND OR REGISTERED OWNERS OF THE SERIES 200 I BONDS SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2Q01 BONDS. The City shall provide for issuance of Series 2001 Bonds (the "Replacement Certificates") directly to owners of Series 2001 Bonds other than DTC, or its nominee, but only in the event that (i) DTC determines not to continue to act as securities depository for the Series 2001 Bonds; or (ii) the City has advised DTC of its determination that DTC is incapable of discharging its duties as a securities depository of immobilized securities; or (iii) the City has determined in its sole discretion not to continue the book-entry system of transfer. Upon the occurrence of (i), (ii) or (iii) above, the City may attempt to locate another qualified securities depository. If the City does not locate another qualified securities depository to replace DTC, the City shall have authenticated and delivered Replacement Certificates. In the event the City makes the determination to issue Replacement Certificates, and has made provision to notify the Beneficial Owners of Series 2001 Bonds by mailing an appropriate notice to DTC, it shall issue Replacement Certificates at the address of such owner as it appears in the registration books;maintained by the Registrar and principal on the Series 2001 Bonds will be payable when due upon presentation and surrender of such Series 2001 Bonds at the office of the Paying Agent. Interest payable on any Series 2001 Bond on any Interest Date will (except for the final payment of interest which shall be paid only upon presentation and surrender of the Series 2001 Bonds at the office of the Paying Agent) be paid by check or draft of the Paying Agent to the Holder in whose name such Bond shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calend~ month next preceding such Interest Date, or by wire transfer to owners of $1,000,000 or more is principal amount of Series 2001 Bonds. Replacement Certificates will be transferable only by presentation and surrender to the Registrar, together with an assignment duly executed by the owner of the Replacement Certificate, or by his attorney or legal representative, in form satisfactory to the Registrar and subject to the other conditions set forth in the Resolution. The City can make no assurances that DTC will distribute payments of principal of, redemption price, if any, or interest on the Series 2001 Bonds to the DTC Participants, or that DTC Participants will distribute payments of principal of, redemption price, if any, or interest on the Series 2001 Bonds or redemption notice (referred to below) to the Beneficial Owners of such Series 2001 Bonds or th~t they will do so on a timely basis, or that DTC or any of its Participants will act in a manner described in this Official Statement. The City is not responsible or liable for the failure ofDTC to make any payment to any DTC Participant or failure of any DTC Participant to give any notice or make any payment to a Beneficial Owner in respect to the Series 2001 Bonds or any error or delay relating thereto. In the event of an insolvency of DTC, or if DTC has insufficient securities to satisfy the claims of the DTC Participants with respect to deposited securities, DTC Participants may not be able to obtain all of their deposited securities. The rights of holders of beneficial interests in the Series 2001 Bonds and the manner of transferring or pledging those interests is subject to applicable state law. Holders of beneficial interests in the Series 2001 Bonds may want to discuss the manner of transferring or pledging their interest in the Series 2001 Bonds with their legal advisors. 0R378176;1 4 , First draft 04/09/01 Redemption Provisions Optional Redemption of Series 2001 Bonds The Series 2001 Bonds maturing on or prior to October 1, _, are not redeemable prior to their respective maturities. The Series 2001 Bonds maturing on or after October 1, -' are subject to optional redemption prior to their maturities on or after October 1, _, at the option of the City in whole or in part at any time, in such manner as shall be determined by the City and by lot within a maturity ifless than a full maturity from any legally available monies at a redemption price (expressed as a percentage of the principal amount to be redeemed) as set forth in the following table, together with accrued interest to the redemption date. Period During Which Redeemed (Both Dates Inclusive) Redemption Price October 1, _ through September 30,_ October 1, _ and thereafter 101% 100% Mandatory Redemption of Series 2001 Bonds The Series 2001 Bonds maturing on October 1, _ are subject to mandatory redemption in part prior to maturity by lot on October 1, _ and on each October 1 thereafter, at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium from Amortization Installments through operation of the Redemption Account, as follows: October 1 of Year Principal Amount The Series 200 1 Bonds maturing on October 1 _ are subject to mandatory redemption in part prior to maturity by lot on October 1, _ and on each October 1 thereafter, at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium from Amortization Installments through operation of the Redemption Account, as follows: October 1 of Year Principal Amount Notice of Redemption Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registrar, and mailed, first class mail, postage prepaid, to all Owners of Series 2001 Bonds to be redeemed at their addresses as they appear on the registration books, but failure to mail such notice to one or more Owners of Series 2001 Bonds shall not affect the validity of the proceedings for such redemption with respect to Owners of Series 2001 Bonds to which notice was duly mailed. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, ifless than all of the Series 2001 Bonds of one maturity are to be called, the distinctive numbers of such Series 2001 0R378176;1 5 , First draft 04109/01 Bonds to be redeemed and in the case of Series 2001 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. Any notice of optional redemption, other than with respect to an advance refunding, shall be circulated only if sufficient funds have been deposited in the Bond Service Fund to pay the redemption price of the Series 2001 Bonds to be redeemed. Official notice of redemption having been given as aforesaid, the Series 2001 Bonds or portions of Series 2001 Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) such Series 2001 Bonds or portions of Series 2001 Bonds shall cease to bear interest. Upon surrender of such Series 2001 Bonds for redemption in accordance with said notice, such Series 2001 Bonds shall be paid by the Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as provided in the Resolution for payment of interest. Upon surrender for any partial redemption of any Series 2001 Bond, there shall be prepared for the Owner a new Series 2001 Bond or Series 2001 Bonds of the same maturity in the amount of the unpaid principal of such partially redeemed Series 200 1 Bond. All Series 2001 Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued. In addition to the foregoing notice, further notice shall be given by the City as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness ofa call for redemption if notice thereof is given as above prescribed. a. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (i) the CUSIP numbers of all Series 200 I Bonds being redeemed; (ii) the date of issue of the Series 2001 Bonds as originally issued; (iii) the rate of interest borne by each Series 2001 Bond being redeemed; (iv) the maturity date of each Series 2001 Bond being redeemed; and (v) any other descriptive information needed to identify accurately the Series 2001 Bonds being redeemed. b. Each further notice of redemption shall be sent at least 35 days before the redemption date by registered or certified mail or overnight delivery service to all registered securities depositories then in the business of holding substantial amounts of obligations of types similar to the type of which the Series 2001 Bonds consist and to one or more national information services that disseminates notices of redemption of obligations such as the Series 2001 Bonds. SECURITY FOR THE SERIES 2000 BONDS General The Series 2001 Bonds are being issued as Additional Parity Obligations under the Resolution and are payable solely from and secured by a prior lien upon and pledge ,of the Net Revenues derived from the operation of the System on a parity and equal status with the Parity Bonds, and any Additional Parity Obligations hereafter issued pursuant to the Resolution. The Series 2001 Bonds, the Parity Bonds, and any Additional Parity Obligations issued pursuant to the Resolution are collectively referred to as the "Bonds." In the Resolution, the City irrevocably pledges the Net Revenues to the payment of the principal of, redemption premium, if any, and interest on the Bonds, the reserves for the Bonds and all other payments required under the Resolution. The Bonds do not constitute a general obligation or indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and no holder of the Bonds shall ever have the right to require or compel the exercise of the ad valorem taxing power of the City or taxation of any real or personal property 'therein for the payment of the principal of and interest on the Bonds or the making of any debt service fund, reserve account or the payments provided for in the Resolution, The Bonds and the indebtedness evidenced thereby do not constitute a lien 0R378176;1 6 , First draft 04/09/01 upon the System, or any part thereof, or on any other property of or in the City, but shall constitute a lien only on the Net Revenues all in the manner provided in the Resolution. The Resolution establishes the Revenue Fund, the Debt Service Fund (which includes the Principal Account, the Interest Account, the Redemption Account, and the Reserve Account) and the Renewal and Replacement Fund. All such funds and accounts will be held by the City as trust funds, but no independent trustee has been appointed to hold the monies in such funds for the benefit of the holders of the Bonds. For information on all funds and accounts lind the disposition and flow of revenues, see "APPENDIX D - Summary of the Resolution" attached hereto. The establishment of the various funds by the Resolution does not require the establishment of any completely independent, self-balancing funds as such is commonly defmed and used in government accounting, but rather is intended solely to constitute an earmarking of certain revenues and assets of the System for certain purposes and to establish certain priorities for application of such revenues and assets as provided in the Resolution. Rate Covenant Pursuant to the Resolution, the City has covenanted to fix, establish, revise from time to time, whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the products, services and facilities of the System which will always provide Revenues in each year sufficient to pay the aggregate of the amount needed to pay all Cost of Operation and Maintenance as the same shall become due in such year, plus one hundred ten percent (110%) of the Bond Service Requirement becoming due in such year on the Bonds Outstanding and one hundred percent (100%) of all other deposits to be made pursuant to the Resolution. Such rates, fees, rental or other charges shall not be reduced so as to render them insufficient to provide Revenues for such purposes. Reserve Account The Resolution provides for the establishment and maintenance of a Reserve Account in the Debt Service Fund. Upon delivery of the Series 2001 Bonds, the City shall deposit into the subaccount in the Reserve Account established for the benefit of the Series 2001 Bonds an amount equal to the Reserve Requirement. Pursuant to the Resolution the "Reserve Requirement" is defmed as the lesser of (i) the Maximum Bond Service Requirement for the Series 2001 Bonds, (i) 125% of the Average Annual Bond Service Requirement for the Series 2001 Bonds, or (ii) 10% of the proceeds ofth Series 2001 Bonds. Amounts on deposit in each subaccount in the Reserve Account shall be applied in accordance with the provisions of the Resolution solely for the purpose of the payment of maturing principal of amortization installments; and interest on the Bonds Outstanding for which such subaccount was established and for no other Series of Bonds, Therefore, amounts on deposit in the subaccount within the Reserve Account established for the benefit of the Series 2001 Bonds may be used for holders of the Parity Bonds or any Additional Parity Obligations. Renewal and Replacement Fund The Resolution creates a Renewal and Replac~~ent Fund into which the City is to deposit monthly from the monies remaining on deposit in the Revenue Fund, an amount equal to one-twelfth (l/I2th) of five percent (5%) of the Gross Revenues received during the immediately preceding Fiscal Year, such deposit to be continued to be made for the purpose of this fund; provided that no deposit shall be required to be made so long as there is an amount on deposit in the Renewal and Replacement Fund in the amount of 5% of the Gross Revenues received during the immediately preceding Fiscal Year. The monies in the Renewal and Replacement Fund shall be used only for the purpose of paying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System and emergency repairs thereto. Such monies on deposit in such account shall also be used to supplement the Reserve Account, if necessary, in order to prevent a default in the payment of the principal of and interest on the Bonds. Investments 0R378176;1 7 First draft 04109/01 Monies in any fund or account created pursuant to the Resolution, with the exception of the Reserve Account, may be invested and reinvested in Investment Securities which mature not later than the dates on which the monies on deposit therein will be needed for the purpose of such fund or account. Monies in the subaccount in the Reserve Account may be invested and reinvested in Investment Securities maturing not later than five (5) years from the date of acquisition of such investment. All income on such investments, except as otherwise provided in the Resolution, shall be deposited in the respective funds and account from which such investments were made and be used for the purposes thereof unless and until the maximum required amount is on deposit and thereafter shall be deposited in the Revenue Fund. ADDITIONAL PARITY OBLIGATIONS The City may issue additional obligations having an equal lien on the Net Revenues and ranking equally in all other aspects with the Series 2001 Bonds and the Parity Bonds subject to the following conditions as provided in the Resolution: 1. There shall have been obtained and filed with the City a certificate or other statement of an independent certified public accountant of suitable experience and responsibility stating: (a) that the books and records of the City relative to the System have been audited by him; (b) the amount of the Net Revenues of the System, derived for the Fiscal Year preceding the date of issuance of the proposed Additional Parity Obligations with respect to which such certificate is made, adjusted as provided in (2) through (5) below; (c) that the aggregate amount of such Net Revenues, as adjusted, from the System, for such preceding Fiscal Year is equal to not less than one hundred ten percent (110%) of the Maximum Bond Service Requirement on all obligations issued under the Resolution if any, then outstanding and on the Additional Parity Obligations with respect to which such certificate is made. 2. Upon recommendation of the Consulting Engineer, historical Net Revenues of the System may be adjusted by including 100% of the additional Net Revenues, which in the opinion of the Consulting Engineer would have been derived by the City from rate increases adopted and in effect before the Additional Parity Obligations are issued. 3. Upon recommendation of the Consulting Engineers if the Additional Parity Obligations are to be issued for the purpose of acquiring an existing water and/or sewer system the Net Revenues maybe adjusted by including: 100% of the additional estimated Net Revenues which in the written opinion of the Consulting Engineers will be derived from the acquired facility during the first complete Fiscal Year after the issuance of such Additional Parity Obligations (the Consulting Engineers' report shall be based on the actual operating revenues of the acquired utility for a recent 12-month period adjusted to reflect the City's ownership and the City's rate structure in effect with respect to the System at the time of the issuance of the Additional Parity Obligations). 4. Upon recommendation of the Consulting Engineers, if the number of connections as of the first day of the month in which the proposed Additional Parity Obligations are to be issued exceeds the average number of such connections during such Fiscal Year, then the Net Revenues shall be adjusted to include the Net Revenues which would have been received in such Fiscal Year as if those additional connections had also been connected to the System during all of such Fiscal Year. i' 5. Upon recommendation of the Consulting Engineer; if the City shall have entered into a contract, which contract shall be for a duration of not less than the fmal maturity of the proposed Additional Parity Obligations, with any public body, whereby the City shall have agreed to furnish services for the collection, treatment or disposal of sewage or agreed to furnish services in connection with any water system, then the Net Revenues during the Fiscal Year shall be increased (to the extent such amounts were not reflected in such Revenues) by the minimum amount which the public body shall guarantee to pay in anyone year for the furnishing of services by the City, after deducting from such payment the estimated Cost of Operation and Maintenance attributable in such year to such services. 6. The City need not comply with the provisions of paragraph 1 above if and to the extent the Bonds to be issued are Refunding Bonds, if the City shall cause to be delivered a certificate of an independent certified public 0R378176;1 8 , First draft 04f09/0l accountant setting forth the Average Annual Debt Service Requirement (i) for the Bonds then Outstanding and (ii) for all Series of Bonds to be immediately Outstanding thereafter and stating that the Average Annual Debt Service Requirement pursuant to (ii) above is not greater than that set forth pursuant to (i) above. 7. The City shall not be in default in carrying out of any of the obligations assumed under the Resolution, and all payments required by the Resolution to be made into the funds and accounts established thereunder shall have 0 been made to the full extent required 8. The resolution authorizing the issuance of the Additional Parity Obligations shall recite that all of the covenants contained in the Resolution will be applicable to such Additional Parity ObligationS, unless in the opinion of Bond Counsel the failure to make any covenant applicable to such Additional Parity Obligations will not adversely affect the,rights of the Holders of any Outstanding Bonds. MUNICIPAL BOND INSURANCE [To Be Provided] DEBT SERVICE REQUIREMENTS The following table shows the scheduled annual principal and interest requirements on the Series 2001 Bonds, total annual debt service on the Series 2001 Bonds, total debt service for the Parity Bonds and combined debt service for all such Bonds. Series 2001 Bonds Year Ending (October 1) Principal Interest Aggr~gate Series 2001 Bonds Debt Service Parity Bonds Debt Service Total Series 2001 Bond and Parity Bonds Debt SerVIce 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 TOTAL · Includes accrued interest of $ on the Series 2001 Bonds. 0R378176;1 9 . First draft 04/09/01 ESTIMATED SOURCES AND USES OF FUNDS Sources of Funds: Series 2001 Bond Proceeds Less Original Issue Discount Other Available Moneys(l) Accrued Interest $ ($ $ $ .~ Total Estimated Sources of Funds $ Uses of Funds Deposit of Accrued Interest to Interest Account Deposit pursuant to Escrow Agreement Underwriter's Discount Cost ofIssuance(2) $ $ $ Total Estimated Uses of Funds $ (1) Includes costs of issuance, and other fees and expenses including the municipal bond insurance premium associated with the issuance of the Series 2001 BoIids. CITY OF WINTER SPRINGS, FLORIDA WATER AND SEWER SYSTEM mSTORICAL STATEMENT OF PRO-FORMA DEBT SERVICE COVERAGE FOR YEARS ENDED SEPTEMBER 30, 1996 THROUGH 2000 1996 1997 1998 1999 2000 Operating Revenues $5,021,899 5,098,941 $5,302,148 $5,652,715 $5,726,142 - User Charges Connection Fees 327,903 305,914 376,942 1,088,862 432,808 Interest 197,526 212,264 244,022 252,455 352,152 Miscellaneous 26.421 Q 1.000 5.660 Total Income $5,573,749 $5,617,119 $5,924,112 $6,999,692 $6,511,102 Direct Operating Expensesl $2.569.791 $2.517 .191 $2.696.506 $3.312.000 $2.432.5573 Total Net Revenues $3,003,958 $3,099,928 $3,227,606 $3,687,692 $4,078,545 Available for Debt Service Maximwn Bond Requirement for Series 2001 Bonds and Parity Bonds2 Coverage "Direct Operating Expenses" exclude depreciation, interest expense and capital expenditures. Asswnes 2002 Bonds are not issued. 0R378176;1 10 First draft 04/09/01 Transfers in/out amongst funds are excluded from the 2000 figures as they are reported as other fmancing sources and uses on the financial statements. In prior years, transfers in/out were classified as revenue and expenses and accordingly included in the figures presented here. Source: The City of Winter Springs Finance Department. THE SYSTEM The Resolution defmes the "System" as all properties and assets, real and personal, tangible and intangible, owned or operated by the City which properties and assets include those properties and assets described as the Seminole System and the City System in the resolution of the Issuer adopted September 28, 1992 merging the City System and the Seminole System, used or useful for the collection, transmission, treatment, and disposal of sewage, and for the supply, storage, treatment, transmission and distribution of water, and all properties and assets hereafter constructed or acquired as additions, improvements, betterments or replacements thereto and extensions thereof. History The System is the result of the combination of two private utilities acquired by the City. Although for debt purposes the System is a single utility, the City from an operational and permitting perspective treats its sewage facilities as consisting of the East System and the West System as hereinafter described. Winter Springs was previously known as the Village of North Orlando. This area was originally a planned development by Florida Land Company. In the 1950's, Florida Land Company commenced development and a utility called North Orlando Water and Sewer Company was formed. This utility company was acquired by the City in 1984 and serves the western half of the current City limits. In the 1970's, Winter Springs Land and Development started a planned unit development currently known as Tuscawilla. The utility company serving this area was Seminole Utilities. Seminole Utilities was acquired by the City in 1990. This utility served the eastern half of the City. Over the last ten years the City has interconnected both systems physically and administratively to provide a cost effective and efficient utility system. Service Area The service area of the System is defmed as the Winter Springs city limits plus a small commercial area in the neighboring City of Oviedo (sewer only). In connection with the issuance of its 1992 Bonds, the City consolidated for bonding purposes the East and West Systems. All new water and sewer customers in the service area are, to the extent pennitted by the law, required to connect to the System. The City has a policy that to obtain service, the area must be incorporated into the City. All areas within the City limits are served with the exception of the Ranchland area, which are large country estate type lots served by septic systems and private wells. As improvements (such as paving projects) are performed, City water service is extended into the Ranchland area. It is estimated that this area represents [approximately 150 single-family units]. i The projections contained in the table below are based on certain assumptions and estimates and no representation is made that any of the assumptions or estimates are valid or that any of such projections will be realized. 0R378176;1 11 Fiscal Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 . First draft 04/09/01 Historical and Projected Customer Growth (ERCs) Water Sewer West East West East ERCs Population ERCs Population ERCs Population ERCs Population 4,824 14,303 4,930 12,918 4,383 ' 12,995 4,564 12,520 4,959 14,667 5,138 13,515 4,518 13,360 4,917 13,290 5,1'01 15,051 5,319 14,035 4,660 13,743 5,099 13,813 5,251 15,451 5,504 14,565 4,803 14,133 5,272 14,309 5,524 16,188 5,676 15,059 5,066 14,843 5,442 14,797 5,690 16,674 5,846 15,511 5,218 15,288 5,605 15,241 5,860 17,174 6,022 15,976 5,375 15,747 5,773 15,698 6,036 17,689 6,202 16,455 5,536 16,219 5,947 ' 16,169 6,217 18,220 6,388 16,949 5,702 16,706 6,125 16,654 6,404 18,766 6,580 17,458 5,873 17,207 6,309 17,154 6,596 19,329 6,777 17,981 6,049 17,723 6,498 17,668 Fiscal year ending September 30. Historical data is based on the City f1les and the projected growth is based on the historical rate of 3 %. Organization The System has been organized as a Utility Enterprise Fund with management and administration provided through City staff. As such, the System is responsible for generating the revenues necessary to fund its activities and pay debt. The City does not have a policy or a practice of making discretionary transfers from the Utility Enterprise Fund to the General Fund. The Utility Enterprise Fund is charged by the General Fund for indirect costs based on an allocation plan to recover the System's share of administrative costs of services rendered such as accounts payable, personnel and information systems support. The City has an existing staff of managers and directors who have experience in utility management, fmancing and operations. The personnel strategically involved in System management include the following: Mr. Ronald McLemore has been the City Manager since 1996. Mr. McLemore has been in leadership positions in county and local government for 30 years: Most recently, Mr. McLemore served as Assistant County Administrator for Martin County from 1993 to 1996. Mr. McLemore holds a Masters Degree in Public Administration from the University of Georgia. He is a member of the International City Management Association, American Society , for Public Administration, and was past president of the Winter Springs Rotary Club. In his government positions, he has been responsible for the fmancing and construction of numerous water and wastewater systems, including acquisitions and systems integration. Ms. Louise Frangoul has joined the City as Finance Director in 2000. Ms. Frangoul has 10 years of experience in both the public and private accounting sector. Prior to her position with the City, she was employed at the Central Florida YMCA as the Corporate Controller. The "Y" is a $30 million dollar organization with 20 branch locations. Prior to her employment with the Y, Ms. Frangoul spent a total of 7 years with Coopers & Lybrand, and 0R378176;1 12 , First draft 04109/01 a local CPA firm where she was responsible for auditing the fmancial records for Orange County, Marion County, Town of Medley, City of Hialeah and various other governmental and non-profit entities. She is a Certified Public Accountant in the State of Florida and holds a Master's of Business Administration from Rollins College. Ms. Frangoul is a member of both the American and Florida Institutes of Certified Public Accountants. Ms. Prangoul oversees 9 City employees and is responsible for all financial functions for the City including financial management, accounting, payroll, budgeting, cash receipts, utility billing, investments and debt functions. Ms. Frangoul reports directly to the City Manager. Mr. Kipton Lockcuffhas been the Public Works/Utility Director for the City since 1991. Prior to that, Mr. Lockcuff worked as a consulting engineer for three years and also as Assistant Utility Director for the City of Margate for four years. Mr. Lockcuff is a registered professional engineer in the States of Florida and Pennsylvania and has a Bachelor's Degree in Environmental Engineering from Penn State University. He has significant past experience managing municipally and contract operating privately owned water and wastewater utilities, including administration, organization and training for the construction, operation and maintenance of water and wastewater facilities. Mr. Lockcuff reports directly to the City Manager. Mr. Doug Taylor is the Utility Superintendent and has been with the City since 1984. Mr. Taylor has over 30 years experience in water and wastewater treatment plant operations, wastewater collection system maintenance, water distribution system maintenance, training, and utility construction. Mr. Taylor reports directly to the Utility Director. Administration Division This Administrative Division of the System is one of three units comprising the System and consists of three personnel and is responsible for the supervision of the three divisions of the Utilities Department, as well as certain fmancial activities involved with the System. The administrative personnel coordinate and supervise the operation and construction of improvements and expansion to the water and wastewater facilities. Regular reporting requirements of the various local, state and federal regulatory agencies involved in water and wastewater issues are the responsibilities of the Administration Division, as well as the continued monitoring and analysis of the infrastructure required for System operation. Water and Wastewater Treatment Plant Operations Division The Water and Wastewater Treatment Plant Operations Division consists of 10 water and wastewater treatment plant operators, all of which are state certified. The water plant operations division oversees the supply, treatment, and storage of potable water. In addition, the staff associated with water plant operations is also responsible for providing customers with a safe and reliable supply of drinking water which meets all local, state and federal standards for potable water quality. The wastewater treatment plant operators are responsible for the operation, maintenance and regulatory reporting of such operations of the wastewater treatment facilities. Water Distribution and Wastewater Collection Division The Water Distribution and Wastewater Collection Division consists of four certified maintenance mechanics, service workers and general laborers. This division is responsible for the maintenance of raw water mains, water transmission and distribution mains, gravity sewers and wastewater force mains throughout the City. This division services over 800 fire hydrants and 34 wastewater lift stations located throughout the System. This division repairs leaks and major line breaks, new main installation, lift station repairs, correction of wastewater backups and general routine preventive and emergency water and wastewater treatment plant maintenance. 0R378176;1 13 First draft 04/09/01 Existing'Water System The water system serves approximately 5,558 connections (approximately 15,223 people) on the former east system and 5,199 connections (approximately 16,409 people) on the former west system for a total of 10,757 connections (31,632 people). The systems are interconnected by the distribution system. The distribution system is supplied from three water treatment plants; one located in the eastern portion of the service area (Northern Way), one located in the northwest part of the service area (Clear Court), and one located in the southwest part of the service area (Bahama Road). The water treatment facilities use a total of 7 wells and 9 thigh service pumps. Water is stored in 4 (lone million and 3 500,000-gallon) storage tanks. There are approximately 753,000 lineal feet of water lines in the system ranging in size from 4-inches to 18- inches, and ranging in material from steel to asbestos cement to PVC and ductile iron. There are over 800 fire hydrants in the System. The oldest materials are the asbestos cement and steel installed from 1959 to around 1975. The PVC and ductile was installed from 1970 to present. Water treatment plants do not have "operations" permits. All plants are currently in full compliance with the regulations of the State of Florida and have excess capacity. Water supply is permitted by the St. Johns River Water Management District ("SJRWMD"). The Consumptive Use Permit (CUP), Permit Number 8238, expires on October 8,2006 and is based on historical data and growth projections provided by the City to SJRWMD. The City exceeded permitted flows in 1998 and 1999 by 5.2% and 7.8% respectively. Since 1998, the Central Florida area has been in a drought condition and higher than normal consumption is to be expected. If an entity such as the City consistently exceeds the allocated value or if they exceed the allocated value by over 10% for anyone year, the entity will be required to appear before the SJRWMD staff to explain the reason(s) for the overage. If necessary, a new permit and/or modification may be required. There are no definitive rules governing overages. The 2000 Project The project, fmanced from a portion of the net proceeds of the 2000 Bonds and other available funds will include the construction of extensions of the sewer and water system to the area of the City known as the Town Center area. The estimated cost of such project is set forth below. Improvement Estimated Cost Wastewater Force Main Improvements $1,150,000 $770,000 Water Line Extensions and Improvements Lift Station Improvements $200,000 Gravity Sewer Extensions " $50,000 $580,000 Reclaimed Augmentation System Utility Operations Facility $1,000,000 $250.000 $4,000,000 Well Number 4 at WTP 1 TOTAL The City expects this project to be complete in the next 2 years. 0R378176;1 14 , First draft 04/09/01 Historical and Projected Water Flows The projections contained in the table below are based on certain assumptions and estimates and no representation is made that any of the assumptions or estimates are valid or that any of such projections will be realized. Population Average Daily Flow Total Year Residential Commercial Residential Commercial ADF Actual ADF (MGD) (MGD) (MGD) (MGD) 1990 21,555 3.60 3.60 1991 22,292 3.06 3.06 1992 23,057 500 3.27 0.05 3.32 3.34 , 1993 23,848 608 3.22 0.06 3.28 3.64 1994 24,670 758 3.92 0.08 4.00 3.52 1995 25,521 897 3.18 0.09 3.27 3.60 1996 26,403 3,420 3.16 0.34 3.50 3.77 1997 27,317 3,845 3.14 0.38 3.52 3.81 1998 27,859 4,336 3.21 0.43 3.64 4.28 1999 28,415 4,905 3.28 0.5 3.78 4.31 2000 28,986 5,567 3.35 0.56 3.91 4.595 2001 29,574 6,339 3.42 0.64 4.06 2002 30,175 7,242 3.5 0.72 4.22 ' 2003 30,794 8,301 3.58 0.83 4.41 2004- 31,429 9,548 3.66 0.96 4.62 2005 32,623 11,019 3.74 1.1 4.84 2006 32,753 12,758 3.82 1.27 5.09 2007 33,442 14,820 3.9 1.48 5.38 2008 34,151 17,269 J.99 1.73 5.72 2009 34,878 17,760 4.09 1.78 5.87 2010 35,6~5 18,290 4.18 ; - 1.83 6.01 Source - Amendment #4: Master Water and Wastewater Plans', 2/15/92. Available capacity is 6.7 MGD for all wastewater treatment plants combined. Water conservation goals were factored into 1995 and beyond in the plan. 0R378176;1 15 , First draft 04109/01 Existing Sewer System The wastewater system serves approximately 15,000 people on the West System and approximately 15,000 on the East System from two separate wastewater facilities for a total of approximately 30,000 people. Each facility is permitted separately and sewage flow cannot be switched between facilities. However, the effluent/reclaimed distribution systems are interconnected to allow complete disposal flexibility between the facilities and maximize the utilization of reclaimed water for beneficial reuse. Both facilities provide reclaimed water to golf courses and also utilize restricted access spray irrigation sites and percolation ponds. Each wastewater treatment location has two circular, field erected, steel waste-activated sludge plants, two parallel tertiary filters, a chlorine contact chamber, effluent holding ponds, and an effluent pumping station. The systems meet full Class I Reliability Criteria. The West facility, located in the northwest comer the City on a 19.1 acre tract, is capable of treating 2.5 MGD (design capacity) of wastewater per day with public access disposal capability, currently permitted for 2.07 M GD of disposal. The current three-month AD F average ending February, 200 1, is 0.989. Seventeen (17) lift stations convey the wastewater to this facility. Improvements to the plant in the last 10 years are the addition of a 2.0 MG effluent storage tank, effluent transfer pump station, effluent distribution pump station, and the installation of a third blower. In the last five years, a larger auxiliary generator was installed and the old generator was relocated to Lift Station 7- W . The East facility, located in the eastern portion of the city on an 11.88 acre tract, is capable of treating 2.24 MGD (design capacity) with an effluent disposal capacity of 2.012 MGD. The current three-month ADF ending, February 2001, is 0.930 MGD. Seventeen (17) lift stations convey the wastewater to this facility. Recent improvements in the last five years to this facility include digester addition, chlorine contact chamber, effluent transfer pump station, 3.0 million gallon reclaimed water storage tank, effluent distribution pump station, blowers were upgraded, and an auxiliary generator was installed to handle the entire facility. The collection and transmission system consists of 527,000 lineal feet of gravity sewer ranging in size from 6-inch to l5-inch with 2,365 manholes and 87,500 lineal feet of force main ranging in size from4-inch to 20-inch. The system was first constructed on the west side in 1959 with additions occurring over the years by mostly residential development. The east side was constructed starting in 1974 as the Tuscawilla PUD and serves predominantly residential development. This original PUD area is close to its build-out capacity. As part of the wastewater system, a reclaimed distribution system was developed to dispose of the effluent from the wastewater reclamation facilities. The reclaimed distribution system serves percolation ponds, parks, golf courses, rights-of-way, and residential areas with public access quality water. There are currently 1,546 residential customers on this alternative water source. In addition, the system serves two golf courses, several schools, several parks and other public areas. There are approximately 177,000 lineal.feet of reclaimed water lines in the system ranging in size from four (4)-inches to eighteen (18)-inches. These lines are predominantly PVC with some DIP. The system is relatively new with construction starting in the 1980's and a major portion of the residential distribution occurring in the 1990's. If reclaimed water is available, reclaimed distribution systems are required to be constructed by the land developer and dedicated to the City after cpristruction. The City recently received designlbuild proposals for a telemetry system to monitor the operation of the water facilities (including wells), lift station facilities, and wastewater facilities. This project is a replacement of a. very minimal tele~etry system that monitors on-site treatment operations. Equipment will be installed to improve the reliability of the operations, decrease response time to changes in plant performance and provide additional record- keeping capabilities. These improvements are expected to be completed in fiscal year 2000/01 for a cost of approximately $400,000 and will not be fmanced with proceeds of the Series 2001 Bonds. 0R378176;1 16 First draft 04109/01 Winter Springs Historical and Projected Sewer Flows West Year Population Average Daily Flow Residential Commercial Total ADF Actual ADF Residential Commercial (MGD) (MGD) (MGD) MGD) 1990 10,612 0.84 1991 10,900 0.92 1992 11 , 197 500 1.12 0.05 1.17 0.93 1993 11 ,501 608 1.15 0.06 1.21 0.93 1994 11,814 758 1.18 0.08 1.26 1.07 1995 12,135 897 1.21 0.09 1.30 1.08 1996 12,465 1,090 1.25 0~11 1.36 1.21 1997 12,804 1,324 1.28 0.13 1.41 1.11 1998 12,904 1,609 1.29 0.16 1.45 1.16 1999 13,004 1,955 1.30 0.20 1.50 1.09 2000 13, 106 2,375 1.31 0.24 1.55 1.02 2001 13,209 2,886 1.32 0.29 1.61 2002 13,312 3,506 1.33 0.35 1.68 2003 13,416 4,260 1.34 0.43 1.77 2004 13,521 5,176 1.35 0.52 1.87 2005 13,627 6,289 1.36 0.63 1.99 2006 13,733 7,641 1.37 0.76 2.14 2007 13,840 9,284 1.38 0.93 2.31 2008 13,948 11,280 1.39 1.13 2.52 2009 14,057 11 ,280 1.41 1.13 2.53 2010 14,167 11,280 1.42 1.13 2.54 Source: Amendment #4: Master Water and Wastewater Plans, 2/15/92. Facility design capacity is 2.5 MGD. ' ,. 0R378176;1 17 , First draft 04/D9/0l Historical and Projected Sewer Flows East Population Average Daily Flow Year Residential Commercial Residential Commercial Total ADF Actual ADF (MGD) (MGD) (MGD) (MGD) 1990 9,909 0.73 0.73 1991 10,349 0.74 0.74 1992 10,809 1.08 1.08 0.77 1993 11 ,208 1.12 1.12 0.94 1994 11,790 1.18 1.18 0.96 1995 12,313 1.23 1.23 0.96 1996 12,860 2,330 1.29 0.23 1.52 0.92 1997 13,431 2,521 1.34 0.25 1.60 1.07 1998 13,881 2,727 1.39 0.27 1.66 0.95 1999 14,345 2,950 1.43 0.30 1.73 0.98 2000 14,286 3,192 1.43 0.32 1.75 0.94 2001 16,322 3,453 1.63 0.35 1.98 2002 15,385 3,736 1.58 0.37 1.96 2003 16,365 4,041 1.64 0.40 2.04 2004 16,913 4,372 1.69 0.44 2.13 2005 17,479 4,730 1.75 0.47 2.22 2006 18,065 5,177 1.81 0.52 2.32 2007 18,669 5,536 1.87 0.55 2.42 ,- 2008 19,294 5,989 1.93 .060 2.53 2009 19,940 6,480 1.99 0.65 2.64 2010 20,608 7,010 2.06 0.70 2.76 Source: Amendment #4: Master Water and Wastewater Plans, 2/15/92. Facility design capacity is 2.24 MGD. 0R378176;1 18 , First draft 04109/0 I Rates and Charges The City has a computer billing and collection system in-house. Each customer is billed monthly by the utility for services provided. The utility utilizes a billing system of a base charge, plus a usage charge per 1,000 gallons. To encourage conservation of water resources, the City has implemented an incremental block fee system. The higher the usage, the higher the cost per 1,000 gallons. The tariff schedule is listed below. A residential customer using 10,000 gallons per month (typical customer) would pay a water and sewer bill of $45.23, excluding taxes. The rates shown below are exclusive of taxes, franchise fees, surcharges, or other rate adjustments. The utility has the authority to discontinue water and sewer service for nonpayment of water and sewer service. In addition to these charges, connection fees are also required as shown in the tariff schedule. Monthly Residential and General Service Water Rates Meter Size Base Facility Charge 5/8" x % " (residential) 1" 1 1/2" 2" 3" 4" 6" $3.58 8.94 17.89 28.62 57.23 89.50 178.85 Gallonage charge per 1,000 gallons $0.91 Individually metered residential customers: Gallons Charge Per Thousand (] . 000) Gallons o - 10,000 10,001 - 15,000 15,001 - 20,000 20,001 - 25,000 25,001 - 30,000 Over 30,000 $0.91 1.25 1.50 1.75 2.00 2.50 Irrigation Meters: 0R378176;1 19 Gallons 0- 5,000 5,001 - 10,000 10,001 - 15,000 15,001 - 20,000 Over 20,000 Meter Installation Fees Meter Size 5/8" x 3/4" 5/8" x 3/4", double check 5/8" x'/4", double check - remote read 1" plus backflow prevention device 1 "/z" plus backflow prevention device 2" with separate double check valve Above 2" with backflow prevention device Sewer Rates Meter Size 5/8" 1" 1 '14" 2" 3" 4" 6" Gallonage charge per 1,000 gallons Reclaimed Rates Non-metered Residential Per Month (No gallonage charge) Metered Commercial Per Month (includes 20,000 gallons) Over 20,000 Gallons - per 1,000 gallons [REMAINDER OF PAGE INTENTIONALLY LEFf BLANK] 0R378176;1 20 , First draft 04/09/01 Charge Per Thousand (1. 000) Gallons $1.25 1.50 1.75 2.00 2.50 Charge $120.00 150.00 225.00 200.00 450.00 550.00 Actual Cost Charge $6.65 16.63 33.24 53.19 106.37 166.25 332.41 $2.59 $5.00 $5.00 0.25 . First draft 04/09/01 COMPARISON OF USER CHARGES Base Fee Consumption Fee Total Meter Size $/1000 gal Total WINTER SPRINGS Water 5/8" x 3/4" $3.58 $0.91 $9.10 $12.68 2" $28.62 $0.91 $9.10 $37.72 Sewer 5/8" x 3/4" $6.65 $2.59 $25.90 $32.55 2" $53.19 $2.59 $25.90 $79.09 CASSELBERRY Water 5/8" x 3/4" $4.50 $0.95 $9.50 $14.00 2" $35.97 $0.95 $9.50 $45.47 Sewer 5/8" x 3/4" $7.85 $2.66 $31.70 $39.55 2" $64.45 $2.66 $31.70 $96.15 OVIEDO Water 5/8" x 3/4" $5.30 $1.00 $7.00 $12.30 2" $5.30 $1.00 $7.00 $12.30 Sewer 5/8" x 3/4" $11.00 $2.63 $26.30 $37.30 2" $66.00 $2.63 $26.30 $92.30 LONGWOOD Water 5/8" x 3/4" $6.25 $1.05/$1.10 $8.50 $14.75 2" $6.25 $1.05/$1.10 $8.50 $14.75 Sewer 5/8" x 3/4" $26.70 I $0.00 $0.00 $26.70 2" $26.70 $0.00 $0.00 $26.70 SANFORD Water 5/8" x 3/4" $3.14 $1.21$1.45 $14.00 $17.14 2" $18.85 $1.21$1.45 $14.00 $32.85 Sewer 5/8" x 3/4" $4.69 $2.21$3.31 $30.88 $35.57 2" $28.17 $2.21$3.31 $30.88 $59.05 0R378176;1 21 . First draft 04/09/01 SEMINOLE COUNTY Water 5/8" x 3/4" $6.60 $0.65 $6.50 $13.10 2" $39.60 $0.65 $6.50 $46.10 Sewer 5/8" x 3/4" $11.35 $2.59 $25.90 $37.25 2" $11.35 $2.59 $25.90 $37.25 Notes: 1. User charges are based on a total usage of 10,000 gallons. 2. Oviedo water base includes first 3,000 gallons. Sewer base is $11.00 per ERU. 3. Longwood base includes fIrst 2,000 gallons. From 2k to 9k is at a rate of $1.05 and over 9k = $1.1 O. 4. Sanford base includes fIrst 2,000 gallons. 5. Seminole County charges base fees of$6.60 per ERC for water and $11.35 per ERC for sewer. .6. The 2" meter is assumed to have 6 ERU's. 7. In City rates only, where applicable. .~ , 0R378176;1 22 . First draft 04/09/01 LITIGATION There is not now pending any litigation restraining or enjoining the issuance or delivery of the Series 2001 Bonds or questioning or affecting the validity of the Series 2001 Bonds or the proceedings and authority under which they are to be issued. Neither the creation, organization or existence of the City, nor the title of the present City Commission members or other officials of the City to their respective offices is being contested. There is no litigation pending which in any manner questions the right of the City to issue the Series 200 I Bonds in accordance with the provisions of the Resolution and the laws of the State of Florida. The City experiences routine litigation and claims incidental to the conduct of its affairs. The City carries substantial insurance for these exposures, and pending claims are defended by and, if necessary, are anticipated to be paid by the insurance carriers. LEGAL MATTERS Certain legal matters incident to the validity of the Series 2001 Bonds and the issuance thereof by the City are subjectto the approving opinion of Akerman, Sentemtt & Eidson, P.A., Orlando, Florida, Bond Counsel. Copies of such opinion will be available at the time of the delivery of the Series 200 I Bonds and the proposed form of such opinion is set forth in Appendix E hereto and reference is made thereto for the terms thereof. The actual legal opinion to be delivered may vary from that text if necessary to reflect facts and law on the date of delivery. The opinion will speak only as of its date, and subsequent distribution of its by recirculation of the Official Statement or otherwise shall create no implication that subsequentto the date of the opinion Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in the opinion. Certain legal matters will be passed upon for the City by Anthony A. Garganese of Brown, Ward, Salzman & Weiss, P.A., City Attorney, Orlando, Florida and by Akerman, Sentemtt & Eidson, P .A., Disclosure Counsel. TAX EXEMPTION General The Internal Revenue Code of 1986 (the "Code") establishes certain requirements which must be met subsequent to the issuance and delivery of the Series 2001 Bonds for interest thereon to be and remain excluded from gross income for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Series 2001 Bonds to be included in gross income for federal income tax purposes retroactive to the date of issue of the Series 200 I Bonds. Those requirements include, but are not limited to, provisions which prescribe yield and other limits within which the proceeds of the Series 2001 Bonds and other amounts are to be invested and require, under certain circumstances, that certain excess investment earnings on the foregoing must be rebated on a periodic basis to the Treasury Department of the United States. ,The City has covenanted in the Resolution to comply with each such requirement. In the opinion of Bond Counsel, assuming continuous compliance by the City with the Code and the covenants in the Resolution, under existing statutes, regulations, published rulings, and judicial decisions, and subject to the conditions described below, interest on the Series 2001 Bonds is excludable from gross income for federal tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax on corporations. Failure by the City to comply subsequent to the issuance of the Series 2001 Bonds with certain requirements of the Code regarding the use, expenditures and investment of Series 2001 Bond proceeds and the timely payment of certain investment earnings to the Treasury of the United States may cause interest on the Series 2001 Bonds to become included in gross income for federal income tax purposes retroactive to their date of issue. The City has covenanted in the Resolution to comply with all provisions of the Code necessary to, among 0R378176;1 23 . First draft 04/09/01 other things, maintain the exclusion from gross income of interest on the Series 2001 Bonds. In rendering its opinion, Bond Counsel has assumed continuing compliance with such covenants. The opinion on federal tax matters will be based on and will assume the accuracy of certain representations and certifIcations and compliance with certain covenants of the City to be contained in the transcript of proceedings and that are intended to evidence and assure the foregoing, including that the Series 2001 Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the certifIcations and representations made by the City. Prospective purchasers of the Series 2001 Bonds should be aware that ownership of the Series 2001 Bonds may result in other federal tax consequences to certain taxpayers. In the opinion of Bond Counsel, the Series 2001 Bonds are exempt from all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. Interest on the Series 2001 Bonds may be subject to state or local income taxation under applicable state or local laws in other jurisdictions. Purchasers of the Series 2001 Bonds should consult their tax advisors as to the income tax status of interest on the Series 2001 Bonds, in their particular state or local jurisdictions. During recent years, legislative proposals have been introduced in Congress, and in some cases, enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2001 Bonds. In some cases these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar in nature to the Series 2001 Bonds. From time to time, legislative proposals may be introduced which could have an effect on both the federal tax consequences resulting from the ownership of the Series 2001 Bonds and their market value. No assurance can be given that any such legislative proposals, if enacted, would not apply to, or would not have an adverse effect upon, the Series 2001 Bonds. Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the Series 2001 Bonds may affect the tax status of interest on the Series 2001 Bonds. Moreover, except as stated above, Bond Counsel expresses no opinion regarding federal or state tax consequences arising with respect to the Series 2001 Bonds. Prospective purchasers of the Series 2001 Bonds are advised to consult their own tax advisors as to the applicability of other federal or state tax consequences. TAX TREATMENT OF ORIGINAL ISSUE DISCOUNT Under the Code, the difference between the maturity amounts of the Series 200 I Bonds maturing in the years _, _, _, _, _ and years _ through _ (the "Discount Bonds"), and the initial offering price to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers, at which price a substantial amount of the Discount Bonds of the same maturity was sold is "original issue discount." Original issue discount will accrue over the term of such Discount Bonds on a compounded basis. A purchaser who acquires such Discount Bonds in the initial offering at a price equal to the initial offering price thereof to the public will be treated as receiving an amount of interest excludable from gross income for federal income tax purposes equal to the original issue discount accruing during the period he or she holds such Discount Bonds, and will increase his or her adjusted basis in such Discount Bonds by the amount of such' accruing discount for purposes of determining taxable gain or loss on the sale or other disposition of such Discount Bonds. The federal income tax consequences of the purchase, ownership and sale or other disposition of such Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those above. Owners of such Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, redemption or other disposition of Discount Bonds and with respect to the state and local tax consequences of owning and disposing of such Discount Bonds. 0R378176;1 24 . First draft 04109/0 I UNDERWRITING The Underwriters shown on the cover page hereof have agreed, subject to certain conditions precedent to purchase the Series 2001 Bonds at a price of $ ($ original par amount, less underwriters' discount of$ and less original issue discount of$ ), plus accrued interest. The Underwriters have furnished the information on the cover page of this Official Statement pertaining to the public offering prices of the Series 2001 Bonds. The public offering prices of the Series 2001 Bonds may be changed from time to time by the Underwriters, and the Underwriters may allow a concession from the public offering prices to certain dealers. None of the Series 2001 Bonds will be delivered by the City to the Underwriters unless all of the Series 2001 Bonds are so delivered. FINANCIAL ADVISOR Public Financial Management, Inc., Orlando, Florida, has served as fInancial advisor to the City in connection with the issuance of the Series 2001 Bonds. INVESTMENT POLICY The City considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. During the 1998 fiscal year, the City adopted GASB Statement No. 31, Accounting and Financial Reportingfor Certain Investments and External Investment Pools. As a result, all investments are presented at fair value. The City Charter authorizes the City to invest in direct obligations of or obligations guaranteed by the Department of the Treasury of the United States of America, obligations of specifIc federal agencies of the United States of America, bonds, notes, or other evidence of indebtedness issued by the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation, secured repurchase agreements, bankers' acceptance, money market, commercial paper, certificates of deposit, and the Local Government Surplus Funds Trust Fund. All investments must be insured, registered, or held by the City or a trustee in the City's name. RATINGS Standard & Poor's Ratings Services and Fitch IBCA, Inc., have assigned ratings of "_" and "_," respectively, to the Series 2001 Bonds, with the understanding that, upon delivery of the Series 2001 Bonds a municipal bond insurance policy will be issued by Financial Guaranty. Such ratings reflect only the views of such organizations and any desired explanation of the signifIcance of such ratings should be obtained from the rating agency furnishing the same, at the following addresses: Fitch IBCA, Inc., One State Street Plaza, New York, New York 10004 and Standard & Poor's Ratings Services, 55 Water Street, New York, New York 10041. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions. There is no assurance such ratings will continue for any given period of time or .that such ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Series 2001 Bonds. FINANCIAL STATEMENTS The City's general purpose fmancial statements for its fIscal year ended September 30, 2000 appearing in Appendix "B" hereto have been audited by McDirmit, Davis, Puckett & Co., P .A., independent auditors, as stated in their report appearing therein. 0R378176; 1 25 , First draft 04109/01 CONTINUING DISCLOSURE The City has agreed and undertaken for the benefit of Series 2001 Bondholders and in order to assist the Underwriters in complying with the continuing disclosure requirements of Securities and Exchange Commission Rule 15c2-12 (the "Rule"), to provide certain fInancial information and operating data relating to the City and the Series 2001 Bonds in each year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events, if material. Such undertaking shall only apply so long as the Series 2001 Bonds remain outstanding under the Resolution. The Annual Report and audited fmancial statements will be fIled annually by the City pursuant to the undertaking with each Nationally Recognized Municipal Securities Information Repository ("NRMSIRs") described in the Continuing Disclosure CertifIcate (Appendix G hereto), as well as any state information repository that is subsequently established in the State of Florida (the "SID"). The notices of material events will be fIled by the City with the Municipal Securities Rulemaking board or the NRMSIRs and with the SID. The specifIc nature of the information to be contained in the Annual Report and the notices of material events are described in the Appendix G. With respect to the Series 2001 Bonds, no party other than the City is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the aforementioned Rule. The City failed to timely provide its Annual Report due March 31, 2000 which it had agreed to provide in connection with the issuance of its Improvement Refunding Revenue Bonds, Series 1999. The City has now provided such Annual Report to the NRMSIRs. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of the arithmetic computations showing the adequacy of the maturing principal and interest on the securities to be acquired with a portion of the proceeds of the Series 2001 Bonds, together with other funds available described under "THE PLAN OF REFUNDING," have been verified by , independent certifIed public accountants. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Section 517.051, Florida Statutes, and the regulations promulgated thereunder (the "Disclosure Act") required that the City make a full and fair disclosure of any bonds or other debt obligations that it has issued or guaranteed that are or have been in default as to principal or interest at anytime after December 31,1975 (including bonds or other debt obligations for which it has served only as a conduit issuer such as industrial development or private activity bonds issued on behalf of private businesses). The City is not and has not since December 31,1975 been in default as to principal and interest on its bonds or other debt obligations. Although the City is not aware of any defaults with respect to bonds or other debt obligations as to which it has served only as a conduit issuer, it has not undertaken an independent review or investigation of such bonds or other obligations. The City does not believe that any information about any default would be considered material be a reasonable investor in the Series 2001 Bonds because t4e City was not liable to pay the principal of or interest on any such bonds except from payments made to it by the private companies on whose behalf such bonds were issued and no funds of the City were used to pay such bonds or the interest thereon. ENFORCEABILITY OF REMEDIES The reme'dies available to the owners of the Series 2001 Bonds upon an event of default under the Resolution and any policy of insurance referred to herein are in many respects dependent upon judicial actions which are often subject to discretion and.delay. Under existing constitutional and statutory law and judicial decisions, the remedies specifIed by the federal bankruptcy code, the Resolution, the Series 2001 Bonds and any policy of insurance referred to herein may not be readily available or may be limited. The various legal opinions to be delivered concurrently with 0R378176;1 26 . First draft 04/09/01 the delivery of the Series 2001 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. MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the owners of the Series 2001 Bonds. The information contained above is neither guaranteed as to accuracy or completeness nor to be construed as a representation by the City or the Underwriters. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder is to create, under any circumstances, any implication that there has been no change in the affairs of the City from the date hereof. This Official Statement is submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, as a whole or in part, for any other purpose. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations offact. CERTIFICATE AS TO OFFICIAL STATEMENT The execution and delivery of this OffIcial Statement has been duly authorized by the City Commission of the City. At the time of delivery of the Series 2001 Bonds to the Underwriters, the City will provide to the Underwriters a certifIcate (which may be included in a consolidated closing certifIcate of the City), signed by those City officials who signed this Official Statement, relating to the accuracy and completeness of certain materials in this Official Statement and to its being a fInal official statement in the judgment of the undersigned for the purposes ofSEC Rule 15c2-12(b )(3). CITY OF WINTER SPRINGS, FLORIDA By: Mayor By: City Manager .I 0R378176;1 27 . First draft 04/09/01 APPENDIX B City of Winter Springs, Florida General Purpose Financial Statements for the Year Ended September 30, 2000 0R378176;1