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HomeMy WebLinkAboutMBIA (2) -1992 09 01 Mayor and City commission City of winter springs, Florida Page 3 purposes), such interest is taken into account in determining adjusted current earnings. The opinions set forth in the immedi- ately preceding sentence are subj ect to the condi tion that the Issuer comply with all requirements of the Internal Revenue Code of 1986 that must be satisfied subsequent to the issuance of the Series 1992 Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Issuer has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Series 1992 Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Series 1992 Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Series 1992 Bonds. 4. The Series 1992 Bonds are exempt from intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. It is to be understood that the rights of the owners of the Series 1992 Bonds and the enforceability of the Series 1992 Bonds and the Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and to the exercise of judicial discretion in appropriate cases. Our opinions expressed herein are predicated upon present law, facts and circumstances, and we assume no affirmative obligation to update the opinions expressed herein if such laws, facts or circumstances change after the date hereof. Very truly yours, , HONIGMAN MILLER SCHWARTZ AND COHN MOW / JMK 35402.0PN Mayor and City commission City of Winter Springs, Florida Page 2 Furthermore, we are not passing on the accuracy or sufficiency of any CUSIP numbers appearing on the Series 1992 Bonds. In addition, we have not been engaged to and, therefore, do not express any opinion as to compliance by the Issuer or the underwriter with any federal or state statute, regulation or ruling with respect to the sale and distribution of the Series 1992 Bonds. The Series 1992 Bonds do not constitute a general obligation or indebtedness of the Issuer within the meaning of any constitu- tional, statutory or other limitation of indebtedness and the holders thereof shall never have the right to compel the exercise of any ad valorem taxing power of the Issuer or taxation in any form of any real or personal property for the paYment of the principal of or interest on the Series 1992 Bonds. The Series 1992 Bonds are solely payable from and secured by a' lien on the Net Revenues. The lien of the Series 1992 Bonds on the Net Revenues is on a parity with the lien thereon of the Issuer's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991 (the "Parity Bonds"). Pursuant to the terms, conditions and limitations contained in the Resolution, the Issuer has reserved the right to issue obligations in the future which shall have a lien on the Net Revenues equal to that of the Series 1992 Bonds and the Parity Bonds. The opinions set forth below are expressly limited to, and we opine only with respect to, the laws of the State of Florida and the federal income tax laws of the united States of America. Based upon the foregoing, we are of the opinion that: 1. The Resolution has been duly adopted by the Issuer and constitutes a valid and binding obligation of the Issuer enforce- able upon the Issuer. 2. The Series 1992 Bonds have been duly authorized, executed and delivered by the Issuer and are valid and binding special obligations of the Issuer, payable solely from the sources provided therefor in the Resolution. 3. The interest on the Series 1992 Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that, for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax Upon delivery of the Series 1992 Bonds, Honigman Miller Schwartz and Cohn, Bond Counsel, proposes to render its approving opinion in sUbstantially the following form: - [DATED DATE OF DELIVERY OF THE SERIES 1992 BONDS] Mayor and city Commission City of winter Springs, Florida winter Springs, Florida $ CITY OF WINTER SPRINGS, FLORIDA WATER AND SEWER REFUNDING REVENUE BONDS SERIES 1992 Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance by the City of winter springs, Florida (the "Issuer"), of $ Water and Sewer Refunding Revenue Bonds, Series 1992 (the "Series 1992 Bonds"), pursuant to the Constitution and laws of the State of Florida, including particularly Chapter 166, Part II, Florida Statutes, and Resolution No. adopted by the Issuer on , 1992, as amended and supplemented (the "Resolution"), and pursuant to the provisions of section 19N of Resolution No. 665 of the Issuer (the "Original Resolution") passed and adopted by the City Commission on April 29, 1991. Any capitalized undefined terms used herein shall have the meaning set forth in the Resolution. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the Resolution and in the certified proceedings and other certifica- tions of public officials furnished to us, without undertaking to verify the same by independent investigation. We have assumed the genuineness of signatures on all documents>' and instruments, the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies. We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the Official Statement for the Series 1992 Bonds or other offering material relating to the Series 1992 Bonds (except to the extent, if any, stated in the Official Statement) and we express no opinion relating thereto (excepting only the matters set forth as our opinion in the Official State- ment). This opinion should not be construed as offering material or as an offering circular, prospectus or official statement and is not intended in any way to be a disclosure statement used in connection with the sale or delivery of the Series 1992 Bonds. [This page intentionally left blank] APPENDIX E SECTION 36. PRELIMINARY OFFICIAL STATEMENT. The City Manager is authorized and directed to cause a Preliminary Official Statement to be prepared and to deem the Preliminary Official Statement final for purposes of Rule 15c2-12 (the "Rule") of the Securities and Exchange Commission, except for "permitted omis- sions," as defined in such Rule. SECTION 37. EFFECTIVE DATE. This Resolution shall become effective immediately upon its adoption. ADOPTED this 28th day of September, 1992 (SEAL) CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA Mayor ATTEST: City Clerk Approved as to Form and Legal Sufficiency: city Attorney 3S402AUT.RES C1J/C1J/92 D-32 and solely from the sources stated in this Resolution and the Series 1992 Bonds; and 2. They will accordingly pay to MBIA the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the pOlicy, which principal and interest shall be deemed past due and not to have been paid), but only from the sources and in the manner provided herein for the paYment of principal of and interest on the Series 1992 Bonds to Holders, and will otherwise treat MBIA as the owner of such rights to the amount of such principal and interest. G. In connection with the issuance of Additional Parity Obligations, the Issuer shall deliver to MBIA a copy of the disclosure document, if any, circulated with respect to such Additional Parity Obligations. H. Copies of any amendments made to the documents executed in connection with the issuance of the Series 1992 Bonds which are consented to by MBIA shall be sent to S&P. I. MBIA shall receive notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto. J. MBIA shall receive copies of all notices required to be delivered to Series 1992 Bondholders and, on an annual basis, copies of the Issuer's audited financial statements and annual budget. K. Any notice that is required to be given to a Holder of the Series 1992 Bonds or to the Paying Agent pursuant to the Resolution shall also be provided to MBIA. All notices required to be given to MBIA under the Resolution shall be in writing and shall be sent by registered or certified mail addressed to Municipal Bond Investors Assurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Surveillance. SECTION 34. EXPENDITURES PRIOR TO ISSUANCE OF BONDS. The Issuer is hereby authorized to expend legally available funds of the Issuer in anticipation of the issuance of the Series 1992 Bonds. Upon the issuance of the Bonds, the Issuer may be reim- bursed for any expenditures made in anticipation of the issuance of such Series 1992 Bonds. SECTION 35. PUBLICATION OF NOTICE OF REFUNDING. within thirty (30) days after the delivery of the Series 1992 Bonds, the Issuer shall cause to be published one time in a financial journal published in the Borough of Manhattan, City and State of New York, a notice of the advance refunding of the Refunded Bonds. D-31 1. If and to the extent there is a deficiency in amounts required to pay interest on the Series 1992 Bonds, the Paying Agent shall (a) execute and deliver to Citibank, N.A., or its successors under the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing MBIA as agent for such Holders in any legal proceeding related to the paYment of such interest and an assignment to MBIA of the claims for interest to which such deficiency relates and which are paid by MBIA, (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy paYment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and 2. If and to the extent of a deficiency in amounts required to pay principal of the Series 1992 Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing MBIA as agent for such Holder in any legal proceeding relating to the paYment of such principal and an assiqnment to MBIA of any of the Series 1992 Bonds surren- dered to the Insurance Paying Agent of so much of the princi- pal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such paYment (but such assignment shall be delivered only if paYment from the Insurance Paying Agent is received), (b) recei ve as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy paYment therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders. E. PaYments with respect to claims for interest on and principal of Series 1992 Bonds disbursed by the Paying Agent from proceeds of the Policy shall not be considered to discharge the obligation 'of the Issuer with respect to such Series 1992 Bonds, and MBIA shall become the owner of such unpaid Series 1992 Bonds and claims for the interest in accordance with the tenor of the assignment. made to it under the provisions of this subsection or otherwise. F. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent hereby agree for the benefit of MBIA that, 1. They recognize that to the extent MBIA makes paYments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Series 1992 Bonds, MBIA will be subrogated to the rights of such Holders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided D-30 agreements or provisions of this Resolution or of the Bonds issued hereunder. SECTION 31. 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 32. NOTICES TO MBIA. For so long. as the Series 1992 Bonds are outstanding, MBIA will be furnished a copy of all significant notices with respect to this Resolution or the Bonds as follows: Municipal Bond Investors Assurance Corporation 113 King Street Armonk".New York 10504 Attention: Surveillance Department SECTION 3 3 . PAYMENTS UNDER MBIA POLICY. As long as the municipal bond insurance policy of MBIA (the "policy") guaranteeing the paYment of principal and interest on the Series 1992 Bonds shall be in full force and effect the Issuer and Paying. Agent agree to comply with the following provisions: A. In the event that, on the second Business Day, and again on the Business Day, prior a the paYment date on the. Series 1992 Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Series 1992 Bonds due on the second following or following, as the case may be, Business Day, the Paying Agent shall immediately notify MBIA or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. B. If the deficiency is made up in whole or in part prior to or on the paYment date, the Paying Agent shall so notify MBIA or its designee. C. In addition, if the Paying Agent has notice that any Series 1992 Bondholder has been required to disgorge paYments of principal or interest on the Series 1992 Bonds to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such paYment constitutes a voidable preference to such Series 1992 Bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify MBIA or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. D. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Holders of the Series 1992 Bonds as follows: D-29 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 22. AMENDING AND SUPPLEMENTING OF RESOLUTION WITHOUT CONSENT OF HOLDERS OF BONDS. The provisions of Section 22 of the Original Resolution ~hall be deemed applicable to this Resolution and shall apply to the Series 1992 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 23. 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 1992 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 24. DEFEASANCE. The provisions of Section 24 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 1992 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 25. GOVERNMENTAL REORGANIZATION. The provisions of Section 25 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 1992 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 26. ADDITIONAL UTILITY FUNCTIONS. The provisions of Section 26 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 1992 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 27. CAPITAL APPRECIATION BONDS. The provisions of Section 27 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 1992 Bonds issued pursuant t~cthis Resolution as though fully restated herein. SECTION 28. DESIGNATED MATURITY OBLIGATIONS. The provisions of Section 28 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 1992 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 29. OPTION BONDS. The provisions of section 29 of the Original Resolution shall be deemed applicable to this Resolution and shall apply to the Series 1992 Bonds issued pursuant to this Resolution as though fully restated herein. SECTION 30. 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 separate from the remaining covenants, D-28 this Resolution and shall apply to the Series 1992 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 1992 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 1992 Bonds in any manner, and shall not take or permit to be taken any other action or actions, which would cause any such Series 1992 Bonds to be an "arbitrage bond" within the meaning of Section 148, or "federally guaranteed" within the meaning of section 149(b), of the Internal Revenue Code of 1986, as amended (in this section called the "Code"), or otherwise cause interest on the such Series 1992 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 permitted by law and this Resolution which are necessary or desirable in order to assure that interest paid on such Series 1992 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"). In order to insure compliance with the rebate provisions of section 148 (t) of the Code with respect to the Series 1992 Bonds the Issuer hereby creates the City of winter springs Water and Sewer Refunding Revenue Rebate Fund to be held by Issuer. The Rebate Fund need not be maintained so long as the Issuer timely satisfies its obligation to pay any rebatable earnings to the united States Treasury; however, the Issuer may, as an administrative convenience, maintain.and deposit funds in the Rebate Fund from time to time. Any moneys held in the Rebate Fund shall not be considered Net Revenues and shall not be pledged in any manner for the benefit of the holders of the Series 1992 Bonds. Moneys in the Rebate Fund (including earnings and deposits therein) shall be held for future paYment to the United States Government as required by the Regulations and as set forth in instructions of Bond Counsel delivered to the Issuer upon issuance of such Series 1992 Bonds. Notwithstanding any provision of this Resolution to the contrary, to the extent the Issuer is required or elects to make deposits to the Rebate Fund, such amounts may be taken from any fund or account created hereunder. SECTION 21. 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 1992 D-27 and expenses incurred in connection with the issuance of the Series 1992 Bonds. (D) 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 retire and/or defease the Refunded Bonds by immediately paying to the holder thereof the amount due such holder to retire said Refunded Bonds or, by depositing such sums of money for investment in appropriate Federal Securities 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 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 the Series 1992 Bonds, the Issuer shall enter into an Agreement substantially in the form attached hereto as Exhibit A with the Escrow Agent. 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 Agreement. SECTION 18. SPECIAL OBLIGATIONS OF ISSUER. The Series 1992 Bonds shall not be or constitute general obligations or indebted- ness of the Issuer as "bonds" within the meaning of the Constitu- tion 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 1992 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 1992 Bonds shall be secured forthwith equally and ratably by an irrevocable lien on the Net Revenues, and the Issuer doesirrevoca- bly pledge such Net Revenues to the paYment of the principal of and interest on the Series 1992 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, irrespecti ve of whether such parties have notice thereof. SECTION 19. COVENANTS OF THE ISSUER. The provl.sl.ons of Section 19 of the Original Resolution shall be deemed applicable to D-26 . SECTION 16. APPLICATION OF PROVISIONS OF ORIGINAL RESOLUTION. The Series 1992 Bonds, herein authorized, shall for all purposes (except as herein expressly provided) be considered to be Addition- al Parity Obligations issued under the authority of the original Resolution, and shall be entitled to all the protection and security provided therein for the Parity Bonds, 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 1992 Bonds herein authorized in like manner as applicable to the Parity Bonds. The principal of and interest on the Series 1992 Bonds shall be payable from the accounts 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 account in the Debt Service Fund by the Issuer in amounts fully sufficient to pay the principal of and interest on the Parity Bonds and the Series 1992 Bonds as such principal and interest become due. The Pledged 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 1992 BOND PROCEEDS. The proceeds, including accrued interest and premium, if any, received from the sale of any or all of the Series 1992 Bonds shall be applied by the Issuer simultaneously with the delivery of such Series 1992 Bonds to the purchaser thereof, as follows: (A) The a.ccrued interest, and at the option of the Issuer interest to accrue on the Series 1992 Bonds in such amount and for a period of time as shall be approved by subsequent resolution of the Issuer, on the Series 1992 Bonds shall be deposited in the Interest Account in the Debt Service Fund and shall be used only for the purpose of paying interest becoming due on the Series 1992 Bonds. (B) Unless provided from other funds of the Issuer on the date of issuance of the Series 1992 Bonds, or unless provided for through the purchase of a guaranty or an insurance policy, an irrevocable letter of credit, a surety bond, or similar credit facility, or any combination thereof, the Issuer shall deposit to the special subaccount in the Reserve Account established for the benefit of the Series 1992 Bonds, a sum sufficient equal to the Reserve Requirement on the Series 1992 Bonds. (C) To the extent not reimbursed therefor by the original purchaser of the Series 1992 Bonds, the Issuer shall pay all costs D-25 CERTIFICATE OF AUTHENTICATION the within mentioned Resolution. This Bond is one of the Bonds issued under the provisions of Date of Authentication: Registrar, as Authenticating Agent By: (Manual Sianaturel ASSIGNMENT AND TRANSFER For value received the undersigned hereby sells, assigns and transfers unto Social Security or other identifying number of the attached bond of the City of 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. (Please insert assignee) Winter Springs, Date Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or a trust company. NOTICE: No transfer will be reg- istered and no new Bonds will be issued in the name of the Trans- feree, unless the signature to this assignment shall correspond wi th the name as it appears upon the face of the within Bond in every particular with- out alteration or enlargement or any change whatever and the Social Security or Federal Em- ployer Identification Number of the Transferee is supplied. If the Transferee is a trust, the names and Social Security or Federal Employer Identification Numbers of the settlor and ben- eficiaries of the trust, the Federal Employer Identification Number and date of the trust and the name of the trustee should be supplied. (Bond Counsel Opinion) [End of Form of Series 1992 Bond] D-24 officers' signatures) and its seal or facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the ____ day of , 1992. ( SEAL) ATTESTED AND COUNTERSIGNED: Clerk CITY OF WINTER SPRINGS, FLORIDA Mayor D-23 the outstanding Bonds, one hundred percent (100%) of all amounts due under the Financial Guaranty Agreement and one hundred percent (100%) of all other deposits 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 City has reserved the right in the Resolution to issue in the future Additional Parity Obligations having a lien on the Net Revenue equal to the lien thereon of this Bond and the Parity Bonds. The City 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. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and ,have been performed in regular and due form and time as required by the laws and Constitution of the state of Florida applicable thereto, and that the issuance of the Bonds of this issue does not violate any constitutional statutory or charter limitations or provisions. This Bond is and has all the qualities and incidents of a negotiable instrument under the Uniform Commercial Code - Invest- ment Securities Law of the State of Florida. The transfer of this Bond is registrable by the Bondholder 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. The 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 Clerk, (the signatures of the Mayor and the Clerk being authorized to be facsimiles of such D-22 This Bond is one of an authorized issue of Bonds in the aggregate principal amount of $ of like date, tenor and effect, except as to number, maturity and interest rate, issued to finance the cost of refunding certain obligations of the City pursuant to and in full compliance wi th the Consti tution and statutes of the state of Florida, including particularly Chapter 166, Part II, Florida statutes, the Charter of the City, other applicable provisions of law and a resolution duly adopted by the City commission of the City on April 29, 1991, as supplemented and specifically as supplemented by a resolution adopted by the City commission of the City on " 1992 (hereinafter collectively called the "Resolution"). It is provided in the Resolution that the Bonds of this issue will rank on a parity with the outstanding Bonds of an issue of Water and Sewer Refunding Revenue Bonds, Series 1991, of the Issuer (the "Parity Bonds"). This Bond and the Parity Bonds are payable solely on a parity with each other from and secured by a prior lien upon and pledge of the Net Revenues, as defined in the Resolution, derived and collected by the City from the operation of the City's water and sewer system (the "System"), in the manner provided in the Resolution. Reference is made to the Resolution for more complete definition and description of Net Revenues and the System. This Bond does not constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the Owner of this Bond that such Owner shall never 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 this Bond or the making of any Debt Service Fund, reserve or other payments provided for in the Resolution. It is further agreed between the city 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 City, but 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 City in the Resolution has covenanted and agreed with the Owners of the Bonds of this issue 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 (i) 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 D-21 No. R - $ UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY OF SEMINOLE I CITY OF WINTER SPRINGS WATER AND SEWER REFUNDING REVENUE BOND, SERIES 1992 MATURITY DATE: INTEREST RATE: DATED DATE: aJSIP: Registered Owner: Principal Amount: KNOW ALL MEN BY THESE PRESENTS, that the ci ty of Winter Springs, Florida (hereinafter called "City"), for value received, hereby promises to pay to the order of , or registered assigns, as herein provided, on the day of , upon the presentation and surrender hereof at the principal corporate trust office of , in the City of , Florida (the "Paying Agent"), from the revenues hereinafter mentioned, the principal sum of DOLLARS 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, and to pay, solely from said sources, by check or draft mailed to the person in whose name this Bond is registered at his address as it appears on the Bond registration books of the City, at the close of business on the fifteenth day of the month (whether or not a business day) next preceding each interest payment date, interest on said principal sum on each 1 and 1 commencing 1, 19 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, 19__, in which event this Bond shall bear interest from 1, 19__ The Bonds of this issue shall be subject to redemption prior to their maturity at the option of the City. (Insert Optional or Mandatory Redemption Provisions) Notice of such redemption shall be given in the manner required by the Resolution. D-20 Series 1992 Bonds will have no right in respect thereof except to receive payment of the redemption price. Upon surrender of any Series 1992 Bond for redemption in part only, the Registrar shall authenticate and deliver to the Owner thereof, the cost of which shall be paid by the Issuer, a new Series 1992 Bond of an authorized denomination equal to the unredeemed portion of the Series 1992 Bond surrendered. SECTION 15. FORM OF SERIES 1992 BONDS. The text of the Series 1992 Bonds, together with the certificate of authentication, shall be in substantially the following form, with such omissions, insertions and variations as may be necessary, desirable, autho- rized or permitted by this Resolution or by any subsequent resolution adopted prior to the issuance thereof, or as may be necessary if the Series 1992 Bonds or a portion thereof are issued as Capital Appreciation Bonds, option Bonds, Designated Maturity obligations, Variable Rate Bonds, or as may be necessary to comply with applicable laws, rules and regulations of the United States and of the State in effect upon the issuance thereof. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 1)-19 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 1992 Bonds of one maturity are to be called, the distinctive numbers of such Series 1992 Bonds to be redeemed and in the case of Series 1992 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. 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. (1) Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (a) the CUSIP numbers of all Series 1992 Bonds being redeemed; (b) the date of issue of the Series 1992 Bonds as originally issued; (c) the rate of interest borne by each Series 1992 Bond being redeemed; (d) the maturity date of each Series 1992 Bond being redeemed; and (e) any other descriptive information needed to identify accurately the Series 1992 Bonds being redeemed. (2) Each further notice of redemption shall be sent at least thirty-five (35) days before the redemption date by registered or certified mail or overnight delivery service to any insurer which shall have insured, or any credit bank whiqh shall have provided a credit facility for, any of the Series 1992 Bonds being redeemed and 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 1992 Bonds consist (such depositories now being Depository Trust Company of New York, New York, Midwest Securities Trust Company of Chicago, Illinois, and Philadelphia Depository Trust Company of Philadelphia, Pennsylvania) and to one or more national information services that disseminate notices of redemption of obligations such as the Series 1992 Bonds. (3) Each such further notice shall be published one time in the Bond Buyer of New York, New York or, if such publication is impractical or unlikely to reach a substantial number of the Holders of the Series 1992 Bonds, in some other financial newspaper or journal which regularly carries notices of redemption of obligations similar to the Series 1992 Bonds, such publication to be made at least 30 days prior to the date fixed for redemption. When notice of redemption is given, Series 1992 Bonds called for redemption will become due and payable on the redemption date at the redemption price stated in such notice. When a notice of redemption is given and funds sUfficient for redemption are deposited with the Registrar, interest on the Series 1992 Bonds to be redeemed will cease to accrue on the date fixed for redemption, such Series 1992 Bonds shall cease to be entitled to any lien, benefit or security under this Resolution and the Holders of such D-18 ,. "J" 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 1992 Bond including the premium, if any, and interest thereon to the extent of the sum or sums so paid. SECTION 13. SERIES 1992 BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Series 1992 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 1992 Bond of like date and tenor (i.e. Current Interest Bonds shall be issued in exchange for Current Interest Bonds and Capital Appreciation Bonds shall be issued in exchange for Capital Appreciation Bonds) as the Series 1992 Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Series 1992 Bond upon surr~nder and cancellation of such mutilated Series 1992 Bond or in lieu of and substitution for the Series 1992 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 1992 Bonds so surrendered shall be canceled by the Issuer. If any of the Series 1992 Bonds shall have matured, or be about to mature, instead of issuing a substitute Series 1992 Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Series 1992 Bond be lost, stolen or destroyed, without surrender thereof. Any such duplicate Series 1992 Bonds issued pursuant to this section shall constitute original, additional contractual obliga- tions on the part of the Issuer whether or not the lost, stolen or destroyed Series 1992 Bonds be at any time found by anyone, and such duplicate Series 1992 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 1992 Bonds issued hereunder. SECTION 14. PROVISIONS FOR REDEMPTION. The Series 1992 Bonds shall be subject to redemption prior to their maturity, at the option of the Issuer, at such times and in such manner as shall be fixed by resolution of the Issuer prior to or at the time of sale of the Series 1992 Bonds. Notice of such redemption shall, at least thirty (30) days prior to the redemption date, be filed with the Registrar; and mailed, postage prepaid, to all Owners of Series 1992 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 1992 Bonds shall not affect the validity of the proceedings for such redemption with respect to Owners of Series 1992 Bonds to which notice was duly mailed D-17 Current Interest Bonds shall be exchanged for Current Interest Bonds and Capital Appreciation Bonds shall be exchanged for Capital Appreciation Bonds) and in an aggregate principal amount of Series 1992 Bonds equal to the principal amount of the Series 1992 Bonds or Series 1992 Bonds so surrendered. The Registrar shall make provisions for the exchange of Series 1992 Bonds at the principal corporate trust office of the Regis- trar. SECTION 11. NEGOTIABILITY, REGISTRATION AND TRANSFER OF SERIES 1992 BONDS. The Registrar shall keep books for the registration of and for the registration of transfers of Series 1992 Bonds as provided in this Resolution. The transfer of any Series 1992 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 authentic~te and delivery in exchange for such Series 1992 Bond, a new Series 1992 Bond or Series 1992 Bonds registered in the name of the transferee, and in an aggregate principal amount equal to the principal amount of such Series 1992 Bond or Series 1992 Bonds so surrendered. In all cases in which Series 1992 Bonds shall be exchanged, the Issuer shall execute and the Registrar shall authenticate and deliver, at the earliest practicable time, Series 1992 Bonds of the same type (i.e. Current Interest Bonds will be exchanged for Current Interest Bonds and capital Appreciation Bonds will be exchanged for Capital Appreciation Bonds) in accordance with provisions of this Resolution. All Series 1992 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 1992 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 1992 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 1992 Bonds during the fifteen (15) days immediately preceding any interest payment date or, in the case of any proposed redemption of Series 1992 Bonds during the fifteen (15) days next preceding the redemption date established for such Series 1992 Bonds. SECTION 12. OWNERSHIP OF SERIES 1992 BONDS. The person in whose name any Series 1992 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 of any such Series 1992 Bond, and the interest on any such Series 1992 D-16 provided adequate records will be kept with respect to the ownership of such Series 1992 Bonds issued in book-entry form or the beneficial ownership of Series 1992 Bonds issued in the name of a nominee. As long as any Series 1992 Bonds are outstanding in book-entry form the provisions or sections 10, 11 and 13 of this Resolution shall not be applicable to such Series 1992 Bonds. The details of any alternative system of issuance, as described in this paragraph, shall be set forth in a resolution of the Issuer duly adopted at or prior to the sale of such Series 1992 Bonds. SECTION 8. EXECUTION OF SERIES 1992 BONDS. The Series 1992 Bonds shall be signed by, or bear the facsimile signature of the Mayor and shall be signed by, or bear the facsimile signature of the Clerk and a facsimile of the official seal of the Issuer shall be imprinted on the Series 1992 Bonds. In case any officer whose signature or a facsimile of whose signature shall appear on any Series 1992 Bonds shall cease to be such officer before the delivery of such Series 1992 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 1992 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 1992 Bond, shall be the proper officers to sign such Series 1992 Bonds although at the date of such Series 1992 Bond such persons may not have been such officers. SECTION 9. AUTHENTICATION OF SERIES 1992 BONDS. Only such of the Series 1992 Bonds as shall have endorsed thereon a certificate of authentication substantially in the form herein set forth, 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 1992 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 1992 Bonds shall be conclusive evidence that such Series 1992 Bonds has been duly authenticated and delivered under this Resolution. The Registrar's certificate of authentication on any Series 1992 Bond shall be deemed to have been duly executed if signed by an authorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Series 1992 Bonds that may be issued hereunder at anyone time. SECTION 10. EXCHANGE OF SERIES 1992 BONDS. Any Series 1992 Bond, upon surrender thereof at the principal corporate trust office of the Registrar, together with an assignment duly executed by the Owner or his attorney or legal representative in such form a shall be satisfactory to the Registrar, may, at the option of the Owner, be exchanged for a Series 1992 Bond of the same type (i.e. D-15 integral multiples thereof for the Current Interest Bonds and in $5,000 maturity amounts for the Capital Appreciation Bonds or in $5,000 multiples thereof, or such other denominations as shall be approved by the Issuer in a subsequent resolution prior to the delivery of the Series 1992 Bonds; shall bear interest at such rate or rates not exceeding the maximum rate allowed by Florida law, the actual rate or rates to be determined by the governing body of the Issuer prior to or upon the sale of the Series 1992 Bonds; maybe issued with variable, adjustable, convertible or other rates with original issue discounts and as zero interest rate bonds; such interest to be payable semiannually at such times as are fixed by resolution of the Issuer if Current Interest Bonds and shall mature annually on such date in such years and amounts as will be fixed by resolution of the Issuer prior to or upon the sale of the Series 1992 Bonds; and may be Serial and/or Term Bonds. Each 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 authentication paYment of any interest which is due and payable has not been made, such Current Interest 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 Compounded Amount. The principal of and the interest and redemption premium, if any, on the Series 1992 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 pri vate debts. The interest on the 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 Holder thereof, by check or draft mailed to such registered Holder at his address as it appears on such registration books on the fifteenth day of the month prior to each interest paYment date. PaYment of the principal of all Current Interest Bonds and the Compounded Amount with respect to the Capital Appreciation Bonds shall be made upon the presentation and surrender of such Bonds at the principal corporate trust office of the Paying Agent as the same shall become due and payable. Notwithstanding any other provl.sl.ons of this section, the Issuer may, at its option, prior to the date of issuance of the Series 1992 Bonds, elect to use an immobilization system or book- entry system with respect to issuance of such Series 1992 Bonds, D-14 1992 Bonds herein authorized or to make any other paYments provided for herein. The Series 1992 Bonds shall not constitute a lien upon any properties owned by or located within the boundaries of the Issuer. (G) The Net Revenues are estimated to be sufficient to pay all principal of and interest on the Series 1992 Bonds and the Parity Bonds, as the same become due, and to make all required paYments required by this Resolution, including paYments required to be made to the Debt Service Fund. (H) The Net Revenues are now pledged or encumbered in any manner, except for the prior paYment of the principal and interest on the Par i ty Bonds and the Refunded Bonds. The pledge and encumbrance of the Refunded Bonds on the Net Revenues shall be defeased pursuant to the refunding herein authorized. (I) The Original Resolution, in section 19(N) thereof, provides for the issuance of Additional Parity Obligations under the terms, limitations and conditions provided therein. (J) The Series 1992 Bonds herein authorized shall be on a parity and rank equally, as to lien on and source and security for paYment from the Pledged Revenues and in all other respects, with the Parity Bonds. SECTION 4. AUTHORIZATION OF REFUNDING. 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 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 Bonds, all of which shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided therein and herein. SECTION 6. AUTHORIZATION OF SERIES 1992 BONDS. Subject and pursuant to the provisions hereof, obligations of the Issuer to be known as "Water and Sewer Refunding Revenue Bonds, Series 1992", are authorized to be issued in the aggregate principal amount of not exceeding $17,000,000. SECTION 7. DESCRIPTION OF SERIES 1992 BONDS. Bonds shall be issued in fully registered form; Appreciation Bonds and/or Current Interest Bonds; shall be numbered; shall be in the denomination of The Series 1992 may be Capital shall be dated; $5,000 each, or D-13 (CCC) "TERM BONDS" shall mean the Bonds of a series, all of which shall be stated to mature on one date. (ODD) "VARIABLE RATE BONDS" shall mean obligations issued with a variable, adjustable, convertible or other similar rate which is not fi~ed in percent~ge at the date of issue for the entire term thereof. . 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 has previously issued the Refunded Bonds, of which $13,050,000 principal amount is outstanding and unpaid as of September 1, 1992. (C) The Issuer deems it necessary, beneficial and in its best interest to provide for the refunding of the Refunded Bonds. The refunding program herein described will be advantageous to the Issuer by (1) effecting an overall reduction in debt service applicable to bonded indebtedness issued to finance the System, and (2) revising certain terms and covenants previously made for the benefit of the holders of the Refunded Bonds and restructuring of debt to the advantage of the Issuer. (D) The sum required for the refunding of the Refunded Bonds will be derived from a portion of the proceeds of the sale of the Series 1992 Bonds, together with certain other funds available to the Issuer more ful.ly described herein and in the Agreement. (E) A portion of the proceeds of the Series 1992 Bonds and other funds available for such purpose, shall be deposited pursuant to the Agreement, in sufficient amounts to make timely payments of all presently outstanding principal, interest and redemption premiums, if any, in respect to all or some of the Refunded Bonds, as the same become due or are redeemed prior to maturity as hereinafter provided. Such funds shall be invested pursuant to the Agreement in such investments as will produce escrow deposit income sufficient to make timely payments of all principal of, redemption premiums and interest on the Refunded Bonds to be paid in accor- dance with the Agreement. Any Refunded Bonds not paid pursUant:to the Agreement shall be retired simultaneously with the de I iverfof the Series 1992 Bonds. )' (F) The p:rincipal of and interest on. the Series 1992 Bonds and all required reserve and other.payments shallD~ payable solely from the Net Revenues as provided herein. The Issuer shall-ne\Ter be required to levy ad valorem taxes on any real or personal property therein to pay the principal of and interest on the Series D-12 (TT) "RESERVE REQUIREMENT" shall mean, as of any date of calculation, an amount equal to the lesser of (1) the Maximum Bond Service Requirement for the Series 1992 Bonds, (2) 125% of the Average Annual Bond Service Requirement of the Series 1992 Bonds, or (3) 10% of the proceeds of the Series 1992 Bonds. In computing the Reserve Requirement, the interest rate on Variable Rate Bonds shall be assumed to be the greater of (a) 110% of the daily average interest rate on such Variable Rate Bonds during the 12 months ending with the month preceding the date of calculation, or such shorter period of time that such Bonds shall have been Outstanding, or (b) the actual rate of interest borne by the Variable Rate Bonds on such date of calculation. (oo) "RETAINED EARNINGS" shall have the same meaning as is ascribed to such term by generally recognized principles and standards of public financial reporting, and notwithstanding the generality of the foregoing, shall mean the accumulated earnings of the System which have been retained in the Revenue Fund and which are not reserved for any specific purpose. (VV) "SERIAL BONDS" shall mean the Bonds of a Series, which mature on more than one date. (WW) "SERIES" or "SERIES OF BONDS" or "BONDS OF A SERIES" shall mean all Bonds designated as being of the same Series issued and delivered on original issuance in a simultaneous transaction, and any Bonds thereafter delivered in lieu thereof or in substitu- tion therefore pursuant to this Resolution. (XX) "SERIES $15,000,000 City Refunding Revenue Resolution. 1992 BONDS" shall mean the not to exceed of winter Springs, Florida Water and Sewer Bonds, Series 1992, authorized pursuant to this (ZZ) "S&P" shall mean Standard & Poor's Corporation, and any assigns or successors thereto. (AAA) "STATE" shall mean the State of Florida. (BBB) "SYSTEM" shall mean all properties and assets, real and personal, tangible and intangible, owned or operated by the Issuer 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: a'ssetSt> hereafter constructed or acquired as additions, - improvements, betterments or replacements thereto and extensions thereof. D-ll publication of such notice and directing the payment of the principal of and interest on all such Bonds at such redemption dates shall have been given to the Escrow Agent; and (iii) Bonds which are deemed paid pursuant to this Resolution or in lieu of which other Bonds have been issued under Sections 11 and 13 hereof. (MM) "OWNER OF BONDS" or "OWNER" or "HOLDER" or any similar term shall mean any person who shall be the registered owner of any such Bond or Bonds. (NN) "PARITY BONDS" shall mean the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991. (00) "PAYING AGENT" shall mean the paying agent, the co-paying agent or any successor paying agent to be appointed by subsequent resolution of the Issuer and at the time serving under this Resolution. (PP) "PRUDENT UTILITY PRACTICE" shall mean, in respect of any particular utility industry, any of the practices, methods and acts which, in the exercise of reasonable judgment, in the light of the facts, including but not limited to the practices, methods and acts engaged in or approved by a significant portion of such utility industry prior thereto, known at the time the decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety, and expedition. It is recognized that Prudent Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather is a spectrum of possible practices, methods or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. (QQ) "REFUNDED BONDS" shall mean (i) the. outstanding bonds of the city of Winter Springs, Florida Water and. Sewer Refunding Revenue Bonds, Series 1990 and the City's outstanding Series 1989 Utility Revenue Bond Anticipation Note. (RR) "REGISTRAR" shall mean the trust company or bank with trust powers' appointed from time 'to time by subsequent'resolution of the^'i$$uer to; serve under- the Resolution. Nothing in."the Resolutio.:n "'shall prohibit the Issuer from serving as Registrar thereunder. ',' (SS) "RENEWAL ANP REPLACEMENT F.UND" shall mean the City of .wi.~text Springs water and Sewer Renewal a.nd Repla.cementFimd created ,i.aJ)d' established pursuant to Section 19B(3) of the. Original Re$Olution. D-lO 3. Leaal oDinion which must be delivered to the munic- iDal entity: a. Repo meets guidelines under state law for legal investment of public funds. L. The Local Government Surplus Funds Trust Fund created pursuant to Chapter 218, Part IV of the Florida Statutes. (EE) Florida. "ISSUER" or "CITY" shall mean the City of Winter springs, (FF) "MAXIMUM BOND SERVICE REQUIREMENT" shall mean, as of any particular date of calculation, the greatest amount of aggregate Bond Service Requirement for the then current or any future Bond Year. (GG) "MBIA" shall mean Municipal Bond Investors Assurance corporation. (HH) "MOODY'S" shall mean Moody's Investors Service, and any assigns or successors thereto. (II) "NET REVENUES" of the system shall mean the Revenues or Gross Revenues after deduction of the Cost of operation and Maintenance. (JJ) "OPTION BONDS" shall mean Bonds subject to tender for paYment prior to their maturity at the option of the Holder thereof. (KK) "ORIGINAL RESOLUTION" means Resolution No. 665 authoriz- ing the Series 1991 Bonds and any Additional Parity obligations as from time to time amended or supplemented, in accordance with the terms therefor. (LL) "OUTSTANDING" or "BONDS OUTSTANDING" means all Bonds which have been issued pursuant to this Resolution, except: (i) Bonds canceled after purchase in the open market or because of paYment at or redemption prior to maturity; .~ ,. (ii) Bonds for the paYment or redemption of which cash funds or Defeasance Obligations or any combinah~~n thereof shall have been theretofore irrevocably set aside tn. a' special account with an Escrow Agent (whether upon or prior to the maturity or redemption date of any such Bonds) in an amount which, together with earnings on such Defeasance Obligations,.wilFbesufficient to pay the pr-incipalof and interest onsueh Bonds at maturity or upon their earlier redemption; provided that, if such 'Bonds are to be redeemed before the maturity thereof, notice of such redemption shall have been gi ven according to the requirements of this Resolution or irrevocable instructions directing the timely D-9 J. Federal funds or bankers acceptances with a minimum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - 1" or "A3" or better by Moody's and "A-1" or "A" or better by S&P. K. Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (sell- er/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal enti ty in exchange for the securities at a specified date. Repurchase Agreements must satisfy the following criteria or be approved by MBIA. 1. Repos must be between the municipal entitv and a dealer bank or securities firm a. Primary dealers on the Federal Reserve report- ing dealer list, or b. Banks rated "A" or above by Standard & Poor's Corporation and Moody's Investor Services. 2. The written repo contract must include the follow- ing: a. Securities which are acceptable for transfer are: (1) Direct U.S. governments, or (2) Federal agencies backed by the full faith and credit of the U.S. government b. The term of the repo may be UP to 30 days c. The collateral must be delivered to the munic- ipal entity, trustee (if trustee is not sup- plying the collateral) or third party ac~ing as agent for the trustee (if the trustee is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities). (1) The securities must be valued weekly. marked-to-market at current market price plus accrued interest (a) The value of collateral must be equal to 103% of the amount of cash transferred by the municipal entity to the dealer bank or security firm under the repo plus accrued inter- est. If the value of securities held as collateral slips below 103% of the value of the cash transferred by municipality then additional cash and/or acceptable securities must be transferred. D-8 6. Government National Mortqaqe Association ("GNMA"): GNMA - guaranteed mortgage-backed bonds; GNMA - guaranteed pass-through obligations (not acceDtable for certain cash-flow sensitive issues.) 7. U.S. Maritime Administration: Guaranteed Title XI financing 8. New Communities Debentures: U.S. government guar- anteed debentures 9. U.S. Public Housinq Notes and Bonds: U.S. govern- ment guaranteed public housing notes and bonds 10. U.S. DeDartment of Housinq and Urban DeveloDment: project Notes; Local Authority Bonds C. Bonds, debentures, notes or other evidence of indebted- ness issued or guaranteed by any of the following U.S. government agencies (non-full faith and credit agencies) : 1. Federal Home Loan Bank System: Senior debt obliga- tions 2. Federal Home Loan Mortqaqe CorDoration: Participa- tion certificates; Senior debt obligations 3. Federal National Mortqaqe Association: Mortgage- backed securities and senior debt obligations 4. Student Loan Marketinq Association: Senior debt obligations D. Money market funds registered under the Federal Invest- ment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of AAAm-G; AAAm; or AAm. E. certificates of deposit secured at all times by collater- al described in (A) and/or (B) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the Bondholders must have a perfected first security interest in the collater- al. F. certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC or FSLIC. G. Investment Agreements, including GIC' s, acceptable to MBIA. H. Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's or "A-1" or better by S&P. I. Bonds or notes issued by any state or municipality which are rated by Moody's or S&P in one of the two highest rating categories assigned by such agencies. 0-7 (Z) "ESCROW AGENT" shall mean a bank with trust powers or a trust company appointed by the Issuer as a party to any Agreement approved by the Issuer for the purposes set forth in Section 24 of this Resolution. (AA) "FISCAL YEAR" shall mean the period commencing on October 1 of each year and ending on the succeeding September 30. (BB) "GROSS REVENUES" or "REVENUES" shall mean all income or earnings, including Connection Charges, from any source received by the Issuer or accrued to the Issuer from the ownership or operation of the System and all parts thereof, including investment income, if any, earned on any fund or account established by the Issuer for the System, all as calculated in accordance with generally accepted accounting principles, but "Gross Revenues" or "Revenues" shall not include proceeds from the sale or other disposition of the System or any part thereof, condemnation awards or proceeds of insurance received with respect to the System. Gross Revenues also do not include Contributions in and of Construction or Impact Fees. (CC) "IMPACT FEES" shall mean the fees imposed by the Issuer on new users connecting to the System which represent a pro rata share of the costs of the System which are attributable to the increased demand such additional connections create upon the System. (DO) "INVESTMENT SECURITIES" shall mean any of the following, if and to the extent that the same are legal for the investment of the proceeds of the Bonds and the Revenues: A. Direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. B. Bonds, debentures, notes or other evidence of indebted- ness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United states of America: 1. U.S. EXDort-ImDort Bank: Direct obligations or fully guaranteed certificates of beneficial owner- ship 2. Farmers Home Administration: Certificates of beneficial ownership 3. Federal Financina Bank 4. Federal Housina Administration Debentures 5. General Services Administration: Participation certificates D-6 dates as shall be determined by subsequent resolution of the Issuer. (W) "DEBT SERVICE FUND" shall mean the City of winter springs Water and Sewer Debt Service Fund created pursuant to the Original Resolution, which fund has within it an Interest Account, a Principal Account, a Redemption Account and a Reserve Account. (X) "DEFEASANCE OBLIGATIONS" shall mean the following: A. Cash B. U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series -- "SLGS"). C. Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities. D. Resolution Funding Corp. (REFCORP) Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable. E. Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If however, the issue is only rated by S&P (Le., 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. F. Obligations issued by the following agencies which are backed by the full faith and credit of the u.S.: a. u.S. Exoort-Imoort Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership. b. Farmers Home Administration (FHA) certificates of beneficial ownership c. Federal Financinq Bank d. General Services Administration participation certificates e. u.S. Maritime Administration Guaranteed Title XI financing f. U. S. Deoartment of Housinq and Urban Develooment (HUD) Project Notes Local Authority Bonds New communities Debentures - U.S. government guar- anteed debentures u.S. Public Housing Notes and Bonds - U.S. govern- ment guaranteed public housing notes and bonds (Y) "DESIGNATED MATURITY OBLIGATIONS" shall mean all of the Bonds of a Series or a particular maturity thereof, so designated by the Issuer by resolution prior to the issuance thereof, for which no Amortization Installments have been established. D-5 (N) "CAPITAL APPRECIATION BONDS" shall mean the aggregate principal amount of the Bonds that bear interest payable solely at maturity or upon redemption prior to maturity in the amounts determined by reference to the Compounded Amounts, all as shall be determined by subsequent resolution of the Issuer. In the case of Capital, Appreciationr Bonds that are convertible to Bonds with interest payable prior to maturity or redemption of such Bonds, such Bonds shall be considered Capital Appreciation Bonds only during the period of time prior to such conversion. (0) "CAPITAL APPRECIATION INCOME BONDS" means those Bonds initially issued as Capital Appreciation Bonds and which become Current Interest Bonds when the original issue amount and the CompoundeQ Amount equals $5,000 principal amount or an integral multiple thereof as determined by subsequent resolution of the Issuer. (P) "CLERK" shall mean the City Clerk of the Issuer. (Q) "COMPOUNDED AMOUNTS"" ,means the amounts as to which reference is made that establish the amounts payable at maturity or upon redemption prior to maturity on the Capital Appreciation Bonds. Sucb amounts shall ,be determined by subsequent resolution of the Issuer. (R) "CONNECTION CHARGES" shall mean all fees and charges assessed by the Issuer to users for the actual cost of connecting to the System, but shall not include any Impact Fees. (S) "CONSULTING ENGINEERS"shall mean qualified and recog- nized consulting engineers, having a favorable reputation for skill and experience in the management and operation of facilities of comparable size and character as the System, at the time retained by the Issuer to perform the acts and carry out the duties as herein provided for such consulting engineers. (T) "CONTRIBUTIONS IN AID OF CONSTRUCTION" shall mean any amount or item of money, services, or property received by the Issuer, any portion of which is provided at no cost to the System, which represents an addition or transfer to the capital of the System, and which is utilized to offset the acquisition, improve- ment or construction costs of the System. (U) "COST OF OPERATION AND MAINTENANCE" of the System shall mean the current expenses, paid or accrued, in the operation, maintenance and repair of the System, as calculated in accordance with generally accepted accounting principles, but shall not include any reserve for renewals and replacements, extraordinary repairs or any allowance for depreciation. (V) "CURRENT INTEREST BONDS" means the aggregate principal amount of the Bonds that bear interest payable semiannually on such D-4 into the Debt Service Fund, as provided herein. For purpose of calculating Bond Service Requirement with respect to Designated Maturity Obligations, the unamortized principal coming due on the final maturity date thereof shall not be included and in lieu thereof there shall be added to Bond Service Requirement for the Bond Year in which such final maturity occurs and to each Bond Year thereafter through the 25th anniversary of the final maturity of such Designated Maturity Obligation (the "Reamortization Period") the amount of substantially level principal and interest payments (using the same interest rate actually applicable to such unamor- tized Bonds before maturity) that if paid in each year during the Reamortization Period would be sufficient to pay in full the unamortized portion of such Designated Maturity Obligations by such anniversary (the "Amortization payment"); provided, however, for the current Bond Year interest coming due on such Designated Maturity Obligations shall be deducted from the Amortization payment. with respect to Variable Rate Bonds, the interest rate used to calculate the Bond Service Requirement shall be assumed to be one hundred ten percent (110%) of the greater of (a) the daily average interest rate on such Variable Rate Bonds during the twelve months ending with the month preceding the date of calculation or (b) the most recent effective interest on such Variable Rate Bonds prior to the date of calculation. If such Variable Rate Bonds were not outstanding for a full twelve months ending with the month immediately preceding the date of calculation, the rate described in clause (b) of the immediately preceding sentence shall be used. If Bonds are option Bonds, the date or dates of tender shall be disregarded, unless actually tendered and not remarketed, and the stated maturity dates thereof shall be used for purposes of this calculation, if such option Bonds are required tb be paid from Net Revenues hereunder on such date of tender. (J) "BONDS" shall mean the Parity Bonds, the Series 1992 Bonds issued hereunder, together with any Additional Parity Obligations hereafter issued under the terms, conditions and limitations contained herein and in the original Resolution. (K) "BOND YEAR" shall mean the period beginning with October 2 of each year and extending for a period of twelve (12) months thereafter. (L) "BOND COUNSEL" shall mean a firm of nationally recognized attorneys at law experienced in the issuance of bonds the interest on which is excluded from gross income of the Holders thereof for purposes of Federal income taxation under the Internal Revenue Code of 1986, as amended. (M) "BUSINESS DAY" shall mean any day other than on saturday, Sunday or a day on which banking institutions located in the state of Florida are required or authorized to remain closed. 0-3 (C) "ADDITIONAL PARITY OBLIGATIONS" shall mean additional obligations issued in compliance with the terms, conditions. and limitations contained herein and which (i) shall have a lien on the Net Revenues equal to that of the Series 1991 Bonds and the Parity Bonds, (ii) shall be payable from the Net Revenues on a parity with the Series 1991 Bonds and"the Parity Bonds, and (iii) rank equally in all other respects with the Series 1991 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 ifor the purpose of providing for the paYment of all a part Refunded Bonds hereinafter mentioned, which Agreement shall be in substantially the form attached hereto as Exhibit A and incorporated herein by reference. (E) "AMORTIZATION INSTALLMENT" with respect to any Term Bonds of . a series, shall mean a.n amount so designated for mandatory principal installments (for mandatory call or otherwise) payable on any Term Bonds issued under the provisions of this Resolution or any subsequent resolution alithorizing Additional Parity Obliga- tiQns~ (F) "AUTHORIZED NEWSPAPERS" shall mean a financial newspaper of general circulation in the Borough of Manhattan, City and State of New York (including, at such times as they are published, The New York Times, The Daily Bond Buyer or The Wall Street JoUrnal) and, a newspaper of general circulation in the City of winter Springs, Florida which in each case, is customarily published at least once a day for at least five days (other than legal holidays) in each calendar week, printed in the English language. (G) "AVERAGE ANNUAL BOND SERVICE REQUIREMENT" means as of each date on which a Series of Bonds is issued, the total amount of the Bond Service Requirement to become due on all Bonds deemed to be Outstanding immediately after the issuance of such Series of Bonds divided by the total number of years for which Bonds are deemed to be Outstanding (including any partial years), except that with respect to any Bonds for which Amortization Installments have been established, the amount of principal coming due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount of such Bonds that are to be redeemed from Amortization Installments to be made in prior Bond Years. (H) "BOND ANTICIPATION NOTES" shall mean notes of the Issuer issued in anticipation of any Series of Bonds and shall be secured by a lien on the proceeds of the Series of Bonds for which such Bond Anticipation Notes were issued. (I) "BOND SERVICE REQUIREMENT" shall mean, for any Bond Year, at any time, the amount required to be deposited in such Bond Year D-2 RESOLUTION NO. A RESOLUTION AUTHORIZING THE ISSUANCE 01' NOT EXCEEDING $17,000,000 WATa AND SEWER REFUNDING RBVENUE BONDS, SERIES 1992, 01' THE CITY 01' WINTER SPRINGS,-FLORIDA TO BE APPLIED ~O REPDRDTHE CITY'S PRESENTLY O~STAHDING WATER AND SBWER'REVENUE BONDS, SERIES 1990' UDTBE CITY'S PRESENTLY OUTSTANDING SERIES 1989 UTILITY REVENUE BOND ANTICIPATION NOTE; PLEDGING THE NET REVENUES 01' THE COKBINED~" ftTBR 'AlU) SEWER SYSTEK 01' TBECrWy,.I'OR THE PAYMBlrl' OJ!'SAIO RBPmtDING BONDS; PROVIDINGJ'OR BE RIGHTS 01' THE 1I0mas OJ' SUCH BONDS; MAKING OTIfD: COVENANTS AND AGREIHENTSIN CONNECTION THEREWITH; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF WINTER SPRINGS, FLORIDA: SECTION 1. AUTHORITY FOR THIS RESOLUTION. This Resolution is adopted pursuant to the Cons'titution of the state of Florida;' Chapter 166, Part II, Florida Statutes, as amended and supplement- ed, Chapter 72";718, Laws of Florida, Special Act of 1972, as amended and supplemented, being the Charter of the City of Winter Springs and other applicable provisions of law. SECTION 2. DEFINITIONS. Unless, the context otherwise requires, the terms defined in this section sh~ll have the meanings specified in this section. Words importlng singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporatiQns. (A) "ACT" shall mean Chapter 166, Part II, Florida Statutes, as amended and supplemented, the Charter of the Issuer and other applicable provisions of, law. (B) "ACT OF BANKRUPTCY" shall mean (1) the Issuer shall be adjudicated a bankrupt or become subject to an order for relief under federal bankruptcy law, (2) the Issuer "shall institute any proceedings seeking an order for relief under federal bankruptcy law or seeking to be adjudicated a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy or insolvency, (3) there shall be appointed a receiver, liquidator or similar official for the Issuer under any law relating to bankruptcy or insolvency, or (4) without the application, approval or consent of the Issuer, a receiver, trustee, examiner, liquidator or similar official shall be appointed for the Issuer, or a proceeding described in (2) above shall be instituted against the Issuer , and such appointment continues undischarged or such proceeding continues undismissed or un stayed for a period of thirty (30) consecutive days. The mere declaration of a state of financial emergency under section 218.503, Florida Statutes, shall not, in and of itself, constitute an Act of Bankruptcy. D-1 [This page intentionally left blank] APPENDIX D [This page intentionally left blank] MBIA FINANCIAL GUARANTY INSURANCE POLICY Municipal Bond Investors Assurance Corporation Armonk, New York 10504 Policy No. xxxxx:x Municipal Bond InvestOl'll Assurmce CorporBtion (the "Insurer"). in consideration of the payment of the premium and subject to the terms of Ibis policy. hereby unconditionally and irrevocably guanneees to any owner. u hereinBfter defined, of the followin8.~~toeribed ohligBtiom. lhe full and complete payment required to be m8de by or on behalf of the Issuer to [INSERT NAME OF PAYING AGENT) or ils successor (the "Paying Agent") of an amount CllJual to (i) the principal of (either at the stated maturity or by any advancement of maturity pursuant to a mandatory ~inking fund payment) and intereat on, the Obligations (as Ibat term is defined below) as such payments shall become clue bUI shall not be so paid (excepl lbat in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise. other Iban any advancemenl of maturity pursuant to a mandalory sinking fund paymenl. the payments guaranteed hereby shall be made in such mIOUnts and at such times as such payments of principal would have been clue had there not been any such acceleralion); and (ii) the reimbursement of any such payment which is subsequendy recovered from any owner pursuant to a fmal judgmenl by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner wilbin the meaning of any applicable bankruptcy law. The llJI'Iounts referred to in clauses (i) and (ii) of the preceding lICntence shall be referred to herein collectively as the "Insured Amounts," "ObligBtions" shall mean: [PAR AMOUNT) [LEGAL Tm..E OF OBLIGATIONS] Upon receipt of telephonic or telegraphic notice. such notice subsequently confirmed in writing by reg~tered or certified mail. or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of an Obligation the paymenl of an Insured Amount for which is then due. that such required payment has not been made. the Insurer on the due dBte of such payment or wilbin one business day after receipt of notice of such nonpayment, whichever is later. will make a deposit of funds. in an account wilb Citibank, N.A.. in New York. New York. or its IIuccessor. sufficient for the payment of any such Insured Amounts which are then due. Upon prellentmenl and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together with any appropnate instruments of assignmenl 10 evidence the assisnment of the Insured Amounts due on the Obliptions as are paid by the Insurer, and appropriate instruments 10 effect the appoinlment of the Insurer as agent for such owners of the Obligations in any legal proceeding related to paymenl of Insured Amounts on the Obligations. such instruments being in a form satisfactory to Citibank, N.A., Citibank. N.A. shall disburse to such owners, or the Paying Agent payment of the Insured Amounts due on such Obligations. less any llJI'Iount held by the Paying Agent for the payment of such Insured Amounts and legally available therefor. This policy does not insure agaimt loss of any prepaymenl premium which may at any time be payable with respect to any Obligation. As used herein, the term "owner" shall mesn the registered owner of any Obligation as indicated in the books maintained by the Paying Agenl, the Issuer. or any designee of the Issuer for such purpose. The term owner shall not include the Issuer or any party whose: agreement wilb the Issuer conslitutes the underlying security for the Obligations. Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Streel, Armonk. New York IOS04 and such service of process shall be va Ii. ,md binding. This policy is non-cancellable for any reason. The premium on Ibis policy is not refundable for any reason including the paymenl prior to maturity of the Obligations. The insurance provided by Ibis Policy is not covered by the Florida Insurance Guaranty Association created under chapter 631. Florida Statutes. IN WITNESS WHEREOF, the Insurer has caused lbi., policy to be executed in facsimile on its behalf by its duly aulborized offICers, Ibis [DAY] day of [MONTH. YEAR]. MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION COUNTERSIGNED: Attest: ~5~..~.~ President \. , '!!~ &.~~ ~ ' AH-~L Resident Licensed Agenl Cily. Stale Date STD-RCSIFL-4 [This page intentionally left blank] APPENDIX C CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 7. Defined Contribution Employee Pension Plan - Continued: Under the terms of the Plan, the City contributes to the Plan up to four percent of the annual compensation of eligible employees. The City's total payroll for fiscal year 1991 was $3,953,853, $2,946,518 of which was covered under the Plan. Contribu- tions to the Plan for the year ended September 30, 1991 were $101,323 in the General Fund and $16,626 in the Enterprise Fund, representing approximately 4.0 percent of covered payroll. 8. Deferred Compensation Plan: The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights pur- chased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provi- sions of benefits under the plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. The City has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the. future. 9. Developer Agreement: In connection with the City's April, 1990 acquisition of the water and sewer utility ass.ets from Seminole Utility Company, the City entered into a ten-year developer agreement with a major local developer. Under this agreement, the City guarantees the availability of 1,500 equivalent residential water and sewer connections (ERC's), most of which will be provided at no charge for reservations or service availability until April, 1995. In return, the developer must pay an annual fee of $256 per ERC not used by April 30, 1995, until used or until April 30, 1999, whichever is earlier. The agreement may be extended to April 30, 2004 at the option of either party. 8-30 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 6. Contributed Capital: Contributed capital recorded in the Enterprise Funds at September 30, 1991 includes Contributions In Aid of Construction (CIAC) and utility system equipment donated by customers and developers. CIAC represents advances made to the West utility by its customers and developers prior to its acquisition by the City on October 6, 1984. The City records as contributed capital equipment donated by developers upon physi- cal connection to the water and sewer systems since acquisition of the West utility in 1984 and the East utility in 1990. Contributed capital is recorded at cost. CIAC and Land Donated by Developers Prior to October 6, 1984: Donated land CIAC $ 28,000 1,766,805 1,794,805 Capital Contributions Subsequent to October 6, 1984: Donated equipment CIAC 1,437,885 50,000 1,487,885 Total Contributed Capital S3,282,690 7. Defined Contribution Employee Pension Plan: Substantially all employees of the City are covered by the Florida Municipal Pension Trust Fund, a multiple employer plan which qualifies as a defined contribution pension plan. All employees who have completed one year of service become eligible participants of the Plan on the earlier of the first day of the Plan year after one year of service is completed or the first day of the sixth month after that require- ment was met. Benefits become partially vested after four years of service, gradu- ally increasing each year and becoming fully vested after ten years of service. City employees who retire at or after age sixty-five are entitled to an annual retirement benefit, on a fully vested basis, in the amount determined to be the actuarial equivalent of a single life annuity based upon contributions made for the life of the participant. Alternatively, participants may elect to receive benefits in the form of one lump-sum payment or periodic payments. The Plan provides death and disability benefits which are similar to the retirement benefits. City employees do not contribute to the Plan. B-29 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 5. Long-Term Debt - Continuned: H. Annual Requirements to Maturity The annual debt service requirements to amortize all bonded debt of ,the City outstanding as of September 30, 1991 are as follows: General LonQ-Term Debt EnterDr ise Fund. I.prove.ent Water and Water and Sewer ri.cal Year Refunding Revenue Sewer Revenue Refunding Revenue Total Annual Ending Bond.. Serie. 1989 Bond.. Series 1990 Bond.. Serie. 1991 Debt Serv ice SeDtember 30. Princh,al Intere.t Pr ine1Dal Intere.t Principal Intereat Require.ent. 1992 150.000 $ 651.345 $ $ 906.500 $ 35.000 $ 186.224 $ 1.929.069 1993 160.000 641.145 906.500 85.000 445.368 2.238.013 1994 170.000 630.105 906.500 90.000 441.457 2.238.062 1995 180.000 618.290 906.500 95.000 436.823 2.236.613 1996 195.000 605.690 190.000 906.500 100.000 431.740 2.428.930 1997 205.000 592.040 200.000 893.380 105.000 426.190 2.421.610 1998 220.000 577.588 215.000 879.700 110.000 420.257 2.422.545 1999 , 235.000 561.968 230.000 864.837 115.000 413.933 2.420.738 2000 255.000 545.165 245.000 848.738 125.000 407.147 2.426.050 2001 275.000 526.805 265.000 831.465 135.000 399.648 2.432.918 2002 295.000 506.868 280.000 812.650 140.000 391.U2 2.425.931 2003 315.000 485.037 300.000 792.630 150.000 382.733 2.425.399 2004 335.000 461.727 325.000 771.030 155.000 373.282 2.421.039 2005 365.000 436.937 350.000 747.468 170.000 363.363 2.432.768 2006 390.000 409.927 375.000 721.568 180.000 352.312 2.428.807 2007 420.000 381.067 400.000 693.818 190.000 340.388 2.425.273 2008 450.000 349.777 430.000 664.218 200.000 328.037 2.422.032 2009 485.000 316.253 465.000 632.398 220.000 315.038 2.433.689 2010 520.000 280.120 495.000 597.988 225.000 300.737 2.418.845 2011 560.000 2U.380 535.000 561.358 245.000 286.113 2.428.851 2012 600.000 199.660 575.000 521.500 255.000 270.187 2.421.347 2013 645.000 154.960 615.000 478.663 280.000 253.613 2.427.236 2014 690.000 106.908 660.000 432.845 295.000 235.U2 2.420.165 2015 745.000 55.503 710.000 383.675 310.000 216.238 2.420.416 2016 765.000 330.780 340.000 196.087 1.631.867 2017 820.000 273.788 360.000 173.138 1.626.926 2018 885.000 212.698 385.000 148,837 1.631,535 2019 950,000 146.765 UO,OOO 122,850 1,629,615 2020 1.020.000 75.990 440,000 95,175 1,631,165 2021 470,000 65,475 535.475 2022 500.000 33.750 533.750 S 8.1'0.000 110.]]'.265 112.300.000 518.702..50 S &.115.000 S 1.252.1'. .filii.]".&71 8-28 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 5. Long-Term Debt - Continued: F. Bond Anticipation Note Payable - The City issued a five-year $750,000 note in anticipation of issuance of the Water and Sewer Revenue Bonds - Series 1990. The note bears interest at 7.0875\ per annum, with interest payable monthly. Principal is due in full during December, 1994. Proceeds of the note were used to pay certain costs related to the City's purchase of Seminole Utility Company during fiscal year ended September 30, 1990. The note is collateralized by a subordinate lien on revenues from the West Water and Sewer System. The notes contain certain restrictive covenants, the most restrictive covenants are mandatory appropriation of debt service requirements and maintenance of a 1.1 to 1 debt service coverage ratio for both the East and West Water and Sewer utilities. G. Obligation Under Futures Agreement - In connection with the City's acquisition of the assets of Seminole Utility Company during fiscal year ended Septem- ber 30, 1990, the City entered into a futures agreement with the seller whereby the City is obligated to pay the seller an amount, in accordance with the agreement, for future connections to the East utility up to a maximum of $4,967,020 over a period of fifteen years. The obligation was included in the purchase price of the East utility. As connections under the futures agreement are made, the futures liability is deposited in a segregated account for payment to the seller on April 30 of the following year. At September 30, 1991, outstanding balances were as follows: Total Obligation Less Current Portion (connections made under the futures agreement as of September 30, 1991) $ 4,967,020 (122,000) S 4.845.020 B-27 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 5. Long-Term Debt - Continued: Enterprise Funds: Original Issue Date Description Amount Originally Issued Principal Balance Outstanding at September 30, 1991 September 1, 1984 Water and Sewer Revenue Bonds - Series 1984 $ 5,035,000 $ 4,775,000 June 1, 1985 Water and Sewer Refunding Revenue Bonds - Series 1985 5,615,000 5,215,000 $10.650.000 S 9.990.000 E. Advance Refunding of Debt - On May 1, 1991, the City issued $6,915,000 in Water and Sewer Refunding Revenue Bonds, Series 1991, with an average interest rate of 5.6\ to advance refund $5,215,000 of outstanding Series 1985 Water and Sewer Refunding Revenue Bonds, with an average interest rate of 7.0\. Approximately $1. 5 million of the net proceeds of $6,483,700 (after payment of $431,300 in underwriting fees, insurance, and other issue costs) was set aside for use for capital improvements to the City's West Utility. The remainder of the proceeds were used to purchase U.S. government securities. These securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1985 Series bonds. As a result, the 1985 Series bonds are considered to be defeased and the liability has been removed from the Water and Sewer - West Utility balance sheet. Although the advance refunding resulted in the recognition of an accounting loss of $679,706, the City in effect obtained an economic gain (difference between the present values of the old and new debt service payments) of $372,540. B-26 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 5. Long-Term Debt - Continued: The Water and Sewer bonds consisted of the following at September 30, 1991: .. Interest Rates and Dates Matur ity Description Water and Sewer Refunding Revenue Bonds 4.5\-6.75\ - Series 1991 (4/1 & 10/1) Less: Original Issue Discount, net of amortization 10/1/91- 10/1/21 Water and Sewer Revenue Bonds - Series 1990 Original Amount $ 6,915,000 6,915,000 6.80\-7.45\ (4/1 & 10/1) 4/1/96-4/1/20 12,300,000 Less current portion S19.215.000 Principal Balance Outstanding at September 30, 1991 $ 6,915,000 (183,500) 6,731,500 12,300,000 19,031,500 35,000 Sl8.996.500 Defeased Debt - The following bonds were legally defeased. Since consisting of governmental obligations are held in escrow for principal and interest, the bonds are not liabilities of the City. pal balance of the defeased general long-term debt and enterprise at September 30, 1991 follows: D. General Long-Term Debt: Original Issue Date Description May 1, 1984 Improvement Revenue Bonds - Series 1984 June 1, 1985 Improvement Refunding Revenue Bonds - Series 1985 B-25 Amount Originally Issued $ 3,505,000 3,785,000 S 7.290.000 investments payment of The princi- funds bonds Principal Balance Outstanding at September 30, 1991 $ 3,185,000 3,415,000 S 6.600.000 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 5. LOng;"Term Debt -Continu~d: (3) ,Early redempt ion. 'Early redelllpt.ion is provided for at a call rate varying from 100' to 102' of the face amount Of the bonds. (4) Investment restrictions. West T,Jtility: (a) The Revenue Fund and the Debt Service Fund may invest in investment securities which mature not later than the dates on-which the monies on depodt the~ein will be needed for t!1e purpose o,f such fund. (b) The. Renewal and Replacement Fund ma,y invest in investmentsec::urities with no more than five years maturity. (c) The Reserve Account' of the Debt Service Fund may invest in investment securities' which mature no later than the last maturity date of the bonds. East utility: Monies in any fund or account may be invested in investment securities which mature no 'later than the dates on which the monies will be needed for the purpose of such fund or account. (5) Pledge of revenues. The bonds are payable solely from and collateralized by the net revenues of the systems. Net revenues include all rates and charges received from customers, connectionres,er\Tation fees, and interest or investment income, less costs for operation and maintenance of the systems. In addition, for the Water and Sewer Revenue Bonds (East utility), net reven,ues include amounts received under a, certain fifteen-year developer agreement (see Note 10). 8-24 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 5. Long-Term Debt - Continued: C. Water and Sewer Refunding Revenue Bonds (West Utility) and Water and Sewer Revenue Bonds (East Utility) - The major provisions of the resolutions autho- rizing the Water and Sewer Refunding Revenue Bonds and Water and Sewer Revenue Bonds: , (1) Establishment and maintenance of various funds. (a) The Revenue Fund records all gross revenues derived from operation of the utility. (b) The Debt Service Fund (including principal, interest and redemption accounts) records all monies to meet current debt service and reserve requirements. (c) The Sewer Renewal and Replacement Fund records monies for paying cost of extensions, enlargements, additions, or replacement of capital assets of the utility. (2) Restrictions on the use of cash from operating revenue in order of priori ty. (a) Transfer of developer agreement payments into a Developer Agreement Payments Account for the East utility (Note 10). (b) Payment of current operating and maintenance expenses. (c) Payment of current debt service and reserve requirements. (d) Payments to Renewal and Replacement Funds at one-twelfth of five percent of gross revenues received in the preceding fiscal year, until the amount on deposit equals or exceeds: Five percent of gross revenues of the preceding fiscal year for the West utility. Five percent of book value of fixed assets of the System for the East utility. (e) Fifty percent of remaining monies in the West utility must either remain in the Revenue Fund or be deposited in the Renewal and Replacement Fund. The remaining fifty percent may be used for any lawful purpose. All remaining monies in the East utility may be used for any lawful purpose. B-23 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 5. Long-Term Debt - Continued: (4) Investment restrictions. Debt Service Fund and Excise Tax Fund monies may be invested in authorized investment securities which mature not later than the dates on which the monies on deposit will be needed for the purpose of such fund. (5) Pledge of revenues. The bonds and related interest are payable solely from and collateralized by a lien on the Public Service Tax that the City is entitled to levy on certain utility sales and Franchise Fees levied by the City for a thirty- year electric franchise granted by the City in 1984. The Improvement Refunding Revenue Bonds following at September 30, 1991: Series 1989 consisted of the Description Interest Rates and Dates Maturity Original Amount Principal Balance Outstanding at September 30, 1991 Improvement Refunding Revenue Bonds - Series 1989 6.80'-7.45' (4/1 & 10/1) 10/1/91- 10/1/14 S9.000.000 S8.860.000 B-22 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 5. Long-Term Debt: A. Changes in General Long-Term Debt - A summary of changes in general long-term debt for the year ended September 30, 1991 follows: Balance October 1, 1990 Balance September 30, Additions Retirements 1991 Improvement Refunding Revenue Bonds - Series 1989' $9.000.000 S S 140.000 S8.860.000 B. Improvement Refunding Revenue Bonds - Series 1989 - The major provisions of the resolutions authorizing these bonds are as follows: (1) Establishment and maintenance of various funds. The Debt Service Fund records all the debt service requirements of the issue, and includes the sinking fund and reserve accounts. (2) Restriction on the use of cash in order of priority. (a) Payment of current debt service requirements. (b) Payment of reserve requirements up to the maximum of $801,937. (c) Any remaining revenue can be used for any lawful purpose. (3) Early redemption. The bond resolutions provide for the City's optional early redemption of outstanding bonds at call rates varying from 100\ to 102\ of the instru- ment's face value plus accrued interest, depending on the call date. The redemption periOd begins on October 1, 1998. B-21 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 4. Property, Plant and Equipment - Continued: The cost of utility system equipment contributed by developers is estimated to the extent that actual cost information is not available. Estimates are based on known costs of similar equipment. At September 30, 1991, est imated amounts included in the utility systems totalled $676,200, all for the West utility. The following is a summary of changes in general fixed assets for the year ended September 30, 1991: Balances October 1, 1990 Additions Deletions Land $2,073,760* $ $ Buildings 1,801,678 174,675 Furniture & Equipment 1,062,715 169,873 (15,110) Vehicles 846,570 103,693 (7,400) Construction in progress 119,737 740,628 (174,022) S5.904.460 Sl.188.869 S(196.532) * Balances September 30, 1991 $2,073,760 1,976,353 1,217,478 942,863 686,343 S6.896.797 October 1, 1990 balance restated to reflect acquisition of $1,823,760 of land during fiscal year ended September 30, 1989. Construction in progress is composed of the following: proiect Description Total Project Authorization Expended to September 30, 1991 Proprietary Funds: High services pumping improvements Irrigation reuse system Sheoal water main extension Chlorine handling facility $ 50,000 1,624,000 HO,OOO 52,900 $ 2,681 24,506 7,427 34,695 S 69.309 General Fixed Assets: Park and Recreational FaciUties $1,776,496 S686.343 B-20 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 2. Cash and Cash Equivalents - Continued: In addition to the cash, cash equivalents and investments listed above, employee deferred compensation plan (see Note 8) cash and cash equivalents of.$662,908, which are carried at market value. These are held separately from those of other City funds and are held by the plan administrators but not in the City's name. 3. Interfund Balances: Individual fund interfund receivable and payable balances at September 30, 1991 are as follows: Due From Other Funds Due To Other Funds General Fund Special Revenue Fund: LGCPA Enterprise Funds: Water and Sewer Utility - West Water and Sewer Utility - East $ 48,835 $ 8,088 7,934 2,801 26,825 24,657 $ 59.570 $ 59.570 4. Property, Plant and Equipment: A summary of the changes in Proprietary Fund Type property, plant and equipment for the year ended September 30, 1991 follows: Balances Balances October 1, September 30, 1990 Additions Deletions 1991 Utility system $22,448,385 $ 54,526 $ (95,637) $22,407,274 Office building 674,051 674,051 Office furniture and equipment 309,603 129,813 (56,037) 383,379 Vehicles 240,270 16,442 (5,000) 251,712 Land 4,090,129 (61,000) 4,029,129 Construction in progress 60,606 63,229 (54,526) 69,309 Total 27,823,044 $ 264.010 $(272.200) 27,814,854 Less accumulated depreciation (1,630,856) $(877.369) $ 63.955 (2,444,270) $26.192.188 $25.370.584 B-19 ~ CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 2. Cash and Investments - Continued: Overnight Repurchase Agreements - Overnight repurchase agreements consist of excess cash balances invested on a daily basis under agreements with local financial institutions, and are considered cash equivalents for financial statement purposes. Repurchase agreements are for the sale and repurchase of secur i ties guaranteed by the United States Government. These are categorized below as to the level of risk assumed by the City. Investments - The City's investments are authorized by the Florida Statutes as well as various bond covenants. Investments at September 30, 1991 are all obligations of the U.S. Government. Investments are categorized below to give an indication of the level of risk assumed by the City at September 30, 1991. Category 1 includes investments that are insured or registered or investments for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent, but not in the City's name. Category Carrying Market 1 2 3 Amount Value Overnight Repurchase Agreements $ $2,464,175 $ $ 2,464,175 $ 2,464,175 U.S. Government Obligations: Treasury bills 798,526 798,526 820,000 FNMA Discount Notes 2,076,162 2,076,162 2,085,000 52.874.688 52.464.175 5 Depos its 4,773,027 4,773,027 Total Cash and Investments 510.111.890 510.142.202 .. B-18 CITY OF,WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: P.Budget and BudgetarY Accounting - Continued - t .i .~ (6) Budgets are adopted on a basis consistent with generally accepted accounting principles. Budgeted amounts are as originally adopted, or as amended by the City Commission. (7) Appropr'iat ions lapse at the end ,of the fiscal year. (8) Budgetary control is established at the departmental level for the General Fund, and at the fund level for the Special Revenue, Debt Service, Capital Projects, and Enterprise Funds. Q. Total Columns on Combined'Statements - Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of Operations in conformity with generally, accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. R. Deficit Retained Earnings Balance - The Water and Sewer - East Utility enter- prise fund had a deficit retained earnings balance of $415,244 at September 30, 1991. The City attributes this deficit to the unanticipated decrease in billable services due to the weak economy. The fund still maintained sufficient net operating income to be in compliance with all applicable debt coverage requirements. 2. Cash and Investments: Following are the components of the Ci ty' s cash and investments at September 30, 1991: Unrestricted Restricted Total ~ Cash and cash equivalents Investments $4,762,477 2,874,688 $3,137,633 $ 7,900,110 2,874,688 f $7.637.165 $3.137.633 $10.774.798 DePosits The City maintains separate bank accounts for all funds. At September 30, 1991, the carrying amount of the City's deposits was $4,773,026, made up of demand deposits, money market accounts and certificates of deposit, all of which are authorized under Florida Statutes and various bond covenants. The City's deposits at September 30, 1991 were fully insured by either federal depository insurance or by collateral pursuant to the Public Depository Security Act of the State of Florida. B-17 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies --Continued: M. Accrued Compensated Absences - Continued - Employees earn sick leave at the rate of 12 days per year. There is no limit on the accumulation of sick leave: however, sick leave is forfeited upon termination of employment, other than death or retirement. Liability for sick leave is recorded when it is deter- mined payment is probable (Le., an employee dies or retires). Total sick leave accumulated at September 30, 1991 is $443,984 for Governmental Fund Types and $45,908 for proprietary funds. None of this amount has been recorded in the" accounts of the various funds at September 30,1991. N. Contributions - The contributions accounted for in the Proprietary Funds repre- sent the estimated equipment costs incurred by customers and developers for connection to the City's utility system, as well as monies contributed by customers for purchase of certain equipment. Depreciation expense on con- tributed fixed assets is reflected in the statement of revenues, expenses and changes in retained earnings. O. Encumbrances Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of resources are recorded to reserve that portion of the applicable appropriation, is utilized in all funds. Encumbrances outstanding at year end are reported as reserva- tions of 'fund balances and do not constitute expenditures or liabilities because the commitments will be honore~ during the subsequent year. P. Budget and Budgetary Accounting - The City follows the procedures set forth below in establishing the budgetary data reflected in the financial statements: (1) On or before July 1st of each year, the City Manager submits a Proposed Budget to the City Commission for the fiscal year beginning the following October 1st. The Budget includes proposed revenues and expenditures, and a description of capital activities for the ensuing fiscal year. (2) The City Commission then holds informal workshops. Each item in the budget is thoroughly discussed, and the public is invited to participate. (3) On or before' September 15th of each year, the public hearings are completed and the Commission adopts the final budget and establishes the ad valorem tax millage. (4) The budget may be formally amended by City Commission at any time. (5) The City Manager is authorized to transfer budgeted amounts between accounts wi thin a department. At any time during the fiscal year, the City Manager may transfer part or all of any unencumbered appropriation among programs wi thin one department. The transfer of unencumbered appropriations from one department to another requires an ordinance by City Commission. B-16, CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies- Continued: I. Property, Plant and Equipment - Continued - (2) Property, plant and equipment of the Proprietary Fund Type are recorded at cost. Donated property, plant and equipment are capitalized at their fair market value at the time received. Depreciation is provided using the straight-line method over the estimated useful lives of the various classes of depreciable assets. The estimated useful lives of the various classes of depreciable assets are as follows: Asset Years Utility System Equipment Vehicles 30 years 5 years 3 years J. Capitalization of Interest In accordance with Statements of Financial Accounting Standards Nos. 34 and 62, the City has adopted a policy of capital- izing net interest costs during the project construction period (interest expense less any interest earned on the invested bond proceeds). No interest was capitalized during the year ended September 30, 1991. K. Unamortized Bond Costs - Costs associated with the issuance of revenue bonds are amortized over the life of the bonds using the straight-line method of accounting, which approximates the interest method. L. Deferred Revenues - Deferred revenues reported in applicable Governmental Fund Types represent unearned revenues or revenues which are measurable but not available and, in accordance with the modified accrual basis of accounting, are reported as deferred revenue. The deferred revenues will be recognized as revenue in the fiscal year they are earned or become available. M. Accrued Compensated Absences - Employees earn vacation leave at the rate of 10 days annually for the first five years of service. Beginning with the first month of the sixth year of service, vacation leave is earned at the rate of 15 days annually. Accrued vacation leave shall not exceed 30 days for employees with less than 10 years of service, or 45 days for employees with more than 10 years of service. In the event of termination, no employee shall be paid for more than 15 days vacation leave. The accrued liability for accumulated annual vacation leave is recorded in the proprietary funds when incurred. The liability for Governmental Fund Types is recorded in the general fund when incurred. B-15 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: (1) Property Taxes - Continued - Property taxes are billed and collected within the same fiscal period, and are reflected on the modified accrual basis. Ad valorem taxes on property values have a lien assessment and date of January 1, with the millage established dur ing September. The fiscal year for which taxes are levied begins October 1. Taxes are billed in November (levied) with a maximum discount available through November 30, and become delinquent April 1. During May of each year, the certificates for unpaid taxes are sold by the County and the proceeds remitted to the City. Therefore, delinquent taxes, if any, are immaterial at September 30, 1991. The City is not permitted to appropriate future tax collections. Therefore, otherwise measurable revenues are not accrued because they are unavailable for current appropriations. (2) Accounts Receivable - The Water and Sewer Utility Funds operating revenues are recognized on the basis of cycle billings rendered monthly. Revenues for services delivered during the last month of the applicable reporting period that have not been read are accrued. (3) Allowance for Doubtful Accounts - The City provides an allowance for water and sewer accounts receivab~e that may become uncollectible. At September 30, 1991, this allowance was $30,528. H. Inventories - Inventories are stated at the lower of cost or market with cost determined on the first-in, first-out method. Inventories in the General and Enterprise Funds consist of expendable supplies held for consumption. The cost is recorded as an expenditure at the time inventory items are used (consumption method). Reported inventories within the governmental funds are offset by a fund balance reserve which indicates that they do not constitute "available spendable resources" even though they are a component of net current assets. I. Property, Plant and Equipment - (1) Property, plant and equipment purchased in the Governmental Fund Types are recorded as capital outlay expenditures at the time of purchase. Such assets are capitalized at cost in the General Fixed Assets Account Group, except for certain improvements other than buildings (" infrastructure" ) such as roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems. Donated and confiscated assets are recorded in the general fixed assets at their fair market value at the time received. NO depreciation has been provided on plant and equipment recorded in the General Fixed Asset Account Group. B-14 _1'" CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: D. Basis of Accounting - Continued - Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long-term debt which is recognized when due. All Proprietary Funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned and their expenses are recognized when they are incurred. The Agency Fund is accounted for on the modified accrual basis. E. Cash Equivalents - The City considers all highly liquid investments (including restricted assets) with an original maturity of three months or less to be cash equivalents. F. Investments - The City Charter and bond resolutions authoriz,e the City to invest in direct obligations of or obligations guaranteed by the United States of America, obligations of specific agencies of the United States of America, investments fully secured by the Federal Deposit Insurance Corporation or collateral, the highest rated commercial paper, secured repurchase agreements, pre-refunded obligations, money market, 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. Investments are stated at cost or amortized cost plus accrued interest. The City's investments were limited to U.S. Government Obligations, certificates of deposit, money market accounts, GMAC commercial paper and overnight repurchase agreements during the current fiscal year. The City invests in certificates of deposit which are insured up to $100,000 by the FDIC. Amounts in excess of $100,000 are collateralized by U.S. Government securities held in the Public Deposit Security Trust Fund. G. Receivables- (1) Property Taxes ~ Under Florida law, the assessment of all properties and the collection of all county, municipal and school board property taxes are consolidated in the offices of the County Property Appraiser and County Tax Collector. The laws of the State regulating tax assessments are also designed to assure a consistent property valuation method statewide. State Statutes permit municipalities to levy property taxes at a rate of up to 10 mills. The millage rate assessed by the City for the fiscal year ended September 30, 1991 was 3.6153 mills. B-13 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: C. Measurement Focus - Governmental Fund Types - General, Special Revenue, Debt' Service and Capital Projects Funds are accounted for on a "spending" or "financial flow" measure- ment focus. This means that only current assets and current liabilities are generally included on the balance sheets. Accordingly, the reported undesig- nated fund balances (net current assets) are considered a measure of available, spendable or appropriable resources. Governmental Fund Type operating state- ments present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Proprietary Fund Types - Enterprise Funds are accounted for on an "income determination" measurement focus. Accordingly, all assets and liabilities are included on their balance sheets, and the ,reported fund equity (total reported assets, less total reported liabilities) provides an indication of the economic net worth of the fund. Operating statements for Proprietary Fund Types (on an income determination measurement focus) report increases (revenues) and decreases (expenses) in total economic net worth. Fiduciary Fund Type - The Agency Fund is accounted for like governmental funds. However, it is custodial in nature (assets equal liabilities) and does not involve the measurement of results of operations. Account Groups - The General Long-Term Debt and General Fixed Assets Account Groups are concerned only with the measurement of financial position. They are not involved with the measurement of results of operations. Long-term debts which are not intended to be financed through Proprietary Funds are accounted for in the General Long-Term Debt Account Group. Fixed assets which are not used in Proprietary Fund operations are accounted for in the General Fixed Assets Account Group. D. Basis of Accounting Basis of accounting refers to when revenues and expendi tures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All Governmental Funds are accounted for using the modified accrual basis of accounting. Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets. Revenues sus- ceptible to accrual include intergovernmental revenues and investment earnings. B-12 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 1. Summary of Significant Accounting Policies - Continued: Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restr icted to expenditures for specif ic purposes. Debt Service Fund - The Debt Service Fund is used to account for the accumulation of resources for the payment of general long-term debt principal, interest and related costs. Capital Proiects Fund - The Capital Projects Fund is used to account for the portion of the proceeds of the Improvement Refunding Revenue Bonds - Series 1989 to be used for the acquisition and construction of civic and recreational facilities and a fire station. Proprietary Funds: Enterprise Funds - The Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent of the City Commission is that the costs (expenses, including depreciation) of providing services to the general public be financed or recovered primarily through user charges. The City's two enterprise funds are water and sewer utilities. Fiduciary Fund: Agency .Fund - The Agency Fund is used to account for assets held by the City as an agent for the City employees under the deferred compensation plan. Account Groups: General Fixed Assets - The General Fixed Assets Account Group is used to account for the fixed assets of the City, except those of the proprietary funds. General Long-Term Debt - The General Long-Term Debt Account Group is used to account for the outstanding principal balances on any general or special obligation bonds, notes, compensated absences or other long-term debt of the City, except for long-term debt of the pro- prietary funds. 8-11 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1991 l. Summary of Significant Accounting Policies - Continued: Special Interfund Total General Assess- Elimi - General ASSETS Fund ments nations Fund Cash and cash equivalents $1,096,991 $ 94,434 $ $1,191,425 Receivables: Special assessments receivable 229,180 229,180 Accrued interest receivable 1,323 1,323 Due from other governments Due from other funds 48,835 48,835 Inventories 11,907 11,907 Restricted cash and cash equivalents 15,394 15,394 51, 174,450 5323,614 5 51,498,064 LIABILITIES AND FUND EQUITY Liabilities: Accounts payable $ 37,109 $ 3,100 $ $ 40,209 Accrued liabilities 215,673 215,673 Due to other funds 7,933 155 8,088 Payable from restricted assets: Customer deposits 15,394 15,394 Deferred revenue 110,994 110,994 Accrued compensated absences 117,416 117 , 416 Total liabilities 393,525 114,249 .507,774 Fund Equity: Fund balances: Reserved for encumbrances 30,883 30,883 Reserved for inventories 11,907 11,907 Unreserved 738,135 209,365 947,500 Total fund equity 780,925 209,365 990,290 $1,174,450 $323,614 $ $1,498,064 8-10 CITY OF WINTER SPRINGS, FLORIDA NOTES TO FINANCIAL STATEMENTS Year Ended September 30, 1991 1. Summary of.. Significant Accountinq Policies: The City of Winter Springs , incorporated in 1959, is located in Seminole County and is a political subdivision of the State of Florida. The legislative branch of the City is composed of a five-member elected Commission. The City Commission is governed by the City Charter and by state and local laws and regulations. The City Commission is responsible for the establishment and adoption of policy. The execution of such policy is the responsibility of the City Manager appointed by the Commission. The accounting pOlicies of the City of Winter Springs conform to generally accepted acco\.1nting principles as applicable to units of local governments. The following is a summary of the mQre significant policies: A. Reporting Entity -The accompanying financial statements present the financial position, results of operations and cash flows of the applicable fund types and account groups controlled or dependent upon the City. The reporting entity for the City inCludes all functions of government in which the City Commission exercises oversight responsibility. Oversight responsibility includes, but is not limited t.o, financial interdependency, selection of governing authority, designation of management, significant ability to influence operations and accountability for fiscal matters. AS a result of applying the abOve reporting entity criteria, no component units exist in which the City has any oversight responsibilities which would require inclusion in the City's financial statements. B. Fund Accounting - The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditure$,or. expenses as apprQpriate. Government resources are allo- cated to and accounted for in individual funds based upon the purpose for which the resources are to be spent and the means by which spending activities are controlled. The purposes of the City's various funds and account groups are as follows: Governmental Funds: General Fund - The General Fund is the general operating fund of the City. . It is used to account for all financial resources except those required to be accounted for in another fund. The accounting for public improvements or services deemed to benefit properties against which special assessments are levied have also been included in this fund. The effect of including the special assessments in the General Fund is as follows: 8-9 B-B CITY OF WINTER SPRINGS, FLORIDA COMBINED STATEMENT OF CASH FLOWS PROPRIETARY FUND TYPE Year Ended September 30, 1991 Increase (Decrease) in Cash and Cash Equivalents: Cash Flows From Operating Activities: Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization provision for uncollectible accounts Changes in assets and liabilities: Increase in accounts receivable Decrease in inventory Decrease in due from other funds Decrease in accounts payable Increase in accrued liabilities Decrease in due to other funds Increase in customer deposits Increase in accrued compensated absences Total adjustments Net cash provided by operating activities Cash Flows From Capital and Related Financing Activities: Proceeds from sale of 1991 revenue bonds Proceeds from sale of land Acquisition and construction of capital assets Interest paid on revenue bonds and bond anticipation note Payment of bond issue costs Cash escrow to refund 1985 revenue bonds Other income (expense) Net cash used for capital and related financing activities Cash Flows From Investing Activities: Earnings on cash, cash equivalents and investments Net cash provided by investing activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, October 1, 1990 Cash and Cash Equivalents, September 30, 1991 See accompanying notes to financial statements. B-7 Enterprise Funds $ 883,927 884,918 7,181 (10,689) 1,459 12,750 (56,770) 19,721 (92,795) 21,795 7,542 795,112 1,679,039 6,747,518 61,000 (194,886) (1,462,205) (245,197) (5,130,179) (962) (224,911) 351,960 351,960 1,806,088 2,624,406 S 4,430,494 CITY OF WINTER SPRINGS, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS PROPRIETARY FUND TYPE Year Ended September 30, 1991 Total non-operating revenues (expenses) Enterprise Funds $ 3,702,032 1,003,049 111,054 884,918 819,084 2,818,105 883,927 345,644 (1,413,969) (23,595) (962) (1,092,882) (208,955) (679,706) (888,661) 2,201,856 S 1. 313 .195 Operating Revenues: User charges Operating Expenses: Salaries and benefits Materials and supplies Depreciation and amortization Other operating expenses Total operating expenses Operating Income Non-Operating Revenues (Expenses): Interest income Interest expense Loss on disposal of fixed assets Other Income (Loss) Before Extraordinary Item Loss on Advance Refunding of Water and Sewer Revenue Bonds Net Loss Retained Earnings, October 1, 1990 Retained Earnings, September 30, 1991 See accompanying notes to financial statements. B-6 Totals Capital Projects Fund (Memorandum Only) Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ $ $ $ 3,707,032 $ 3,720,415 $ 13,383 444,227 456,631 12,404 1,711,748 1,764,106 52,358 38,360 35,369 (2,991) 218,432 221,686 3,254 148,753 157,681 8,928 346,916 370,682 23,766 950 950 30,600 48,150 17,550 148,753 158,631 9,878 6,497,315 6,617,039 119,724 See accompanying notes to financial statements. B-5 CITY OF WINTER SPRINGS, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET (GAAP BASIS) AND ACTUAL - CONTINUED ALL GOVERNMENTAL FUND TYPES Year Ended September 30, 1991 Debt Service Fund I Budget Actual Revenues: Taxes and special assessments Licenses, permits and fees Intergovernmental revenues Charges for services Fines and forfeitures Interest Miscellaneous Total revenues $ $ 72,780 75,954 72,780 75,954 Expenditures: Current: General government Public safety Transportation Culture and recreation Capital outlay Debt service: Principal retirement Interest and fiscal charges Total expenditures 150,000 651,345 801,345 140,000 651,345 791,345 Excess (Deficiency) of Revenues Over (Under) Expenditures (728,565) (715,391) Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) 728,565 696,410 728,565 696,410 Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Uses (18,981) Fund Balances, October 1, 1990 866,581 971,368 Fund Balances, September 30, 1991 s s 952.387 866.581 Variance Favorable (Unfavorable) $ 3,174 3,174 10,000 10,000 13,174 (32,155) (32,155) (18,981) 104,787 s 85.806 Special Revenue Funds Variance Favorable Budqet Actual (Unfavorable) $ 1,494,984 $ 1,551,831 $ 56,847 181,952 223,938 41,986 263,300 268,779 5,479 14,950 15,343 393 58,495 64,829 6,334 2,013,681 2,124,720 111,039 4,225 50,787 33,000 17,184 13,086 38,073 (12,959) 37,701 (5,073) 193,562 165,872 27,690 281,574 234,215 47,359 1,732,107 1,890,505 158,398 607,026 680,459 73,433 (2,105,265) (2,236,333) (131,068) (1,498,239 ) (1,555,874) (57,635) 233,868 334,631 100,763 532,395 787,547 255,152 S 766.263 S 1.122.178 S 355.915 See accompanying notes to financial statements. B-4 CITY OF WINTER SPRINGS, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET (GAAP BASIS) AND ACTUAL ALL GOVERNMENTAL FUND TYPES Year Ended September 30, 1991 Revenues: Taxes and special assessments Licenses, permits and fees Intergovernmental revenues Charges for services Fines and forfeitures Interest Miscellaneous Total revenues Expenditures: Current: General government Public safety Transportation Culture and recreation Capital outlay Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses Fund Balances, October 1, 1990 Fund Balance, September 30, 1991 Budget $ 2,212,048 262,275 1,448,448 38,360 203,482 66,888 30,600 4,262,101 1,121,069 3,126,617 773,947 256,716 313,226 5,591,575 (1,329,474) 769,674 769,674 (559,800) 843,934 s 284.134 General Fund Actual $ 2,168,584 232,693 1,495,327 35,369 206,343 72,218 47,200 4,257,734 920,871 2,940,940 726,944 182,444 289,928 5,061,127 (803,393) 949,749 949,749 146,356 843,934 s 990.290 Variance Favorable (Unfavorable) $ (43,464) (29,582) 46,879 (2,991) 2,861 5,330 16,600 (4,367) 200,198 185,677 47,003 74,272 23,298 530,448 526,081 180,075 180,075 706,156 s 706.156 Types Totals Debt Capital (Memorandum Service Projects On1v) $ $ $ 3,720,415 456,631 1,764,106 35,369 221,686 75,954 157,681 370,682 950 48,150 75,954 158,631 6,617,039 938,055 2,954,026 765,017 182,444 740,628 1,196,428 140,000 140,000 651,345 651,345 791,345 740,628 6,827,315 (715,391) (581,997) (210,276) 696,410 2,326,618 (90,285) (2,326,618) 696,410 (90,285) (18,981) (672,282) (210,276) 971,368 2,501,989 5,104,838 S 952.387 S 1. 829.707 S 4.894.562 See accompanying notes to financial statements. B-3 CITY OF WINTER SPRINGS, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES Year Ended September 30, 1991 Revenues: Taxes and special assessments Licenses, permits and fees Intergovernmental revenues Charges for services Fines and forfeitures Interest Miscellaneous Total revenues Expenditures: Current: General government Public safety Transportation Culture and recreation Capi tal outlay Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Operating transfers in Operating transfers out Total other financing sources (uses) Excess of Revenues and Other Financing Sources OVer (Under) Expenditures and Other Uses Fund Balances, October 1, 1990 Fund Balances, September 30, 1991 Governmental Fund Special General Revenue $ 2,168,584 232,693 1,495,327 35,369 206,343 72,218 47,200 4,257,734 920,871 2,940,940 726,944 . 182,444 289,928 5,061,127 (803,393) 949,749 949,749 146,356 843,934 s 990.290 $ 1,551,831 223,938 268,779 15,343 64,829 2,124,720 17,184 13,086 38,073 165,872 234,215 1,890,505 680,459 (2,236,333) (1,555,874) 334,631 787,547 S 1,122,178 Fiduciary Proprietary Fund Type Fund Type Account Groups Totals General General Long- (Memorandum Enterprise Agency Fixed Assets Ter. Debt Only) $ 1,306,276 $662,908 $. $ $ 4,760,498 2,874,688 419,594 419,594 229,180 3,234 4,557 5,480 2,801 59,570 1,262 13,169 3,124,218 3,139,612 27,814,854 6,896,797 34,711,651 (2,444,270) (2,444,270) 283,463 283,463 952,387 952,387 7,907,613 7,907,613 30,000 30,000 830.511.432 S662.908 $6.896.797 S 8.890.000 552.947.192 $ 51,066 $ $ $ $ 349,321 84,900 626,246 51,482 59,570 639,476 639,476 35,000 35,000 122,000 122,000 316,985 332,379 110,994 23,118 140,534 662,908 662,908 750,000 750,000 4,845,020 4,845,020 18,996,500 8,860,000 27,856,500 30.000 30,000 25,915,547 662,908 8,890,000 36.559.948 6.896,797 6,896,797 3,282,690 3,282,690 247,455 247,455 161,865 161,8t5 903,875 903,875 952,387 32,883 11,907 1,829,707 2.067.6.7.8 4.595.885 6,896.797 16.387.244 S30.511.432 S6fi2.908 S6.896.797 S 8.a90.000 852.947.192 See accompanying notes to financial statements. B-2 CITY or WINTER SPRINGS, FLORIDA COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS ~ Cash and Cash Equivalents Investments Receivable.: Account. receivable - net Special ass.....nt. Accrued interest receivable Du. Fro. Other Govern.ents Due Fro. Other Funds Inventories Restricted Ca.h and Cash Equivalents Property, Plant and Equip.ent Le.. Accu.ulated Depr.ciation Un..ortized Bond Cost. Amount Available in Debt Service Funds Amount to be Provided for Retir...nt of G.n.ral Long-Ter. D.bt Aaount to b. Provided for paya.nt of Arbitrag. Liability Total Ass.ts LIABILITIES AND FUND EQUITY Liabiliti..: Account. payable Accru.d liabiliti.. Du. to oth.r fund. Payable fro. r..trict.d a...t.: Accru.d int.r..t- R.venu. bond. payable Obligation und.r futur.. agr....nt Cu.toaer d.po.it. Def.rr.d r.v.nu. Accrued-co.pen.at.d ab..nc.. Def.rr.d coapen.ation Bond anticipation not. pay.bl. Obligation und.r futur.. .gr....nt, 1... portion pay.bl. fro. r..tricted a...t. R.v.nu. bond. payable, 1... portion pay.bl. froa r..trict.d ....t. Accru.d .rbitr.g. li.bility Total li.biliti.. Fund Equitya Inv..t..nt in g.n.r.l fix.d ....t., .. r..tated Contributed capit.l a.t.ined .arning.a a...rv.d for r.n.w.l and r.plac...nt a...rved for capit.l iaprov...nt. Unre..rv.d Fund b.l.nc..a Re..rv.d for d.bt ..rvic. a...rv.d for .ncuabr.nc.. a...rv.d for inventor i.. a...rv.d for capital proj.ct. Unr...rv.d Tot.l fund equity Tot.l Li.biliti.. and Fund Equity September 30, 1991 General $1,191,425 229,180 1,323 48,835 11,907 15,394 S1.498.064 $ 40,209 215,673 8,088 15,394 110,994 117,416 507.774 Governmental Fund Type. Special Debt Revenue S.rvice $1.120,355 5,480 7,934 $1.133.769 $ 11.591 11.591 $ 479.534 798,526 51.278.060 $ 325,673 325.673 Capital Proiects $ 2,076,162 12.076.162 $ 246,455 246.455 Coopers & Lybrand certified public accountants Report of Independent Accountants The Honorable Mayor, Members of the City Commission, and City Manager City of Winter Springs, Florida We have audited the accompanying general purpose financial statements of the City of Winter Springs, Florida as of September 30, 1991, and for the year then ended, as listed in the table of contents. These financial statements are the responsibility of the City of Winter Springs, Florida management. Our. responsi- bility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General u of the United States. Those standards require that we plan and perform the'audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial ~tat;ement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Winter Springs, Florida as of September 30, 1991, and the results of its opera- tions and cash flows of its propr ietary fund type for the year then ended in conformity with generally accepted accounting principles. {l~<-O "" ~~~fl-:m~ Orlando, Florida Deceaber 13, 1991 8-1 APPENDIX B CITY OF WINTER SPRINGS, FLORIDA CONTENTS Page Report of Independent Accountants.................................................... .B-1 General Purpose Financial Statements (Combined Statements - Overview) I Combined Balance Sheet - All Fund Types and Account Groups..........................B-2 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types............................................B-3 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget (GAAP Basis) and Actual - All Governmental Fund Types......................B-4 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - Propr ietary Fund Type............................................................. B-6 Combined Statement of Cash Flows - Proprietary Fund Type............................B-7 Notes to Financial Statements.......................................................8-9 [This page intentionally left blank] Seminole County School Board Overlappinl Debt km Seminole County School District General Obligation School Bonds, Series 1986-A Seminole County School District General Obligation School Bonds, Series 1986-B Total Overlapping Seminole County School Board Debt Seminole County School Board Overlapping Debt as of September 30. 1991 General Obliption $13,725,000 81.050.000 $94,775,000 $ A-I5 Non-Self Supportin~ Self- Supporti~ -0- -0- -0- -0- -0- $89,130,000 Seminole County, Florida Direct and Overlapping Debt as of September 30. 1992 Seminole County, Florida Direct Debt Iwul General Non-Self Self- Obllgation SupportiQg SupportiQg $4,415,000 -0- -0- $15,000,000 -0- -0- General Obligation Library Refunding Bonds, Series 1992 Limited General Obligation Bonds, Series 1992 Seminole County, Florida Sales Tax Revenue Bonds, Series 1987 -0- $4,600,000 -0- -0- -0- -0- -0- -0- -0- -0- -0- $20,410,000 -0- $3,235,000 -0- 17.220.000 $19,415,000 $45,465,000 -0- Solid Waste Disposal System Revenue Bonds, Series 1990 $22,665,000 $3,170,000 Water and Sewer Bonds, Series 1985 Water and Sewer Bonds, Series 1987 $38,660,000 Water and Sewer Revenue Bonds, Series 1989 20,000,000 Local Option Gas Tax Revenue Bonds -0- Gas Tax Refunding Revenue Bonds, Series 1992A -0- Gas Tax Refunding Revenue Bonds, Series 1992B -0- Total Seminole County Direct Debt $84,235,000 MSBU Line of Credit Note: the County also has a Master Equipment Lease debt of $2,853,386 $1.764.011 A-14 City of Winter Springs, Florida Direct Debt as of .lune 30. 1992 General Non-Self Self- ~ Obltgation Supporting Supporting $6.915.000 Water and Sewer Refunding Revenue Bonds, Series 122.1 -0- -0- $ 6,880,000 $9,000,000 Improvement Refunding Revenue Bonds, Series 1989 -0- $8,710,000 -0- $12,300,000 Water and Sewer Revenue Bonds, Series 1990 -0- -0- 12,300,000 Note Payable -0- -0- 750.000 Total $ -0- $8,710,000 $19,930,000 A-13 Ten Largest Taxpayers of 1991 _in Seminole County. Florida Assessed 1991 Com1)8nv Name Valualion Taxes 1. United Telephone Company $115,966,479 $2,353,624 2. Florida Power Corporation 85,267,800 1,694,371 3. Southern Bell Telephone 62,565,331 1,311,161 4. Altamonte Mall- Joint Venture 59,581,050 1,277 ,656 5. Heathrow Development Association, Ltd. 37,302,180 694,591 6. AAA Properties, Incorporated 30,929,870 585,528 7. Florida Power & Light 28,090,385 582,116 8. Siemens Stromberg-Carlson Company 27,127,780 543,725 9. Post Lake Limited ill 24,868,390 472,780 10. Renaissance Center 23,635,292 (1) 506,835 Top Ten Taxpayers $ 495,334,557 $ 10,022,389 Total Other Taxpayers 9.261.782.722 169.222.905 Total 1991 Tax Roll $9,757,117,279 $179,245,294 (1) Millage rate is 21.44 while Post Lake Limited millage rate is 19.0113 Source: Office of the Property Appraiser, Seminole County, Florida. A-12 Seminole County, Florida Property Tax Levies and Collections (1) Last Ten Years (Amounts Expressed in Thousands) (2) Total Percent Delinquent Collections Fiscal Tax Current Tax of Levy Tax Total Tax As Percent of Year Le~ Collections Collected Collections Collections Current Levy 1980-81 $17,769 $17,131 96.4% $24 $17,155 96.5% 1981-82 18,509 18,079 97.7 312 18,391 99.4 1982-83 19,179 18,308 95.5 205 18,513 96.5 1983-84 20,415 19,579 95.9 51 19,630 96.2 1984-85 22,850 22,043 96.5 67 22,110 96.8 1985-86 26,564 25,645 96.5 87 25,732 96.9 1986-87 33,091 31,855 96.3 72 31,927 ;96.5 1987-88 37,801 36,311 96.1 166 36,477 96.5 1988-89 43,298 41,678 96.3 189 41,867 96.7 1989-90 48,335 46,031 95.2 409 46,440 96.1 1990-91 62,026 59,494 95.9 328 59,822 94.4 (1) Includes only millage levies - not front footage assessments. (2) Property taxes become due and payable on November 1st of each year. A four percent discount is allowed if the taxes are paid in November, with discount declining by one percent each month thereafter. Accordingly, taxes collected will not be 100 percent of the tax levy. Taxes become delinquent on Aprillst of each year and tax certificates for the full amount of any unpaid taxes and assessments must be sold not later than June 1st of each year. Source: Seminole County, Florida Comprehensive Annual Financial Report, September 30, 1991. A-ll Millaee Rates for a Resident of the City of Winter Sprines- Florida Water Management City of Tax RoD County Rate School District Winter Sprin. Total 1983 4.4268 7.1253 .2840 1.1551 12.9912 1984 4.1776 7.0694 .3260 1.0090 12.5820 1985 4.1776 7.4320 .2060 1.5000 13.3156 1986 4.6000 7.4450 .2210 1.5930 13.8590 1987 4.5764 7.6320 .2070 1.5930 14.0084 1988 4.5582 7.8090 .2810 1.8410 14.4892 1989 4.5445 7.9900 .3460 3.??oo 15.8805 1990 5.5343 10.1690 .3580 3.6153 19.6766 1991 5.6970 10.0890 .3580 3.6153 19.7593 Source: Office of the Property Appraiser, Seminole County, Horida. "l:i.. '''~' " A-lO Tax &ill 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992* Ad Valorem Assessment Rolls for the City of Winter Sprin~ Florida Non-Exempt Property Value $217,081,895 271,103,886 307,080,811 346,714,534 395,105,976 460,510,234 495,414,638 552,236,775 614,635,841 626,552,418 Non-Exempt Personal Property Value $9,155,741 10,474,588 13,504,118 16,323,311 17,829,506 16,889,924 17,585,905 20,279,346 20,845,871 20,845,547 Total Taxable $226,387,113 281,836,185 320,746,888 363,279,583 413,200,403 477,584,834 513,192,882 572,717,685 635,683,276 647,047,589 Utilities Railroads $149,477 257,711 161,959 241,738 264,921 184,676 192,339 201,564 201,564 201,624 * Estimate Source: Office of the Property Appraiser, Seminole County, Horida The following table sets forth the taxable assessed property valuations for the 1980 through 1990 tax rolls for the County. Tax Roll 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992* Seminole County, Florida Taxable Assessed Pro.perty Valuations Non-Exempt Property Value $2,380,661,327 2,437,167,277 3,067,727,288 3,251,215,051 3,830,936,415 4,395,856,160 5,102,415,928 5,873,492,165 6,611,027,051 7,113,973,133 7,912,268,978 8,916,304,410 9,154,672;366 Non-Exempt Personal Property Value $259,407,370 310,793,390 339,200,711 374,264,070 425,408,629 489,521,734 547,370,497 615,240,926 665,516,523 725,195,223 798,986,828 834,285,032 861,162,907 Total Taxable $2,648,784,874 2,755,822,594 3,412,455,652 3,631,192,511 4,265,987,922 4,890,394,876 5,657,058,417 6,496,367,522 7,282,866,182 7,845,646,706 8,717,972,774 9,757,117,279 10,022,409,946 Utilities Railroads $8,716,177 7,861,927 5,527,653 5,713,390 9,642,878 5,016,982 7,271,992 7,634,431 6,322;608 6,478,350 6,716,968 6,527,837 6,574,673 * Estimate Source: Office of the Property Appraiser, Seminole County, Horida A-9 15 Largest Employers in Metro Area Orlando MSA Name of ElIlployer 1991 Employees 1. Walt Disney World... .................................. ......... ........ .............. .............. ................. ............ ............ .....33,000 2. U.S. Naval Training Center....................................................................................................................16,000 3. Orange County Public Schools .......................... ............................... ................. ............ ........................14,700 4. Martin Marietta Electronics & Missiles Systems Group....................................................................... 10,000 5. Florida Hospital..................... ....... ..... ............ .......... ....... .............. ............... ......... ... .............. ....... ............6, 100 6. School Board of Seminole County...........................................................................................................5,600 7. State of Florida.............. ...................... ............................... ...................................... ..... ................. .........5,600 8. Orlando Regional Medical Center..... ... ..................... ............ .......... .......................... ....... ..... ...................5,400 9 . AT&T Information System........................... .......... ................... ..................... ... .............. ....... ..... ............5,000 10. Publix Supermarkets, Inc. ..... ....... ..... ..... .............. ................. .............. ..... ... ......... ... ................ ............ ... ..5,000 11. Winn-Dixie....... ............ ......... ..... ........................ .......... ....... .............. ........................ ..... ............ ......... ... ..4,800 12. Orange County Government ......................... ............ ....... ............ ............................. ....... ............ .......... ..4,700 13. United States Postal Service ....................................................................................................................4,200 14. General Mills........ ..... ....... ..... ....... ..... ... ................ .......... ....... .............. ..... ....... ..... ....... ............ ............... ..3,000 15. Sun Bank, N.A. ......... ....... ..... ....... ..... ............ ..... ....... ....... ............ ............................... ..... ...................... ..3,000 Source: Individual companies; The Orlando Sentinel Marketing Services Division. A-8 Largest Taxpayers of 1990 City of Winter Sprinp. Florida Assessed Valuation Taxes Levied 1. Winter Springs Dev. Joint Venture 2. Alamo Savings Assn. of Texas 3. Seville of Orlando L.P. 4. Ameriftrst Development Corp. 5. Gulfstream Housing Corp. 6. Aubrey L. & Mary L. Rhoden 7. Monroe Venture IT & LeCesse Corp. of Winter Springs 8. Country Club Joint Venture 9. Mindich Construction 10. Oleda D. Casscells 11. Casa Allegre 12. Continental Funding Corporation $13,272,380 6,642,500 6,097,260 3,784,570 2,764,180 2,120,980 1,958,900 1,791,130 1,618,850 1,515,180 1,454,810 1,341,240 $261,156 130,701 119,973 74,468 54,390 41,733 38,544 35,243 15,069 23,147 28,625 26,391 Source: Offtce of the City Oerk, City of Winter Springs, Florida Largest Employers of 1992 City of Winter Sprinp. Florida Employer City of Winter Springs Winter Springs Elementary School Keeth Elementary School Florida Country Clubs (Iuscawilla) Visiting Nurse Association United States Post Offtce Feeder Truss Dituneer Architectural Aluminum Winter Springs Golf Course Number of EDlPloyees 176 89 71 60 48 52 40 35 30 Source: Offtce of the City Oerlc, City of Winter Springs, Florida A-7 The following chart shows employment in the various sectors of the labor force in actual numbers of people employed in the Seminole County area as reported for the Orlando MSA. Orlando MSA Non-Agricultural Wage and Salary Average Annual Employment (In Thousands of People) 12SJ 12M ~ 1!86 mz !288 !282 .l22n 1221 1992 Total, All Industries 347.0 385.1 413.5 444.4 474.9 502.6 534.5 568.5 554.4 558.5 Manufacturing 41.6 45.5 48.1 51.1 54.0 57.3 56.2 54.1 48.6 47.2 Construction 25.6 30.9 32.7 34.2 33.6 37.3 38.8 37.1 30.3 28.6 Transportation, Communications & Utilities 17.2 20.1 21.7 23.3 24.6 25.6 26.5 38.6 30.0 29.7 Trade 94.9 104.7 108.8 115.2 124.6 130.6 140.1 148.1 141.2 141.3 Wholesale Trade 23.4 25.8 27.3 27.9 29.7 30.0 31.1 33.1 31.7 30.6 Retail Trade 71.5 78.9 81.5 87.3 94.9 100.6 109.0 114.9 109.5 110.7 Finance, Insurance & Real Estate 22.6 24.9 27.9 30.1 33.2 33.2 34.1 32.6 33.0 31.8 \0 Services 100.2 113.7 125.9 140.0 151.0 161.2 175.5 202.0 202.8 209.3 I < Hotels & Other Lodging Places 16.2 18.6 19.5 23.9 25.4 26.8 27.8 32.2 30.3 30.7 Personal Services 3.6 4.0 4.5 4.9 5.2 5.4 5.7 5.5 5.8 6.0 Business Services 19.5 23.7 26.2 29.1 31.8 31.0 33.4 32.7 32.0 32.0 Health Services 20.8 22.6 24.0 25.9 27.5 29.5 32.7 35.4 36.7 37.8 Membership Organizations 4.2 4.8 5.0 5.2 5.9 8.9 9.3 10.2 11.0 10.9 Other 35.9 40.0 46.7 51.0 55.2 58.2 Government 44.9 45.3 48.3 50.4 53.7 48.1 63.1 65.1 68.4 70.5 * Non-Agricultural Wage and Salary Average Annual Employment through June 1992. Sources: Report on Employment, U.S. Department of Labor, Bureau of Labor Statistics, Florida Department of Labor and Employment Security The following chart shows the labor force unemployed from 1980-1992. The second chart describes the percent of the labor force in the County as compared to the State of Florida that is unemployed on a monthly basis for years 1987-1992. Civilian Labor Force Summary Seminole County. Florida Year Civilian Labor Force Employment Unemployment Annual Average Percent Unemployment 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992* 88,430 95,385 103,413 110,166 121,187 129,316 139,938 149,115 157,463 170,344 179,038 178,253 178,874 83,444 88,965 96,633 103,248 115,093 123,510 133,884 142,453 150,280 161,715 170,042 167,125 166,376 8,986 6,420 6,780 6,918 6,094 5,806 6,134 6,662 7,183 8,629 8,996 11,128 12,499 5.6% 6.7 6.6 6.3 5.0 4.5 4.4 4.5 4.6 5.1 5.0 6.2 7.0 * Preliminary Labor Force Summary as reported for April 1992. Source: Florida Department of Labor and Employment, Division of Employment Security, Bureau of Research and Analysis, 1980-1992. Unemployment Statistics Seminole County State of Florida 1987 1988 1989 1990 1991 1m 1m 1988 1989 1990 1991 1992 January 4.8% 4.5% 5.8% 5.2% 5.5% 7.4% 5.8% 5.0% 5.9% 5.8% 6.2% 8.6% February 4.3 4.5 5.2 5.1 6.0 7.4 5.2 5.0 5.2 5.8 7.0 8.7 March 4.5 4.4 4.8 4.0 6.0 7.1 5.4 4.7 4.7 5.0 6.9 8.1 April 4.5 4.5 5.0 4.8 5.6 7.0* 5.2 5.0 5.1 5.5 6.6 8.0* May 4.3 4.8 6.2 4.4 6.0 5.1 4.7 6.2 5.4 7.2 June 4.3 4.9 5.4 5.4 6.3 5.3 4.8 6.1 6.6 7.9 July 4.6 4.6 5.8 5.0 6.5 5.9 5.1 6.0 6.1 8.1 August 4.5 4.3 4.9 5.5 6.5 5.7 5.0 5.4 6.8 8.3 September 4.3 4.5 5.2 5.3 6.4 5.3 5.1 5.7 6.2 8.0 October 4.1 4.6 5.2 5.5 6.0 5.0 4.9 5.7 6.2 7.2 November 4.3 4.7 4.8 5.8 6.4 5.1 5.2 5.6 6.3 7.1 December 4.4 4.8 5.3 5.1 6.2 5.0 5.4 5.8 5.5 7.3 * Preliminary Civilian Labor Force Summary as reported for the month of April 1992. Source: Florida Department of Labor and Employment, Division of Employment Security, Bureau of Research and Analysis, 1987-1992 A-5 '-.~~ Building Permit Activity City of Winter Springs, Florida (value in thousands) Additions, Number of Units Non- Alterations Single Multi- Residential Residential and Public Total Yw: EiuDih EiuDih Valuations V aluations Valuations Valuations 1 1980 352 121 $14,631 $2,252 $711 $17,595 1981 207 121 9,206 "\j 1,881 623 11,710 1982 290 88 13,843 1,605 801 16,249 1983 457 16 20,583 2,531 827 23,941 1984 580 246 27,345 6,264 924 34,533 1985 461 358 24,688 2,522 1,223 28,432 1986 299 28 25,056 2,712 3,056 30,825 1987 460 0 40,941 6,408 1,360 48,710 1988 290 0 29,135 5,533 993 35,660 1989 418 0 40,489 4,899 1,535 46,924 1990 270 12 29,418 2,693 1,602 33,713 1991 145 0 23,492 2,703 2,673 28,165 19922 170 0 22,875 1,072 506 24,453 Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 19922 Building permit Activity in Seminole County, Florida (value in thousands) Additions, Number of Units Non- Alterations Single Multi- Residential Residential and Public Total Family Family Valuations Valuations Valuations Valuations 1 2,655 836 $111,198 $37,879 $16,679 $165,757 1,787 1,438 98,839 67,211 15,709 181,758 2,142 607 123,233 61,258 16,706 201,197 4,722 1,644 279,353 92,083 27,690 399,125 5,088 3,858 360,082 86,893 26,822 473,797 5,188 2,348 367,546 128,022 65,588 561,156 3,614 2,137 296,382 118,059 33,051 444,493 4,301 1,420 374,596 115,165 28,873 518,634 4,094 902 403,071 237,943 33,030 644,848 3,983 799 378,425 101,452 34,783 514,661 2,746 2,479 350,420 70,267 104,412 525,098 2,052 290 258,879 47,002 45,928 351,809 1 Totals may not add due to rounding. 2 Preliminary Annual Building Permit Activity for 1992. Source: City of Winter Springs Building Deparbnent; University of Florida, College of Business Administration, Bureau of Economic and Business Research, Building Permit Activity in Florida, 1980-1991. A-4 Education The Seminole County schools system presently consists of 45 public schools which include two exceptional education facilities. For the 1992-93 school year, there are 2,846 teachers and 51,209 students in the Seminole County School System.. Facilities are available for exceptional children and programs provided for the multi- handicapped, emotionally disturbed and gifted children. There are also four major institutions of higher learning in the area. They are the University of Central Florida, Rollins College, Seminole Community College and Valencia Community College. The University of Central Florida, which opened in 1968, is a four-year, co-e<lucational university with an enrollment of over 16,000 full-time and part-time students. The school is located 12 miles east of Orlando on 1,200 acre campus. Rollins College in Winter Park is the oldest four year instibltion of higher learning in the state and is an independent co-educational liberal arts college with an enrollment of over 1,300. Valencia has three campuses and an enrollment of 11,200 students. Seminole Community College has an enrollment of 8,500 students. Economy The East Central Florida economy, which managed to remain relatively healthy while most other areas of the country were in a recession, is again experiencing the tremendous growth which area residents have come to expect. Walt Disney World's EPCOT Center, which has established the Orlando area as the State's #1 tourist destination, continues to fill area hotels to capacity during peak seasons and has been the impetus for investment of hundreds of millions of dollars in new hotel construction: MCA has announced a $205 million project to develop Universal City, Florida, a theme attraction to be styled after the Universal Studios Tour in California. Major corporation with expansion and relocation plans will also contribute to the areas growth; ftrms such as AT&T Information Systems, Paulucci Enterprises, Harcourt Brace Jovanovich, Martin Marietta, and the Harris Corporation represent the additional millions of dollars in construction expenditures and annual payrolls to the region's economy. Projects such as these will help to further diversify the region's economic base and will help to sustain the momentum of growth in the region. . The current interest in creating a substantial industrial lands inventory is to some extent the reflection of a commitment on the part of business and government to establish the region as an international trade and business center. A-3 Government The City is served by a City Commission and City Manager form of government consisting of a Mayor, five commissioners and a City Manager. The Mayor and City Commissioners are elected for tbree-year terms. The City Manager is appointed by the City Commission. Listed below are the current Mayor and City Commissioners with their term expiration dates. City Official Term Expiration Date Philip A. Kulbes, Mayor John Langellotti, Deputy Mayor John Torcaso Don Jonas Terri Donnelly Cindy Kaehler December 1993 December 1994 December 1994 December 1993 December 1993 December 1994 Budeet and Budeetary Accountine The City follows the procedures set forth below in establishing the budgetary data reflected in the financial statements: (1) On or before July 1st of each year, the City Manager submits a Proposed Budget to the City Commission for the fiscal year beginning the following October 1st. The Budget includes proposed revenues and expenditures, and a description of capital activities for the ensuing fIScal year. (2) The City Commission then holds informal workshops. Each item in the budget is thoroughly discussed, and the public is invited to participate. (3) On or before September 15th of each year, the public hearings are completed and the Commission adopts the final budget and establishes the ad valorem tax millage. (4) The budget may be amended by the City Commission at any time. (5) The City Manager is authorized to transfer budgeted amounts between accounts within a department. At any time during the fiscal year, the City Manager may transfer part or all of any unencumbered appropriation among programs within one department. The transfer of unencumbered appropriations from one department to another requires an ordinance by the City Commission. (6) Budgets are adopted on a basis consistent with generally acc~pted accounting principles. Budgeted amounts are as originally adopted, or as amended by the City Commission. (7) Appropriations lapse at the end of the fIScal year. (8) Budgetary control is established at the departmental level for the General Fund, and at the fund level for the Special Revenue, Debt Service, Capital Projects, and Enterprise Funds. Employee Pension Plan Substantially all employees of the City are covered by the Florida Municipal Pension Trust Fund. Contributions to the Plan for the year ended September 30, 1991 was $101,323 as recorded in the General Fund and $16,626 as recorded in the Enterprise Fund. The City contributes to the Plan up to four percent of the annual compensation of eligible employees. A-2 APPENDIX A GENERAL INFORMATION THE FOLLOWING INFORMATION CONCERNING THE CITY OF WINTER SPRINGS, FLORIDA SEMINOLE COUNTY, FLORIDA AND THE ORLANDO MSA IS INCLUDED ONLY FOR THE PURPOSE OF PROVIDING GENERAL BACKGROUND INFORMATION. THE INFORMATION HAS BEEN COMPILED ON BEHALF OF THE CITY, AND SUCH COMPILATION INVOLVED ORAL AND WRITTEN COMMUNICATION WITH VARIOUS SOURCES AS INDICAlED. THE INFORMATION IS SUBJECT TO CHANGE, ALTHOUGH EFFORTS HAVE BEEN MADE TO UPDATE THE INFORMATION WHERE PRACTICABLE. THE BONDS ARE NOT A GENERAL OBLIGATION OF THE STAlE OF FLORIDA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE CITY OF WIN1ER SPRINGS, FLORIDA. General Description and Location The City of Winter Springs, Florida (the "City") was originally incorporated in 1959 under the name of North Orlando Village 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. Population The following reflects the average annual percentage of growth in the City as compared to the County: Population Trends 1960-2020 City of Winter Springs, Florida and Seminole County. Florida Average Average City of Annual Annual Winter Percentage Seminole Percentage Yw: Springs Increase County Increase 1960 609 54,947 1970 1,161 9.06% 83,692 5.23% 1980 10,475 80.22 179,752 11.48 1985 16,636 11.76 229,937 5.58 1990 22,151 33.15 287,528 5.01 1991 23,590 6.50 298,057 3.66 2000* N/A 388,800 3.38 2010 N/A 476,500 2.26 2020 N/A 557,000 1.69 * Medium migration assumption as projected by Population Program, Population Division, Bureau of Economic and Business Research, University of Florida, Population Studies #96, July 1991. Sources: U.S. Department of Commerce, Bureau of Census, for the years 1960, 1970, 1980 and 1990; Florida Estimates of Population, Population Program, Bureau of Economics and Business Research, University of Florida. [This page intentionally left blank] entirely if, in their judgment, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Series 1992 Bonds. For any additional description of the rating and its meaning, Standard & Poor's and Moody's should be contacted. ENFORCEABILITY OF REMEDIES The remedies available to the Holders of the Series 1992 Bonds upon an event under the Resolution are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, the remedies specified by the Resolution may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 1992 Bonds will be qualified, as to the enforceability of 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. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY LAW Florida law requires the City to make a full and fair disclosure of any bonds or other debt obligation which it has issued or guaranteed to which City revenues are pledged and which are or have been in default as to principal or interest at any time after December 1, 1975 (including bonds or other debt obligations foe which it has served as a conduit issuer). The City is not and has not been in default as to principal and interest on its bonds or other debt obligations. Although the City is not aware of any other defaults, it has not undertaken an independent review of bonds or other debt obligations for which it served only as a conduit issuer. To the extent of any such bonds or other debt obligations are in default as to principal and interest, the City does not believe that any additional information would be material to an investor in the Series 1992 Bonds as the obligation of the City thereunder is limited solely to funds received by the party borrowing the proceeds of such bonds or other debt obligations and the City is not obliged to pay principal and interest on such bonds or debt obligations from any other funds of the City. CERTIFICA TE CONCERNING OFFICIAL STATEMENT Concurrently with the delivery of the Series 1992 Bonds, the City will furnish its certificate, executed by the Mayor, the City Clerk and the City Manager to the effect that, to the best of their knowledge, this Official Statement, as of date of delivery of the Series 1992 Bonds, does not contain an untrue statement of a material fact and does not omit any material in fact which should be included therein for the purpose for which the Official Statement is to be used, or which is necessary to make the statement contained therein, in the light of the circumstances under which they were made, not misleading. MISCELLANEOUS So far as any statements made in this Official Statement involve matters of opinion or estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of the statements 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 1992 Bonds. CITY OF WINTER SPRINGS, FLORIDA SEAL By: Is! Mayor By: Is! City Manager 15 affect the market price or marketability of the Series 1992 Bonds, or otherwise prevent the Series 1992 Bond owners from realizing the full current benefit of the interest thereon. PROSPECTIVE PURCHASERS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THEIR ACQUISmON, HOLDING OR DISPOSITION OF THE SERIES 1992 BONDS. LITIGATION There is no litigation or controversy of any nature now pending or threatened to restrain or enjoin the sale, execution, issuance or delivery of the Series 1992 Bonds or any proceedings of the City taken with respect to the authorization, sale or issuance of said Series 1992 bonds, or the pledge or application of any monies, revenues or securities provided for the payment of or security for the Series 1992 bonds, or having any significant effect on the receipts or sources of income to be collected which contribute to the Net Revenues of the System. FINANCIAL ADVISOR Capital Market Consultants, Inc. has served as financial advisor to the City in connection with the issuance of the Series 1992 Bonds. UNDERWRITING The Series 1992 Bonds are being purchased by Prudential Securities, Inc., Gardnyr Michael Capital, Inc., A.G. Edwards & Sons, Inc., Harcourt Ryder Capital, Inc., William R. Hough & Co., and The Leedy Corporation (the "Underwriters") at an aggregate purchase price of , less an original issue discount of , for an aggregate net purchase price of plus accrued interest to the date of delivery. The Underwriters intend to offer the Series 1992 Bonds to the public initially at the offering prices stated on the cover page hereof, which prices may subsequently change without any requirement of prior notice. The Underwriters reserve the right to join with other dealers and underwriters in offering the Series 1992 Bonds to the public and may offer and sell the Series 1992 Bonds to certain dealers and others at prices lower than the public offering prices on the cover page hereof. FINANCIAL STATEMENTS The City of Winter Springs Financial Statements for the year ended September 30, 1991, audited by Coopers & Lybrand, Independent Accountants, are included herein as Appendix B and are an integral part of this Official Statement. VERIFICA TION OF MA THEMA TICAL COMPUTATIONS The accuracy of (i) the mathematical computations of the adequacy of the Federal Securities to be held under the Escrow Deposit Agreement to pay, when due, the principal of, interest and redemption premiums on, the Water and Sewer Revenue Bonds, Series 1990; and (ii) the mathematical computations suppOrting the conclusion that the Series 1992 Bonds are not "arbitrage bonds" under Section 148 of the Internal Revenue Code of 1986, as amended, (the "Code") will be verified for the City by Coopers & Lybrand Independent Accountants. BOND RATINGS Standard & Poor's Corporation and Moody's Investor's Service, Inc., have given the Series 1992 Bonds a rating of _ and _ respectively. Standard & Poor's and Moody's have assigned their ratings to the Series 1992 Bonds on the understanding that the standard policy of Municipal Bond Investors Assurance Corporation ("MBIA") issuing the timely payment of the principal of and interest on the Series 1992 Bonds will be issued by MBIA upon delivery of the Series 1992 Bonds. Such rating reflects the view of such organization and an explanation of the significance of such rating may be obtained only from Standard & Poor's Corporation and Moody's Investors Service, Inc. There is no assurance that such rating will continue for any given period of time or that it will not be revised downwar:d or withdrawn 14 LEGAL OPINION The Series 1992 Bonds will be accompanied at delivery with customary closing documents, including an opinion as to their legality by Honigman Miller Schwartz and Cohn, Orlando, Florida, Bond Counsel to the City. Bond Counsel has not undertaken to verify and thereforeexpres$es no opinion as to the accuracy, completeness or sufficiency of any of the information to statements contained in this Official Statement or any exhibits, schedules or appendices hereto, except as to the accuracy and correctness of the information in sections hereof entitled "THE 1992 BONDS," "SECURITY OF THE 1992 BONDS," "ADDITIONAL PARITY OBLIGATIONS," and "RATE COVENANT" to the extent such statements purport to summarize certain provisions of the Resolution of the Series 1992 Bonds and the accuracy of the information undetthe caption "TAX EXEMPTION." . Certain legal matters will be passed upon for the City by Honigman Miller Schwartz and Cohn, City Attorney. TAX EXEMPTION In the opinion of Honigman Miller Schwartz and Cohn, as Bond Counsel, rendered in reliance on certain schedules provided by Prudential Securities, Inc. and Gardnyr Michael Capital, Inc. and verified as to the mathematical accuracy by Coopers & Lybrand under existing law, the interest on the Series 1992 Bonds is excludable from gross income for federal income tax purposes. and is not an item of tax preference in computing the alternative minimum tax for individuals and corporations. However, interest on the Series 1992 Bonds will be included in "adjusted current earnings" for purposes of the alternative minimum tax imposed on corporations. The alternative minimum taxable income of a corporation must be increased by 75% of the excess of such corporation's adjusted current earnings over its alternative minimum taxable income (determined without regard to this adjustment and prior to reduction by the alternative tax net operating loss deduction). The opinion set forth above is subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986 (the "Code") that must be satisfied subsequent to the issuance of the Series 1992 Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause the interest on the Series 1992 Bonds to included in gross income retroactive to the date of issuance of the Series 1992 bonds. The City has covenanted to comply with all such requirements. Bond Counsel will express no opinion regarding other federal tax consequences arising with respect to thee Series 1992 Bonds. Prospective purchasers of the Series 1992 Bonds should be aware that (i) in the case of a corporation, interest on the Series 1992 Bonds may be subject to an environmental tax impOsed by Section 59A of the Code, (ii) interest on the Series 1992 Bonds is included in the effectivelycdiUieCfed earnings and profits of certain foreign corporations for purposes of calculating the branch profits tax imposed by Section 884 of the Code, (Hi) interest on the Series 1992 Bonds may be subject to a tax on excess net passive income of certain S corporations imposed by Section 1375 of the Code, (iv) interest on the Series 1992 Bonds is included in the calculation of modified adjusted gross income for purposes of determining the taxability of social security or railroad retirement benefits, (v) the receipt of interest on the Series 1992 Bonds by life insurance companies may affect the federal tax liability of such companies, (vi) in the case of property and casualty insurance companies, the amount of certain loss deduction otherwise allowed is reduced by a specific percentage of, among other things, interest on the Series 1992 Bonds, and (vii) owners of the Series 1992 may not deduct interest on indebtedness incurred or continued to purchase or carry the Series 1992 Bonds and financial institutions may not deduct that portion of their interest expense allocated to interest on the Series .1992 Bonds. In addition, in the opinion of Bond Counsel, under existing law, the Series 1992 Bonds are exempt from intangible personal property taxes imposed pursuant to Chapter 199, FloridaStatutes. No assurance can be given that any future legislation, or clarifications or amendments to the Code or Florida law, if enacted into law, will not contain proposals which could cause the interest on the Series 1992 Bonds to be subject directly or indirectly to Federal income taxation or Florida taxation, adversely 13 CITY OF WINTER SPRINGS, FLORIDA SERIES 1992, PARlTY BONDS AND AGGREGATE DEBT SERVIC:E RE.QUIREMENTS October 1 Series 1992 Principal Interest Parity Bonds Debt Service 10/01192 10/01193 10/01/94 10/01195 10/01196 10/01/97 10/01198 10/01199 10/01100 10/01101 10/01102 10/01/03 10/01/04 10/01105 10/01/06 10/01/07 10/01108 10/01109 10/01110 10/01/11 10/01112 10/01113 10/01114 10/01115 10/01/16 10/01117 10/01118 10/01119 10/01120 10/01121 . $ 530,367.50 531,457.50 531,822.50 531,740.00 531,190.00 530,257.50 528,932.50 532,147.50 534,647.50 531,412.50 532,732.50 528,282.50 533,362.50 532,312.50 530,387.50 528,037.50 535,037.50 525,737.50 531,112.50 525,187.50 533,612.50 530,412.50 526,237.50 536,087.50 533,137.50 533,837.50 532,850.00 535,175.00 535,475.00 533,750.00 Total $15,946,740.00 12 Total Debt Service Combined Water and Sewer Operations and Historical Cover. of ~bt Servi~e (Fiscal. Years Ended September 30) West System Only Consolidated Results Projected 1987 1988 1989 1990 1991 1992 Operating Revenues $1,961,701 $2,147,960 $1,814,238 $2,859,141 $3,702,032 $4,018,175 Interest Income 134,231 111,073 153,585 184,606 345,644 134,875 Other Income 397.147 195.178 7.945 54.615 (962) 48.430 Gross Revenues $2,493,079 $2,454,211 $1,975,768 $3,098,362 $4,046,714 $4,201,480 Operating Expenses(1) $ 800.244 . $ 937.575 $1.058.121 $1.342.440 $1.956.782 $2.322.545 Total Net Revenues Available $1,692,835 $1,516,636 $ 917,647 $1,755,922 $2,089,932 $1,878,935 for Debt Service Annual Debt Service, Parity Bonds(2) $ 475,311 $ 472,149 $ 468,390 $ 470,175 $ 453,575 $ 443,910 Annual Debt Service, Refunded $ 430,369 $ 906,500 $ 906,500 Bonds Coverage 3.56 3.21 1.96 1.95 1.54 1.39 (1) Excludes depreciation (2) Debt service for years 1987-1990 represents debt service on bonds refunded by Parity Bonds. The lien of the City's Series 1989 Utility Revenue Bond Anticipation Note on the Net Revenues is junior to the lien of the Parity bonds and the series 1992 Bonds. Projected 1992 figures based on actual unaudited ten month annualized figures. Source: 1987-1991 Financial Statements of the City. 11 Meter Installation Fees Meter Size 5/8" x 3/4" 3/4" I" 1-1/2" 2" 3" 6" Over 6" Sewer Rates Meter Size 5/8" I" 1-112" 2" 3" 6" Gallonage charge per 1,000 gallons Service Availability Char~e - Sin~le Family Residence * Water Sewer ... Used for capital improvements to the System. 10 - --------=-:;:;---------'};~. Char2e $ 90.00 125.00 150.00 420.00 530.00 Actual Cost Actual Cost Actual Cost Char2e $ 6.65 16.63 33.24 53.19 106.37 332.41 2.59 West System East System $ 392.00 1,890.00 $ 560.00 1,890.00 third blower. The plant records indicate that the plants are operating well and within the permit requirements. The plants and lift stations have been maintained properly and are in good condition. The East facility, located in the eastern portion of the city on an 11.88 acre tract, is capable of treating 2.24 MGD with an effluent disposal capacity of 2.012 MGD. The current ADF average for the three months ending July, 1992 is 0.750 MGD. Eleven lift stations convey the wastewater to this facility. Developer Aereements The water and wastewater systems have sufficient capacity to provide service to all outstanding Developer Agreement commitments. The West system's outstanding obligation is 281,980 GPD sewer and 328,977 GPD water. The East system's outstanding obligation is 487,800 GPD sewer and 813,000 GPD water. Both systems should be capable of providing service to these commitments with minor modifications required to the existing facilities. Permits All permits are up-to-date and no violations or deficiencies exist for either the water or wastewater facilities The regulatory bodies having jurisdiction over the facilities are the Florida Department of Environmental Regulation and the St. Johns River Water Management District. RATES AND CHARGES The City of Winter Springs 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 use charge per 1000 gallons. The tariff schedule is listed below. A residential customer using 10,000 gallons per month would pay a water and sewer bill of $45.23, excluding taxes. 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 5/8" x 3/4" (residential) I" 1-112" 2" 3" 6" Base Facility Charf:e $ 3.58 8.94 17.88 28.62 57.23 178.85 .91 Meter Size Gallonage charge per 1,000 gallons 9 THE SYSTEM The service area of the System is defined as the Winter Springs City limits plus a small commercial area in the neighboring City of Oviedo. In connection with the issuance of the Series 1992 Bonds, the City will consolidate its East and West Systems. The Net Revenues from the combined System secure the Parity Bonds and the Series 1992 Bonds. All new water and sewer customers in the service area are to the extent permitted by law required to connect to the System. Water System The water system serves approximately 8,210 equivalent residential connections ("ERC's") 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 (Clearn Court), and one located in the southwest part of the service are (Bahama Road). Plant 1, which is located in the eastern portion of the service area on a 2.7 acre tract, was constructed in 1972. The plant has three wells which supply water to the plant. Well #1 has a 12 inch diameter and was constructed in 1972 with a 1,200 gallons per minute (gpm) pump. Well #2 has a 12 inch diameter and was constructed in 1979 with a 2,000 gpm pump. Well #3 has a 12 inch diameter and was constructed in 1989 with a 2,000 gpm pump. The plant has three high service pumps - 2,400 gpm, 2,400 gpm and 2,600 gpm. A diesel generator provides emergency power to the wells and high service pumps. The plant has two prestressed concrete ground storage tanks, a 1,000,000 gallon tank and a 500,000 gallon tank. The operations building is a concrete block structure which houses the system's three high service pumps, electric~ and control systems, and a small office area. Plant 2, which is located in the northwest part of the service area in a 1.1 acre tract, was constructed in 1972. The plant has one 12 inch well with an 1100 gpm pump. The plant has three high service pumps of 2,500, 1,200 and 900 gpm capacities. The 2,500 gpm pump has a propane gas engine available for auxiliary power. The plant also has a 500,000 gallon concrete storage tank and a concrete block building, which houses the high service pumps, and the electrical equipment. The plant is in good physical condition and has been well maintained. Plant 3 was constructed in 1972 and is located in the southwest part of the service area on a 0.5 acre tract. The plant has two wells, one 12 inch well with a 1,100 gpm pump, the other a 24 inch well with a 2,400 gpm pump. The plant has three high service pumps, one 1,800 gpm,a 1,200 gpm pump and the other a 375 gpm pump. The 1800 gpm pump has an auxiliary propane gas engine for emergency use. The plant has a 500,000 gallon concrete storage tank and a concrete block building, which houses the high service pumps and electrical equipment There are approximately 496,000 feet of water lines in the System ranging from two inches to fourteen inches and ranging in material from steel and asbestos cement to PVC and ductile iron. The oldest materials are the asbestos cement and steel installed from 1959 to around 1975. The PVC and ductile was installed from 1970 to the present. . Wastewater System The wastewater system serves approximately 7,744 ERC's from two separate wastewater facilities. 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 West facility, located in the northwest corner of the City on a 19.1 acre tract, is capable of treating 2.2 MGD of wastewater per day with an effluent disposal capacity of 1.345 MGD. Thecurrent ADF average for the three months ending July, 1992 is 0.783 MGD. Twelve lift stations convey the wastewater to this facility. Recent improvements to the plant are the addition of a 2.0 MG effluent storage tank, effluent transfer pump station, effluent distribution pump station, and the installation of a 8 ESTIMA TED SOURCES AND USES OF FUNDS The following table sets for the estimated sources and uses of funds for the Project: SOURCES: Principal Amount of Series 1992 Bonds........................................................ $ Accrued Interest.............. ..... ..................... ......... ................................................. Original Issue Discount......................................................................................... ( Transfer from certain funds and accounts held pursuant to Resolution for Refunded Bonds...................................... .......................... ............................ .-> TOTAL ESTIMA TED SOURCES............................................................ $ USES: Deposit to Escrow Account (1) ...................................................................... $ Deposit to Interest Account................................................ ................................... Retirement of Series 1989 Utility Revenue Bond Anticipation Note.............. $ Estimated Issuance Expenses (2) ........................................................................ Underwriters' Discount....................................................................................... TOTAL ESTIMA TED USES......................................................................$ (1) Used to acquire United States Government obligations, the principal and interest of which shall be sufficient to pay the debt service and the premium, when due, on the Refunded Bonds. (2) Includes legal fees, printing, insurance and surety bond premiums, rating agencies fees and miscellaneous fees and expenses. 7 (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 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 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 immediately Outstanding after the refunding 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 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, unless in 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. RATE COVENANT The City will 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, one hundred percent (100%) of all amounts due the Insurer under the Financial Guaranty Agreement and one hundred percent (100%) of all other deposits to be made pursuant to the Resolution. RESERVE ACCOUNT The Resolution provides for the establishment and maintenance of a Reserve Account within the Debt Service Fund. Upon delivery of the Series 1992 bonds, the City shall deposit into or credit to a separate account in the Reserve Account established for the benefit of the Series 1992 Bonds a sum equal to the Reserve Requirement. Pursuant to the Resolution, the "Reserve Requirement" is defined as of any date of calculation, an amount equal to the lesser of (i) the Maximum Bond Service Requirement for the Series 1992 Bonds, (ii) 125% of the Average Annual Bond. Service Requirement for the Series 1992 Bonds, or (Hi) 10% of the net proceeds of the Series 1992 Bonds. Moneys 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 principal of, redemption premium, if any, or interest on the Outstanding Series of Bonds for which such account was established and for no other Series of Bonds. Therefore, moneys on deposit in the special subaccount established for the benefit of the Series 1992 Bonds may not be used for any other Series of bonds, including the Parity Bonds or any Additional Parity Obligations. 6 Insurer's year end financial statements prepared in accordance with statutory accounting practices are available from the Insurer. The address of the Insurer is 113 King Street, Armonk, New York 10504. Moody's Investors Service rates all bond issues insured by the Insurer "Aaa" and short term loans "MIG 1", both designated to be of the highest quality. Standard & Poor's Corporation rates all new issues insured by the Insurer "AAA" Prime Grade. The Moody's Investors Service rating of the Insurer should be evaluated independently of the Standard & Poor's Corporation rating of the Insurer. No application has been made to any other rating agency in order to obtain additional ratings on the Series 1992 Bonds. The rating reflect the respective rating agency's current assessment of the creditworthiness of the Insurer and its ability to pay claims on its policies of insurance. Any further explanation as to the significance of the above ratings may be obtained only from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold the Series 1992 Bonds, and such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of either or both ratings may have an adverse effect on the market price of the Series 1992 Bonds. The insurance provided by this Policy is not covered by the Florida Insurance Guaranty Association created under Chapter 631, Florida Statutes. ADDITIONAL PARITY OBLIGATIONS The City may issue obligations having an equal lien on the Net Revenues and ranking equally in all other aspects with the Series 1992 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 the 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 andlor sewer system the Net Revenues may be adjusted by including: 100% of the additional Net Revenues, which in the 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 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 such Fiscal Year. 5 MUNICIPAL BOND INSURANCE General The following information has been furnished by MBIA (the "Insurer") for use in this Official Statement. Reference is made to Appendix C for a specimen of the Insurer's policy. The Insurer's policy unconditionally and irrevocably guarantees the full and complete payment required to be made on the behalf of the Issuer to the Paying Agent or its successor of an amount equal to (i) the prinCipal of (either at the stated maturity or by an advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Series 1992 Bonds as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed by the Insurer's policy shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner of the Bonds pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law (a "Preference"). The Insurer's policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Series 1992 Bond. The Insurer's policy does not, under any circumstance, insure against loss relating to: (i) optional or mandatory redemptions (other than mandatory sinking fund redemptions); (ii) any payments to be made on an accelerated basis; (iii) payments of the purchase price of Series 1992 Bonds upon tender by an owner thereof; or (iv) any Preference relating to (i) through (iii) above. The Insurer's policy also does not insure against nonpayment of principal of or interest on the Series 1992 Bonds resulting from the insolvency, negligence or any other act or omission of the Paying Agent or any other paying agent for the Series 1992 Bonds. Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of a Series 1992 Bond, the payment of an insured amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with Citibank, N.A., in New York, New York, or its successor, sufficient for the paymenfOf any such insured amounts which are then due. Upon presentment and surrender of such Series 1992 Bonds or presentment of such other proof of ownership of the Series 1992 Bonds, together with any appropriate instruments of assignment to evidence the assignment of the insured amounts due on the Series 1992 Bonds as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Series 1992 Bonds in any legal proceeding related to payment of insured amounts on the Series 1992 Bonds, such instruments being a form satisfactory to Citibank, N.A., Citibank, N.A. shall 'disburse to such owners or the Paying Agent payment of the insured amounts due on.such Series '1992 Bonds, less any amount held by the Paying Agent for the payment of such insured amounts and legally available therefor. The Insur~ is the principal operating subsidiary of the MBIA, Inc., a New York Stock Exchange listed company. MBIA, Inc. is not obligated to pay the debts or claims against the Insurer. The Insurer is a limited'liability corporation rather than a several liability association. The Insurer is domiciled in the State of New York and licensed to do business in all 50 states, the District of Columbia and the Commonwealth of Puerto Rico. As of December 31, 1991 the Insurer had admitted assets of $2.0 billion (audited), total liabilities of $L4 billion (audited), and total capital and surplus of,$647"million (audited) determined in accordance with statutory accounting practices prescribed or permitte'd by insurance regulatory authorities. As of June 30, 1992, th~ Insurer had admitted"assetS:m $2~~' bimon (unaudited), total liabilities of $1.6 billion (unauditoo},and total capital and surplus of $146 million (unaudited) determined in accordance with statutory, accounting practices prescribed or permitted by insurance regulatory authorities. Copies of the 4 When notice of redemption is given, Series 1992 Bonds called for redemption will become due and payable on the redemption date at the redemption price stated in such notice. When a notice of redemption is given and funds sufficient for redemption are deposited with the Registrar, interest on the Series 1992 Bonds to be redeemed will cease to accrue on the date fixed for redemption, such Series 1992 Bonds shall cease to be entitled to any lien, benefit or security under this Resolution and the Holders of such Series 1992 Bonds will have no right in respect thereof except to receive payment of the redemption price. Upon surrender of any Series 1992 Bond for redemption in part only, the Registrar shall authenticate and deliver to the Owner thereof, the cost of which shall be paid by the City, a new Series 1992 Bond of an authorized denomination equal to the umedeemed portion of the Series 1992 Bond surrendered. THE REFUNDING PROGRAM The City has determined, pursuant to the Resolution, that it is in the best interest of the City to refund the Refunded Bonds. The moneys required to refund the Refunded Bonds will be obtained from the proceeds of the sale of the Series 1992 Bonds and other legally available sources. The City's Series 1989 Utility Revenue Bond Anticipation Note will be retired simultaneously with the delivery of the Series 1992 Bonds. A portion of the proceeds of the Series 1992 Bonds will be deposited into an escrow account established pursuant to the Escrow Deposit Agreement, dated as of September 1, 1992, between the City and NationsBank of Florida, N.A., as Escrow Agent. Such moneys will be invested by the Escrow Agent in direct obligations of or obligations backed by the full faith and credit of the United States of America or held uninvested (the "Federal Securities") and utilized in the manner set forth. in the Escrow Deposit Agreement to pay the principal of and interest and applicable redemption premium on the City's outstanding Water and Sewer Revenue Bonds, Series 1990 on and prior to the date the same mature or are called for early redemption all as provided in the Escrow Deposit Agreement. The lien and pledge of the Net Revenues for the benefit of the owners of Refunded Bonds will no longer be in effect upon the retirement of the City's Utility Revenue Bond Anticipation Note and simultaneous deposit of sufficient funds with the Escrow Agent, the purchase of the Federal Securities and the pledging and setting aside of such moneys and Federal Securities pursuant to the Escrow Deposit Agreement for payment of all the principal of, applicable premium and interest on the City's outstanding Water and Sewer Revenue Bonds, Series 1990. See the section hereof entitle "VERIFICATION OF MA THEMA TICAL COMPUTATIONS" for information regarding the verification of the adequacy of such moneys and Federal Securities to be held in escrow. The Federal Securities held in escrow will not be available to pay debt service on the Series 1992 Bonds. SECURITY OF THE SERIES 1992 BONDS The principal of and interest on the Series 1992 Bonds is payable solely from and secured by a prior lien upon and pledge of the Net Revenues derived and collected by the City from the operation of the System. The lien of the Series 1992 Bonds on the Net Revenues is on a parity with the lie,n thereof the Parity Bonds. "Net Revenues" are defined by the Resolution to include all income or earnings, including Connection Charges, received or accrued to the City from the ownership or operation of the City's water and sewer system after deduction of current expenses, either paid or accrued, for the operation, maintenance, and repair of the System but not including any reserve for renewal and replacement, extraordinary repairs or any allowance in depreciation. Net Revenues do not include Impact Fees or Contributions in Aid of Construction. The Series 1992 Bonds do not constitute a general indebtedness of the City 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 therein for the payment of the Series 1992 Bonds or the making of deposit into the Debt Service Fund, reserve or other payments provided for in the Resolution. The Series 1992 Bonds shall not constitute a lien upon the System, or any part thereof oronany property of or in the City, but shall constitute a lien only on the Net Revenues derived from the operation of the System all in the manner provided in the Resolution. 3 .'-':I/)<.-,....:,j ?""'~FJ Optional Redemption The Series 1992 Bonds maturing after October 1,2002 will be subject to optional redemption by the City prior to maturity in whole at any time or in part on .any interest payment date on or after October 1,2002 (less than all of single maturity to be selected by lot by the City in such a manner as the City may deem appropriate), at a redemption price (expressed as a percentage of principal amount) as set forth in the table below, together with accrued interest to the redemption date: Redemption Period (Both Dates Inclusive) Redemption Price October I, 2002 to September 30, 2003 October 1, 2003 to September 30, 2004 October 1, 2004 and thereafter 102% 101% 100% Mandatory Redemption The Series 1992 Bonds maturing on October 1,2012 and October 1,2020 (the "Term Bonds") are subject to mandatory redemption prior to maturity on October 1,2009, and October 1, 2013, respectively, and on each October 1 thereafter, by operation of the Redemption Account in the Debt Service Fund at 100% of the principal amount of such Series 1992 Bonds so to be redeemed plus accrued interest, if any, to the redemption date in the years and amounts set forth below: Term Bonds Due October 1, 2012 October 1 Amount 2009 2010 2011 2012 (maturity) Term Bonds Due October 1, 2020 October 1 Amount 2013 2014 2015 2016 2017 2018 2019 2020 (maturity) 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, postage prepaid, to all Owners of Series 1992 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 the Series 1992 Bonds shall not affect the validity of the proceedings for such redemption with respect to Owners of Series 1992 Bonds to which notice was duly mailed pursuant to the Resolution. 2 OFFICIAL STATEMENT $16,000,000. City of Winter Springs, Florida Water and Sewer Refunding Revenue Bonds, Series 1992 INTRODUCTION The purpose of this Official Statement, including the cover page and appendices, is to set forth certain information in connection with the issuance by the City of Winter Springs, Florida (the "City") of its Water and Sewer Refunding Revenue Bonds, Series 1992 (the "Series 1992 Bonds"). The Series 1992 Bonds are 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 and supplemented and other applicable provisions of law and pursuant to and subject in all respects to the provisions of a resolution duly adopted by the City Commission of the City on April 29, 1991 as supplemented and specifically as supplemented by a resolution adopted September 14, 1992, as supplemented (the "Resolution"). The references, excerpts and summaries of all documents referred to herein do not purport to complete statements of all matters of fact relating to the Series 1992 Bonds, the security for the payment of the Series 1992 Bonds and rights and obligations of the Holders. Capitalized terms used but not defined herein have the same meaning as in the Resolution unless the context would clearly indicate otherwise. PURPOSE OF THE SERIES 1992 BONDS The Series 1992 Bonds are being issued to provide funds for the purpose of (i) refunding the City's Water and Sewer Revenue Bonds, Series 1990 dated April 1, 1990 which are currently outstanding in the amount of $12,300,000 the City's Series 1989 Utility Revenue Bond Anticipation Note which is currently outstanding in the amount of $750,000 (collectively the "Refunded Bonds"), (ii) making a deposit to the subaccount in the Reserve Account established for the benefit of Ute Series 1992 Bonds; and (Hi) providing moneys to pay certain costs and expenses relating to the issuance of the Series 1992 Bonds; all pursuant to resolution No. 665 duly adopted by the City Commission of the City on April 29, 1991 as supplemented and specifically as supplemented by a resolution to be adopted September 28, 1992, as supplemented (the "Resolution"). DESCRIPTION OF THE SERIES 1992 BONDS General The Series 1992 Bonds will be dated, will mature and will bear interest computed on the basis of a 360- day year of twelve 30-day months from the date of issuance and delivery to the purchaser as set forth on the cover page hereof. The Series 1992 Bonds are being issued in fully registered form, without coupons, in the denomination of $5,000 and any integral multiples thereof. Interest on the Series 1992 Bonds will be payable semi-annually on each October 1 and April 1, commencing on April 1, 1993, by check or draft mailed to the registered owner by NationsBank of Florida, N.A., as Paying Agent or its successor at its address as it appears on the registration books of the City on the fifteenth (15) day of the month immediately preceding such interest payment date. The principal of the Series 1992 Bonds and redemption premium, if any, is payable to the registered owner thereof or his transferee upon presentation when due at the principal corporate trust office of the Paying Agent. * Preliminary, subject to change. 1 Water and Sewer Operations and Historical Coverale of Detlt Service (Fiscal Years Ended September 30) West System Only Consolidated ResultS Projected 1m 12M 1989 1990 .1221 1m Operating Revenues $1,961,701 $2,147,960 $1,814,238 $2,859,141 $3,702,032 $4,018,175 Interest Income 134,231 111,073 153,585 184,606 345,644 134,875 Other Income 397.147 195.178 7.945 54.615 (962) 48.430 Gross Revenues $2,493,079 $2,454,211 $1,975,768 $3,098,362 $4,046,714 $4,201,480 Operating Expenses(l) $ 800.244 $ 937.575 $1.058.121 $1.342.440 $1.956.782 $2.322.545 Total Net Revenues Available $1,692,835 $1,516,636 $ 917,647 $1,755,922 $2,089,932 $1,878,935 for Debt Service Annual Debt Service, Parity Bonds (2) $ 475,311 $ 472,149 $ 468,390 $ 470,175 $ 453,575 $ 443,910 Annual Debt Service, Refunded Bonds $ 430,369 $ 906,500 $ 906,500 Coverage 3.56 3.21 1.96 1.95 1.54 1.39 (1) Excludes depreciation (2) Debt service for years 1987-1990 represents debt service on bonds refunded by Parity Bonds. The lien of the City's Series 1989 Utility Revenue Bond Anticipation Note on the Net Revenues is junior to the lien of the Parity bonds and the series 1992 Bonds. Projected 1992 figures based on actual unaudited ten month annualized figures. Source: 1987-1991 Financial Statements of the City. Redemption Provisions The Series 1992 Bonds are subject to redemption prior to maturity as more fully described herein. Rate Covenant The City will 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, one hundred percent (100%) if all amounts due the Insurer under the Financial Guaranty Agreement and one hundred percent (100%) of all other deposits to be made pursuant to the Resolution. Additional Parity ObUlations Pursuant to certain requirements set forth in the Resolution, the City may issue additional bonds or other obligations payable on a parity with the Series 1992 Bonds and the Parity Bonds. See "Additional Parity Obligations" herein. v 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 of the City if Winter Springs, Florida, Water and Sewer Refunding Revenue Bonds, Series 1992 (the "Series 1992 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 ~rms 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 "Resolution Authorizing the Issuance of the Series 1992 Bonds Resolution" - Appendix D hereto. The City The City of Winter Springs is a Florida municipality located in southern Seminole County with Lake Jessup to the north, unincorporated Seminole County to the south, Oviedo to the east and Longwood and Casselberry to the west. The City had a population in 1991 of approximately 23,590 and is primarily a residential community. The Series 1992 Bonds The Series 1992 Bonds are being issued in fully registered form, without coupons, in denominations of $5,000 and any integral multiples thereof. Interest on the Series 1992 Bonds is payable in October 1 and April 1 of each year commencing October 1, 1992. Purpose of the Series 1992 Bonds The Series 1992 Bonds are being issued to provide funds for the purpose of (i) refunding the City's Water and Sewer Revenue Bonds, Series 1990 dated April 1, 1990 which are currently outstanding in the amount of $12,3()O,000 the City's Series 1989 Utility Revenue Bond Anticipation Note which is currently outstanding in the amount of $750,000 (collectively he "Refunded Bonds"), (ii) providing moneys for a debt service reserve surety bond~ and (iii) providing moneys to pay certain costs and expensesrelatingto the issuance of the Series 1992 Bonds; all pursuant to a resolution duly adopted by the City Commission of the City on April 29, 1991 as supplemented and specifically as supplemented by a resolution adopted September 14, 1992, as supplemented (the "Resolution"). In connection with the issuance of the Series 1992 Bonds the City will consolidate the operations of its two separately maintained Water and Sewer Systems; the "East" System the acquisition of which was financed by the Refunded Bonds and the "West" System refinanced with proceeds of the Parity Bonds (collectively the "System'). Security and Source of Payment Pursuant to the Resolution, the Series 1992 Bonds and all reserve account and other payments are payable solely from and secured by a lien upon and a pledge of the Net Revenues derived and collected by the City from the operation of the combined System. The lien of the Series 1992 Bonds on the Net Revenues is on a parity with the lien thereon of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991 currently outstanding in the aggregate principal amount of $6,880,000. The Series 1992 Bonds do not constitute a general indebtedness of the City 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 therein for the payment of the Series 1992 Bonds or the making of deposits into the Debt Service Fund, reserve or other payments provided for in the Resolution. The Series 1992 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 on the Net Revenues derived from the operation of the System all in the manner provided in the Resolution. Municipal Bond Insurance Payments of principal and interest on the Series 1992 Bonds are to be insured through a policy to be issued by Municipal Bond Investors Assurance Corporation ("MBIA"), which policy will take effect upon the delivery of the Series 1992 Bonds. iv TABLE OF CONTENTS Sununary Statement ................... .............................................................. ........................ .......... ......... ............ iv Introduction........................................................ .............................................................................................. 1 Purpose of the Series 1992 Bonds....................................................................................................................1 Description of the Series 1992 Bonds..............................................................................................................1 General.................................. ............... ....... ....................................................................................... 1 Optional Redemption ....................................... ............................ ................. ..... ............ ....................2 Mandatory Redemption ...................................................... .......................... ..... ............ .............. ......2 Notice of Redemption......... ....................................... ............................................... ..... .................... 2 The Refunding PrograIIl................................................................................................................................... 3 Security of the Series 1992 Bonds ................................................................................................................... 3 Municipal Bond Insurance .............................. .................... ......... ............ ............ ..... ............ ............ ...............4 General........................................................................... ....................................................................4 Additional Parity Obligations.. ........ ................... .............. ................. ........................................... .......... ..........5 Rate Covenant....................... ........................................................................ ................... ............ ....... ... .......... 6 Reserve Account................. ............................................... .................... ..................... '" ......... .............. ...........6 Estitnated Sources and Uses of Funds..............................................................................................................7 The System................................... ... .......................... ................................. .......... .............. ............ ............ ......8 Water System............... ..... ......... .......... ....... .............. .......... ......... ........................ ............ .......... ........8 Wastewater System............................................................................................................................ 8 Developer Agreements... ... ............................................. ................... .......... ....................................... 9 Permit................................................ ................................................................................................. 9 Rates and Charges... .............. ................................................ .............. .................................. .......... ................. 9 Debt Service Coverage..... ....................................................... ....................................... ................................ 11 Debt Service Requirements............................................................................................................................ 12 Legal Opinion.......... ..................... ..... ................................................................. ......... ............... .................... 13 Tax Exemption................................................ ............................................................................................... 13 Litigation....... ......................................................................................... ........................................................ 14 Financial Advisor ............. ................... .................................. ................... .......................... ... ......................... 14 Underwriting................................................................................................................................................... 14 Financial Statements....................................................................................................................................... 14 Verification of Mathematical Computations.... .................................... ....... ........................ ....... ..... .... ........... 14 Bond Ratings.................................................................................................................................................. 14 Enforceability of Remedies...... ....... ................................................ ....... .............. ..... ..... ..... ............ ............... 15 Disclosure Required by Florida Blue Sky Law.............................................................................................. 15 Certificate Concerning Official Statement........... ....... ..... ....... ... ....... ............ ..... ......... ..... .............................. 15 Miscellaneous................................................................................................................................................. 15 APPENDIX A - General Information Concerning the City........................................................................ A-I APPENDIX B - City of Winter Springs, Florida Financial Statements For Year Ended September 30, 1991......................................................................................................B-l APPENDIX C - Specimen Copy of Municipal Bond Guaranty Insurance Policy and Surety Bond................................................................................C_l APPENDIX D - Resolution Authorizing the Issuance . of the Series 1992 Bonds ............................................................................................. D-l APPENDIX E - Form of Proposed Opinion of Bond Counsel....................................................................E_l \ Hi J NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED BY THE CITY OR THE UNDERWRITERS TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENT A TlONS WITH RESPECT TO THE SERIES 1992 BONDS OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT, AND IF GIVEN OR MADE, SUCH 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 NOR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THE SERIES 1992 BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE AN OFFER, SOLICITATION OR SALE. THE INFORMATION SET FORTH HEREIN HAS BEEN OBTAINED FROM THE CITY OF WINTER SPRINGS, FLORIDA, AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE, BUT IT IS NOT TO BE CONSTRUED AS A REPRESENTATION OF THE UNDERWRITER. THE INFORMATION AND EXPRESSIONS OF OPINION STATED HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE. THE DELIVERY OF THIS OFFICIAL STATEMENT SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE DATE HEREOF. THE SERIES 1992 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, NOR HAS THE RESOLUTION BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE SERIES 1992 BONDS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. IN CONNECTION WITH THE OFFERING OF THE SERIES 1992 BONDS, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 1992 BONDS OFFERED HEREBY AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY DISCONTINUED AT ANY TIME. . ii """"'~.i:::\ ''''"'''~'''-''--'-~-''-~ .'~ ~ ...... .......- CITY OF WINTER SPRINGS, FLORIDA CITY COMMISSION John Langellotti................................................. Comlllissioner Philip A. KuI bes....................... ............................ ........... Mayor John Torcaso...................................................... Comlllissioner Cindy Kaehler...... ........ .............. ...... .......... ........ Comlllissioner Don Jonas............... ........ ...... ............ ............ ...... Comlllissioner ''.(~ Terri Donnelly................................................... Comlllissioner CITY MANAGER Richard Rozansky CITY CLERK FINANCE DIRECTOR Mary T. Norton Harry E. Martin COUNSEL TO THE CITY Honigman Miller Schwartz and Cohn Orlando, Florida FINANCIAL ADVISORS Capital Market Consultants, Inc. Orlando, Florida ENGINEERING CONSULTANTS Conklin, Porter & Holmes Engineers, Inc. Sanford, Florida .. .' ... INDEPENDENT ACCOUNTANTS Coopers & Lybrand Orlando, Florida i J,. .1 s ~c a; .a .2 =013 0.... -- c"1i ca ~ '':: > 0.2. ~ifi 00 ~ cc> -ooc -'- ca ~jo 1P~ 0 o~.I c CD 0 >oS.!I! ~l5'E ~ 0=2 :!lam .~ S.! 2"'- m CD ... :a-8 a c c CD ca ~ r:.sa ~:Eti u 1;i.2 CD a;!;; oSu!!l >1: I:J' ~CDl5 ca E c > S 0 o ca'- a en "! i' 'ii l! -o'u m c .- l!! ca g 0 B - .- ~ l5 '0 :g-.:: C._ a. -E- ~.- ~ j"2!'i 'i~~ ...:2:::1 lii=1: E'ii-o -0 ~- c 0 ~ CD 0 0 E CD ~ cauCD "'0 i ca - 0 a ~ l5 .- ~ &UC _...0 ~'uE o 0 .- u c .2 0"'0 --80 11 :5 Ii :ge~ 0"'~ ..2u :a"i&~ .5 :5 fi Ii .5 :c ~al~ al ....5 .5.~ a ~~~ 8.!!! "i c c"c o CD .2. tiE> E CD c _ ca .sm-S C _ 0 .- ca CD ..! 'u ;e "'g~ -gCD~ ca ~ 0 1:-a CD CD CD EE~ cPZ'" 'Iii Q)'O liS=.!! _oca ca_0 :2 l5 >c 5.~ co ~al ~ !al!! .- CD CD Eu~ =ai~~ ~1:Jl! II) 0 .- >-... ~~O .....ac 1 ExVl." b;+ 1; PRELIMINARY OFFICIAL STATIEMENT DATED SEPTEMBER 25, 1992 Ratings: Moody's: Standard & Poor's: ("MBIA" Insured) (See "Bond Ratings" herein) In the opinion of Bond Counsel, under existing law, conditioned upon compliance with certain tax requirements refe"ed to herein, interest on the Series 1992 Bonds is excludable from gross income for federal income tax purposes and will not be treated as an item of tax preference in computing the aUemative minimum tax for individuals and corporations. Interest on the Series 1992 Bonds will, however, be taken into account in computing an adjustment made in determining a corporate Bondholder's alternative minimum tax, and holders of the Series 1992 Bonds could be subject to the consequences of other provisions of the Intemal Revenue Code of 1986, as amended. In the opinion of Bond Counsel, under existing law, the Series 1992 Bonds are also exempt from all present intangible personal property taxes imposed pursuant to Chapter 199, Florida Statutes. See "Tax Exemption" herein. NEW ISSUE $16,000,000* CITY OF WINTER SPRINGS, FLORIDA Water and Sewer Refunding Revenue Bonds Series 1992 Dated: September 1,1992 Due: October 1 in each year as shown below The Water and Sewer Refunding Revenue Bonds, Series 1992 (the "Series 1992 Bonds") are to be issued by the City of Winter Springs, Florida (the "City") as fully registered bonds without coupons in the denomination of $5,000 or any integral multiples thereof. Interest on the Series 1992 Bonds is payable on each October 1 and April 1, beginning April 1 , 1993. by a check or draft to be mailed to the address of the registered owner thereof (the "Holder") as recorded in the registration books of the City on the fifteenth day of the month prior to each interest payment date by NationsBank of Florida, N.A., as Registrar and Paying Agent (the "Paying Agent"). Principal of and any premium on the Series 1992 Bonds are payable to the Holder, when due upon presentation and surrender of the Series 1992 Bonds at the principal corporate trust office of the Paying Agent. The Series 1992 Bonds may be transferred or exchanged as described herein. The Series 1992 Bonds are subject to redemption prior to maturity as described herein. The payment of the principal and interest on the Series 1992 Bonds when due will be insured by a municipal bond insurance policy to be issued by Municipal Bond Investors Assurance Corporation simultaneously with the delivery of the Series 1992 Bonds. MBIA The Series 1992 Bonds are being issued to provide funds for the purpose of (i) refunding the City's Water and Sewer Revenue Bonds, Series 1990 dated April 1, 1990 which are currently outstanding in the principal amount of $12,300,000 and the City's Series 1989 Utility Revenue Bond Anticipation Note which is currently outstanding in the principal amount of $750,000 (collectively the "Refunded Bonds"), (Ii) making a deposit to the subaccount in the Reserve Account established for the benefit of the Series 1992 Bonds; and (iii) providing moneys to pay certain costs and expenses relating to the issuance of the Series 1992 BondS; all pursuant to Resolution No. 665 duly adopted by the City Commission of the City on April 29, 1991 as supplemented and specifically as supplemented by a resolution to be adopted September 28, 1992, as supplemented (the "Resolution"). The Series 1992 Bonds and interest thereon are payable solely from and secured by a lien upon and pledge of the net revenues derived from the operation of the City's Water and Sewer System (the "Net Revenues"). The lien of the Series 1992 Bonds on the Net Revenues is on a parity with the lien thereon of the City's outstanding Water and Sewer Refunding Revenue Bonds, Series 1991 (the "Parity Bonds") currently outstanding in the aggregate principal amount of $6,880,000. THE SERIES 1992 BONDS DO NOT CONSTITUTE INDEBTEDNESS OF THE CITY 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 THEREIN FOR THE PAYMENT OF THE SERIES 1992 BONDS OR THE MAKING OF DEPOSITS INTO THE DEBT SERVICE FUND, RESERVE OR OTHER PAYMENTS PROVIDED FOR IN THE RESOLUTION, THE SERIES 1992 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 ON THE NET REVENUES DERIVED FROM THE OPERATION ON THE SYSTEM ALL IN THE MANNER PROVIDED IN THE RESOLUTION. This cover page contains certain information for quick reference only. It is not a summary of the Series 1992 Bonds. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. MATURITIES, AMOUNTS, INTEREST RATES AND YIELDS $ SERIAL BONDS Maturity 1996 1997 1998 1999 2000 2001 2002 Principal Amount Interest Rate Principal Amount Interest Rate Yield Maturity Yield 2003 **2004 **2005 **2006 **2007 **2008 $ ,Term Bonds Due October 1,20_ - Yield to Maturity _% $ Term Bonds Due October 1, 20_ - Yield to Maturity _% The Series 1992 Bonds are offered, when, as and if issued, and received by the Underwriters, subject to the opinion as to the legality of the Series 1992 Bonds, by Honigman Miller Schwartz and Cohn, Orlando, Florida, Bond Counsel to the City. Certain legal matters will be passed upon for the City by Honigman Miller Schwartz and Cohn, Orlando, Florida. Counsel to the City. It is expected that the Series 1992 Bonds will be available for delivery in New Yorlc, New Yorlc on or about October _, 1992. Prudential Securities, Inc. A.G. Edwards & Sons, Inc. William R. Hough & Co. Gardnyr Michael Capital, Inc. The Leedy Corporation Harcourt Ryder Capital, Inc. Dated: "Estimate ""May be designated as term bond on date of pricing.