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96-22210 Reso Incomplete RESOLUTION NO. 96-22210 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $15,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF MIAMI BEACH, FLORIDA GENERAL OBLIGATION BONDS, SERIES 1996 (PARK IMPROVEMENT PROJECTS), TO CONSTRUCT, RENOVATE AND REBUILD PARKS AND RECREATION FACILITIES WITHIN THE CITY'S PARK SYSTEM; PROVIDING THAT SUCH GENERAL OBLIGATION BONDS SHALL CONSTITUTE GENERAL OBLIGATIONS OF THE CITY AND THAT THE FULL FAITH, CREDIT AND TAXING POWER OF THE CITY SHALL BE IRREVOCABLY PLEDGED FOR THE PAYMENT OF THE PRINCIPAL OF AND THE INTEREST ON SUCH GENERAL OBLIGATION BONDS; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING CERTAIN DETAILS OF THE BONDS; DELEGATING CERTAIN MATTERS IN CONNEC- TION WITH THE ISSUANCE OF THE BONDS TO THE MAYOR; AUTHORIZING THE NEGOTIATED SALE OF THE BONDS TO THE ORIGINAL PURCHASERS; APPOINTING A PAYING AGENT AND A BOND REGISTRAR; APPROVING THE FORM AND EXECUTION OF A BOND PURCHASE AGREEMENT; PROVIDING FOR A PRELIMINARY OFFI- CIAL STATEMENT AND AUTHORIZING THE EXECUTION OF AN OFFICIAL STATEMENT; AUTHORIZING OBTAINING A BOND INSURANCE POLICY AND ANY NECESSARY COVENANTS WITH RESPECT THERETO; COVENANTING TO PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE BONDS IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 15c2 -12 AND AUTHORIZING THE EXECUTION OF A COMMITMENT WITH RESPECT THERETO; AUTHORIZING A BOOK-ENTRY REGISTRATION SYSTEM FOR THE BONDS; AUTHORIZING CERTAIN OFFICIALS AND EMPLOYEES OF THE CITY TO TAKE ALL ACTIONS REQUIRED IN CONNECTION WITH THE ISSUANCE OF SAID BONDS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Mayor and City Commission (collectively, the "Commission") of the City of Miami Beach, Florida (the "City") adopted Resolution No. 94-21284 on September 8, 1994 calling for a special election on November 8, 1994 to submit to the qualified electors of the City a bond referendum to decide whether the City should be authorized to issue general obligation bonds in a principal amount not to exceed Fifteen Million Dollars (the "Bonds") to construct, renovate and rebuild parks and recreation facilities within the City's park system (the "Project"); and 009: [04548.00CS.MIA180062lBONO_RES-3. WHEREAS, by bond referendum duly held on November 8, 1994 in accordance with applicable laws of the State of Florida, the issuance of the Bonds was approved by the qualified electors of the City; and WHEREAS, the Commission adopted Resolution No. 94-21400 on November 9, 1994 adopting the certification by the Supervisor of Elections of Metropolitan Dade County, Florida of the results of such bond referendum approving the issuance of the Bonds; and WHEREAS, the Commission has determined that it is in the best interest of the City to proceed at this time with the issuance of the Bonds to finance the Project; and WHEREAS, the Commission has further determined that it is in the best interest of the City to delegate as provided herein the determination of various terms of the Bonds, the final award of the Bonds, including execution of a Bond Purchase Agreement, whether to obtain bond insurance with respect to the Bonds and all other actions necessary or desirable in connection with the issuance of the Bonds, subject to the limitations contained herein; and WHEREAS, for reasons more fully set forth herein, the Commission finds and determines it to be in the best interest of the City to authorize the sale of the Bonds on the basis of a negotiated sale rather than a public sale by competitive bid. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA: SECTION 1. DEFINITIONS. As used herein, unless the context otherwise requires: "Act" means the Constitution and laws of the State of Florida, including without limitation, Article VII, Section 12 of the ConstitutioIl, Chapter 166, Florida Statutes, and the City of Miami Beach Charter. "Authorized Depository" means any bank, trust company, national banking association, savings and loan association, savings bank or other banking association selected by the City as a depos- itory, which is authorized under Florida law to be a depository of municipal funds and which has complied with all applicable state and federal requirements concerning the receipt of City funds. "Bond" or "Bonds" mean the City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) issued from time to time hereunder in an aggregate principal amount not to exceed $15,000,000. "Bond Insurance Policy" in the Mayor's Certificate, issued by a municipal bond Bonds. means, as and if provided by the Mayor the municipal bond insurance policy insurance company in respect of the D09:[04548.DOCS.MIA180062JBOND_RES-3. 2 "Bond Purchase Agreement" means the Bond Purchase Agreement substantially in the form presented at the meeting at which this Resolution was considered to be entered into between the City and the Original Purchasers of the Bonds providing for the terms of the sale of the Bonds to such Original Purchasers. "Bondholder", "holder" or "registered owner" means the person in whose name any Bond is registered on the registration book maintained by the Bond Registrar. "Bond Registrar" means First Union National Bank of Florida, Miami, Florida, and any other agent designated from time to time by the City, by resolution, to maintain the registration books for the Bonds issued hereunder or to perform other duties with respect to registering the transfer of the Bonds. "City" means the City of Miami Beach, Florida. "City Attorney" means the City Attorney of the City or his or her designee. "City Clerk" means the City Clerk or his or her designee or the officer succeeding to his or her principal functions. "City Manager" means the City Manager or his or her designee or the officer succeeding to his or her principal functions. "Code" means the Internal Revenue Code of 1986, as amended, and all temporary, proposed or permanent implementing regulations promulgated or applicable thereunder. "Commission" means collectively the Mayor and City Commission of the City. "Continuing Disclosure Commitment" means the Continuing Disclosure Commitment substantially in the form presented at the meeting at which this Resolution was considered to be delivered by the City in accordance with Section 12 of this Resolution. "DTC" means The Depository Trust Company, New York, New York, its successors and assigns. "Finance Director" means the Finance Director of the City or his or her designee or the officer succeeding to his or her principal functions. "Financial Advisor" means Rauscher pierce Refsnes, Inc., the financial advisor to the City in connection with the issuance of the Bonds. "Fiscal Year" means the period commencing on October 1 of each year and ending on the succeeding September 30, or such other consecutive 12-month period as may hereafter be designated as the fiscal year of the City. D09:[04548.DOCS.MIA180062lBOND_RES-3. 3 "Government Obligations" means: (a) direct obligations of, or obligations guaranteed as to timely payment by, the United States of America; (b) Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (i) which are not callable prior to maturity or as to which irrevocable instruc- tions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (ii) which are secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or obligations of the character described in clause (a) hereof which fund may be applied only to the payment of such principal of and interest and redemp- tion premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this clause (b), as appropriate, and (iii) as to which the principal of and interest on the obligations of the character described in clause (a) hereof which have been deposited in such fund along with any cash on deposit in such fund are sufficient to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (b) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this clause (b), as appropriate; (c) Evidences of indebtedness issued by the Federal Home Loan Banks, Federal Home Loan Mortgage Corporation (including participation certificates), Federal Financing Banks, or any other agency or instrumentality of the United States of America created by an act of Congress provided that the obligations of such agency or instrumentality are unconditionally guaranteed as to timely payment by the United States of America or any other agency or instrumentality of the United States of America or of any corporation wholly- owned by the United States of America; and (d) Evidences of ownership of proportionate interests in future interest and principal payments on obligations described in (a) held by a bank or trust company as custodian. "Intent Resolution" means Resolution No. 95-21834 adopted by the Commission on December 6, 1995 declaring the official intent of the City to issue the Bonds in accordance with the requirements of the Code. "Mayor" means the Mayor of the City or in his absence or inability to perform, the Vice Mayor of the City. 009: [04548.OOCS.MIA180062] BONO_RES-3. 4 "Mayor's Certificate" means the Certificate to be executed by the Mayor prior to or at the time of the execution of the Bond Purchase Agreement, which certificate shall provide certain details of the Bonds as required under this Resolution. "Official Statement" means that certain Official Statement with respect to the issuance of the Bonds, as such Official Statement shall be approved by the Mayor and the City Manager in accordance with the provisions of this Resolution. "Original Purchasers" means Smith Barney Inc., Goldman, Sachs & Co., William R. Hough & Co. and PaineWebber Incorporated, the original purchasers of the Bonds. "Outstanding" or "Bonds outstanding" means all Bonds which have been issued pursuant to this Resolution except: (a) Bonds canceled after purchase in the open market or because of payment at or redemption prior to maturity; (b) Bonds for the payment or redemption of which cash funds or Government Obligations or any combination thereof shall have been theretofore irrevocably set aside in a special account with the Paying Agent or other Authorized Depository, whether upon or prior to the maturity or redemption date of any such Bond, in an amount which, together with earnings on such Government Obligations, will be sufficient to pay the principal of and interest and redemption premium, if any, on such 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 given according to the requirements of this Resolution or irrevocable instructions directing the timely giving of such notice and directing the payment of the principal of and interest on all Bonds at such redemption dates shall have been given to the Paying Agent; (c) Bonds which are deemed paid pursuant to Section 5.G hereof; and (d) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered pursuant to this Resolution. "Paying Agent" means First Union National Bank of Florida, Miami, Florida, and any other agent which is an Authorized Depository, designated from time to time by the City, by resolu- tion, to serve as a Paying Agent for the Bonds issued hereunder that shall have agreed to arrange for the timely payment of the principal of, interest on and redemption premium, if any, with respect to the Bonds to the registered owners thereof, from funds made available therefor by the City. D09:[04548.DOCS.MIA180062lBOND_RES-3. 5 "Preliminary Official Statement" means the Preliminary Offi- cial Statement with respect to the issuance of the Bonds substantially in the form presented at the meeting at which this Resolution was considered. "proj ect" means the construction, renovation and rebuilding of parks and recreation facilities within the City's park system authorized to be funded with the proceeds of the Bonds by the qualified electors of the City at a bond referendum held on November 8, 1994. "Resolution" means this resolution authorizing the issuance of the Bonds, as amended from time to time to the extent permitted hereby. Words in this Resolution importing singular numbers shall include the plural number in each case and vice versa, and words importing persons shall include firms, corporations or other entities including governments or governmental bodies. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. SECTION 2. FINDINGS AND DETERMINATIONS. It is hereby ascer- tained, determined and declared that: A. The recitals to this Resolution are hereby incorporated herein as findings and determinations. B. The Project consists solely of "capital projects" as such term is used in Article VII, Section 12 of the Constitution of the State of Florida. C. On December 6, 1995 the Commission adopted the Intent Resolution. D. The City will have advanced funds for costs incurred with respect to the Project prior to the issuance of the Bonds. E. Due to the character of the Bonds, prevailing market conditions and the recommendation of the Financial Advisor that the sale of the Bonds be by negotiation, the sale of the Bonds on the basis of negotiated sale rather than a public sale by competitive bid is found to be in the best interest of the City and is hereby authorized. SECTION 3. CONTRACT. In consideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the City, the Bondholders, the Bond Registrar, the Paying Agent and the provider of any Bond Insurance Policy. The covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection and security of the Bondholders and the provider of any Bond Insurance Policy, and all Bonds shall be of equal rank and without 009: [04548.00CS.MIA180062lBONO_RES-3. 6 preference, priority or distinction over any other thereof, except as expressly provided herein. SECTION 4. AUTHORIZATION OF THE BONDS; SALE AND AWARD OF THE BONDS. A. Subject and pursuant to the provisions hereof, general obligation bonds of the City to be known as "City of Miami Beach, Florida, General Obligation Bonds, Series 1996 (Park Improvement Projects)" are hereby authorized to be issued at one time or as needed in an aggregate principal amount of not exceeding Fifteen Million Dollars ($15,000,000) for the purpose of paying the costs of the Project and to pay certain costs of issuance of the Bonds, including the premium for any Bond Insurance Policy. The Mayor, upon the recommendations of the Finance Director and the Financial Advisor, shall determine the aggregate principal amount of the Bonds to be issued and may determine to issue the Bonds at one time or as needed, such determinations to be evidenced in the Mayor's Certificate. B. The Commission hereby approves the form of the Bond Purchase Agreement for the purchase of the Bonds by the Original Purchasers. Upon compliance by the Original Purchasers with the requirements of Florida Statutes, Section 218.385, the Mayor is hereby authorized, upon the recommendations of the Finance Director and the Financial Advisor, to award the Bonds to the Original Purchasers and to execute the Bond Purchase Agreement, in substantially the form presented at the meeting at which this Resolution was considered, subject to such changes, insertions and omissions and such filling-in of blanks therein as may be necessary to evidence the terms of the Bonds and such additional changes as may be approved by the Mayor, after consultation with the Finance Director and the City Attorney. The underwriting discount for the Bonds shall be determined by the Mayor upon the recommendations of the Finance Director and the Financial Advisor but shall not be more than 2% of the principal amount of the Bonds. The execution and delivery by the Mayor of the Bond Purchase Agreement for and on behalf of the City shall be conclusive evidence of the approval of such officer and the City of any such changes, insertions, omissions or filling-in of blanks. SECTION S. TERMS, REDEMPTION AND FORM OF BONDS. A. The Bonds shall be issued as fully registered bonds in the denomination of $5,000 each or any integral multiple thereof and shall be numbered consecutively from 1 upward preceded by the letter "R". The principal of and redemption premium, if any, on the Bonds shall be payable upon presentation and surrender at the designated corporate trust office of the Paying Agent. Interest on the Bonds shall be paid by check or draft drawn upon the Paying Agent and mailed to the registered owners of the Bonds at the addresses as they appear on the registration books maintained by the Bond Registrar at the close of business on the 15th day (whether or not a business day) of the month next preceding the 009: [04548.00CS.MIA1800621BONO_RES-3. 7 interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Bonds subsequent to such Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date; provided, however, that (i) if ownership of Bonds is maintained in a book-entry only system by a securities depository, such payment may be made by automatic funds transfer (wire) to such securities depository or its nominee or (ii) if such Bonds are not maintained in a book-entry only system by a securities depository, upon written request of the holder of $1,000,000 or more in prin- cipal amount of Bonds, such payments may be made by wire transfer to the bank and bank account specified in writing by such holder on or prior to the Record Date (such bank being a bank within the continental United States), if such holder has advanced to the Paying Agent the amount necessary to pay the cost of such wire transfer or authorized the Paying Agent to deduct the cost of such wire transfer from the payment due such holder. In the event of any default in the payment of interest, such defaulted interest shall be payable to the persons in whose names such Bonds are registered at the close of business on a special record date for the payment of such defaulted interest as established by notice deposited in the U.S. mails, postage prepaid, by the Paying Agent to the registered owners of the Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business on the fifth day (whether or not a business day) preceding the date of mailing. B. Prior to the issuance of the Bonds the Mayor shall execute the Mayor's Certificate, upon the recommendations of the Finance Director and the Financial Advisor, setting forth certain terms of the Bonds including, but not limited to: the dated date of the Bonds, interest payment dates, interest rates, but not to exceed 7% per annum, maturities, but not later than December 31, 2015, sinking fund installments, if any, and any redemption provisions. The Mayor's Certificate may also provide for any Bond Insurance Policy to be procured in connection with the issuance of the Bonds, based upon the recommendations of the Financial Advisor, and covenants of the City in connection therewith, which covenants shall have the same effect as if included in this Resolution. C. The Bonds shall be executed in the name of the City by the Mayor and the seal of the City shall be imprinted, reproduced or lithographed on the Bonds and attested to by the City Clerk. The signatures of the Mayor and the City Clerk on the Bonds may be by facsimile. If any officer whose signature appears on the Bonds ceases to hold office before the delivery of the Bonds, his signature shall nevertheless be valid and sufficient for all purposes. In addition, any Bond may bear the signature of, or may be signed by, such persons as at the actual time of execution of such Bond shall be the proper officers to sign such Bond although at the date of such Bond or the date of delivery thereof such persons may not have been such officers. 009: [04548.00CS.MIA180062lBONO_RES-3. 8 Only such of the Bonds as shall have endorsed thereon a certi- ficate of authentication substantially in the form hereinafter set forth in Section 5.K hereof, duly manually executed by the Bond Registrar, shall be entitled to any right or benefit under this Resolution. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Bond Registrar, and such certificate of the Bond Registrar upon any such Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The Bond Registrar's certificate of authentication on any Bond shall be deemed to have been duly executed if signed by an authorized officer of the Bond Registrar, but it shall not be necessary that the same officer sign the certificate of authenti- cation on all of the Bonds that may be issued hereunder at anyone time. D. Any Bond may be transferred upon the registration books maintained by the Bond Registrar upon delivery thereof to the designated corporate trust office of the Bond Registrar accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Bondholder or his attorney-in-fact or legal repre- sentative, containing written instructions as to the details of the transfer of such Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Bond, the Bond Registrar shall at the earliest practical time in accordance with the terms hereof enter the transfer of ownership in the registration books and shall deliver in the name of the new transferee or transferees a new fully registered Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same source of funds. Bonds may be exchanged at the office of the Bond Registrar for a like aggregate principal amount of Bonds, of other authorized denomina- tions of the same series and maturity. The City and the Bond Registrar may charge the Bondholder for the registration of every transfer or exchange of a Bond an amount sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the City) to be paid with respect to the registra- tion of such transfer or exchange, and may require that such amounts be paid before any such new Bond shall be delivered. The City, the Bond Registrar, and the Paying Agent may deem and treat 1:he registered owner of any Bond as the absolute owner of such Bond for the purpose of receiving payment of the principal thereof and the interest and redemption premium, if any, thereon. E. If any Bond is mutilated, destroyed, stolen or lost, the City or its agent may, in its discretion (i) deliver a duplicate replacement Bond, or (ii) pay a Bond that has matured or is about to mature. A mutilated Bond shall be surrendered to and canceled by the Bond Registrar. The Bondholder must furnish the City and the Bond Registrar proof of ownership of any destroyed, stolen or lost Bondi post satisfactory indemnitYi comply with any reasonable D09:[04548.DOCS.MIA180062JBOND_RES-3. 9 conditions the City and the Bond Registrar may prescribe; and pay the City's and the Bond Registrar's reasonable expenses. Any such duplicate Bond shall constitute an original contrac- tual obligation on the part of the City whether or not the des- troyed, stolen or lost Bond be at any time found by anyone, and such duplicate Bond shall be entitled to equal and proportionate benefits and rights as to lien on, and source of payment of and security for payment from, the funds pledged to the payment of the Bond so mutilated, destroyed, or stolen or lost. F. The Bonds shall be subject to redemption prior to their maturity at such times and in such manner as may be set forth in the Mayor's Certificate, based upon the recommendations of the Finance Director and the Financial Advisor. Notice of redemption shall be given by deposit in the U.S. mails of a copy of a redemption notice, postage prepaid, at least thirty (30) and not more than sixty (60) days before the redemption date to all regis- tered owners of the Bonds or portions of the Bonds to be redeemed at their addresses as they appear on the registration books to be maintained in accordance with the provisions hereof. Failure to mail any such notice to a registered owner of a Bond, or any defect therein, shall not affect the validity of the proceedings for redemption of any Bond or portion thereof with respect to which no failure or defect occurred. Such notice shall set forth the date fixed for redemption, the rate of interest borne by each Bond being redeemed, the name and address of the Bond Registrar and Paying Agent, the redemption price to be paid and, if less than all of the Bonds then outstand- ing shall be called for redemption, the distinctive numbers and letters, including CUSIP numbers, if any, of such Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Bond is to be redeemed in part only, the notice of redemption which relates to such Bond shall also state that on or after the redemp- tion date, upon surrender of such Bond, a new Bond or Bonds in a principal amount equal to the unredeemed portion of such Bond will be issued. Any notice mailed as provided in this section shall be con- clusively presumed to have been duly given, whether or not the owner of such Bond receives such notice. In addition to the mailing of the notice described above, each notice of redemption and payment of the redemption price shall meet the requirements set forth in subparagraphs (i), (ii) and (iii) below; provided, however, that, notwithstanding any other provision of this Resolution to the contrary, failure to comply with the terms of this paragraph shall not in any manner defeat the effectiveness of a call for redemption if notice thereof is given as otherwise prescribed above in this Section 5.F. D09:[04548.DOCS.MIA180062lBOND_RES-3. 10 (i) Each 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 or telecopy to registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds. (ii) Each notice of redemption shall be published one time in The Bond Buyer, New York, New York or, if such publication is impractical or unlikely to reach a substantial number of the holders of the Bonds as determined by the Finance Director in consultation with the Bond Registrar, in some other financial newspaper or journal which regularly carries notices of redemption of other obligations similar to the Bonds, such publication to be made at least thirty (30) days prior to the date fixed for redemption. (iii) Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. The Bond Registrar shall not be required to transfer or exchange any Bond after the publication and mailing of a notice of redemption nor during the period of fifteen (15) days next preceding publication and mailing of a notice of redemption. G. Notice having been given in the manner and under the conditions provided in the first three paragraphs of Section 5.F above, the Bonds or portions of Bonds so called for redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price provided for redemption for such Bonds or portions of Bonds on such date. On the date so designated for redemption, moneys for payment of the redemption price being held in separate accounts by the Paying Agent or other Authorized Depository in trust for the registered owners of the Bonds or portions thereof to be redeemed, all as provided in this Resolution, interest on the Bonds or portions of Bonds so called for redemption shall cease to accrue, such Bonds and portions of Bonds shall cease to be entitled to any lien, benefit or security under this Resolution and shall be deemed paid hereunder, and the registered owners of such Bonds or portions of Bonds shall have no right in respect thereof except to receive payment of the redemp- tion price thereof and, to the extent provided in the next subsection, to receive Bonds for any unredeemed portions of the Bonds. DD9:[04548.DOCS.MIA180062lBOND_RES-3. 11 H. In case part but not all of an outstanding fully regis- tered Bond shall be selected for redemption, the registered owners thereof shall present and surrender such Bond to the Paying Agent for payment of the principal amount thereof so called for redemp- tion, and the City shall execute and deliver to or upon the order of such registered owner, without charge therefor, for the un- redeemed balance of the principal amount of the Bonds so surren- dered, a Bond or Bonds fully registered as to principal and inter- est. I. Bonds or portions of Bonds that have been duly called for redemption under the provisions hereof, or as to which irrevocable instructions to call for redemption have been given by the City, and with respect to which amounts (including Government Obligations) sufficient to pay the principal of, redemption premium, if any, and interest to the date fixed for redemption shall be delivered to and held in separate trust accounts by an escrow agent, any Authorized Depository or the Paying Agent in trust for the registered owners thereof, as provided in this Resolution, shall not be deemed to be Outstanding under the provi- sions of this Resolution and shall cease to be entitled to any lien, benefit or security under this Resolution, except to receive the payment of the redemption price on or after the designated date of redemption from moneys deposited with or held by the escrow agent, Authorized Depository or Paying Agent, as the case may be, for such redemption of the Bonds and, to the extent provided in the preceding subsection, to receive Bonds for any unredeemed portion of the Bonds. J. If the date for payment of the principal of, redemption premium, if any, or interest on the Bonds shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the city where the corporate trust office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and effect as if made on the nominal date of payment. K. The text of the Bonds, the authentication certificate to be endorsed thereon and the form of assignment for such Bonds shall be substantially in the following form, with such omissions, insertions and variations as may be necessary or desirable and authorized by this Resolution or as may be approved and made by the officers of the City executing the same, such execution to be conclusive evidence of such approval, including, without limita- tion, such changes as may be required for the issuance of uncertificated public obligations: 009: [04548.OOCS.MIA180062] BONO_RES-3. 12 [Form of Bond] No. R- $ UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF MIAMI BEACH, FLORIDA GENERAL OBLIGATION BOND, SERIES 1996 (PARK IMPROVEMENT PROJECTS) Interest Rate: Maturity Date: Original Dated Date: CUSIP NO: % 1, , 199 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The City of Miami Beach, Florida (hereinafter called the "City"), for value received, hereby promises to pay to the Registered Owner identified above, or to registered assigns or legal representatives, to the extent and from the sources provided therefor, as described herein, on the Maturity Date identified above (or earlier as hereinafter provided), the Principal Amount identified above, upon presentation and surrender hereof at the designated corporate trust office of First Union National Bank of Florida, Miami, Florida, as the Paying Agent for the Bonds, or any successor Paying Agent appointed by the City pursuant to the Resolution hereinafter referred to, and to pay, to the extent and from the sources herein described, interest on the principal sum from the date hereof, or from the most recent interest payment date to which interest has been paid, at the Interest Rate per annum identified above, until payment of the Principal Amount, or until provision for the payment thereof has been duly provided for, such interest being payable semiannually on the first day of and the first day of of each year, commencing on , 199_. Interest will be paid by check or draft mailed to the Registered Owner hereof at his address as it appears on the registration books of the City maintained by First Union National Bank of Florida, Miami, Florida, as the Bond Registrar for the Bonds, at the close of business on the fifteenth (15th) day (whether or not a business day) of the month next preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Bond subsequent to each Record Date and prior to such interest payment date, unless the City shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name such Bond is registered at the close of business on a special record date for the payment of such defaulted interest as established by notice by deposit in the U.S. mails, postage prepaid, by the Bond Registrar D09:[04548.DOCS.MIA180062JBOND_RES-3. 13 to the Registered Owners of Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names the Bonds are registered at the close of business on the fifth (5th) day (whether or not a business day) preceding the date of mailing. This Bond is one of an authorized issue of bonds in the aggregate principal amount of $ (the "Bonds") of like date, tenor and effect, except as to number, maturity and interest rate, issued to construct, renovate and rebuild parks and recreation facilities within the City's park system, pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly Article VII, Section 12 of the Constitution, Chapter 166, Florida Statutes, the City of Miami Beach Charter and Resolution No. 96- duly adopted by the City on , 1996 (the "Resolution"), and other applicable provisions of law. This Bond is subject to all the terms and conditions of the Resolution, and capitalized terms not otherwise defined herein shall have the same meanings ascribed to them in the Resolution. The full faith, credit and taxing power of the City are pledged to the punctual payment of the principal of and interest on the Bonds, as the same shall become due and payable. Reference is made to the Resolution for the provisions, among others, relating to the terms, lien and security for the Bonds, the custody and application of the proceeds of the Bonds, the rights and remedies of the holders of the Bonds, and the extent of and limitations on the City's rights, duties and obligations, to all of which provisions the registered owner hereof assents by acceptance hereof. The mandatory lot, at a on following Bonds maturing redemption prior to redemption price of 1 , and on principal amounts 1, maturity, 100% of the each are subject to in part and selected by principal amount thereof 1 thereafter in the Date Principal Amount $ * * Maturity. The Bonds maturing of the years to shall be further subject to redemption prior to their maturity, at the option of the City on or after " as a whole at any time, or in part on any interest payment da~selected by the City among maturities and by lot within a maturity), at the redemption prices (expressed as percentages of principal amount) 009: [04548.00CS.MIA180062lBONO_RES-3. 14 set forth in the following table, plus accrued interest from the most recent interest payment date to the redemption date: Redemption Periods (Dates Inclusive) Redemption Prices ~ o Notice of call for redemption is to be given by mailing a copy of the redemption notice by U.S. mail at least thirty (30) but not more than sixty (60) days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books maintained by the Bond Registrar, or any successor Bond Registrar appointed by the City pursuant to the Resolution. Failure to give such notice by mailing to any Bondholder, or any defect therein, shall not affect the validity of the proceedings for the redemption of any Bond or portion thereof with respect to which no such failure or defect has occurred. All such Bonds called for redemption and for the retirement of which funds are duly provided will cease to bear interest on such redemption date. This Bond may be transferred upon the registration books of the City upon delivery thereof to the designated corporate trust office of the Bond Registrar accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the registered owner of this Bond or by his attorney-in-fact or legal representative, containing written instructions as to the details of transfer of this Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Bond, the Bond Registrar shall at the earliest practical time in accordance with the provisions of the Resolution enter the transfer of ownership in the registration books and shall deliver in the name of the new transferee or transferees a new fully registered Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same source of funds. Bonds may be exchanged at the office of the Bond Registrar for a like aggregate principal amount of Bonds, of authorized denominations of the same series and maturity. The City and the Bond Registrar may charge the owner of such Bond for the regis- tration of every transfer or exchange of a Bond an amount sufficient to reimburse them for any tax, fee or any other govern- mental charge required (other than by the City) to be paid with respect to the registration of such transfer or exchange, and may require that such amounts be paid before any such new Bond shall be delivered. If the date for payment of the principal of, redemption pre- mium, if any, or interest on this Bond shall be a Saturday, Sunday, 009: [04548.00CS.MIA180062lBONO_RES-3. 15 legal holiday or a day on which banking institutions in the city where the corporate trust office of the Paying Agent is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and effect as if made on the nominal date of payment. It is hereby certified and recited that this Bond is autho- rized by and is issued in conformity with the requirements of the Constitution and statutes of the State of Florida; that all acts, conditions and things required to exist, to happen, and to be performed precedent to 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 hereto; that the issuance of the Bonds of this issue does not violate any constitutional or statutory limitation or provision; that due provision has been made for the levy and collection of an annual tax, without limitation as to rate or amount, upon all taxable property within the corporate limits of the City (excluding exemptions as provided by applicable law), in addition to all other taxes sufficient to pay the principal of and interest on the Bonds as the same shall become due and payable, which tax shall be assessed, levied and collected at the same time and in the same manner as other taxes are assessed, levied and collected within the corporate limits of the City; and that the full faith, credit and taxing power of the City are pledged to the punctual payment of the principal of and interest on the Bonds, as the same shall become due and payable. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication endorsed hereon shall have been manually signed by the Bond Registrar. This Bond is and has all the qualities and incidents of, an investment security under the Uniform Commercial Code-Investment Securities Law of the State of Florida. D09:[04548.DOCS.MIA180062lBOND_RES-3. 16 IN WITNESS WHEREOF, the City of Miami Beach, Florida, has issued this Bond and has caused the same to be signed by its Mayor and attested by its City Clerk, either manually or with their facsimile signatures, and its seal to be affixed hereto or a facsimile of its seal to be reproduced hereon. CITY OF MIAMI BEACH, FLORIDA ( SEAL) By: Mayor ATTESTED: By: City Clerk 009: [04548.00CS.MIA180062lBONO_RES-3. 17 CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds designated in and executed under the provisions of the within mentioned Resolution. First Union National Bank of Florida, as Bond Registrar By: Authorized Officer Date of Authentication: 009: [04548.00CS.MIA180062lBONO_RES-3. 18 ASSIGNMENT FOR VALUE RECEIVED, the undersigned (the "Transferor") hereby sells, assigns and transfers unto (the "Transferee") PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints as attorney to register the transfer of the within Bond on the books kept for registration and registration of transfer thereof, with full power of substitution in the premises. Date: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a member firm of any other recognized national securities exchange or a commercial bank or a trust company. NOTICE: No transfer will be registered and no new Bond will be issued in the name of the Transferee, unless the signa- ture(s) to this assignment cor- respond(s) with the name as it appears upon the face of the within Bond in every particu- lar, without alteration or en- largement or any change what- ever and the Social Security or Federal Employer Identification Number of the Transferee is supplied. [End of For.m of Bond] 009: [04548.00CS.MIA180062JBONO_RES-3. 19 SECTION 6. APPLICATION OF BOND PROCEEDS. The proceeds, including accrued interest and premium, if any, received from the sale of the Bonds shall be applied by the City, simultaneously with delivery of the Bonds, as follows: A. Accrued interest, if any, shall be deposited in the account designated "City of Miami Beach 1996 General Obligation Bond Principal and Interest Account" (the "Principal and Interest Account") which is hereby established with the Paying Agent, who shall apply such moneys to pay interest on the Bonds as the same becomes due. B. An amount set forth in a certificate of the Finance Director delivered concurrently with the delivery of the Bonds (the "Proceeds Certificate") shall be deposited in a separate account designated "City of Miami Beach 1996 General Obligation Bond Construction Account" which is hereby established with the City to be held in an Authorized Depository and shall be disbursed to pay the costs of the Project, including reimbursement to the City of funds advanced for costs incurred with respect to the Project which may be reimbursed pursuant to the Code under the Intent Resolution. Any balance remaining after payment or provision for payment of such costs of the Project shall be transferred to the Paying Agent for deposit in the Principal and Interest Account and used solely to pay principal of and interest on the Bonds. C. The remainder of the proceeds as set forth in the Proceeds Certificate shall be deposited in a separate account designated "City of Miami Beach 1996 General Obligation Bond Cost of Issuance Account" which is hereby established with the City in an Authorized Depository and shall be disbursed for payment of expenses incurred in issuing the Bonds; provided, however, that any premium for a Bond Insurance Policy may be paid directly to the issuer thereof by the Original Purchasers from the proceeds of the Bonds. Any balance remaining after payment or provision for payment of such expenses has been made shall be transferred to the Paying Agent for deposit in the Principal and Interest Account and used solely to pay principal of and interest on the Bonds. SECTION 7. INVESTMENT OF BOND PROCEEDS AND OTHER MONEYS. All proceeds of the Bonds and other moneys held under the provisions of this Resolution may be invested by the City and, with respect to the Principal and Interest Account, shall be invested by the Paying Agent at the direction of the Finance Director, in such investments as are permitted by applicable law. SECTION 8. LEVY OF AD VALOREM TAX; PAYMENT AND PLEDGE. In each Fiscal Year while any of the Bonds are Outstanding there shall be assessed, levied and collected a tax, without limitation as to rate or amount, on all taxable property within the corporate limits of the City (excluding exemptions as provided by applicable law), in addition to all other taxes, sufficient in amount to pay the principal of and interest on the Bonds as the same shall become due. 009: [04548.00CS.MIA180062JBONO_RES-3. 20 The tax assessed, levied and collected for the security and payment of the Bonds shall be assessed, levied and collected in the same manner and at the same time as other taxes are assessed, levied and collected and the proceeds of said tax shall be applied solely to the payment of the principal of and interest on the Bonds. On or before each interest or principal payment date for the Bonds, the City shall transfer to the Paying Agent for deposit in the Principal and Interest Account an amount sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds then due and payable and the Paying Agent is hereby author- ized and directed to apply such funds to said payment. The full faith, credit and taxing power of the City are hereby irrevocably pledged to the punctual payment of the principal of, interest on and redemption premium, if any, with respect to the Bonds as the same shall become due and payable. The City will diligently enforce its right to receive tax revenues and will diligently enforce and collect such taxes. The City will not take any action that will impair or adversely affect its rights to levy, collect and receive said taxes, or impair or adversely affect in any manner the pledge made herein or the rights of the Bondholders. SECTION 9. COMPLIANCE WITH TAX REQUIREMENTS. The City hereby covenants and agrees, for the benefit of the holders from time to time of the Bonds, to comply with the requirements applicable to it contained in the Code to the extent necessary to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes. Specifically, without intending to limit in any way the generality of the foregoing, the City covenants and agrees: A. to pay to the United States of America from any legally available funds, at the times required pursuant to Section 148(f) of the Code, the excess of the amount earned on all nonpurpose investments (as defined in Section 148(f) (6) of the Code) over the amount which would have been earned if such non-purpose investments were invested at a rate equal to the yield on the Bonds, plus any income attributable to such excess (the "Rebate Amount"); B. to maintain and retain all records pertaining to and to be responsible for making or causing to be made all determinations and calculations of the Rebate Amount and required payments of the Rebate Amount as shall be necessary to comply with the Code; C. to refrain from using proceeds from the Bonds in a manner that would cause the Bonds or any of them, to be classified as private activity bonds under Section 141(a) of the Code; and D. to refrain from taking any action that would cause the Bonds, or any of them, to become arbitrage bonds under Section 148 of the Code. 009: [04548.00CS.MIA180062JBONO_RES-3. 21 The City understands that the foregoing covenants impose continuing obligations on the City to comply with the requirements of the Code so long as such requirements are applicable. SECTION 10. APPOINTMENT OF PAYING AGENT AND BOND REGISTRAR. A. First Union National Bank of Florida, Miami, Florida, is hereby appointed the Paying Agent and Bond Registrar for the Bonds. The Finance Director, after consultation with the City Attorney, is hereby authorized to enter into any necessary agreements in connection with the appointment of the Paying Agent and the Bond Registrar. B. The recitals of facts contained herein and in the Bonds shall be taken as the statements of the City and neither the Bond Registrar nor the Paying Agent assumes any responsibility for the correctness of the same. Neither the Bond Registrar nor the Paying Agent makes any representation as to the validity or sufficiency of this Resolution or of any Bonds issued thereunder or as to the security afforded by this Resolution, and neither shall incur any liability in respect thereof. The Bond Registrar shall, however, be responsible for its representation contained in its certificate of authentication of the Bonds. The Paying Agent shall be entitled to rely upon the directions of the Finance Director in the investment of proceeds of the Bonds and other moneys under this Resolution and neither the Bond Registrar nor the Paying Agent shall be responsible with respect to the application of money paid by it in accordance with the provisions of this Resolution. Neither the Bond Registrar nor the Paying Agent shall be under any obligation or duty to take any action constituting enforcement of the covenants of the City under this Resolution, which would involve it in expense or liability, or to institute or defend any suit in respect thereof, or to advance any of its own moneys, unless properly indemnified. Neither the Bond Registrar nor the Paying Agent shall be liable in connection with the performance of its duties hereunder except for its own negligence, misconduct or default. C. The City shall agree to pay the Bond Registrar and the Paying Agent reasonable compensation for all services rendered by each of them under this Resolution, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution. SECTION 11. PRELIMINARY OFFICIAL STATEMENT; OFFICIAL STATE- MENT. The use of a Preliminary Official Statement in connection with the marketing of the Bonds is hereby authorized. The Preliminary Official Statement in substantially the form presented at the meeting at which this Resolution was considered is hereby approved with such changes, insertions and omissions and such filling-in of blanks therein as may be approved by the Mayor, after consultation with the Finance Director and the City Attorney. The Mayor and the City Manager are hereby authorized to approve and D09:[04548.DOCS.MIA180062JBOND_RES-3. 22 execute, on behalf of the City, an Official Statement relating to the Bonds substantially in the form of the Preliminary Official Statement, with such changes from the Preliminary Official State- ment, as the Mayor and the City Manager, after consultation with the Finance Director and the City Attorney, may approve, such exe- cution to be conclusive evidence of such approval. The Mayor, after consultation with the Finance Director and the City Attorney, is hereby authorized to deem the Preliminary Official Statement final for the purposes of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). SECTION 12. CONTINUING DISCLOSURE. For the benefit of the holders and beneficial owners from time to time of the Bonds, the City agrees, in accordance with and as the only obligated person with respect to the Bonds under the Rule, to provide or cause to be provided such financial information and operating data, financial statements and notices, in such manner, as may be required for purposes of paragraph (b) (5) of the Rule. In order to describe and specify certain terms of the City's continuing disclosure agreement, including provisions for enforcement, amendment and termination, the Finance Director is hereby authorized and directed to sign and deliver, in the name and on behalf of the City, a Continuing Disclosure Commitment (the "Continuing Disclosure Commi tment "), in substantially the form presented at the meeting at which this Resolution was considered, with such changes, insertions and omissions and such filling- in of blanks therein as may be approved by the Finance Director, after consultation with the City Attorney. The execution of the Continuing Disclosure Commitment, for and on behalf of the City by the Finance Director, shall be deemed conclusive evidence of the City's approval of the Continuing Disclosure Commitment. The agreement formed, collectively, by this paragraph and the Continuing Disclosure Commitment, shall be the City's continuing disclosure agreement for purposes of the Rule, and its performance shall be subject to the availability of funds to meet costs the City would be required to incur to perform it. Notwithstanding any other provisions of this Resolution, any failure by the City to comply with any provisions of the Continuing Disclosure Commitment or this Section 12 shall not constitute a default under this Resolution and the remedies therefor shall be solely as provided in the Continuing Disclosure Commitment. The Finance Director is further authorized and directed to establish, or cause to be established, procedures in order to ensure compliance by the City with the Continuing Disclosure Commitment, including the timely provision of information and notices. Prior to making any filing in accordance with such agreement, the Finance Director shall consult with, as appropriate, the City Attorney or the City's bond counsel. The Finance Director, acting in the name and on behalf of the City, shall be entitled to rely upon any legal advice provided by the City Attorney or the City's bond counsel in determining whether a filing should be made. D09:[04548.00CS.MIA180062JBONO_RES-3. 23 SECTION 13. CONCERNING THE BOND INSURANCE POLICY. The Mayor may, after consultation with the Finance Director and the City Attorney, provide in the Mayor's Certificate or by separate agreement covenants for the benefit of the provider of a Bond Insurance Policy, which covenants shall have the same effect as if included in this Resolution. The provider of any Bond Insurance Policy shall, so long as it has not defaulted in its obligations thereunder, be entitled to exercise all rights granted the Bondholders (i) in the event of a default by the City hereunder or (ii) subject to the provisions of Section 15 hereof, in connection with the modification or amendment of this Resolution, in lieu of the Bondholders whose Bonds are insured by the Bond Insurance Policy. SECTION 14. FURTHER AUTHORIZATIONS. The Mayor, the City Manager, the Finance Director, the City Attorney and the City Clerk, or any of them and such other officers and employees of the City as may be designated by the Mayor or the City Manager are each designated as agents of the City in connection with the issuance and delivery of the Bonds and are authorized and empowered, col- lectively or individually, to take all actions and steps and to execute all instruments, documents and contracts on behalf of the City, including, but not limited to, the procurement of the Bond Insurance Policy, that are necessary or desirable in connection with the execution and delivery of the Bonds, and which are specifically authorized or are not inconsistent with the terms and provisions of this Resolution or any action relating to the Bonds heretofore taken by the City. Such officers and those so designated are hereby charged with the responsibility for the issuance of the Bonds. SECTION 15. MODIFICATION OR AMENDMENT. After the issuance of the Bonds, no modification or amendment of this Resolution or of any resolution amendatory hereof or supplemental hereto materially adverse to the Bondholders may be made without the consent in writing of the registered owners of not less than a majority in aggregate principal amount of the Outstanding Bonds, but no modification or amendment shall permit a change (a) in the maturity of the Bonds or a reduction in the rate of interest thereon, (b) in the amount of the principal obligation of any Bond, (c) that would affect the unconditional promise of the City to levy and collect taxes as herein provided, or (d) that would reduce such percentage of registered owners of the Bonds required above for such modifica- tions or amendments, without the consent of all of the Bondholders. For the purpose of Bondholders' voting rights or consents, (i) the Bonds owned by or held for the account of the City, directly or indirectly, shall not be counted and (ii) the provider of any Bond Insurance Policy shall, so long as it has not defaulted in its obligations thereunder, be deemed the owner of all the Bonds insured by such Bond Insurance Policy in lieu of the Bondholders, except that with respect to modifications or amendments described in clauses (a) through (d) above, the consent of all the Bondholders shall still be required. 009: [04548.00CS.MIA180062JBONO_RES-3. 24 SECTION 16. DEFEASANCE AND RELEASE. If, at any time after the date of issuance of the Bonds (a) all Bonds secured hereby or any maturity thereof shall have become due and payable in accordance with their terms or otherwise as provided in this Resolution, or shall have been duly called for redemption, or the City shall have given irrevocable instructions directing the payment of the principal of, redemption premium, if any, and in- terest on such Bonds at maturity or at any earlier redemption date scheduled by the City, or any combination thereof, (b) the full amount of the principal, redemption premium, if any, and the interest so due and payable upon all of such Bonds then Outstanding or any portion of such Bonds, at maturity or upon redemption, shall be paid, or sufficient moneys or Government Obligations maturing not later than the maturity or redemption dates of such principal, redemption premium, if any, and interest, which, together with the income realized on such investments, shall be sufficient to pay all such principal, redemption premium, if any, and interest on said Bonds at the maturity thereof or the date upon which such Bonds are to be called for redemption prior to maturity, shall be held by an escrow agent who shall be an Authorized Depository or the Paying Agent in irrevocable trust for the benefit of such Bondholders (whether or not in any accounts created hereby), and (c) provision shall also be made for paying all other sums payable hereunder by the City, including compensation due the Bond Registrar and the Paying Agent, then and in that case the right, title and interest of such Bondholders hereunder shall thereupon cease, determine and become void; otherwise, this Resolution shall be, continue and remain in full force and effect. Notwithstanding anything in this Section 16 to the contrary, however, the obligations of the City under Section 9 hereof shall remain in full force and effect until such time as such obligations are fully satisfied. SECTION 17. SEVERABILITY. If anyone or more of the cove- nants, agreements or provisions of this Resolution shall be held contrary to any express provisions of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements or provisions of this Resolution or of the Bonds issued hereunder. SECTION 18. NO THIRD PARTY BENEFICIARIES. Except as herein otherwise expressly provided, nothing in this Resolution expressed or implied is intended or shall be construed to confer upon any person, firm or corporation other than the City, the registered owners of the Bonds, the provider of any Bond Insurance Policy, the Bond Registrar and the Paying Agent, any right, remedy or claim, legal or equitable, under or by reason of this Resolution or any provision hereof, this Resolution and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the registered owners from time to time of the Bonds, the provider of any Bond Insurance Policy, the Bond Registrar and the Paying Agent. 009: [04548.00CS.MIA180062JBONO_RES-3. 25 SECTION 19. CONTROLLING LAW; MEMBERS OF COMMISSION OR CITY NOT LIABLE. This Resolution shall be governed by and construed in accordance with the laws of the State of Florida and all covenants, stipulations, obligations and agreements of the City contained herein shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized by the Act. No covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent, independent contractor or employee of the Commission or the City in his individual capacity, and neither the members of the Commission nor any official executing the Bonds shall be liable personally on the Bonds or this Resolution or shall be subj ect to any personal liability or accountability by reason of the issuance or the execution by the Commission or such members thereof. SECTION 20. QUALIFICATION FOR THE DEPOSITORY TRUST COMPANY. Notwithstanding any other provision hereof, the City, the Bond Registrar and the Paying Agent are hereby authorized to take such actions as may be necessary to qualify the Bonds for deposit with DTC, including but not limited to those actions as may be set forth in a letter agreement entered into by and between the City and DTC, wire transfers of interest and principal payments with respect to the Bonds, utilization of electronic book entry data received from DTC in place of actual delivery of Bonds and provisions of notices with respect to Bonds registered by DTC (or any of its designees identified to the City, the Bond Registrar or the Paying Agent) by overnight delivery, courier service, telegram, telecopy or other similar means of communication. The Mayor, City Manager and the Finance Director is each hereby authorized to execute and deliver any necessary agreement or other documents with DTC on behalf of the City. SECTION 21. EFFECTIVE DATE. This Resolution shall be effec- tive immediately upon its adoption. ADOPTED this the 20th day of ( SEAL) Mayor ATTEST: ~. k<< P UA~ City Clerk fOF?M APPr: ~,. ) LEGAL DEF I By 1# er!~_.~ Date JJ/1-:5,lfjh _ D09:[04548.DOCS.MIA180062JBOND_RES-3. 26 CITY OF MIAMI BEACH CITY HAll 1700 CONVENTION CENTER DRIVE MIAMI BEACH FlqRIDA 33139 OFFICE OF THE CITY MANAGER TELEPHONE: (305) 673-7010 FAX: (305) 673-7782 COMMISSION MEMORANDUM NO. ~ 5-q~ November 20, 1996 To: Mayor Seymour Gelber and Members of the City Commission Subject: Authorizing the Iss ce of $15 Million in General Obligation Bonds for Park Improvements. From: Jose Garcia-Pedrosa City Manager Administrative Recommendation The Administration recommends that the Mayor and City Commission approve the Resolution authorizing the issuance of $15 Million in General Obligation Bonds for Park Improvements. Background On November 8, 1994, the voters of the City authorized the issuance of $15 million in general obligation bonds for park improvements. In a series of meetings prior to the election, the citizens were told of the proposed projects and given assurance that there would be neighborhood meetings for the plan of the renovations of each of the neighborhood parks. The City hired a design consultant and these meetings were held over the last two years. Now that the planning process is complete, the Parks Board and the City Commission have approved the plan, it is time to get the money and start the construction. Analysis The accompanying resolution will authorize the Administration to move forward with the issuance of these bonds. It will also authorize the Mayor amd City Clerk to execute the bond purchase agreement on behalf of the City subject to certain terms and conditions. The Administration currently anticipates the bond sale in early December and the actual final closing and receipt of funds in late December. Conclusion As these bonds were authorized in a general election of the voters of the City and as the citizens have devised the improvements for the neighborhood parks in their area, the issuance of the bonds should be approved. JGP~/cP Agenda Item R ., ~ Date \\-^O.~ BOND PURCHASE AGREEMENT CITY OF MIAMI BEACH, FLORIDA $15,000,000 General Obligation Bonds, Series 1996 (Park Improvement Projects) This Bond Purchase Agreement dated September 26, 1997 ("Bond Purchase Agreement") is entered into by and among the following parties (hereinafter individually called a "Party" and collectively called the "Parties"): CITY OF MIAMI BEACH, FLORIDA, a validly existing political subdivision of the State of Florida (the "City") and SMITH BARNEY, INC. (the "Managing Underwriter") and Goldman Sachs & Co., PaineWebber Incorporated and William R. Hough & Co. (collectively with the Managing Underwriter, the "Underwriters"). TABLE OF CONTENTS PAGE ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . '.' . .. 1 SECTION 1.1. Participants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1 SECTION 1.2. Contracts, Instruments and Documents ................ 1 SECTION 1.3. Legal Authorities ............................. 2 SECTION 1.4. Events, Dates and Places. . . . . . . . . . . . . . . . . . . . . . . .. 3 SECTION 1.5. Other Definitions ............................. 3 ARTICLE II - REPRESENTATIONS AND COVENANTS. . . . . . . . . . . . . . . . .. 3 SECTION 2.1. Representations and Covenants of City ................ 3 ARTICLE III - AGREEMENT TO PURCHASE BONDS . . . . . . . . . . . . . . . . . .. 8 SECTION 3.1. Delivery of Documents to Underwriters ................ 8 SECTION 3.2. Agreement to Sell and Purchase the Bonds ............. 8 SECTION 3.3. Public Offering of the Bonds . . . . . . . . . . . . . . . . . . . . .. 9 SECTION 3.4. Good Faith Check ............................ 9 ARTICLE IV - CLOSING CONDITIONS ............................ 10 SECTION 4.1. Performance of Obligations. . . . . . . . . . . . . . . . . . . . . .. 10 SECTION 4.2. Delivery of Closing Papers . . . . . . . . . . . . . . . . . . . . . .. 10 SECTION 4.3. Other Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 12 SECTION 4.4. Form of Closing Papers; Waiver of Conditions. . . . . . . . . .. 12 ARTICLE V - TERMINATION; PAYMENT OF EXPENSES. . . . . . . . . . . . . . .. 12 SECTION 5.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 12 SECTION 5.2. Payment of Expenses .......................... 14 ARTICLE VI - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14 SECTION 6.1. Parties In Interest; Survival of Representations .. . . . . . . . .. 14 SECTION 6.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15 SECTION 6.3. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15 SECTION 6.4. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15 SECTION 6.5. Captions .................................. 15 SECTION 6.6. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15 SECTION 6.7. Severability ................................ 15 SECTION 6.8. Rights of Managing Underwriter. . . . . . . . . . . . . . . . . . .. 16 SECTION 6.9. Effective Time of this Bond Purchase Agreement ......... 16 EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-I EXHIBIT B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1 EXHIBIT C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-l EXHIBIT D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-l EXHIBIT E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1 SCHEDULE A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SA-l ARTICLE I DEFINITIONS SECTION 1.1. Participants. In addition to the Parties, various persons and firms will participate in the financing to which this Bond Purchase Agreement relates. Among them are those identified below (hereinafter collectively called the "Participants"): Authorized Party: The persons duly authorized and legally empowered to execute documents on behalf of the City. Bond Counsel: Squire, Sanders & Dempsey L.L.P., Miami, Florida Bond Registrar and Paying Agent: First Union National Bank of Florida, Miami, Florida Certified Public Accountant: KPMG Peat Marwick City Attornev: Murray H. Dubbin, Esq. City's Governing Body: Mayor and City Commission Financial Advisor: Rauscher Pierce Refsnes, Inc., Miami, Florida Insurer: Financial Guaranty Insurance Company Underwriters' Counsel: Eckert Seamans Cherin & Mellott, LC, Miami, Florida SECTI 0 N 1.2. Contracts, Instruments and Documents . Various contracts, instruments and documents are involved in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: Arbitrage Certificate: The certificate of the City setting forth its reasonable expectations regarding the use of the proceeds of the Bonds, among other matters. This Bond Purchase Agreement and the Continuing Disclosure Commitment. Basic Documents: Closing Papers: Collectively, the certificates, OpInIOnS, instruments and other documents described in Section 4.2 of this Bond Purchase Agreement. 1 Continuing Disclosure Commitment: Financial Statements: Insurance Policy: Official Statement: Preliminary Official Statement: The Bonds: The Continuing Disclosure Commitment delivered by the City on the date of delivery of the Bonds. The audited financial statements of the City included in the Preliminary Official Statement and Official Statement as Appendix B. The insurance policy to be issued by the Insurer concurrently with the issuance and delivery of the Bonds. The Official Statement (including the Appendices thereto), dated the date hereof, summarizing the terms of the Bonds and other related matters. The Preliminary Official Statement (including the Appendices thereto), dated September 8, 1997, summarizing the terms of the Bonds and related matters. The City's $15,000,000 General Obligation Bonds, Series 1996 (Park Improvement Projects) SECTION 1.3. Legal Authorities. Various legal authorities are involved in the financing to which this Bond Purchase Agreement relates. Among them are those identified below: Bond Resolution: Code: Mayor's Certificate: Resolution No. 96-22210 adopted by the City's Governing Body on November 20, 1996. The Internal Revenue Code of 1986, as amended through and including the Closing Date and, to the extent applicable, the Internal Revenue Code of 1954, as amended, and, to the extent applicable, the regulations issued or proposed pursuant thereto. The Certificate of the Mayor of the City dated the date hereof, providing for among other matters, the fixing of the amount of the Bonds and the maturities, amortization installments and interest rates of the Bonds, and fixing other details of the Bonds. 2 SECTION 1.4. Events. Dates and Places. Various dates and places are significant in the fmancing to which this Bond Purchase Agreement relates. Among them are those identified below: Closing: The consummation of the transaction at which the Bonds are delivered by the City to the Underwriters, and paid for by the Underwriters, pursuant to this Bond Purchase Agreement. Closing Date: October 14, 1997, or such other date as the Parties may agree. Closing Time: 1 :00 p.m. Eastern Standard Time or such other time as the Parties may agree. Place of Closing: Squire, Sanders & Dempsey L.L.P., Miami, Florida Miami Center, 29th Floor 201 South Biscayne Boulevard Miami, Florida 33131 SECTION 1.5. Other Definitions. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Bond Resolution. ARTICLE II REPRESENTATIONS AND COVENANTS SECTION 2.1. Representations and Covenants of City. As an inducement to the other Parties to enter into this Bond Purchase Agreement, the City makes the following representations and covenants, each of which representations shall be true and correct on the date hereof and on the Closing Date as if such representations were made again at the Closing Time: (a) The City is a validly existing political subdivision of the State of Florida. (b) The Bond Resolution was adopted by the City's Governing Body at a meeting duly called and held in open session upon requisite prior public notice pursuant to the laws of the State of Florida and the standing resolutions and rules of procedure of the City's Governing Body. The City has full right, power and authority to adopt the Bond Resolution. On the date hereof, the Bond Resolution is, and, at the Closing it shall be, in full force and effect, and no portions thereof have been or shall have been supplemented, repealed, rescinded or revoked. The Bond Resolution constitutes the legal, valid and binding obligation of the City, enforceable in accordance with its terms. The Bond Resolution creates a valid pledge of, and lien and charge upon, the ad valorem taxes to be levied and collected for the payment of the Bonds. 3 (c) The City has full right, power and authority to enter into, execute and deliver the Official Statement, the Basic Documents and the Bonds, and to perform its obligations under the Basic Documents and as contemplated by the Official Statement. All permits, consents or licenses, if any, and all notices to or filings necessary to accomplish the foregoing have been obtained or made. When executed and delivered, the Basic Documents and the Bonds shall constitute legal, valid and binding obligations of the City enforceable in accordance with their respective terms and all conditions and requirements of the Bond Resolution relating to the issuance of the Bonds will have been complied with or fulfilled. (d) The Authorized Party executing the Basic Documents and Official Statement on behalf of the City is authorized for and in the name of the City to execute, deliver and perform the obligations of the City under the Basic Documents and as contemplated by the Official Statement and to execute, deliver, file or record such other incidental papers, documents and instruments as shall be necessary to carry out the intention and purposes of the Basic Documents, the Bonds and the Bond Resolution. On the Closing Date the Bonds will be duly authenticated, executed and delivered by the City in accordance with the Bond Resolution and will be entitled to all the benefits and security thereof. Any certificate signed by the Authorized Party shall be deemed a representation and covenant by the City to the Underwriters as to the statements made therein. (e) No authorization, approval, consent or license of any governmental body or authority not already obtained, is required for the valid and lawful execution and delivery by the City of the Bonds, the Basic Documents, the Official Statement and the Bond Resolution and the performance of its obligations thereunder or as contemplated thereby; provided, however, that no representation is made concerning compliance with the registration requirements of the federal securities laws or the securities or Blue Sky laws of the various states. (t) The execution and delivery by the City of the Bonds, the Basic Documents, the Official Statement and the Bond Resolution and the performance by the City thereunder or as contemplated thereby is permitted by, and will not conflict with or constitute a breach of or default under, any existing law, court or administrative regulation, decree or order or any commitment, indenture, mortgage, lease, contract, agreement or instrument to which the City is a party, or by which it or any of its properties are bound or subject. No event has occurred which, with the lapse of time or the giving of notice or both, would constitute a default under any of the Basic Documents or the Bond Resolution. (g) The Bonds and the Bond Resolution conform to the descriptions thereof set forth in the Official Statement. (h) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending with 4 regard to which the City has received service of process or, to the actual knowledge of the City, threatened against the City affecting, contesting, questioning or seeking to restrain or enjoin: (i) the powers or valid existence of the City or the titles of the members of the City's Governing Body or its other officers to their respective offices; (ii) any of the proceedings had or actions taken leading up to the sale, issuance and delivery of the Bonds or the execution, delivery or performance of this Bond Purchase Agreement; (iii) the delivery, validity or enforceability of the Bonds or any of the Basic Documents; or (iv) the power of the City to consummate the transactions contemplated in the Basic Documents and in the Official Statement. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending, with regarding to which the City has received service of process, or to the actual knowledge of the City, threatened against the City, (i) which contests in any way the completeness or accuracy of the Official Statement; (ii) with regard to which an unfavorable decision, ruling or finding would materially and adversely affect the validity or enforceability of the Bonds, the Bond Resolution or the Basic Documents; or (iii) which would have a material adverse effect upon the levy and collection of the ad valorem taxes pledged to the payment of the Bonds. (i) To the knowledge of the City, the City is not on the date hereof, and will not be on the Closing Date, in default under any instrument to which the City is subject or by which it or its properties are or may be bound or subject, which default would (i) have a material adverse effect on the condition of the City, financial or otherwise (other than as disclosed in the Official Statement) or (ii) otherwise materially adversely affect its ability to perform its obligations under the Bonds, the Basic Documents or the Bond Resolution. G) The City has not been advised by the Commissioner, any District Director or any other official of the Internal Revenue Service that certifications by the City with respect to arbitrage may not be relied upon. (k) The City shall apply the proceeds of the sale of the Bonds in the manner described in the Official Statement and the Arbitrage Certificate and will not take or omit to take any action that will in any way cause or result in the proceeds of the sale of the Bonds to be applied in a manner other than as described in same. (1) The Financial Statements have been prepared in accordance with generally accepted accounting principles and fairly present the financial condition and results of the operations of the City at the dates and for the periods indicated. (m) As of the date hereof, there has been no material adverse change in the business, properties or financial condition of the City from that shown in the Financial Statements. 5 (n) Between the date hereof and the Closing Date (i) the City will not, without the prior written consent of the Underwriters, .sell any bonds, notes or other obligations, provided that such consent shall not be unreasonably withheld, and provided further that the retention in the inventory of the Underwriters of any portion of the Bonds shall be sufficient reason for withholding such consent; and (ii) the City will not incur any material liabilities, direct or contingent, other than those in the ordinary course of business. (0) Appendices A and B to the Preliminary Official Statement and the Official Statement and the statements relating to the City, the Bonds (not including the information relating to the Insurance Policy or DTC and its book-entry only system), including the application of proceeds thereof, and the Bond Resolution set forth in the Preliminary Official Statement and the Official Statement and the Appendices thereto did not on the respective dates of the Preliminary Official Statement and the Official Statement and do not on the date hereof, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading. Without having undertaken to determine independently the accuracy or completeness of the information in the Preliminary Official Statement and Official Statement or Appendices thereto, nothing has come to the City's attention that would lead it to believe that the Preliminary Official Statement and Official Statement and the Appendices to such documents (except for the information excluded in the preceding sentence as to which no representation is made) contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading. The City has consented to the use of the Preliminary Official Statement and the Official Statement by the Underwriters in connection with the public offering of the Bonds. . (p) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriters as the Underwriters may reasonably request in order to qualify the Bonds for offer and sale under the Blue Sky or other securities laws or regulations of such states and other jurisdictions of the United States as the Underwriters may designate and to determine the eligibility of the Bonds for investment under the laws of such states and jurisdictions, and will undertake its best efforts to continue such qualifications in effect as long as required for the distribution of any Bonds, provided that the City will not be required to qualify to do business, or be subject to service of process in or subject itself to the jurisdiction of, any state other than the State of Florida. (q) The City has not, since December 31, 1975, been in default in the payment of principal of, premium, if any, or interest on, or otherwise been in default with respect to, any bonds, notes, lease purchase arrangements or other obligations which it has issued, assumed or guaranteed as to payment of principal, premium, if any, or interest, nor has any other person been in default with respect to payment of principal of, 6 premium, if any, or interest on any bonds, notes or other obligations which the City has issued. (r) . If between the date hereof and the date of the Closing, or between the date of the Closing and the "end of the underwriting period" as defined in (s) below, any event shall occur which would or might cause the information contained in the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Underwriters thereof, and if in the reasonable opinion of the Underwriters such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will cooperate with the Underwriters in supplementing or amending the Official Statement (the printing of which will be the expense of the City) in sUGh form and manner and at such time or times as may be reasonably called for by the Underwriters. (s) The City agrees that after the Closing and during the period ended on the earlier of (A) ninety (90) days after the "end of the underwriting period", hereinafter described or (B) the time when the Official Statement is available from a Nationally Recognized Municipal Securities Information Repository ("NRMSIR") (but in no event less than 25 days following the end of the underwriting period) (i) the City will not adopt any amendment of or supplement to the Official Statement to which, after having been furnished a copy prior to any proposed adoption, the Managing Underwriter shall object in writing or which shall be disapproved by Underwriter's Counsel and (ii) if any event relating to or affecting the City or the Bonds shall occur as a result of which it is necessary, in the opinion of the City, the Managing Underwriter or Underwriters' Counsel, to amend or supplement the Official Statement in order to make the Official Statement not misleading in light of the circumstances existing at the time it is delivered to a purchaser, the City shall, at its expense, forthwith prepare and furnish to the Managing Underwriter a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the City and the Underwriters) which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading. The City will promptly notify the Managing Underwriter of the occurrence of any event which, in the City's opinion, is an event described in clause (ii) of the preceding sentence. For purposes of the foregoing, the term "end of the underwriting period" means the later of the date of Closing or the date on which the Underwriters do not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public, which date shall be no later than ninety (90) days after the date of Closing. The Underwriters will promptly notify the City in writing of the end of the underwriting period. 7 (t) The City will undertake, pursuant to the Bond Resolution and the Continuing Disclosure Commitment, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the final Official Statement. ARTICLE III AGREEMENT TO PURCHASE BONDS SECTION 3.1. Delivery of Documents to Underwriters. Prior to or simultaneously with the execution and delivery of this Bond Purchase Agreement, the Underwriters shall have delivered the Underwriters' Truth-in-Bonding and Disclosure Statement required by law, as set forth in Exhibit E. As soon as practicable after the date hereof, and in any event, within seven days of the date hereof, as required by paragraph (b)(3) of Rule 15 (c)2-12 of the Securities and Exchange Commission ("SEC") or the rules of the Municipal Securities Rulemaking Board ("MSRB"), the City shall deliver or cause to be delivered to the Managing Underwriter copies of the Official Statement, dated the date hereof, relating to the Bonds, in sufficient quantities to allow the Underwriters to comply with paragraph (b)(4) of Rule 15(c)2-12 of the SEC and the rules of the MSRB, in substantially the form of the Preliminary Official Statement with only such changes therein as shall have been approved by the City and the Managing Underwriter. References to the Official Statement shall include the cover page and all exhibits, appendices, reports and statements included with or attached to it and any amendments and supplements that may be authorized by the City and to which the Managing Underwriter does not reasonably object, and any amendments and supplements which may be reasonably required by the Managing Underwriter for use with respect to the Bonds. The Official Statement shall be executed on behalf of the City by duly authorized officers thereof. The City approves. the Preliminary Official Statement, and consents to the use of the Preliminary Official Statement and the Official Statement and the information contained therein by the Underwriters. The City deems final the Preliminary Official Statement, as of its date, for purposes of Rule 15(c)(2)-12, with certain omissions therein in connection with the pricing of the Bonds. SECTION 3.2. Agreement to Sell and Purchase the Bonds. The Bonds shall have the terms specified in the Official Statement, including maturities, amounts, interest rates, prices or yields and redemption provisions, and such terms as are required to be set forth herein by the Bond Resolution, all as described on Exhibit A annexed hereto. Upon the basis of the representations and upon the terms and conditions set forth in this Bond Purchase Agreement, the Underwriters agree to purchase, and the City agrees to issue, sell and deliver to the Underwriters, all (but not less than all) of the Bonds for the aggregate purchase price of $14,842,140.25 (representing the $15,000,000 original principal amount of the Bonds, less $56,009.75 of original issue discount and less $101,850.00 of Underwriter's discount) plus accrued interest through the day immediately preceding the Closing Date on the Bonds (the "Purchase Price"). Payment of the Purchase Price shall be made by the Underwriters to the 8 order of the City prior to or at the Closing Time in Federal or other immediately available funds. One fully registered Bond for each maturity, duly executed and authenticated, shall be delivered to or upon the order of the Underwriters, together with the other documents hereinafter mentioned, and subject to the terms and conditions hereof, the Underwriters will accept such delivery and pay the Purchase Price. The Bonds shall be registered in the name of Cede & Co., or in such other names and in such authorized denominations as the Underwriters shall reasonably specify in writing at least three (3) business days prior to the Closing Date. The Bonds shall be available for examination and packaging at the office of The Depository Trust Company, New York, New York by the Underwriters at least one (1) business day prior to the Closing Date. SECTION 3.3. Public Offering of the Bonds. The Underwriters agree to make a bona fide public offering of the Bonds, solely pursuant to the Official Statement, at the initial offering prices set forth in the Official Statement, reserving, however, the rights to (i) change ~uch initial offering prices as the Managing Underwriter shall deem necessary in connection with the marketing of the Bonds and (ii) offer and sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) at concessions to be determined by the Managing Underwriter. The Underwriters also reserve the right to over-allot or effect transactions that stabilize or maintain the market prices of the Bonds at levels above that which might otherwise prevail in the open market and to discontinue such stabilizing, if commenced, at any time. SECTION 3.4. Good Faith Check. The City hereby acknowledges receipt of a corporate check payable to the City in an amount equal to $300,000 (the "Good Faith Check") as security for the performance by the Underwriters of their obligation to accept and pay for the Bonds at the Closing in accordance with the provisions of this Bond Purchase Agreement. The City shall retain the check, uncashed, except under the circumstances hereinafter set forth. In the event the City fails to deliver the Bonds at the Closing, or if City shall be unable to satisfy the conditions to the obligations of the Underwriters contained in this Bond Purchase Agreement or if such obligations shall be terminated for any reason permitted by this Bond Purchase Agreement, the City shall be obligated to immediately return the uncashed Good Faith Check to the Underwriters. In the event the Underwriters accept and pay for the Bonds at Closing, the uncashed Good Faith Check shall be returned to the Underwriters at Closing. In the event the Underwriters fail (other than for a reason permitted under this Bond Purchase Agreement) to accept and pay for the Bonds at Closing, the Good Faith Check may be cashed and the proceeds thereof shall be retained by the City as and for full liquidated damages for such failure, and not as a penalty, and for any and all defaults hereunder on the part of the Underwriters, and thereupon, all claims and rights hereunder against the Underwriters shall be fully released and discharged, it being understood by the City and the Underwriters that actual damages in such circumstances may be difficult or impossible to compute. 9 ARTICLE IV CLOSING CONDITIONS SECTION 4.1. Performance of Obligations. The obligations and agreements of the Underwriters under this Bond Purchase Agreement are expressly made subject to the due performance by the City at or prior to the Closing Time of its respective obligations and undertakings pursuant to this Bond Purchase Agreement. SECTION 4.2. Delivery of Closing Papers. The obligations and agreements of the Underwriters under this Bond Purchase Agreement are expressly made subject to the condition that, at or prior to the Closing Time, there shall have been delivered to the Underwriters each of the following which the City agrees to do: (a) Basic Documents: Miscellaneous Documents: (i) One executed copy of each of the Basic Documents, in the respective forms thereof delivered to the Underwriters pursuant to Section 3.1 of this Bond Purchase Agreement, which documents shall be in full force and effect, with only such revisions therein or additions thereto as shall have been required to incorporate terms specified in this Bond Purchase Agreement or as shall be satisfactory to the Managing Underwriter. (ii) Ten executed copies of the Official Statement and Appendices included therein. (b) Closing Papers to be Furnished by the City: (i) One copy of the Bond Resolution certified by the appropriate City official to be true and correct copies thereof as adopted and approved. (ii) One fully executed Mayor's Certificate. (iii) One executed copy of a certificate of an Authorized Party on behalf of the City, dated the Closing Date, (A) confirming that each of the representations of the City contained in Section 2.1 of this Bond Purchase Agreement was true and accurate in all material respects on the date when made, has been true and accurate in all material respects at all times since, and continues to be true and accurate in all material respects on the Closing Date as if such representations were made on the Closing Date, (B) stating that there has been no material adverse change in the business or financial condition of the City from that shown in the Financial Statements, (C) stating that to its best knowledge no event affecting the City has occurred since the respective dates of the Preliminary Official Statement and the Official Statement which should be 10 disclosed therein for the purpose for which the Preliminary Official Statement and the Official Statement are used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect as of the Closing Date; and (D) certifying that the Bond Resolution has not been supplemented, modified, amended or repealed. (iv) One executed original of a customary incumbency certificate, in form prepared by and reasonably acceptable to Bond Counsel, the City Attorney and Underwriters' Counsel, dated the Closing Date and signed by the City Clerk. (v) One executed copy of the Arbitrage Certificate, in form satisfactory to Bond Counsel, dated the Closing Date, signed by an Authorized Party on behalf of the City. (vi) One executed copy of the final approving opinion of Bond Counsel, in substantially the form contained in an Appendix to the Official Statement, and one executed copy of the supplemental legal opinion of Bond Counsel, dated the Closing Date, in the form as set forth in Exhibit B hereto. (vii) One executed copy of the opinion of the City Attorney in the form as set forth in Exhibit C hereto. (viii) One executed copy of a customary authorization and incumbency certificate, and a standard closing certificate, both dated the Closing Date, signed by authorized officers of the Bond Registrar and Paying Agent. (ix) A certified copy of the Insurance Policy accompanied by a certificate of, or opinion of counsel to, the Insurer to the effect that the information relating to the Insurer appearing under the caption "MUNICIPAL BOND INSURANCE" in the Official Statement does not contain any untrue statement of a material fact or omit to state a material fact required in order to make the statements therein, in light of the circumstances under which they were made, not misleading. (x) One executed copy of a certificate from the Insurer to the effect that it is not currently in default, nor has it been in default at any time with respect to the payment of the principal of, or interest on, any obligation guaranteed by the Insurer and the opinion of counsel to the Insurer to the effect that (A) the Insurer is duly incorporated and validly existing under the laws of the state of its incorporation and is licensed and authorized to issue the Insurance Policy under the laws of the State of Florida; and (B) the Insurance Policy has been duly executed and is a valid and binding obligation of the Insurer enforceable in accordance with its terms. 11 (xi) Letters of confirmation with respect to the ratings of the Bonds from Moody's Investors Service, Inc. and Standard & Poor's Ratings Services of "Aaa" and "AAA", respectively, and the underlying rating of the City's general obligations of "A3" and "A" respectively. (xii) One executed copy of a letter from the Certified Public Accountant consenting to the references to it in the Official Statement and inclusion of the Financial Statements and its report thereon as Appendix B to the Official Statement. (xiv) One executed copy of the Letter of Representation to The Depository Trust Company relating to the Bonds. (c) Other Assurances: Such additional OpInIOns, certificates, proceedings, instruments and other documents as the Underwriters, Underwriters' Counselor Bond Counsel may reasonably request to verify or evidence (i) compliance by the Parties with applicable legal requirements, (ii) the truth and accuracy of the representations or opinions of the Parties contained in this Bond Purchase Agreement or in any Closing Paper, or (Hi) the due performance of all agreements and the satisfaction of all conditions required to be performed or satisfied at or prior to the Closing Time. SECTION 4.3. Other Conditions. The obligations of the Underwriters under this Bond Purchase Agreement are expressly made subject to the condition that, at or prior to Closing Time, there shall be delivered to the Underwriters an opinion of Underwriters' Counsel substantially in the form set forth in the attached Exhibit D. SECTION 4.4. Form of Closing Papers: Waiver of Conditions. The Closing Papers to be delivered to the Underwriters pursuant to this Bond Purchase Agreement shall be deemed to be in compliance with the conditions of this Bond Purchase Agreement if, but only if, in the reasonable judgment of the Underwriters, they are satisfactory in form and substance. The legal opinions and certificates described in Section 4.2 shall be addressed to the Underwriters or a reliance letter with respect thereto shall be addressed to the Underwriters. No condition hereof shall be deemed to have been waived by the Underwriters unless expressed specifically in a writing signed by the Underwriters. ARTICLE V TERMINATION: PAYMENT OF EXPENSES SECTION 5.1. Termination. This Bond Purchase Agreement may be terminated by the Underwriters without liability on the part of the Underwriters, if, at or prior to the Closing Time: 12 (a) The Bond Resolution, the Mayor's Certificate or this Bond Purchase Agreement shall not be in full force and effect or shall have been supplemented, modified, amended or repealed, without the prior written consent of the Underwriters; (b) Any representation of the City contained in this Bond Purchase Agreement or in any Closing Paper shall prove to be ,or to have been false in any material respect; (c) There shall be a material failure of anyone or more of the conditions set forth in Sections 4.1, 4.2 or 4.3 of this Bond Purchase Agreement; (d) Litigation or an administrative proceeding or investigation shall be pending or threatened (i) affecting, contesting, questioning or seeking to restrain or enjoin the powers or the valid existence of the City or the titles of its officers to their respective offices; (ii) contesting the validity or affecting the enforceability of the Bonds, the Bond Resolution, the Mayor's Certificate, or the Basic Documents; (iii) contesting the power of the City to execute and deliver such documents or to consummate the transactions contemplated therein or in the Official Statement or apply the proceeds of the Bonds as contemplated therein, or (iv) contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement; wherein such litigation, administrative proceeding or investigation an unfavorable decision, ruling or finding would, in the judgment of the Underwriters, materially and adversely affect the validity or enforceability of the Bonds, the Bond Resolution, the Mayor's Certificate or the Basic Documents; (e) Any legislative, executive or regulatory action or any court decision shall occur which, in the reasonable judgment of the Underwriters, casts sufficient doubt on the legality of, or the excludability or the relative benefit to be derived from excludability from gross income for Federal income tax purposes of interest on, obligations of the general kind and character as the Bonds so as to impair materially the marketability, or to reduce materially the market price of, such obligations or otherwise materially impairs the marketability, or materially reduces the market price of, such obligations; (0 Any action by or on behalf of the Securities and Exchange Commission or a court shall occur which would require registration of any Bonds under the Securities Act of 1933, as amended, or the qualification of the Bond Resolution under the Trust Indenture Act of 1939, as amended; (g) Any material restriction not presently in force on trading in securities generally or any banking moratorium shall be imposed, which, in the judgment of the Managing Underwriter, substantially impairs the marketability of the Bonds; (h) The outbreak or escalation of war or hostilities involving the United States or any national or international calamity or crisis, financial or otherwise, including a general suspension of trading on any national securities exchange, shall occur, provided 13 that the occurrence of any such event, in the judgment of the Managing Underwriter, materially and adversely affects the public offering or the delivery of the Bonds; (i) There shall occur any adverse change in the operations or financial condition of the City from that described in the Official Statement, which adverse change, in the reasonable judgment of the Underwriters, is material and makes it inadvisable to proceed with the issuance of the Bonds; (j) Any event or condition shall exist or occur which, in the judgment of the Underwriters, renders untrue or incorrect, in any material respect, as of the time to which the same purports to relate, the information contained in the Official Statement or which requires that information not reflected therein be included in the Official Statement in order to make the statements and information contained therein not misleading in any material respect as of such time; or (k) Any national securities exchange, or any governmental authority shall impose, as to the Bonds, any material restrictions not now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriters. SECTION 5.2. Payment of Expenses. The following costs and expenses relating to the transactions contemplated or described in this Bond Purchase Agreement shall be borne and paid by the City regardless of whether the transactions herein contemplated shall close: printing of Bonds; printing or copying of Closing Papers (including the Preliminary Official Statement and the Official Statement) in such reasonable quantities as the Underwriters may request; fees and disbursements of Bond Counsel; fees and disbursements of the City's Financial Advisor, the Certified Public Accountant, the Bond Registrar and Paying Agent, and the premium for the Insurance Policy; and fees of the rating agencies. The Underwriters shall pay (i) all advertising expenses in connection with the public offering of the Bonds; and (ii) all other expenses incurred by them in connection with their public offering and distribution of the Bonds. Except as otherwise provided above, the City and the Underwriters shall each bear the costs and expenses incident to the performance of their respective obligations under this Bond Purchase Agreement. ARTICLE VI MISCELLANEOUS SECTION 6.1. Parties In Interest: Survival of Representations. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriters, and no other person, partnership, association or corporation, including but not limited to owners of the Bonds or beneficial interests therein, shall acquire or have any rights hereunder or by virtue hereof. All representations and agreements in this Bond Purchase Agreement shall remain operative and in 14 full force and effect regardless of any investigation made by or on behalf of any Party and shall survive the delivery of and payment for the Bonds. SECTION 6.2. Notices. All notices,. demands, certificates or other communications (other than the Closing Papers) under this Bond Purchase Agreement shall be sufficiently given and shall be deemed given when hand delivered or when mailed by certified or registered mail, postage prepaid, return receipt requested, or by prepaid telegram, or by electronic communications with the original forwarded by certified or registered mail, postage prepaid, return receipt requested, with proper address as indicated below: To the City: City of Miami Beach 1700 Convention Center Drive Miami Beach, Florida 33139 Attention: Finance Director cc: City Attorney To the Underwriters: Smith Barney, Inc. 110 East Broward Boulevard Suite 1850 Fort Lauderdale, Florida 33301 Attention: John Rodstrom SECTION 6.3. Amendment. No modification, alteration or amendment to this Bond Purchase Agreement shall be binding upon any Party until such modification, alteration or amendment is reduced to writing and executed by all Parties. SECTION 6.4. Governing: Law. The laws of the State of Florida without reference to principles of conflict of laws, shall govern this Bond Purchase Agreement. SECTION 6.5. Captions. The captions or headings in this Bond Purchase Agreement are for convenience only and in no way define, limit or describe the scope or intent of any of the provisions of this Bond Purchase Agreement. SECTION 6.6. Counterparts. This Bond Purchase Agreement may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. SECTION 6.7. Severability. If any provision of this Bond Purchase Agreement shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or any constitution or statute or rule of public policy, or for any other reason, such circumstance shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, 15 inoperative, or unenforceable to any extent whatever. The invalidity of anyone or more phrases, sentences, clauses or sections in this Bond Purchase Agreement contained, shall not affect the remaining portions of this Bond Purchase Agreement, or any part thereof. SECTION 6.8. Rights of Managing Underwriter. The Managing Underwriter, on behalf of the Underwriters, being duly authorized so to do, shall have the power to enter into this Bond Purchase Agreement, to consent to any amendments hereto, to agree to the interpretation of the provisions hereof and to waive any preconditions to Closing hereunder. SECTION 6.9. Effective Time of this Bond Purchase Agreement. This Bond Purchase Agreement shall be effective and binding upon its execution and delivery. IN WITNESS WHEREOF, the parties hereto have executed this Bond Purchase Agreement as of the day and year set forth beneath each signature. ~~ Robert Parcher City Clerk September 26, 1997 THE UNDERWRITERS: SMITH BARNEY, INC. on behalf of itself and the other Underwriters APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION \~.~~ ~r~7 97 16 EXHIBIT A MATURITIES, AMOUNTS, INTEREST RATES, AND YIELDS Maturity Date o 1-Sep-98 o 1-Sep-99 01-Sep-2000 o 1-Sep-200 1 o 1-Sep- 2002 o 1-Sep- 2004 o 1-Sep-2005 o 1-Sep-2006 o 1-Sep- 2007 Principal Amount 50,000.00 50,000.00 1,100,000.00 1,900,000.00 3,525,000.00 4,525,000.00 2,850,000.00 500,000.00 500,000.00 Interest Rate .3.700% 3.800% 3.900% 4.000% 4.100% 4.300% 4.300% 4.400% 4.500% REDEMPTION PROVISIONS Yield 3.700% 3.900% 4.000% 4.100 % 4.150% 4.350% 4.400% 4.500% 4.550% The Bonds are not redeemable prior to their stated dates of maturity . A-I EXHIBIT B [Closing Date] Smith Barney, Inc. As Representative of the Underwriters Fort Lauderdale, Florida Re: $15,000,000 City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance of the above-captioned bonds the (the "Bonds") and related transactions. This opinion is furnished pursuant to the Bond Purchase Agreement dated September 26, 1997 (the "Purchase Agreement") among City of Miami Beach, Florida (the "City") and Smith Barney, Inc., PaineWebber Incorporated, Goldman, Sachs & Co. and William R. Hough & Co. (collectively, the "Underwriters"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. We have examined such documents and instruments as deemed necessary to render the requested opinion. It is our opinion that: 1. The Basic Documents and the Official Statement have been duly authorized, executed and delivered on behalf of the City. The Basic Documents constitute legal, valid and enforceable agreements of the City in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally and by the availability of equitable remedies. 2. The City has duly approved the distribution by the Underwriters of the Preliminary Official Statement. The City has duly executed and delivered the Official Statement in accordance with the terms of the Purchase Agreement, and the City has authorized the distribution of the Official Statement and the use thereof by the Underwriters in connection with the public offering of the Bonds in accordance with the terms of the Purchase Agreement. 3. The Bonds and the Bond Resolution conform in form and tenor with the terms and provisions thereof set out in the Official Statement. 4. The information (other than any financial and statistical data contained in the Official Statement as to which no opinion is expressed) set forth in the Official Statement under the headings "INTRODUCTION", "PURPOSE OF THE BONDS", "THE BONDS" (other than the information under the subheading "Book-Entry Only System", as to which no opinion is expressed), "SECURITY FOR THE BONDS", "TAX EXEMPTION", and "CONTINUING B-1 DISCLOSURE" and "APPENDIX C -- THE RESOLUTION" and "APPENDIX D - CONTINUING DISCLOSURE COMMITMENT," insofar as such statements constitute summaries of the Bond Resolution, the Bonds, the Continuing Disclosure Commitment and the Constitution and laws of the State 'of Florida or the United States of America, constitute fair summaries of such documents and said Constitution and laws. 5. The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Bond Resolution is exempt from qualification under the Trust Indenture Act of 1939, as amended. This opinion is supplemental to our approving opinion dated as of even date herewith with respect to the Bonds. You are authorized to rely upon such approving opinion as if such opinion were addressed to you. Respectfully submitted, SQUIRE, SANDERS & DEMPSEY L.L.P. B-2 EXHIBIT C [Closing Date] Smith Barney, Inc. As Representative of the Underwriters Fort Lauderdale, Florida [BOND INSURER] Re: $15,000,000 City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) Ladies and Gentlemen: I am the City Attorney for the City of Miami Beach, Florida and have served in such capacity in connection with the issuance of the above-captioned bonds (the "Bonds"). This opinion is furnished pursuant to the Bond Purchase Agreement dated September 26, 1997 (the "Purchase Agreement") by and between the City of Miami Beach, Florida (the "City"), Smith Barney, Inc., PaineWebber Incorporated, Goldman, Sachs & Co. and William R. Hough & Co. (collectively, the "Underwriters"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. I have reviewed such documents and instruments as I deemed necessary to render this opinion. Based upon examination of such documents and matters of law as I have determined relevant for the purposes of rendering this opinion, and subject to the reservations set forth herein, I am of the opinion that: 1. The City is a political subdivision of the State of Florida, duly organized and validly existing under the constitution and laws of the State of Florida. 2. The City is authorized by the laws of the State of Florida to execute and deliver the Bonds, the Basic Documents and the Official Statement and to perform its obligations thereunder or as described therein. 3. The Bond Resolution has been duly adopted and the execution and delivery by the City of the Bonds, the Basic Documents and the Official Statement, and the performance of its obligations thereunder or as described therein, for and in the name of the City, have been duly authorized by the City. C-l 4. The City has duly authorized the distribution of the Preliminary Official Statement by the Underwriters, has duly approved and executed the Official Statement and has duly authorized the distribution thereof by the Underwriters in connection with the public offering of the Bonds. 5. The Bonds and the Basic Documents have been duly authorized, executed and. delivered by the City and constitute valid and legally binding obligations of the City enforceable against the City in accordance with their respective terms. 6. To the best of my knowledge, no authorization, approval, consent, license or other action of any court or public or governmental or regulatory authority having jurisdiction over the City that has not been obtained is or will be required for the issuance and sale of the Bonds or the valid and lawful authorization, execution and delivery of, or consummation by the City of the other transactions contemplated by, the Basic Documents and the Official Statement; however, no opinion is given regarding compliance with the registration requirements of state and federal securities laws. 7. The adoption by the City of the Bond Resolution and the execution and delivery by the City of the Bonds, the Basic Documents and the Official Statement and compliance on the City's part with the provisions contained or described therein, will not conflict with, violate or constitute a breach of or a default under (a) any existing law, court or administrative regulation, order or decree, or (b) any commitment, mortgage, lease, indenture, agreement, contract or instrument to which the City is a party or by which it or any of its properties is bound. 8. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending with regard to which the City has received service of process or, to the actual knowledge of the City, threatened against the City, affecting, contesting, questioning or seeking to restrain or enjoin: (i) the powers or valid existence of the City or the titles of the members of the City's Governing Body or its other officers to their respective offices; (ii) any of the proceedings had or actions taken leading up to the sale, issuance and delivery of the Bonds or the execution, delivery or performance of this Bond Purchase Agreement; (iii) the delivery, validity or enforceability of the Bonds or any of the Basic Documents or (iv) the power of the City to consummate the transactions contemplated in the Basic Documents and in the Official Statement. There is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, governmental agency, public board or body, pending with regard to which the City has received service of process, or to the actual knowledge of the City, threatened against the City, (i) which contests in any way the completeness or accuracy of the Official Statement; (ii) with regard to which an unfavorable decision, ruling or finding would materially and adversely affect the validity or enforceability of the Bonds, the Bond Resolution or the Basic Documents; or (iii) which would have a material adverse effect upon the levy and collection of the ad valorem taxes pledged to the payment of the Bonds. 9. Without having undertaken to determine independently the accuracy or completeness of the information in the Official Statement, the statements and information relating to the City, C-2 the Basic Documents and the Bonds, including the application of the proceeds thereof, set forth in the Official Statement (except for the fmancial statements and other financial and statistical data included therein, the information contained in the sections entitled "MUNICIPAL BOND INSURANCE" and "UNDERWRITING" or the price of and yield on the Bonds appearing on the cover page, as to which no opinion is expressed) did not on the date of the Official Statement, and do not on the date hereof, contain any untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. All opinions as to the enforceability of the legal obligations of the City set forth herein are subject to and limited by bankruptcy, insolvency, reorganization, moratorium, and similar laws in each case relating to or affecting the enforcement of creditors' rights generally, and subject to the enforceability thereof, to the exercise of judicial discretion in accordance with the general principles of equity. Very truly yours, Murray H. Dubbin, Esquire City Attorney C-3 EXHffiIT D [Closing Date] Smith Barney, Inc. As Representative of the Underwriters Fort Lauderdale, Florida Re: $15,000,000 City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) Ladies and Gentlemen: We have acted a,s counsel to the Underwriters in connection with the purchase by Smith Barney, Inc., PaineWebber Incorporated, Goldman, Sachs & Co. and William R. Hough & Co. (the "Underwriters") of the above-captioned bonds (the "Bonds") pursuant to the Bond Purchase Agreement dated September 26, 1997 (the "Purchase Agreement") between the Underwriters and the City of Miami Beach, Florida. Capitalized terms not defined herein shall have the meanings ascribed to them in the Purchase Agreement. In our capacity as counsel to the Underwriters, we participated in the preparation of the Official Statement dated September 26, 1997 (the "Official Statement") relating to the Bonds. Although we do not express an opinion, and do not assume responsibility for, the accuracy, completeness or fairness of the statements contained in the Official Statement, based upon the information made available to us as counsel for the Underwriters in the course of our participation in the preparation of the Official Statement, and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to our attention that would cause us to believe that the Official Statement (except for the information under the caption "THE BONDS -Book-Entry Only System" and the statistical and financial data included in the Official Statement, as to which no opinion is expressed), as of its date, or as of the date hereof, contained or contains any untrue statement of material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. As part of our engagement we have examined the written agreement (the "Continuing Disclosure Commitment") of the City to provide certain continuing disclosure specified therein, as contemplated by Rule 15c2-12(b)(5) of the United States Securities and Exchange Commission (the "Rule") and are of the opinion that the Underwriters are in compliance with the Rule as it pertains thereto. This opinion may be relied upon solely by you. Respectfully submitted. D-l EXHffiIT E UNDERWRITERS' TRUTH-IN-BONDING AND DISCLOSURE STATEMENT September 26, 1997 City of Miami Beach, Florida Miami Beach, Florida Re: $15,000,000 City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) The City of Miami Beach, Florida (the "City") is proposing to issue its $15,000,000 General Obligation Bonds, Series 1996 (Park Improvement Projects) (the "Bonds") for the purposes described in the Official Statement. The Bonds are expected to be repaid over a period of approximately 10 years. At a forecasted true interest rate of 4.464%, total interest paid over the life of the Bonds will be $3,874,000.00. The source of repayment for the Bonds is ad valorem taxes to be levied and collected solely for the payment of the Bonds. The voted millage to be used to pay the bonds would not be available to pay for other projects or services in the City. In addition, pursuant to the provisions of Sections 218.385(6), Florida Statutes, the following disclosure is made: (a) The nature and estimated amounts of expenses to be incurred by Smith Barney, Inc., PaineWebber Incorporated, Goldman, Sachs & Co. and William R. Hough & Co. (collectively, the "Underwriters") in connection with the purchase and re-offering of the Bonds are set forth in Schedule A attached hereto. (b) No person has entered into an understanding with the Underwriters, or to the knowledge of the Underwriters with the City, for any paid or promised compensation or valuable consideration, directly or indirectly, expressly or implied, to act solely as an intermediary between the City and the Underwriters for the purpose of influencing any transaction in the purchase of the Bonds. (c) The underwriting spread (i.e., the difference between the price at which the Bonds will be initially offered to the public by the Underwriters and the price to be paid to the City for the Bonds, exclusive of accrued interest in both cases) will be $101,850.00 or .679% of the principal amount of the Bonds. E-l (d) The underwriting spread set forth in paragraph (c) above, includes a management fee of $7,500.00 ($.50/$1,000 of Bonds) and a takedownlconcession of $66,600.00 ($4.44/$1,000 of Bonds) (e) No other fee, bonus or other compensation is estimated to be paid by the Underwriters in connection with the issuance of the Bonds to any person not regularly employed or retained by the Underwriters (including any "fmder" as defmed in Section 218.386(1) (a), Florida Statutes), except as specifically enumerated as expenses to be incurred by the Underwriters as set forth in Schedule A. (t) The name and address of each of the Underwriters is: Smith Barney Inc. 110 East Broward Boulevard Suite 1850 Fort Lauderdale, Florida 33301 Paine Webber Incorporated One International Place, Suite 1600, Miami, Florida 33131 Goldman, Sachs & Co. 85 Broad Street, 24th Floor New York, New York 10004 William R Hough & Co. 100 2nd Avenue South, Suite 800 S1. Petersburg, Florida 33701 We understand that you do not require any further disclosure from the Underwriters pursuant to Section 218.385(6), Florida Statutes. Very truly yours, SMITH BARNEY, INC., as Representative of the Underwriters E-2 SCHEDULE A $15,000,000 City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) Underwriter's Expenses $ Amount $ Per Bond(1) Day Loan Dalcomp PSA/CUSIP Travel Communications Underwriter's Counsel Underwriter's Counsel Exp. 450.00 900.00 606.00 2,000.00 300.00 21,875.00 1,500.00 0.03 0.06 0.04 0.13 0.02 1.46 0.10 Total Estimated Expenses 27,631.00 1.84 (1) Totals may not add due to rounding. 50907.8 SA-l EXHIBIT B [Closing Date] Smith Barney, Inc. As Representative of the Underwriters Fort Lauderdale, Florida Re: $15,000,000 City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance of the above-captioned bonds the (the "Bonds") and related transactions. This opinion is furnished pursuant to the Bond Purchase Agreement dated _,1996 (the "Purchase Agreement") among City of Miami Beach, Florida (the "City") and Smith Barney, Inc., PaineWebber Incorporated, Goldman, Sachs & Co. and William R. Hough & Co. (collectively, the "Underwriters"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. We have examined such documents and instruments as deemed necessary to render the requested opinion. It is our opinion that: 1. The Basic Documents and the Official Statement have been duly authorized, executed and delivered on behalf of the City. The Basic Documents constitute legal, valid and enforceable agreements of the City in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally and by the availability of equitable remedies. 2. The City has duly approved the distribution by the Underwriters of the Preliminary Official Statement. The City has duly executed and delivered the Official Statement in accordance with the terms of the Purchase Agreement, and the City has authorized the distribution of the Official Statement and the use thereof by the Underwriters in connection with the public offering of the Bonds in accordance with the terms of the Purchase Agreement. 3. The Bonds and the Bond Resolution conform in form and tenor with the terms and provisions thereof set out in the Official Statement. 4. The information (other than any financial and statistical data contained in the Official Statement as to which no opinion is expressed) set forth in the Official Statement under the headings "INTRODUCTION", "PURPOSE OF THE BONDS", "THE BONDS" (other than the information under the subheading "Book-Entry Only System", as to which no opinion is expressed), "SECURITY FOR THE BONDS", "AD VALOREM TAXATION", "TAX MIAMI:F:\DOCS\JLOIMF\50907.2: 11113/96(8:06am) EXEMPTION", "ORIGINAL ISSUE DISCOUNT" and "CONTINUING DISCLOSURE" and "APPENDIX C -- THE BOND RESOLUTION" and "APPENDIX D - CONTINUING DISCLOSURE COMMITMENT," insofar as such statements constitute summaries of the Bond Resolution, the Bonds, the Continuing Disclosure Commitment and the Constitution and laws of the State of Florida or the United States of America, constitute fair summaries of such documents and said Constitution and laws. 5. The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Bond Resolution is exempt from qualification under the Trust Indenture Act of 1939, as amended. This opinion is supplemental to our approving opinion dated as of even date herewith with respect to the Bonds. You are authorized to rely upon such approving opinion as if such opinion were addressed to you. Respectfully submitted, SQUIRE, SANDERS & DEMPSEY, L.L.P. MIAMI:F:\DOCSIJLOIMFI50907 .2: 11/13/96(8:06am) B-2 EXHIBIT C [Closing Date] City of Miami Beach, Florida Miami Beach, Florida Smith Barney, Inc. As Representative of the Underwriters Fort Lauderdale, Florida [BOND INSURER] Re: $15,000,000 City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) Ladies and Gentlemen: I am the City Attorney for the City of Miami Beach, Florida and have served in such capacity in connection with the issuance of the above-captioned bonds (the "Bonds") and related transactions. This opinion is furnished pursuant to the Bond Purchase Agreement dated , 1996 (the "Purchase Agreement") among City of Miami Beach, Florida the "City"), Smith Barney, Inc., PaineWebber Incorporated, Goldman, Sachs & Co. and William R. Hough & Co. (collectively, the "Underwriters"). All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement. I have reviewed such documents and instruments as I deemed necessary to render the requested opinion. Based upon examination of such documents and matters of law as I have determined relevant for the purposes of rendering this opinion, and subject to the reservations set forth herein, I am of the opinion that: 1. The City is a political subdivision of the State of Florida, duly organized and validly existing under the constitution and laws of the State of Florida. 2. The City is authorized by the laws of the State of Florida to execute and deliver the Bonds, the Basic Documents and the Official Statement and to perform its obligations thereunder or as described therein. 3. The Bond Resolution has been duly adopted and the execution and delivery by the City of the Bonds, the Basic Documents and the Official Statement, and the performance of its obligations thereunder or as described therein, for and in the name of the City, have been duly authorized by the City. MIAMI:F:IDOCSIJLOIMFI50907 .2: 11113/96(8:06am) 4. The City has duly authorized the distribution of the Preliminary Official Statement by the Underwriters, has duly approved and executed the Official Statement and has duly authorized the distribution thereof by the Underwriters in connection with the public offering of the Bonds. 5. The Bonds and the Basic Documents have been duly authorized, executed and delivered by the City and constitute valid and legally binding obligations of the City enforceable against the City in accordance with their respective terms. 6. To the best of my knowledge, no authorization, approval, consent, license or other action of any court or public or governmental or regulatory authority having jurisdiction over the City that has not been obtained is or will be required for the issuance and sale of the Bonds or the valid and lawful authorization, execution and delivery of, or consummation by the City of the other transactions contemplated by, the Basic Documents and the Official Statement; however, no opinion is given regarding compliance with the registration requirements of state and federal securities laws. 7. The adoption by the City of the Bond Resolution and the execution and delivery by the City of the Bonds, the Basic Documents and the Official Statement and compliance on the City's part with the provisions contained or described therein, will not conflict with, violate or constitute a breach of or a default under (a) any existing law, court or administrative regulation, order or decree, or (b) any commitment, mortgage, lease, indenture, agreement, contract or instrument to which the City is a party or by which it or any of its properties is bound. 8. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body pending and with regard to which the City has received service of process or, to my actual knowledge, threatened against the City affecting, contesting, questioning or seeking to restrain or enjoin any of the following: (i) the powers or the valid existence of the City or the titles of its officers to their respective offices, or (ii) any of the proceedings had or actions taken leading up to the sale, issuance and delivery of the Bonds or the execution, delivery or performance of the Purchase Agreement; or (iii) the delivery, validity or enforceability of the Bonds or the Basic Documents or contesting the power of the City to execute and deliver such documents (to the extent applicable) or to consummate the transactions contemplated therein or in the Official Statement, or (iv) contesting in any way the completeness or accuracy of the Official Statement, or (v) wherein an unfavorable decision, ruling or finding would materially and adversely affect the validity or enforceability of the Bonds, the Bond Resolution or the Basic Documents; or (vi) which would have a material adverse effect upon the financial condition or the operations of the City. 9. Without having undertaken to determine independently the accuracy or completeness of the information in the Official Statement, the statements and information relating to the City, the Basic Documents and the Bonds, including the application of the proceeds thereof, set forth in the Official Statement (except for the financial statements and other financial and statistical data included therein, the information contained in the sections entitled "UNDERWRITING" and "MUNICIPAL BOND INSURANCE" or the price of and yield on the Bonds appearing on the MIAMI:F:\DOCS\JLO ,MF\50907 .2: 1 1/13/96(8:06"111) C-2 cover page, as to which no opinion is expressed) did not on the date of the Official Statement, and do not on the date hereof, contain any untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. All opinions as to the enforceability of the legal obligations of the City set forth herein are subject to and limited by bankruptcy, insolvency, reorganization, moratorium, and similar laws in each case relating to or affecting the enforcement of creditors' rights generally, and subject to the enforceability thereof, to the exercise of judicial discretion in accordance with the general principles of equity. Very truly yours, Murray H. Dubbin, Esquire Miami Beach City Attorney MIAMI:F:IDOCSIJLO\MFI50907 .2: I 1/13/96 (8:06am) C-3 EXHIBIT D [Closing Date] Smith Barney, Inc. As Representative of the Underwriters Fort Lauderdale, Florida Re: $15,000,000 City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) Ladies and Gentlemen: We have acted as counsel to the Underwriters in connection with the purchase by Smith Barney, Inc., PaineWebber Incorporated, Goldman, Sachs & Co. and William R. Hough & Co. (the "Underwriters") of the above-captioned bonds (the "Bonds") pursuant to the Bond Purchase Agreement dated 1, 1996 (the "Purchase Agreement") between the Underwriters and the City of Miami Beach, Florida. Capitalized terms not defined herein shall have the meanings ascribed to them in the Purchase Agreement. In our capacity as counsel to the Underwriters, we participated in the preparation of the Official Statement dated 1, 1996 (the "Official Statement") relating to the Bonds. Although we do not express an opinion, and do not assume responsibility for, the accuracy, completeness or fairness of the statements contained in the Official Statement, based upon the information made available to us as counsel for the Underwriters in the course of our participation in the preparation of the Official Statement, and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to our attention that would cause us to believe that the Official Statement (except for the information under the caption "THE BONDS -Book-Entry Only System" and the statistical and financial data included in the Official Statement, as to which no opinion is expressed), as of its date, or as of the date hereof, contained or contains any untrue statement of material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. This opinion may be relied upon solely by you. Respectfully submitted. ECKERT SEAMANS CHERIN & MELLOTI MIAMI:F:IDOCSIJLO\MFI50907 .2: 11/13/96(8:06am) EXHIBIT E UNDERWRITERS' TRUTH-IN-BONDING AND DISCLOSURE STATEMENT , 1996 City of Miami Beach, Florida Miami Beach, Florida Re: $15,000,000 City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) The City of Miami Beach, Florida (the "City") is proposing to issue its $15,000,000 General Obligation Bonds, Series 1996 (the "Bonds") for the purposes described in the Official Statement. The Bonds are expected to be repaid over a period of approximately nine years. At a forecasted true interest rate of %, total interest paid over the life of the Bonds will be $ The source of repayment for the Bonds is ad valorem taxes to be levied and collected solely for the payment of the Bonds. Authorizing the Bonds will not effect the availability of other taxes and revenues to finance the other services of the City. In addition, pursuant to the provisions of Sections 218.385(4), Florida Statutes, the following disclosure is made: (a) The nature and estimated amounts of expenses to be incurred by Smith Barney, Inc., PaineWebber Incorporated, Goldman, Sachs & Co. and William R. Hough & Co. (collectively, the "Underwriters") in connection with the purchase and re-offering of the Bonds are set forth in Exhibit A attached hereto. (b) No person has entered into an understanding with the Underwriters, or to the knowledge of the Underwriters with the City, for any paid or promised compensation or valuable consideration, directly or indirectly, express or implied, to act solely as an intermediary between the City and the Underwriters for the purpose of influencing any transaction in the purchase of the Bonds. (c) The underwriting spread (i.e., the difference between the price at which the Bonds will be initially offered to the public by the Underwriters and the price to be paid to the City for the Bonds, exclusive of accrued interest in both cases) will be $ or % of the principal amount of the Bonds. MIAMI:F:\DOCS\JLOIMF\50907 .2: 11/13/96(8:06am) (d) The underwriting spread set forth in paragraph (c) above, includes a management fee of $ ($_/$1,000 of Bonds) and a takedownlconcession of $ ($_/$1,000 of Bonds) (e) No other fee, bonus or other compensation is estimated to be paid by the Underwriters in connection with the issuance of the Bonds to any person not regularly employed or retained by the Underwriters (including any "finder" as defined in Section 218.386(1) (a), Florida Statutes), except as specifically enumerated as expenses to be incurred by the Underwriters as set forth in Exhibit A. (t) The name and address of each of the Underwriters is: Smith Barney Inc. 3696 N. Federal Highway Third Floor Fort Lauderdale, Florida 33308 Paine Webber Incorporated One International Place, Suite 1600, Miami, Florida 33131 Goldman, Sachs & Co. 85 Broad Street, 24th Floor New York, New York 10004 William R Hough & Co. 100 2nd A venue South, Suite 800 St. Petersburg, Florida 33701 We understand that you do not require ally further disclosure from the Underwriters pursuant to Section 218.385(4), Florida Statutes. Very truly yours, SMITH BARNEY, INC., as Representative of the Underwriters MIAMI:F:IDOCSIJLOIMFI50907 .2: 11113/96(8:06um) E-2 SCHEDULE A $15,000,000 City of Miami Beach, Florida General Obligation Bonds, Series 1996 (Park Improvement Projects) Underwriters' Expenses $ Amount $ Per Bond( 1) Computer Time Courier Service and Overnight Mail CUSIP Dalcomp Dalnet DTC Day Loan Fed Funds Miscellaneous PSA Fee Teleconference and Telephone Travel Total Estimated Expenses (1) Totals may not add due to rounding. MIAMI:F:\DOCS\JLO\MF\50907 .2: 11/13/96(8:0Gam) SS&:D DRAFT #2 11/08/96 CONTINUING DISCLOSURE COMMITMENT THIS CONTINUING DISCLOSURE COMMITMENT dated as of , 1996, is made by the CITY OF MIAMI BEACH, FLORIDA, a political subdivision duly organized and existing under the Constitution and laws of the State of Florida (the "City"), for the benefit of the holders and beneficial owners from time to time of the City's $ General Obligation Bonds, Series 1996 (Park Improvement Projects) dated as of , 1996 (the "Bonds"), under the circumstances summarized in the following recitals (with each capitalized term used but not defined in this Commitment having the meaning assigned to it in Resolution No. 96- adopted by the City on , 1996 (the "Bond Resolution") authorizing the issuance of the Bonds) : A. The City has determined to issue the Bonds pursuant to the Bond Resolution and the Original Purchasers have agreed to purchase the Bonds. B. The City understands that the Original Purchasers will sell and deliver Bonds to other holders and beneficial owners and that the Bonds will be transferred from time to time from holders and beneficial owners to other holders and beneficial owners who may rely upon the continuing disclosure agreement made by the City in the Bond Resolution and this Commitment. C. As a condition to the purchase of the Bonds from the City and the sale of Bonds to holders and beneficial owners, the Original Purchasers are required to reasonably determine that the City has made an agreement for the benefit of holders and beneficial owners of the Bonds in accordance with paragraph (b) (5) (i) of Rule lSc2-12 (the "Rule") promulgated by the Securities and Exchange Commission (the "SEC") pursuant to the Securities Exchange Act of 1934. D. The City made an agreement in the Bond Resolution, certain terms of which were to be further described and specified in a Continuing Disclosure Commitment, to provide or cause to be provided such financial information and operating data, financial statements and notices, in such manner, as may be required for purposes of paragraph (b) (5) (i) of the Rule. NOW, THEREFORE, in consideration of the purchase of the Bonds from the City by the Original Purchasers and the contemplated sale of the Bonds to, and transfer of Bonds between, holders and beneficial owners from time to time, the City hereby sets forth certain terms of its continuing disclosure agreement made for purposes of the Rule and formed, collectively, by Section 12 of the Bond Resolution and this Commitment (the "Agreement"), for the benefit of the holders and beneficial owners from time to time of the Bonds, as follows: 009: [04548.00CS.MIA180062JCONT_OISC_COMM-2. Section 1. Provision of Annual Information: Audited Financial Statements: and Notices of Events. The City shall provide or cause to be provided: (a) to each nationally recognized municipal securities information repository designated from time to time by the SEC ("NRMSIR") and to any state information depository with which filings are required to be made by the City in accordance with the Rule ("SID"), (i) annual financial information and operating data of the type described in Section 2 ("Annual Information") for each Fiscal Year ending on or after September 30, 1997, not later than the 240th day following the end of each Fiscal Year, and (ii) when and if available, audited financial statements of the City for each such Fiscal Year which may be a part of the City's consolidated audited financial report (the "Financial Statements"); and (b) to each NRMSIR or to the Municipal Securities Rulemaking Board established by the SEC ("MSRB") and to the SID, in a timely manner, notice of (i) any Specified Event described in Section 2 if that Event is material, (ii) the City's failure to provide the Annual Information on or prior to the date specified above, and (iii) any change in the accounting principles applied in the preparation of the Financial Statements, any change in its Fiscal Year, and of the Agreement's termination. The City expects that the Financial Statements will be prepared, any such statements will be available together with the Annual Information, and the accounting principles to be applied in the preparation of the Financial Statements will be generally accepted accounting principles as recommended from time to time by the Governmental Accounting Standards Board. Section 2. Annual Information and Specified Events. (a) Annual Information to be provided by the City for each Fiscal Year shall consist of the following: (b) Specified Events shall include the occurrence of the following events, within the meaning of the Rule, with respect to the Bonds: principal and interest payment delinquencies; non-payment related defaults; unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; adverse tax opinions or events affecting the tax-exempt status of the Bonds; modifications to rights of beneficial owners; Bond calls; defeasances; release, substitution, or sale of property securing repayment of the Bonds; and any rating changes. 2 D09: [04548.00CS.MIA180062JCONT_DISC_COMM-2. Section 3. Amendments. The City reserves the right to amend the Agreement, and noncompliance with any provision of the Agreement may be waived, as may be necessary or appropriate to achieve its compliance with any applicable federal securities law or rule, to cure any ambiguity, inconsistency or formal defect or omission, and to address any change in circumstances arising from a change in legal requirements, change in law, or change in the identity, nature, or status of the City, or type of business conducted by the City. Any such amendment or waiver shall not be effective unless the Agreement (as amended or taking into account such waiver) would have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any applicable amendments to or official interpretations of the Rule, as well as any change in circumstances, and until the City shall have received either (a) a written opinion of bond or other qualified independent special counsel selected by the City that the amendment or waiver would not materially impair the interests of holders or beneficial owners, or (b) the written consent to the amendment or waiver of the holders of at least a majority of the principal amount of the Bonds then outstanding. Annual Information containing any revised operating data or financial information shall explain, in narrative form, the reasons for any such amendment or waiver and the impact of the change on the type of operating data or financial information being provided. Section 4. Remedy for Breach. The Agreement shall be solely for the benefit of the holders and beneficial owners from time to time of the Bonds. The exclusive remedy for any breach of the Agreement by the City shall be limited, to the extent permitted by law, to a right of holders and beneficial owners to institute and maintain, or to cause to be instituted and maintained, such proceedings as may be authorized at law or in equity to obtain the specific performance by the City of its obligations under the Agreement. Any holder or beneficial owner may exercise individually any such right to require the City to specifically perform its obligation to provide or cause to be provided a pertinent filing if such a filing is due and has not been made. Holders and beneficial owners shall not be entitled to institute or maintain any such proceedings individually that assert a breach of the Agreement that is based on the alleged inadequacy of any pertinent filing that has been made. Notwithstanding any other provisions of the Bond Resolution or the Agreement, any failure by the City to comply with any provisions of the Agreement shall not constitute a default under the Bond Resolution. Section 5. Sources of Payments: Extent of Covenants: No Personal Liability. The City shall be required to use only legally available funds to pay any costs and expenses to be incurred in the performance of this Agreement by-it, and the performance of its obligations hereunder shall be subj ect to the availability of legally available funds for that purpose. All covenants, stipulations, obligations and agreements of the City contained in this Agreement are and shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full 3 009: [04548.00CS.MIA180062JCONT_OISC_COMM-2. extent authorized by law. No covenant, stipulation, obligation or agreement of the City contained in this Agreement shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future officer, agent or employee of the City in other than that person's official capacity. Section 6. Termination. The obligations of the City under the Agreement shall remain in effect only for such period that the Bonds are outstanding in accordance with their terms and the City remains an obligated person with respect to the Bonds within the meaning of the Rule. The obligation of the City to provide the Annual Information and notices of the events described above shall terminate, if and when the City no longer remains such an obligated person. IN WITNESS WHEREOF, the City has caused this Commitment to be duly signed and delivered to the Original Purchasers, as part of the Bond proceedings and in connection with the original delivery of the Bonds to the Original Purchasers, on its behalf by its Finance Director, all as of the date set forth above, and the holders and beneficial owners from time to time of the Bonds, shall be deemed to have accepted the Agreement, as contained in Section 12 of the Bond Resolution and further described and specified herein, in accordance with the Rule. CITY OF MIAMI BEACH, FLORIDA By Finance Director 4 D09:[04548.DOCS.MIA180062JCONT_DISC_COMM-2. AGREEMENT BETWEEN RAUSCHER PIERCE REFSNES, INC. AND CITY OF MIAMI BEACH, FLORIDA FOR FINANCIAL ADVISORY SERVICES 1. PARTIES. The parties to this Agreement ("Agreement") are the City of Miami Beach, Florida ("CITY") and Rauscher Pierce Refsnes, Inc. ("RPR") as financial advisor. 2. PURPOSE. The purpose of this Agreement is to secure for the CITY the services of an experienced and qualified financial advisor to assist the CITY in the issuance of debt and the evaluation of financial strategies, capital structure and debt management. 3. TERM. The term of this Agreement shall be for two (2) years commencing on July 1, 1997 and ending June 30, 1999. Upon agreement of the parties, this Agreement may be extended for three additional one year terms under the same terms and conditions provided herein. 4. SCOPE OF SERVICES. RPR shall perform all financial advisory services for the CITY that are necessary in connection with the issuance, remarketing and restructuring of debt issuances, loans or other obligations. These financial advisory services shall be called "Debt Services. " As requested by the CITY, the Debt Services shall include the following: a. Preparing a time schedule coordinating the necessary actions of CITY's legal, managerial and financial representatives and scheduling the date of the sale of bonds, loans or other obligations and availability of proceeds. b. Providing estimated interest rates and final amortization schedules to CITY. c. Advising CITY and staff as to market conditions and recommending the timing of the sale of bonds, loans or other obligations. d. Advising as to the provisions regarding redemption or defeasance of any proposed obligations prior to maturity. e. Providing recommendations regarding accounts and flow of funds, rate covenant test for the issuance of parity obligations, audit reports and other details which may be set forth in the legal documents supporting future fInancings. f. Coordinating the bond, loan or obligation working group consisting of CITY, its staff, underwriters, bond counsel and others and attend necessary meetings, hearings Execution Copy and otherwise assist in matters relating to administrative, judicial, legislative and other governmental bodies. g. Assisting in the preparation of Preliminary and Final OffIcial Statements and other necessary documents, ordinances, resolutions and trust indentures. h. Providing legal counsel with information and details necessary for drafting of the authorizing bond or loan documents. 1. Assisting CITY with the selection of a paying agent and registrar and trustee of the bond, loan or other type of obligations, if necessary. J. Coordinating with and providing the municipal bond rating agencies (and municipal bond insurers and letter of credit providers, if applicable) with information necessary to stimulate interest and obtain the highest possible rating on CITY bonds, loans or other type of obligations. k. Advising CITY in arranging for printing of necessary documents, execution and signing and delivery of the obligations after sale. 1. Advising as to the advantages and disadvantages of various credit enhancements, including the feasibility and desirability of acquiring insurance, letters of credit, other credit facilities, or investment agreements. m. Assisting with validation proceedings, if necessary, and testifying as an expert witness on the financing program. n. Coordinating and assisting CITY at bond or loan closings. o. Development of investment programs for bond or loan proceeds. p. In connection with a competitive sale, RPR will provide the following additional financial advisory services necessary in connection with the issuance, remarketing and restructure of debt issuances, loans or other obligations: 1. In cooperation with legal counsel, preparing the official notice for sale of the bonds. 11. Arranging for the insertion of necessary advertisement of the notice of sale in The Bond Buyer. 111. Assisting CITY at the time of sale in checking all bids for compliance with bid specifications, and making a recommendation to the CITY as to whether Page 2 Execution Copy an award of bonds or notes on the terms offered would be in the best interest of CITY. q. In connection with a negotiated sale, RPR will, at the request of the CITY, provide the following additional financial advisory services in connection with the issuance, remarketing and restructure of debt issuances, loans or other obligations: 1. Assisting in the selection ofthe underwriting syndicate. 11. Evaluating the bond purchase agreement and advising as to its acceptance or rejection in light of market conditions. 5. COMPENSATION. In consideration of the services provided for in this Agreement, specified as Debt Services, CITY shall pay to RPR: For bond issues, including the full Debt Services described within this Agreement, RPR's fee schedule for advisory services to the CITY shall be as follows: Transaction Size $/Bond Maximum $10,000,000 or less $1.25/Bond $12,500* $10,000,001 to $50,000,000 $1.25/Bond $62,500 $50,000,001 and Higher $1.00/Bond $120,500 * $12,500 would be the minimum fee RPR would charge for any completed transaction. This fee schedule will apply to all types of borrowings sold at either competitive or negotiated sales. These fees would be in effect for the duration of the contract period. Additional services may be rendered upon request of CITY at the following rate: $125/Per Hour $100/Per Hour Managing Director Assistant Vice President Senior Vice President Associate/Analyst First Vice President Vice President Page 3 Execution Copy 6. EXPENSES. In addition to all other fees and charges allowed by this Agreement, CITY shall pay all reasonable out-of-pocket expenses incurred for transportation, lodging, meals and incidentals in connection with travel performed by RPR as a result of its performance under this contract, and of the cost of communications, materials and supplies used in connection with an information program, postage, data processing services, telephone and shipping expenses related to the duties of RPR hereunder, upon submission of appropriate documentation to the extent reasonably available. 7. SALE OF CITY BONDS. RPR will not participate either directly or indirectly as underwriter in the sale of bonds issued by or on behalf of the CITY. 8. INVESTMENT ADVICE AND ASSISTANCE. RPR will provide advice and assistance as to the investment of certain proceeds from the sale of the CITY's debt obligations. However, it is acknowledged that the purchase and sale of securities or other investments, at the request of the CITY, whether such funds are for construction purposes, reserve fund deposits, for ultimate use in defeasing outstanding obligations of the CITY, or for investment of any funds of the City, do not constitute the rendering of financial advisory services and are not subject to the terms of this Agreement. RPR will charge its normal and customary commission for such purchase or sale transaction. All fees and commissions will be approved by the CITY prior to the execution of any investment related trade. 9. AUTHORIZATION AND COMMENCEMENT OF WORK. RPR shall not be entitled to any compensation, fees or expenses unless, RPR shall have, prior to the incurring of any expense or the performing of any service, received the authorization and permission therefor from the CITY. CITY has the right to specify the schedule RPR will use in performing assigned tasks and shall have the right to delay or exclude tasks to be performed by RPR. CITY shall only be obligated to pay for services actually rendered. 10. ASSIGNMENT. RPR shall not assign any interest in this Agreement and shall not transfer any interest, whether by assignment or novation without prior written consent of CITY. 11. CONFLICT OF INTEREST. RPR has not had, does not have, nor will entertain any implied, verbal or written understanding or contract with any other investment banking firm in regard to the negotiation of, or participation in, the approved financing plan except in its capacity as financial advisor to CITY. Unless otherwise directed and approved by CITY, RPR agrees not to be a member of an investment banking group proposing to provide financing to CITY. 12. AGREEMENT. This Agreement may be executed in one or more copies, each of which shall be an original, but the copies shall together constitute but one and the same contract which may be amended with the consent of both parties from time to time, and shall be construed under the laws of the State of Florida. Page 4 Execution Copy 13. EXECUTION. To witness this Agreement, the parties have caused their representatives to execute this Agreement as of the date signed by the Representative of CITY. 14. Either party may terminate this Agreement with or without cause, upon thirty (30) days written notice to the other party. In the event of termination of this Agreement, RPR shall be paid for all Debt Services rendered prior to termination. 15. Upon request by CITY, copies of all documents prepared by RPR pursuant to this Agreement shall be delivered to CITY by RPR, and said documents shall become the property of CITY, without restriction or limitation on their use. 16. MISCELLANEOUS PROVISIONS. a. All notices or other communications which shall or may be given pursuant to this Agreement shall be in writing and shall be mailed addressed to the other party at the address indicated herein or as the same may be changed from time to time. Such notice shall be deemed given on the day on which personally served; or ifby mail, on the fifth business day after being posted or the date of actual receipt, whichever is earlier. Notices shall be mailed to: CITY: Ms. Patricia Walker Finance Director City of Miami Beach 1700 Convention Center Drive 3rd Floor Miami Beach, Florida 33139 RPR: Rauscher, Pierce Refsnes, Inc. Miami Center - Suite 830 201 South Biscayne Boulevard Miami, Florida 33131 Attn: Percy R. Aguila, Jr. b. No waiver or breach of any provision of this Agreement shall constitute a waiver of subsequent breach of the same or any other provision hereof, and no waiver shall be effective unless made in writing. c. Should any provisions, paragraphs, sentences, words or phrases contained in this Agreement be determined by a court of competent jurisdiction to be invalid, illegal or otherwise unenforceable under the laws of the State of Florida such provisions, paragraphs, sentences, word or phrases shall be deemed modified to the extent necessary in order to conform with such laws, then shall be deemed severable, and Page 5 Execution Copy in either event the remaining terms and provisions of this Agreement shall remain unmodified and in full force and effect. d. Any litigation, arbitration or administrative proceeding arising hereunder shall be conducted in Dade County, Florida. By: ATTEST: ~ City Clerk RAUSCHER PIERCE REFSNES, INC. APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION By: 1t!~ qh~ City Attorney ~ By: /tA ;fu!--Itl1"-= Dale R. Henderson Managing Director F:\A TTOILEVLIRESO&ORDIRPRF A2.AGR September 12. 1997 (lO:35am) Page 6 Execution Copy MAYOR'S CERTIFICATE I, SEYMOUR GELBER, Mayor of the City of Miami Beach, Florida (the "City"), DO HEREBY CERTIFY that: 1. Pursuant to Resolution No. 96-22210, adopted November 20, 1996 (the II Bond Resolution") , the City Commission (the "Commission") of the City authorized the issuance of the City's General Obligation Bonds, Series 1996 (Park Improvement Projects) in an aggregate principal amount not to exceed $15,000,000 (the "Bonds") for the purposes set forth in the Bond Resolution, set forth certain details with respect to the Bonds and delegated, subject to the limitations contained in the Bond Resolution, certain matters in connection with the issuance of the Bonds, including the final award of the Bonds, to the Mayor as evidenced by a Mayor's Certificate. 2. All terms used herein in capitalized form and not defined are as defined in the Bond Resolution. 3. Pursuant to the authorization contained in the Bond Resolution and the recommendations of the Finance Director and the Financial Advisor, the Bonds are hereby directed to be issued by the City and awarded to the Original Purchasers upon compliance with the conditions contained in the Bond Resolution and the Bond Purchase Agreement and payment of the purchase price thereof. 4. The Bonds shall be issued in the aggregate principal amount of $15,000,000, shall be dated as of October 1, 1997, shall have interest payment dates of March 1 and September 1 of each year, commencing March 1, 1998, and shall consist of serial bonds maturing on September 1 of the years and in the principal amounts and bearing interest at the fixed rates set forth in Schedule A attached hereto. 5. The Bonds shall not be subject to redemption prior to maturity. 6. Based upon the recommendations of the Financial Advisor, the Mayor hereby determines to secure a Bond Insurance Policy issued by Financial Guaranty Insurance Company. 7. The purchase price to be paid by the Original Purchasers to the City for the Bonds shall be $14,842,140.25 (consisting of $15,000,000 principal amount of Bonds less original issue discount of $56,009.75 and underwriting discount of $101,850.00) plus accrued interest from October 1, 1997. The purchase price of the Bonds shall be paid in the manner provided in the Bond Purchase Agreement at closing. The underwritings discount for the Bonds is .679% of the principal amount of the Bonds. 009: [04548.DOCS.MIA180062]MAYORS-CERTIF. WITNESS MY HAND this 26th day of S ptember, 199 . elber, Mayor iami Beach, Florida APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION 1tIlfVJ~ ;)41; tv may Date 009: [04548.DOCS.MIA180062]MAYORS-CERTIF. 2 Maturity Date (September 1) 1998 1999 2000 2001 2002 2004 2005 2006 2007 D09: [04548.DOCS.MIA180062]MAYORS-CERTIF. SCHEDULE A Principal Amount Interest Rate $ 50,000 50,000 1,100,000 1,900,000 3,525,000 4,525,000 2,850,000 500,000 500,000 3.70% 3.80 3.90 4.00 4.10 4.30 4.30 4.40 4.50 A-1 Cb! /1 l___ A.--1 It. . /' . (/' . " ~Jt.) yJ . /L~_J,' Y/!.L d'~~... (~C . /j v f~ k~) ~1L',., ~jLr~KJ /' '~(~u [,,-,~) ~[/~1; L - If' /1 /) ;2 J! \' N1~t. ~)~ " ,. "'J v U"L ' I Ci ~ / j - Cj 7 l Pi)) cfu: Ctih?kTj;..; ,) L/i-f P~/~ jU'&V JiL 1JtNJf ~i~ l~ JJ c/2V;iul //L n rr c, /..,-.-' ,; 1(" IlL, J '.1 II..' v r:::I-,~ ./-. ',-- ) /... /-Yrtj RA TI N(;;~: Moody's:Aaa Standard & Poor'S:AAA UNDERLYING RATINGS: Moody's:A3 Standard & Poor's:A In the opinion of Bond Counsel, under existing law, (i) assuming continuing compliance by the City with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes; (ii) interest on the Bonds is not an item of tax preference for purposes of the altemative minimum tax imposed on individuals and corporations; and (iii) the Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except for estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended, on interest, income or profits on debt obligations owned by "corporations., "banks" and "savings associations", as defined therein. Interest on the Bonds may be subject to certain federal taxes imposed only on certain corporations, including the corporate alternative minimum tax on a portion of that interest. For a more complete discussion of other tax consequences of ownership of the Bonds, see the discussion under the heading "Tax Exemption" herein. $15,000,000 CITY OF MIAMI BEACH, FLORIDA GENERAL OBLIGATION BONDS, SERIES 1996 (Park Improvement Projects) Dated: October 1, 1997 Due: September 1, as shown below The Bonds (the "Bonds") will be initially delivered in book-entry form, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York, which will act as securities depository for the Bonds. Purchasers will not receive certificates representing their ownership interest in the Bonds purchased. Interest on the Bonds will accrue from the dated date and is payable semiannually on March 1,1998 and each September 1 and March 1 thereafter. See 'The Bonds-Book-Entry Only System." The Bonds are being issued to provide funds to (i) construct, renovate and rebuild parks and recreation facilities within the City's park system and (ii) pay the costs of issuance of the Bonds, including a premium for municipal bond insurance. In each year in which the Bonds are outstanding there shall be assessed, levied and collected a tax, without limitation as to rate or amount, on all taxable property within the City (excluding exemptions as provided by applicable law) sufficient in amount to pay the principal of and interest on the Bonds as the same become due. Such tax shall be assessed, levied, and collected in the same manner and at the same time as other City taxes are assessed, levied and collected. THE FULL FAITH, CREDIT AND TAXING POWER OF THE CITY HAVE BEEN PLEDGED FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS. Payment of the principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy to be issued by Financial Guaranty Insurance Company simultaneously with the delivery of the Bonds. [FGIC LOGO] The Bonds are not subject to redemption prior to maturity. MATURITIES, AMOUNTS,INTEREST RATES AND YIELDS. $15,000,000 Serial Bonds Maturity Date 01-Sep-98 01-Sep-99 01-Sep-2000 01-Sep-2001 01-Sep-2002 01-Sep-2004 01-Sep-2005 01-Sep-2006 01-Sep-2007 Principal Interest Amount Rate 50,000.00 3.700% 50,000.00 3.800% 1,100,000.00 3.900% 1,900,000.00 4.000% 3,525,000.00 4.100% 4,525,000.00 4.300% 2,850,000.00 4.300% 500,000.00 4.400% 500,000.00 4.500% ( Accrued interest to be added) Yield 3.700% 3.900% 4.000% 4.100% 4.150% 4.350% 4.400% 4.500% 4.550% This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. The Bonds are offered when, as and if issued and accepted by the Underwriters subject to the unqualified approval of legality by Squire, Sanders & Dempsey L.L.P., Miami, Florida, Bond Counsel. Certain legal matters will be passed upon for the City by Murray H. Dubbin, City Attorney and for the Underwriters by Eckert Seamans Cherin & Mellott, LC, Miami, Florida. Rauscher Pierce Refsnes, Inc. has served as Financial Advisor to the City in connection with the issuance of the Bonds. It is expected that the Bonds, in book-entry form, will be available for delivery in New York, New York on or about October 7, 1997. Smith Barney, Inc. William R. Hough & Co. Dated: September 26,1997 Goldman, Sachs & Co. PaineWebber Incorporated TABLE OF CONTENTS PAGE INTRODUCTION ..................................................... 1 PURPOSE OF THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2 THE PROJECT ...................................................... 2 ESTIMATED SOURCES AND USES OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2 THE BONDS ........................................................ 2 Description of the Bonds .......................................... 2 Book-Entry Only System .......................................... 3 Registration, Transfer and Exchange ................................. 4 SECURITY FOR THE BONDS ........................................... 5 MUNICIPAL BOND INSURANCE ......................................... 5 AD VALOREM TAXATION .............................................. 6 Tax Assessment ................................................ 6 Tax Collection .................................................. 7 DEBT SERVICE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 13 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 13 CHARTER AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 13 TAX EXEMPTION .................................................... 14 Original Issue Discount ........................................... 15 UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16 FINANCIAL ADVISOR ................................................. 16 RATINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16 LEGAL MATTERS .................................................... 16 CONTINUING DISCLOSURE ............................................ 17 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS .............. 17 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 17 CERTIFICATE CONCERNING THE OFFICIAL STATEMENT. . . . . . . . . . . . . . . . . . . .. 17 APPENDIX A - GENERAL INFORMATION REGARDING THE CITY OF MIAMI BEACH AND DADE COUNTY, FLORIDA . . . . . . . . . . . . . . . . . . . . . . . . . A-1 APPENDIX B - GENERAL PURPOSE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING SEPTEMBER 30, 1996 .................................... B-1 APPENDIX C - THE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. C-1 APPENDIX 0 - CONTINUING DISCLOSURE COMMITMENT. . . . . . . . . . . . . . . . . . .. 0-1 APPENDIX E - SPECIMEN COpy OF MUNICIPAL BOND INSURANCE POLICY . . . . . . E-1 APPENDIX F - FORM OF APPROVING OPINION OF BOND COUNSEL ............ F-1 CITY OF MIAMI BEACH MAYOR Seymour Gelber VICE MAYOR Susan F. Gottlieb CITY COMMISSION Sy Eisenberg Neisen O. Kasdin Nancy Liebman David T. Pearlson Martin Shapiro CITY MANAGER CITY A TIORNEY Jose Garcia-Pedrosa Murray H. Dubbin, Esq. FINANCE DIRECTOR CITY CLERK Patricia D. Walker Robert Parcher FINANCIAL ADVISOR Rauscher Pierce Refsnes, Inc. BOND COUNSEL Squire, Sanders & Dempsey L.L.P. No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the 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 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from City of Miami Beach, Florida and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, the Underwriters. 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. No registration statement relating to the Bonds has been filed with the Securities and Exchange Commission (the "SEC") or with any state securities agency. The Bonds have not been approved or disapproved by the SEC or any state securities agency, nor has the SEC or any state securities agency 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 BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH BONDS OFFERED HEREBY AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. OFFICIAL STATEMENT RELATING TO $15,000,000 CITY OF MIAMI BEACH, FLORIDA GENERAL OBLIGATION BONDS, SERIES 1996 (Park Improvement Projects) INTRODUCTION The purpose of this Official Statement, including the cover page and all appendices, is to furnish information with respect to the issuance and sale by the City of Miami Beach, Florida (the "City") of $15,000,000 aggregate principal amount of General Obligation Bonds, Series 1996 (Park Improvement Projects) (the "Bonds"). On September 8, 1994, the Mayor and City Commission of the City (the "Commission") adopted Resolution No. 94-21284 calling for a referendum relating to the issuance of not to exceed $15,000,000 of the City's general obligation bonds to construct, renovate and rebuild parks and recreation facilities within the City's park system. An election was held on November 8, 1994 at which the issuance of the Bonds was approved by the electorate. The Bonds are being issued pursuant to Resolution No. 96-22210 adopted by the Commission on November 20, 1996 (the "Resolution") and the Constitution and laws of the State of Florida, including, without limitation, Article VII, Section 12 of the Constitution, Chapter 166, Florida Statutes, as amended, and the City of Miami Beach Charter, as amended (the "Act"). The Bonds will be payable from ad valorem taxes assessed, levied and collected, without limitation as to rate or amount, on all taxable property within the corporate limits of the City (excluding exemptions as provided by applicable law). Such taxes shall be in addition to all other taxes collected and shall be in an amount sufficient to pay the principal of and interest on the Bonds as the same shall become due. The full faith, credit and taxing power ofthe City have been irrevocably pledged to the punctual payment of the principal of and interest on the Bonds as the same shall become due and payable. See "AD VALOREM TAXES" herein. Payment of the principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy to be issued by Financial Guaranty Insurance Company ("Financial Guaranty") simultaneously with the delivery of the Bonds. See "MUNICIPAL BOND INSURANCE" herein. For a complete description of the terms and conditions of the Bonds, reference is made to the proceedings authorizing the issuance of the Bonds. The description of the Bonds and of the documents authorizing and securing the same contained herein constitute summaries of certain provisions thereof, and do not purport to be comprehensive or complete. Reference is made to the Resolution, a copy of which is attached hereto as Appendix C, and to such other documents, copies of which are on file at the offices of the City, for a more complete description of such provisions. PURPOSE OF THE BONDS The Bonds are being issued to provide funds to (i) construct, renovate and rebuild parks and recreation facilities within the City's park system (the "Project") and (ii) pay the costs of issuance of the Bonds, including a premium for municipal bond insurance. THE PROJECT The Project involves the construction, renovation and rebuilding of City parks and other community recreational facilities as approved by a majority of qualified voters of the City on November 8, 1994. ESTIMATED SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of funds from the proceeds of the Bonds: Sources of Funds Principal Amount of Bonds Accrued Interest on the Bonds Net Original Issue Discount Total Estimated Sources of Funds $15,000,000.00 7 ~ ' .0106,110.0& 21., 0 . \::l 6t} .1n.1 A5 (5~, 'i 33.' $1 ~,QS-4,470.25 l~, 1'bc',11 S. Il Uses of Funds Deposit to Construction Account Deposit to Principal and Interest Account Cost of Issuance, including Municipal Bond Insurance Premium Underwriter's Discount Total Estimated Uses of Funds THE BONDS $14,685,000.00 ~~U.eo L.. '1.;7 0 C:.. (" 1.5J 1A~ t -" ~t 1 101'85000 I S"1, 2.H. $.t!1,9!: 1.110.25- \ ~ ,q ~ L ,I 7 3. \ 1 Description of the Bonds The Bonds will bear interest at the rates and mature in the amounts and on the dates as set forth on the cover page of this Official Statement. The Bonds will be dated October 1, 1997 and will bear interest therefrom payable semi-annually on March 1 and September 1 of each year, commencing March 1, 1998, until maturity. First Union National Bank, Miami, Florida, is acting as Paying Agent and Bond Registrar for the Bonds. The Bonds are not subject to redemption prior to maturity. 2 Book-Entry Only System . DTC will act as securities depository for the Bonds. The Bonds will be issued as fully- registered securities registered in the name of Cede & Co. as DTC's partnership nominee. One fully-registered Bond certificate for each maturity will be issued for the Bonds in the aggregate principal amount of such maturity as set forth on the cover page of this Official Statement, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book- entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. 3 Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor Cede & Co. will consent or vote with respect to Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. 's consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants accounts on payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor Securities Depository is not obtained, certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to the Beneficial Owners of the Bonds or their designees. The information in this section concerning DTC and DTC's book-entry system has been obtained from DTC. The City makes no representation as to the accuracy or correctness of the information provided in this section. Registration, Transfer and Exchange So long as the Book-Entry Only system is in place for the Bonds, the registered owner of the Bonds for all purposes will be Cede & Co., see "Book-Entry Only System" herein. In the event that the Book-Entry Only system is discontinued, the Beneficial Owners shall receive certificated bonds which will be subject to registration of transfer or exchange as set forth in this section. Transfer of any Bond may be registered upon the registration books maintained by the Bond Registrar upon delivery of such Bond to the Bond Registrar together with a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Bondholder or his attorney-in-fact or legal representative 4 and written instructions as to the details of the transfer of such Bond. The Bond Registrar shall register the transfer in the registration books and deliver a new registered Bond or Bonds of the same maturity and the same interest rate, in authorized denominations, for the same aggregate principal amount registered in the name of the transferee. The City and the Bond Registrar may charge the Holder of the Bonds an amount sufficient to reimburse them for any tax, fee or any other governmental charge required with respect to the registration of such transfer. The City, the Bond Registrar, and the Paying Agent may deem and treat the registered owner of any Bond as the absolute owner of such Bond for the purpose of receiving payment of the principal of and interest thereon. SECURITY FOR THE BONDS The Bonds are payable from ad valorem taxes assessed, levied and collected on all taxable property in the City (excluding exemptions as required by law) without limitation as to rate or amount. The direct annual property tax provided to pay the Bonds is required to be levied upon all taxable property within the corporate limits of the City, except property of such nature as may be exempt from taxation under the provisions of the Constitution and laws of the State of Florida (the "State"). The taxes so levied and collected shall be in addition to all other taxes so collected, shall be in an amount sufficient to pay the principal of and interest on the Bonds as the same shall become due and shall be assessed, levied and collected in the same manner and at the same time as other taxes. The proceeds of such tax shall be applied solely to the payment of the principal of and interest on the Bonds. See "AD VALOREM TAXATION" herein. The full faith, credit and taxing power of the City are irrevocably pledged to the punctual payment of the prinCipal of and interest on the Bonds as the same shall become due and payable. The City has covenanted to diligently enforce its right to receive such taxes and to enforce and collect such taxes. The City has further covenanted that it will not take any action that would impair or adversely affect its rights to levy, collect and receive such taxes, or impair or adversely affect in any manner the pledge made in the Resolution or the rights of the holders of the Bonds. MUNICIPAL BOND INSURANCE Concurrently with the issuance of the Bonds, Financial Guaranty Insurance Company ("Financial Guaranty") will issue its Municipal Bond New Issue Insurance Policy for the Bonds (the "Policy"). The Policy unconditionally guarantees the payment of that portion of the principal of and interest on the Bonds which has become due for payment, but shall be unpaid by reason of nonpayment by the issuer of the Bonds (the "Issuer"). Financial Guaranty will make such payments to State Street Bank and Trust Company, N.A., or its successor as its agent (the "Fiscal Agent"), on the later of the date on which such principal and interest is due or on the business day next following the day on which Financial Guaranty will have received telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from an owner of Bonds or the Paying Agent of the nonpayment of such amount by the Issuer. The Fiscal Agent will disburse such amount due on any Bond to its owner upon receipt 5 by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the owner's right to receive payment of the principal and interest due for payment and evidence, including any appropriate instruments of assignment, that all of such owner's rights to payment of such principal and interest shall be vested in Financial Guaranty. The term "nonpayment" in respect of a Bond includes any payment of principal or interest made to an owner of a Bond which has been recovered from such owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. The Policy is non-cancellable and the premium will be fully paid at the time of delivery of the Bonds. The Policy covers failure to pay principal of the Bonds on their respective stated maturity dates or dates on which the same shall have been duly called for mandatory sinking fund redemption, and not on any other date on which the Bonds may have been otherwise called for redemption, accelerated or advanced in maturity, and covers the failure to pay an installment of interest on the stated date for its payment. This Official Statement contains a section regarding the ratings assigned to the Bonds and reference should be made to such section for a discussion of such ratings and the basis for their assignment to the Bonds. Reference should be made to the description of the Issuer for a discussion of the ratings, if any, assigned to such entity's outstanding parity debt that is not secured by credit enhancement. The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation (the "Corporation"), a Delaware holding company. The Corporation is a subsidiary of General Electric Capital Corporation ("GE Capital"). Neither the Corporation nor GE Capital is obligated to pay the debts of or the claims against Financial Guaranty. Financial Guaranty is a monoline financial guaranty insurer domiciled in the State of New York and subject to regulation by the State of New York Insurance Department. As of March 31, 1997, the total capital and surplus of Financial Guaranty was approximately $1,123,724,061. Financial Guaranty prepares financial statements on the basis of both statutory accounting principles and generally accepted accounting principles. Copies of such financial statements may be obtained by writing to Financial Guaranty at 115 Broadway, New York, New York 10006, Attention: Communications Department (telephone number: 212-312-3000) orto the New York State Insurance Department at 160 West Broadway, 18th Floor, New York, New York 10013, Attention: Financial Condition Property/Casualty Bureau (telephone number: 212-602-0389). AD VALOREM TAXATION Tax Assessment The laws of the State of Florida provide for a uniform procedure to be followed by all counties, municipalities, school districts and special districts for the levy and collection of ad valorem taxes on real and personal property. The law provides that the county property 6 appraiser of each county shall prepare an assessment roll for all taxing units within the county and shall levy such millage, subject to constitutional limitations, as determined by each taxing unit, and the county tax collector shall collect all ad valorem taxes for all taxing units in the same manner as county taxes are collected. Municipalities are not permitted to levy ad valorem taxes at a rate of more than ten mills for all municipal purposes; however, there is no limitation as to rate or amount of ad valorem taxes levied for the purpose of paying general obligation bonds such as the Bonds. Real and personal property valuations are determined each year as of January 1 by the county property appraiser's office. State law requires, with certain exceptions, that property be assessed at fair market value; however, $25,000 of the assessed valuation of a homestead is exempt from taxation for a residence occupied by the owner on a permanent basis and who has filed for and received a homestead exemption. On November 3, 1992, the voters of the State approved an amendment to Article VII, Section 4 of the State Constitution establishing a limitation of the lesser of 3% or the increase in the consumer price index during the relevant year, on the annual increase in assessed valuation of homestead property, except in the event of a sale of such property during such year, and except as to improvements to such property during that year. Assessments as of January 1, 1995 are subject to the foregoing limitation. The amendment did not alter any caps on millage rates otherwise set forth in the State Constitution. Since the City has authority to increase the millage levy for general obligation debt such as the Bonds, to the amount necessary to satisfy the related debt service requirements, the limitation on increases in assessed value will not affect the ability of the City to pay the principal of and interest on the Bonds. The tax on personal property covers only tangible personal property and exempts, among other things, household goods and personal effects and inventory. The county property appraiser's office prepares the assessment roll and gives notice to each property owner of the proposed taxes. The property owner then has the right to file an appeal with the value adjustment board, which considers petitions relating to assessments and exemptions. The value adjustment board certifies the assessment roll upon completion of the hearings of all appeals so filed. Millage rates are then computed by the various taxing authorities and certified to the county property appraiser who applies the millage rates to the assessment roll. The taxes of all taxing units, including the City, are billed together by the county tax collector and each property owner is required to pay all such taxes without preference. Tax Collection All ad valorem taxes become due and payable on November 1 and become delinquent on the following April 1, at which time they bear interest at 18% per annum until a tax certificate is sold with respect to real property taxes and until paid with respect to personal property taxes. Discounts are allowed for early payment of 4% if paid in November, 3% if paid in December, 2% if paid in January, and 1 % if paid in February. All taxes collected are distributed by the county tax collector to the applicable taxing units. It is the tax collector's duty on or before June 1 of each year to advertise and sell tax certificates on real property tax delinquencies extending from the previous April 1. Delinquent taxes may be paid by the property owner prior to sale of tax certificates upon payment of all costs, delinquent taxes and interest at the rate of 18% per . 7 annum. The tax certificates must be for an amount not less than the taxes due, plus interest from April 1 to the date of sale at 18% per annum, together with the cost of advertising and expense of the sale. Each tax certificate is awarded to the bidder paying the above amounts who accepts the lowest interest to be borne by the certificate after its sale. If there are no bidders, the county must hold, but not pay for, such tax certificates. Thereafter, the county may sell such tax certificates to the public at any time at the principal amount thereof plus interest at 18% per annum and a fee. With respect to personal property tax delinquencies, such delinquent taxes must be advertised within 45 days after delinquency and, after May 1, the property is subject to warrant, levy, seizure and sale. The proceeds of the sale of the tax certificates are distributed to the respective taxing agencies. Tax certificates held by persons other than the county may be redeemed and cancelled by any person prior to the time a tax deed is issued upon payment of the face amount of the certificate plus interest, costs and other charges. Holders of tax certificates, other than the county, which have not been redeemed, may at any time after two years but prior to seven years from date of issuance, file an application for a tax deed with the tax collector upon payment of all other outstanding tax certificates on such property plus interest, any omitted taxes plus interest, and delinquent taxes plus interest covering the real property. Thereafter, the property is advertised for public sale at auction to the highest bidder, subject to certain minimum bids. If there are no other bidders, the holder of the tax certificate receives title to the land. If the tax certificate is held by the county and the county has not succeeded in selling it within two years, the county applies for a tax deed upon payment of all applicable costs and fees but not any amount to redeem the certificate. Such property is then also advertised for public sale to the highest bidder, subject to certain minimum bids. If there are no other bidders, the county may purchase the land for the minimum bid. In the case of unsold lands, after seven years the county will take title to such lands. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] 8 City of Miami Beach, Florida Property Tax Levies and Collections Fiscal Years 1986 through 1995 Assessed Valuations (2) Total Tax Including Excluding Total Collected Percent Year (1) Homesteads Homesteads Tax Levy In Year (3) Collected 1986 $3,751,470,889 $3,001,176,711 $41,029,091 $40,776,251 99.4% 1987 3,617,648,031 3,009,079,061 41,137,120 41,100,410 99.9 1988 3,786,641,043 3,105,045,655 42,449,079 41,266,273 97.2 1989 3,939,311,340 3,269,628,413 44,699,090 43,872,953 98.1 1990 4,376,417,088 3,632,426,183 47,824,523 46,497,571 97.2 1991 4,654,936,873 3,863,597,605 46,142,946 45,196,736 97.9 1992 4,726,911,403 3,932,985,608 45,610,535 46,102,609 101.1 1993 5,354,688,618 4,444,391,552 45,477,364 45,933,970 101.0 1994 6,369,445,913 5,286,640,108 47,359,133 46,885,783 99.0 1995 6,713,103,433 5,639,006,884 51,698,797 51,834,737 100.3 SOURCE: Comprehensive Annual Financial Report, 1996, City of Miami Beach, Florida. (1) Assessments as of January 1 of the year listed; bills mailed in October of that year; taxes become delinquent at the end of April of the subsequent year. (2) Assessments are at 100% of fair market value. (3) Actual collections of current and delinquent Real and Personal Property Taxes. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] 9 The table below sh.ows ad valorem tax rates and ad valorem tax levies for general government operations and debt service. City of Miami Beach, Florida Statement of Tax levies and Tax Rates Fiscal Years 1987 through 1996 Fiscal General Fund Debt Service Fund Total Year Tax Levv Millaae Tax Levv Millaae Tax Levv Millaae 1987 $29,009,372 9.666 $12,019,719 4.005 $41,029,091 13.671 1988 29,988,467 9.966 11,148,653 3.705 41,137,120 13.671 1989 30,944,855 9.966 11,504,194 3.705 42,449,049 13.671 1990 32,585,114 9.966 12,113,976 3.705 44,699,090 13.671 1991 36,200,773 9.966 11,623,750 3.200 47,824,523 13.166 1992 37,642,954 9.743 8,499,992 2.200 46,142,946 11 .943 1993 35,812,374 9.302 9,798,161 2.545 45,610,535 11.847 1994 35,514,506 8.238 9,962,858 2.311 45,477,364 10.549 1995 36,629,597 7.143 10,729,536 2.039 47,359,133 9.182 1996 41,330,511 7.499 10,368,286 1.862 51,698,797 9.361 SOURCE: Comprehensive Annual Financial Report, 1996, City of Miami Beach, Florida. [BALANCE OF PAGE INTENTIONAllY LEFT BLANK] 10 . City of Miami Beach, Florida Computation of Direct and Overlapping Debt September 30, 1996 DIRECT DEBT General obligation indebtedness Public improvement bonds (net of amount available) Non-self-supporting indebtedness: (1) Resort Tax Revenue Refunding Bonds, Series 1996 Gulf Breeze Government Loan Program Sunshine State Loan Pool Pension Obligation Bonds Tax Increment Revenue Bonds (2) $ 41,166,288 Less: Reserve funds $ 4,095,000 20,315,000 27,810,000 54,325,000 74.500.000 181,045,000 12.376.291 Total non-self-supporting indebtedness 168.668.709 $209.834.997 Total direct indebtedness OVERLAPPING DEBT (3) Dade County Total general obligation indebtedness Percent applicable to City - 6.93% (4) Total school district obligation indebtedness Percent applicable to City - 6.93% (4) Total net non-self-supporting indebtedness Percent applicable to City - 6.93% (4) 390,976,000 934,455,000 27,094,637 64,757,732 372,497,000 Total overlapping debt 25.814.042 117.666,411 $327.501.408 TOTAL DIRECT AND OVERLAPPING DEBT SOURCE: Comprehensive Annual Financial Report. 1996, City of Miami Beach, Florida. (1) Excludes self-supporting debt obligations. (2) Such bonds are secured by the tax increment revenues from the City Center/Historic Convention Village Redevelopment Area and a secondary pledge of the City's Resort Taxes. (3) All debt listed as Overlapping Debt is secured either solely from a tax source or from a combination of self- supporting revenues and a tax source. (4) Based upon 1995 assessed valuation figures for the City and Dade County. 11 . City of Miami Beach, Florida Summary of Direct and Overlapping Debt As of September 30, 1996 Financial Parameters Population (1995) Total Assessed Valuation - City of Miami Beach (Tax Year 1996) Total Taxable Valuation - City of Miami Beach (Excluding Homestead) (Tax Year 1996) SOURCE: City of Miami Beach, Florida, Finance Department. (Unaudited) Financial Ratios 1996 Percent of Assessed Valuation Percent of Taxable Valuation DIRECT DEBT Ad Valorem Non-self-supporting 0.56 2.29 0.67 2.76 Total Direct Debt Total Overlapping Debt Total Direct and Overlapping Debt 2.85 1.60 3.43 1.92 4.45 5.35 VALUATION Total Assessed Valuation Total Taxable Valuation SOURCE: City of Miami Beach, Florida, Finance Department. (Unaudited) [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] 12 93,681 $7,366,942,524 $6,114,562,295 Per Capita $ 440 1,800 $2,240 1,256 3,496 $78,639 65,270 DEBT SERVICE REQUIREMENTS The table below shows the debt service payable on the Bonds and the City's outstanding general obligation bonds. Outstanding The Bonds Debt Service Principal Interest 1997 $10,043,582.50 $ 0 $ 1998 9,618,132.50 50,000.00 1999 9,284,182.50 50,000.00 2000 7,118,882.50 1,100,000.00 2001 5,371,882.50 1,900,000.00 2002 3,227,332.50 3,525,000.00 2003 6,676,020.00 0 2004 0 4,525.000.00 2005 0 2,850,000.00 2006 0 500,000.00 2007 0 500,000.00 $51,340,015.00 $15,000,000.00 Total Total Debt Service $ $ SOURCE: City of Miami Beach, Florida, Finance Department. LITIGATION There is no litigation or other proceedings, of any nature now pending with regard to which the City has received service of process or, to the actual knowledge of the City, threatened against the City, with regard to which an unfavorable decision, ruling or finding (i) would materially and adversely affect the validity or enforceability of the Bonds, or (ii) would have a material adverse effect on the levy and collection of the ad valorem taxes pledged to the payment of the Bonds. CHARTER AMENDMENT On June 3, 1997, a majority of voters in the City approved a Charter amendment which was initiated by a citizen's petition drive. This Charter amendment requires a City-wide referendum prior to the approval of any increase in the permitted floor area ratio on any waterfront property located in the City. Prior to the approval of this Charter amendment, citizens were able to participate in public hearings with regard to increases in floor area ratio on parcels of waterfront land within the City, but there was no requirement of a referendum as a condition for approval of such increases. 13 One effect of the amendment was the termination of a development agreement involving certain parcels of land near the Miami Beach Marina (the "Marina"). The Marina is owned by the City and is leased to a private operator. As a result of the termination of that development agreement, the City may be required to construct a parking garage for the Marina, because one of the parking lots presently leased to the Marina is to be transferred to a private developer, pursuant to certain provisions which survived the termination of the development agreement. At this time the City is unable to ascertain the impact, if any, of the Charter amendment on the City's financial position, property values within the City, or future development within the City. However, as the Bonds are payable from ad valorem taxes levied specifically for the payment of such Bonds, the effect, if any, on the City's financial position will not impact the City's ability to pay the Bonds. TAX EXEMPTION In the opinion of Bond Counsel, under existing law, (i) interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103(a) of the Internal Revenue Code of 1986, as amended (the "Code"); (ii) interest on the Bonds is not an item of tax preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on individuals and corporations, and (Hi) the Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except for estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended, on interest, income or profits on debt obligations owned by "corporations," "banks" and "savings associations" as such terms are defined in said Chapter 220. Bond Counsel will express no opinion as to any other tax consequences regarding the Bonds. The opinion on federal tax matters will be based on and will assume the accuracy of certain representations and certifications and compliance with certain covenants of the City to be contained in the transcript of proceedings and which are intended to evidence and assure the foregoing, including that the Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the certifications and representations made by the City. The Code prescribes a number of qualifications and conditions for the interest on state and local obligations to be and to remain excluded from gross income for federal income tax purposes, some of which, including provisions for potential payments by the City to the federal government, require future or continued compliance after issuance in order for the interest to be and to continue to be so excluded from the date of issuance. Noncompliance with these requirements by the City could cause the interest on the Bonds to be included in gross income for federal income tax purposes and thus to be subject to federal income tax retroactively to the date of their issuance. The City will covenant to take actions required of it for the interest on the Bonds to be and to remain excluded from gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion. 14 Under Code provisions applicable only to certain corporations (as defined for federal income tax purposes), a portion of the excess of adjusted current earnings (which includes interest on all tax-exempt bonds, including the Bonds) over other alternative minimum taxable income is included in alternative minimum taxable income which may be subject to a corporate alternative minimum tax. In addition, interest on the Bonds may be subject to a branch profits tax imposed on certain foreign corporations doing business in the United States and to a tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes can have certain adverse federal income tax consequences on items of income, deductions or credits for certain taxpayers, including among them financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations and individuals otherwise eligible for the earned income credit. The applicability and extent of these or other tax consequences will depend upon the particular tax status or other tax items of the owner of the Bonds. Bond Counsel will express no opinion regarding such consequences. From time to time, there are legislative proposals in Congress which, if enacted, could alter or amend one or more of the federal income tax matters referred to herein or adversely affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to obligations (such as the Bonds) issued prior to enactment. The discussion of tax matters in this Official Statement applies only in the case of purchasers of the Bonds at their original issuance and at the respective prices indicated on the cover. It does not address any other tax consequences such as, among others, the consequence of the existence of any market discount to subsequent purchasers of the Bonds. Original Issue Discount The Bonds maturing after September 1, 1998 (collectively, the "Discount Bonds"), have been offered and sold to the public at an original issue discount ("010"). 010 is the excess of the stated redemption price at maturity (original principal amount) over the "issue price" of such Discount Bond. The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity are sold pursuant to that offering. For federal income tax purposes, 010 accrues to the owner of a Discount Bond over the period to maturity based on the constant interest rate method, compounded semiannually (or over such shorter permitted compounding interval selected by the owner). The portion of 010 that accrues during the period of ownership of a Discount Bond (i) is interest excludable from the owner's gross income for federal income tax purposes to the same extent and subject to the same considerations discussed above as to other interest on the Bonds, and (ii) is added to the owner's tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Bond. A purchaser of a Discount Bond at its issue price in the initial public offering who holds that Discount Bond to maturity will realize no gain or loss upon the retirement of that Discount Bond. 15 Owners of Discount Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of 010 properly accruable in any period with respect to such Bonds and as to other federal tax consequences and the treatment of 010 for state and local tax purposes. UNDERWRITING The Bonds are being purchased by the Underwriters, subject to certain terms and conditions set forth in the purchase contract between the City and the Underwriters, including the approval of certain legal matters by Bond Counsel and the existence of no material adverse change in the condition of the City from that set forth in the Official Statement. The Bonds are being purchased at a purchase price of $14,842,140.25 (representing a principal amount of $15,000,000 less an underwriters' discount of $101,850.00 less net original issue discount of $56,009.75), plus accrued interest. The Bonds are offered for sale to the public at the prices or yields set forth on the cover page of this Official Statement. The Bonds may be offered and sold to certain dealers at prices lower than such offering prices, and such public offering prices may be changed from time to time by the Underwriters. FINANCIAL ADVISOR Rauscher Pierce Refsnes, Inc., Miami, Florida is serving as financial advisor to the City. RATINGS Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's ("S&pII) which have assigned ratings to the Bonds, have done so with the understanding that, upon delivery of the Bonds, the Financial Guaranty Policy will be issued by Financial Guaranty. In addition, Moody's and S&P have assigned ratings of "A3" and "A" respectively, to the City's unenhanced general obligation debt. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same, at the following addresses: Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007 and Standard & Poor's, 25 Broadway, New York, New York 10004. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is not assurance that any such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agency concerned, if in the jUdgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of any such ratings may have an adverse effect on the market price of the Bonds. LEGAL MATTERS Certain legal matters incident to the authorization and issuance of the Bonds are subject to the approval of Squire, Sanders & Dempsey L.L.P., Miami, Florida, Bond Counsel, whose approving opinion will be available at the time of delivery of the Bonds. The proposed form of 16 such opinion is attached hereto as Appendix F. Certain legal matters will be passed upon for the City by Murray H. Dubbin, City Attorney, and for the Underwriters by Eckert Seamans Cherin & Mellott, LC, Miami, Florida, Counsel to the Underwriters. CONTINUING DISCLOSURE The City will covenant for the benefit of Bondholders to provide certain financial information and operating data relating to the City and the ad valorem taxes not later than 240 days following the end of each Fiscal Year (the "Annual Report"), and to provide, or cause to be provided, notices of the occurrence of certain enumerated events. The Annual Report will be filed by the City with each Nationally Recognized Municipal Securities Information Repository and with any state information depository with which filings are required to be made by the City. The notices of material events will be filed by the City with the Municipal Securities Rulemaking Board or each Nationally Recognized Municipal Securities Information Repository and with any state information depository with which filings are required to be made by the City. The specific nature of the information to be contained in the Annual Report or the notices of material events is contained in "APPENDIX D - Continuing Disclosure Commitment." These covenants have been made in order to assist the Underwriters in complying with S.E.C. Rule 15c2-12(b)(5). DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Florida law requires that the City make a full and fair disclosure of any bonds or other debt obligations which it has issued or guaranteed and which are or have been in default as to principal or interest at any time after December 31, 1975 (including bonds or other debt obligations for which it has served as a conduit issuer). The City is not and has not been in default as to principal and interest on bonds or other debt obligations which it has issued as the principal obligor or has guaranteed. MISCELLANEOUS All of the summaries or portions of the Resolution, the Act and any other documents described herein are made subject to all of the detailed provisions of such acts or documents, to which reference is hereby made for further information. The foregoing summaries do not purport to be complete statements of any of the provisions of such acts or documents. CERTIFICATE CONCERNING THE OFFICIAL STATEMENT Concurrently with the delivery of the Bonds, the City will furnish its certificate, executed by the Mayor, to the effect that, to the best of his knowledge, this Official Statement as of its date and as of the date of the delivery of the Bonds, does not contain an untrue statement of a material fact and does not omit any material 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 statements contained therein, in light of the circumstances under which they were made, not misleading. 17 This Official Statement has been duly executed and delivered by the Mayor, the City Manager and the City Clerk of the City of Miami Beach, Florida. Fo~cr POA~ City Clerk t/ City Manager 50659.10 APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION ~. %~7 18 APPENDIX A GENERAL INFORMATION REGARDING THE CITY OF MIAMI BEACH, FLORIDA AND DADE COUNTY, FLORIDA The following information pertaining to the City of Miami Beach, Florida (the "City") and Dade County, Florida (the "County") is set forth for purposes of background only. The Bonds are payable only from the ad valorem taxes levied for payment of the Bonds and moneys in certain funds and accounts under the Resolution, as described in this Official Statement. INTRODUCTION The City comprises seven square miles of land area and ten square miles of Biscayne Bay. The climate is tropical with an average annual temperature of 75 degrees fahrenheit, 24 degrees Celsius. The City is the home of the Art Deco Historic District consisting of one of the greatest concentrations of this style of architecture in the United States. Within this Historic District is the world famous Ocean Drive, which has been called the "Riviera" of Florida. The economy of the area is based on tourism. For fiscal year 1995, room rents, food and beverage sales accounted for an estimated $500 million in sales in the City. The population demographics of the City have drastically changed over the last fifteen years. In the 1980 Census the average age of the population was 65.3 years old. In the 1990 Census the average age had declined to 44.5 and 1995 estimates place it at 44 years old. The City is a group of islands between Biscayne Bay and the Atlantic Ocean and is connected to the mainland by four causeways. The County is the largest county in the southeastern United States in terms of population and one of the largest in terms of land area. The County consists of 2,042 square miles of land area. The population is mainly clustered along the coast with the western area of the County covering a part of the Everglades. There are numerous incorporated municipalities in the County, including Miami, Hialeah and Coral Gables, as well as the City. POPULATION The U. S. Bureau of the Census estimated the population of the City at 95,160 as of April 1, 1994. According to estimates of the City's Department of Economic and Community Development, the population is expected to increase to 95,881 by the year 2000 based on Census information. The County's population, as estimated by the Metro-Dade County Planning Department, was 1,990,445 for 1994 and they estimate growth to 2,260,000 by 2000. Population Projections, City of Miami Beach and Dade County, 1970 - 2010 Year City of Miami Beach Percent Chan2e Dade County Percent ~ 1970 1980 1990 2000 2010 87,072 (1) 96,298 (1) 92,639 (1) 95,881 (2) 98,757 (2) 10.6% (3.8)% 3.5% 3.0% 1,267,800 (1) 1,625,598 (1) 1,937,194 (1) 2,260,000 (3) 2,557,000 (3) 28.2% 19.2% 16.7% 13.1 % SOURCE: (1) u. S. Census (2) City Department of Economic Development (3) Metro- Dade Planning Depi.rtment Population Breakdown by Age City of Miami Beach, 1980 - 2000 Age Group 1980 1990 2000 00-14 6.5% 12.0% 20.6% 15-24 7.2% 9.8% 8.2% 25-44 13.7% 28.8% 21.5% 45-64 22.0% 19.3% 23.2% 65-74 24.4 % 11.5% 10.4% 75+ 26.2% 18.6% 16.2% Median Age: 65.3 44.5 43.7 SOURCE: Metro-Dade County Planning Department GOVERNMENT The City of Miami Beach is organized under the Commission-City Manager form of government. The governing body is an elected City Commission of six members and an elected Mayor. The City Commission sets policy for the administration of the City and appoints a City Manager and a City Attorney. The City Attorney appoints his staff and the City Manager is responsible for the appointment of the balance of the employees of the City. The City Commissioners are elected to staggered four year terms and the Mayor is elected every two A-2 years. Both the City Attorney and the City Manager serve at the pleasure of the City Commission. The City Manager carries out the policies of the City Commission, directs the operations of the City and, with the exception of the City Attorney's Office, has the power to appoint or remove all heads of the various Departments. CERTAIN CITY STAFF MEMBERS Jose Garcia-Pedrosa. City Manal!er Appointed City Manager May 17, 1995; Managing Partner, Tew, Garcia-Pedrosa & Beasley, 1990-1995; Partner, Tew, Jorden & Schulte, 1984-1990; Miami City Attorney, 1982-1984. Education: Harvard College, B.A.; Harvard Law School, J.D. . Deputy City Mana~er Robert Nachlin~er. City Finance Director Finance Director, City of Miami Beach, November, 1985; Finance Director, City of Beaumont, Texas, 1979-1985; Treasurer, Dallas Independent School District, 1975-1979; Chief Accountant, Dallas County, Texas, 1970-1975. Education: East Texas State University, B.B.A. and M.B.A. with Accounting and Finance Majors. Certification: Certified Public Accountant, 1975. SCOPE OF SERVICES The City provides a full range of municipal services, including police, fire, parks, water, sewer, sanitation and zoning. The City is continuing a process of "rightsizing", a process of adjusting the size of the government to the needs of the community. As a result of this process, the number of Departments has been reduced from twenty to twelve. The total workforce has remained approximately the same at 1 ,500; however, significant shifts have occurred in the personnel assigned to various activities. A-3 ECONOMIC AND DEMOGRAPHIC DATA INCOME The mean family income for Miami Beach increased by almost 92 percent, from $23,324 in 1980 to $44,738 in 1990. This compares well to growth rates experienced by Dade County, which experienced mean family growth rates of approximately 59 percent. In 1990, the mean family income for Miami Beach exceeded that of Dade County by 18 percent, while in 1980, they were almost even. Mean Family Incomes 1980 - 1990 1980 1990 $44,738 $37,903 % CHANGE Miami Beach Dade County $23,324 $23,846 91.8% 58.9% SOURCE: U.S. Bureau of the Census, 1980 and 1990 Per Capita Personal Income (Current Dollars) 1980 - 1992 Dade County Florida United States Current Percent Current Percent Current Year Dollars of U.S. Dollars of U.S. Dollars 1980 9,541 100.5 9,245 94.4 9,494 1981 10,704 101.5 10,386 98.5 10,544 1982 11 ,327 101.9 10,966 98.7 11,113 1983 12,027 103.0 11 ,633 99.6 11 ,681 1984 13,249 103.7 12,773 100.0 12,772 1985 13,992 100.6 13,898 99.9 13,910 1986 14,863 101.5 14,630 99.9 14,639 1987 15,689 101.3 15,584 100.6 15,484 1988 16,874 102.3 16,607 100.7 16,491 1989 17,963 101. 7 17,715 100.4 17,594 1990 17,823 95.3 18,539 99.2 18,696 1991 18,252 95.6 18,985 99.4 19,091 1992 17,340 86.2 19,797 98.5 20,105 1993 19,779 95.1 20,828 100.1 20,800 1994 21,677 99.4 21 ,807 SOURCE: Florida Statistical Abstract 1995, University Press of Florida and Miami Business Profile 96-97, the Beacon Council, 1996 A-4 EMPLOYMENT Employment figures by type of employment are not currently available for individual cities. They are available only for the county and state levels. City of Miami Beach Employment 1991 - 1994 1991 1992 1993 1994 Labor Force Employed 38,618 38,355 39,600 40,150 Labor Force Unemployed 4,415 5,040 3,917 4,112 Total Labor Force 43,033 43,395 43,517 44,262 Unemployment Rate 10.3% 11.6% 9.0% 9.3% SOURCE: Florida Department of Labor Major Employers on Miami Beach Rank Employer Service Number Employed 1. Mount Sinai Medical Center 2. City of Miami Beach 3. Fontainebleau Hilton 4. Miami Heart Institute 5. South Shore Hospital 6. DWG Corporation 7. Doral on the Beach 8. Eden Roc Resort & Spa 9. Alexander Hotel 10. Shawnee Beach Resort Hospital Government Hotel Hospital Hospital Diversified Ind. Hotel Hotel Hotel Hotel 2,800 1,569 1,172 890 873 600 400 375 230 200 SOURCE: Personnel Divisions of Companies A-5 Ten Largest Public and Private Employers Located in Dade County Public Employers Dade County Public Schools Metropolitan Dade County Federal Government State of Florida Agencies Jackson Memorial Hospital City of Miami Miami-Dade Community College Florida International University Veterans Affairs Medical Center City of Miami Beach Private Employers 32,474 28,000 18,000 17,400 7,216 3,189 2,668 2,627 2,610 1,620 American Airlines University of Miami BellSouth Telecommunications Florida Power and Light Burdines Department Stores Baptist Health Systems of Florida Kmart Publix Supermarkets Mount Sinai Medical Center of of Greater Miami Winn Dixie Stores SOURCE: The Beacon Council, Miami Business Profile, 1996-1997 A-6 8,200 7,481 5,000 3,589 3,400 3,275 3,000 3,000 2,800 2,672 BUILDING PERMITS City of Miami Beach, Florida Value of Building Permits Issued Calendar Years 1983 - 1996* Year New Construction Additions. Rehabilitations. Etc. Total Value 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996* $ 36,663,625 11,897,784 47,508,992 6,593,335 3,804,616 17,835,490 55,422,320 62,594,905 32,863,120 9,544,515 150,549,661 91,566,442 221,822,900 92,790,000 $ 23,052,215 28,587,383 17,736,022 19,026,892 69,897,353 36,334,701 51,804,525 34,366,872 40,545,996 40,398,741 81,156,235 68,358,627 48,865,427 49,224,391 $ 59,715,840 40,485,167 65,245,014 25,620,227 73,701,969 54,170,191 107,226,845 96,961,777 73,409,116 49,943,256 231,705,896 159,925,069 270,688,327 142,014,391 SOURCE: City Building Department * Nine Months through September, 1996 A-7 City of Miami Beach, Florida Direct and Overlapping Tax Rates ($1 per $1,000 of Assessed Value) For Tax Years 1983 Through 1996 City Tax General Service School Year (1) Fund Funds Total District County Other Total 1983 7.480 2.170 9.650 6.500 5.726 0.384 22.260 1984 7.570 2.080 9.650 7.200 6.297 0.399 23.546 1985 8.554 3.648 12.202 7.360 7.059 0.427 27.048 1986 8.554 4.005 12.559 7.316 8.768 0.439 29.082 1987 9.666 4.005 13.671 7.558 8.579 0.513 30.321 1988 9.966 3.705 13.671 7.551 8.965 0.564 30.751 1989 9.966 3.705 13.671 7.693 8.213 0.587 30.164 1990 9.966 3.705 13.671 9.001 7.368 0.602 30.642 1991 9.966 3.200 13 . 166 9.104 7.368 0.600 30.238 1992 9.743 2.200 11.943 9.528 8.795 0.599 30.865 1993 9.302 2.545 11.847 9.923 9.236 0.648 31.654 1994 8.238 2.311 10.549 10.266 9.202 0.652 30.669 1995 7.143 2.039 9.182 10.345 9.214 0.696 29.437 1996 7.499 1.862 9.361 10.389 7.946 0.687 28.383 SOURCE: City of Miami Beach, Comprehensive Annual Financial Report; City of Miami Beach; Adopted Budget 1995/96 Fiscal Year; Dade County Tax Collector (1) Assessments as of January 1 of the year listed; bills mailed in October of that year; taxes become delinquent at the end of April of the subsequent year. A-8 City of Miami Beach, Florida Property Tax Levies and Collections Fiscal Years 1983 - 1995 (Tax Years 1982 - 1994) Assessed Valuations Total Tax Including Excluding Total Collected Percent Year( 1) Homesteads Homesteads Tax Levv in Year(2) Collected 1982 $3,915,166,153 $3,174,249,255 $ 30,631,505 $ 30,481,087 99.5% 1983 4,020,957,209 3,244,369,197 30,948,029 30,948,029 98.9 1984 3,932,920,102 3,153,518,358 38,479,231 36,589,073 95.1 1985 3,870,883,186 3,097,123,808 38,896,778 37,682,843 96.9 1986 3,751,470,889 3,001,176,711 41,029,091 40,776,251 99.4 1987 3,617,648,031 3,009,079,061 41,137,120 41,100,410 99.9 1988 3,786,641,043 3,105,045,655 42,449,079 41,266,273 97.2 1989 3,939,311,340 3,269,628,413 44,699,090 43,872,953 98.1 1990 4,376,417,088 3,632,426,183 47,824,523 46,497,571 97.2 1991 4,654,936,873 3,863,597,605 46,142,946 45,196,736 97.9 1992 4,726,911 ,403 3,932,985,608 45,610,535 46,102,609 101.1 1993 5,354,688,618 4,444,391,552 45,477,364 45,933,970 101.0 1994 6,238,235,311 5,286,640,108 48,541,929 46,726,040 96.3 SOURCE: City of Miami Beach, Comprehensive Annual Financial Report (1) Assessments as of January 1 of the year listed; bills mailed in October of that year; taxes become delinquent at the end of April of the subsequent year. (2) Actual collections of current and delinquent Real and Personal Property Taxes. (3) Assessments are at 100% of fair market value. A-9 Owner Hotelerama Roney Plaza Associates, Ltd. Richard and Allen Morton Trs. et al Suncoast Towers East Inc. Tri-County Community Hospitals OBR Limited Miami Beach Healthcare Group 5600 Collins Corp. Suncoast Towers South Assoc. Forte Towers South Inc. City of Miami Beach Ten Largest Taxpayers 1995 Type of Property Real Property Assessed Value Hotel Apartments Apartments Apartments Hospital Hotel Hospital Apartments Apartments Apartments $ 114,000,000 48,500,000 39,378,298 31,010,000 25,800,000 21,100,500 17,745,000 17,424,000 17,000,000 15.137.844 Total (representing 6.6% of total assessed valuation) $ 347.095.642 SOURCE: Metropolitan Dade County; Department of Property Appraisal; City of Miami Beach Valuation Roll FILM AND PRINT INDUSTRY The film and print industry has become an important part of the Miami Beach economy. This industry has spent an average of approximately $50 million a year for the years 1990 through 1995 in the City for the production of movies and fashion photographs. Numerous international talent and modeling agencies have located in the City. A-I0 Film and Print Industry Permits Issued and Production Budgets For the Five Years 1990 - 1995 Year Permits Issued Production Budl!ets 1990 1991 1992 1993 1994 1995 1,281 1,604 1,901 1,871 1,827 1,939 $ 57,111,250 43,570,250 49,547,200 59,119,950 52,363,600 58,512,750 SOURCE: City of Miami Beach, Office of Public Information, Film and Print Division CONVENTION AND MEETING ACTIVITY Dade County and the Miami Beach Convention Center host a large number of conventions each year. Dade County Convention Activity for the Nine Years ended December 31, 1995 Number of Number of Number of Total Year Conventions Dele~ates Room Ni~hts Expenditures 1987 425 475,000 1,176,000 $285,000,000 1988 475 546,000 1,380,000 368,400,000 1989 515 600,000 1,500,000 405,300,000 1990 525 650,000 1,750,000 439,000,000 1991 500 620,000 1,674,000 428,000,000 1992 525 680,000 1,850,000 469,404,000 1993 550 704,000 1,970,000 485,971,200 1994 616 857,578 2,401,218 600,304,600 1995 660 929,603 2,597,288 958,210,800 SOURCE: Greater Miami Convention and Visitor's Bureau A-ll TOURISM AND VISITOR ACTIVITY Domestic and International Overnight Visitors Dade County 1994 - 1995 ORIGIN Latin America: Caribbean Central America South America Total Latin America 1994 1995 900,600 844,800 719,800 464,200 1.937.400 1.984.400 3,557,800 3,293,400 201,200 244,400 158,200 373,400 579.700 521.300 939,100 1,139,100 406,200 501,300 125.600 163.800 5,028,700 5,401 ,400 3.728.600 4.317.600 8,757,300 9,415,200 Europe: England Germany Other Europe Total Europe Canada Other International Total International Total Domestic Total Overnight Expenditures: Domestic International $2,513,470,000 4.402.705.000 $6,916,175,000 $3,291,134,000 5.102.092.800 $8,393,226,800 Total Expenditures Overnight Visitors by Region * Miami Beach Downtown Miami North Dade Airport Area South Dade Grove/Gables/Key Biscayne Other 1994 32.9% 15.1 % 18.4% 17.3% 8.7% 6.2% 1.4% 1995 32.3% 15.3% 18.1 % 14.4% 10.8% 8.2% 0.9% SOURCE: Strategy Research Corporation *Note: Based on a random sampling provided by Strategy Research Corp. A-12 Transportation The City is located within two hours by air from the major population centers of the northeastern United States and is also at the terminus of a highway network. The Port of Miami has become the world's largest passenger port. The Port estimates that more than 80% of cruise ship passengers arrive and depart Miami by air. The Port also specializes in trailer and container cargo. From 1988 to 1995, the total cargo handled increased from 2.6 million tons to over 5.8 million tons, an increase of 123 %. The Port has become the nation's leading port for exports to Latin America and the Caribbean. The summary of the growth in passengers and cargo for the previous five years is presented below: Passengers and Cargo Handled by Port of Miami Fiscal Years 1988-1996 Fiscal Year Cruise Passengers Cargo (in tons) 1988 1989 1990 1991 1992 1993 1994 1995 1996 2,502,411 3,100,055 2,734,816 2,928,532 3,095,487 3,157,130 2,967,081 2,974,703 3,052,450 2,602,556 3,206,417 3,590,937 3,882,284 4,596,481 5,198,293 5,574,252 5,840,815 5,859,538 SOURCE: Dade County Seaport Department Five separate airports owned and operated by Dade County are within easy reach of the City. Miami International Airport ranks 8th in the nation and 11 th in the world in the number of passengers using its facilities. It ranks fourth in the nation and sixth in the world in the movements of domestic and international air cargo. In 1995 the airport served 32.8 million passengers and handled over 1.7 million tons of cargo. A-13 Passengers and Cargo Handled by Miami International Airport Fiscal Year 1988-1996 Passengers (In Thousands) Cargo (in tons) F iscal Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 24,210 23,422 25,294 26,709 26,125 28,246 29,474 32,852 33,497 773,599 869,612 945,773 951,328 1,073,429 1,215,553 1,418,499 1,703,367 1,847,838 SOURCE: Dade County Aviation Department RECREATION There are numerous parks and playgrounds in the City of Miami Beach. Each park provides different amenities, from tennis and boccia courts to swimming pools and tot lots, to Vita courses and barbecue pits. There are four Vita courses, two swimming pools, and numerous tennis courts, including the Holtz Tennis Stadium which houses championship, professional and amateur tournaments. Offshore, the Gulf stream provides a variety of game fish, while the Miami Beach Marina provides an abundance of space to house boats as well as direct access to the Atlantic Ocean and Gulf stream. The Marina is a private development on City owned bay front land in the South Pointe area. Renovation has increased the number of boat slips to 388 making the Marina the largest in the area and a first class facility. In the north part of the City, the public can enjoy a leisurely sail in the quiet waters of the Intercoastal Waterway from the Miami Beach Sailport. The facility, though open to all ages, was specially designed to teach young adults the basic art of sailing on small prams. The City owns two championship golf courses and one Par 3 course that are open to the public. The two championship courses, Bayshore and Normandy, offer a clubhouse complete with a restaurant, lounge and pro shop. 50660 A-14 CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 1996 (Continued) 11. Sianificant Commitments and Contingencies A. The City has authorized $4,000,000 and $1,080,000 of general obligations bonds which will be used for street rights of way and street lighting, respectively. There are no plans at present to issue these bonds. The City has aiso authorized"$650,OOO of general obligation bonds which will be used for street construction. Plans as to when these bonds will be issued are indefinite at this time. B. The City, in the normal course of operations, is a party to various other actions in which plaintiffs have alleged certain damages. In all cases, management does not believe the disposition of these matters will materially affect the financial position of the City. C. The City participates in a number of Federal and State assisted grant programs which are subject to financial and compliance audits. Audits for these programs are to be conducted at a future date. and the City expects the amount, if any, of the expenditures which may be disallowed by the granting agency to be immaterial. D. The City has executed various major construction contracts in connection with construction of a parking garage. improvements to a pedestrian mall and the water and sewer supply and distribution system. The total amount of these executed contracts is $38,915,400 of which $17,538,261 was incurred during the year ended September 30, 1996 and prior fiscal years. The remainder of these costs are expected to be incurred during fiscal years 1997 and 1998. E. The Redevelopment Agency has committed to provide the developers of two hotels certain incentives. The Request for Proposal originally called for a $60 million incentive for which $10 million was designated for the African American Hotel. The Agency issued $70 million in bonds of which $39 million has been spent for land acquired for the main hotel and related hotel agreement negotiations. The Agency is also committed to constructing a parking facility for the hotels in order to provide 800 spaces. The cost of the garage, land acquisition and street improvements is estimated to be $16 million.. This commitment is in addition to the incentive to be provided to the developers. F. The City is in compliance with all terms of bond indenture agreements, all contracts, and federal, state and local laws and regulations. 12. Reconciliation of Contributed Caoital Beginning Contributed Capital Additions Reductions Ending Contributed Capital Enterprise $161,852,566 5,880,373 5.359.037 5162.373.902 Internal Service $ 7,698,848 1,687,481 1.978.024 5 7.408.305 13. Excess of Expenditures over Approoriations at Legal Level of Budgetary Control The Bass Museum Special Revenue Fund expenditures exceeded appropriations by $882 resulting from unanticipated program costs. B-36 ~"~~~-~~~~:,J'~,""'-~'!r1,f,r'\ APPENDIX C RESOLUTION NO. 96-22210 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $15,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF MIAMI BEACH, FLORIDA GENERAL OBLIGATION BONDS, SERIES 1996 (PARK IMPROVEMENT PROJECTS), TO CONSTRUCT, RENOVATE AND REBUILD PARKS AND RECREATION FACILITIES WITHIN THE CITY'S PARK SYSTEM; PROVIDING THAT SUC~ GENERAL OBLIGATION BONDS SHALL CONSTITUTE GENERAL OBLIGATIONS OF THE CITY AND THAT THE FULL FAITH, CREDIT AND TAXING POWER OF THE CITY SHALL BE IRREVOCABLY PLEDGED FOR THE PAYMENT OF THE PRINCIPAL OF AND THE INTEREST ON SUCH GENERAL OBLIGATION BONDS; MAKING CERTAIN COVENANTS AND AGREEMENTS IN CONNECTION THEREWITH; PROVIDING CERTAIN DETAILS OF THE BONDS; DELEGATING CERTAIN MATTERS IN CONNEC- TION WITH THE ISSUANCE OF THE BONDS TO THE MAYOR; AUTHORIZING THE NEGOTIATED SALE OF THE BONDS TO THE ORIGINAL PURCHASERS; APPOINTING A PAYING AGENT AND A BOND REGISTRAR; APPROVING THE FORM AND EXECUTION OF A BOND PURCHASE AGREEMENT; PROVIDING FOR A PRELIMINARY OFFI- CIAL STATEMENT AND AUTHORIZING THE EXECUTION OF AN OFFICIAL STATEMENT; AUTHORIZING OBTAINING A BOND INSURANCE POLICY AND ANY NECESSARY COVENANTS WITH RESPECT THERETO; COVENANTING TO PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE BONDS IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE lSc2 -12 AND AUTHORIZING THE EXECUTION OF A COMMITMENT WITH RESPECT THERETO; AUTHORIZING A BOOK-ENTRY REGISTRATION SYSTEM FOR THE BONDS; AUTHORIZING CERTAIN OFFICIALS AND EMPLOYEES OF THE CITY TO TAKE ALL ACTIONS REQUIRED IN CONNECTION WITH THE ISSUANCE OF SAID BONDS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Mayor and City Commission (collectively, the "Commission") of the City of Miami Beach, Florida (the "City") adopted Resolution No. 94-21284 on September 8, 1994 calling for a special election on November 8, 1994 to submit to the qualified electors of the City a bond referendum to decide whether the City should be authorized to issue general obligation bonds in a principal amount not to exceed Fifteen Million Dollars (the "Bonds") to construct, renovate and rebuild parks and recreation facilities within the City's park system (the "project"); and C-l ~~-:.r:";-~';"';w" ~ : CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30,1996 (Continued) Fund Eauity A Reservations/Designations of Fund Balance include the followina: 1. Reserve for Inventory - This amount is equal to the amount of inventory shown in assets. 2. Reserve for Employee Retirement System - This is the amount of the equity in the pension system that is to be used only for retiree benefits. 3. Reserve for Debt Service - This is the amount of fund equity in the Debt Service Funds which is set aside solely for the repayment of outstanding debt. 4. Reserve for Prepaid - This represents excess pension contributions by the City and bond issuance cost attributable to periods subsequent to September 30. 1996. 5. Reserve for Encumbrances - This is an amount equal to the outstanding purchase orders for goods and services at year end. 6. Reserve for Capital Improvements - This amount is the funds appropriated to capital projects or restricted to that use by City ordinance. 7. Reserve for Notes Receivable - This amount is equal to the amount of notes receivable shown in assets that will not be collected in the current period. 8. Designated for Contingencies - This is the amount of fund equity in the general fund which is set aside solely for emergencies. B. Reservation of Retained Earnings include the following items: Reserved Per Revenue Bond Indenture - The required debt service sinking fund and reserve accounts held by a Trustee or by the City in accordance with requirements of the bond issue, are reserved in the Parking Revenue and Water and Sewer Funds. 9. Segment Information for Enterorise Funds Enterprise Fund segment information for the year ended September 30, 1996 is as follows: Storm Water Water Parking Convention Utility and Sewer Revenue Sanitation Center Total Operating Revenues $ 2,690,376 $ 31.380.027 $ 10.464,072 $ 2,807,680 $ 5,999,864 $ 53,342,019 Depreciation 92,897 1,335,613 665,715 117,615 2.949,297 5,161.137 Operating Income (loss) 1,534.282 1,101,893 1,202,705 (690,946) (5,109,658) (1.961,724) Operating Transfers In (Out) (930,297) (243,000) 3,025,828 678.297 . 5,732,919 8,263,747 Net Income (Loss) 676,227 841,964 4,118.220 17.857 (10.458,084) (4,803,816) Depreciation on Capital Contributions 10,247 1,106,624 207,207 34,601 2,077,725 3,436,404 Current Capital Contribu- tions (Reductions) 67,443 (1.075,497) 1,905,484 (34.601) 1,580,217 2,443,046 Property, Plant and Equipment Additions(Reductions), Net 305,081 4,767,299 2,945,693 (1,286) 765,033 8,781.820 Total Assets 2,434,641 107,372,374 38,368.341 1,748.741 126,644,450 276,568.547 Net Working Capital 1.342,446 48,467,709 9,470.592 (29.319) 4.525,280 63.776,708 Long Term Debt 54,183.115 9.670.000 63,853,115 Total Fund Equity 2.176.394 44,402,690 27,467.130 1,123.390 124.090.335 199.259.939 B-14 ..-,.'...,".,....."""" ,_..... ',T\. CITY OF MIAMI BEACHt FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30t 1996 (Continued) 10. Cash and Investments The City's deposits at year end were entirely covered by Federal Depository Insurance, a collateral pool held by the State Treasurer for the benefit of all Public Deposits in Florida, or by collateral held in trust in the name of the City. The investments owned by the Retirement-Systems are held in Trust Accounts in the name of the System by a third party custodian who is the System's Agent. The City has adopted an ordinance designating the investments which are allowable for its cash management activities. The authorized investments include direct U.S. Treasury obligations, Bankers Acceptance~, Certificates of Deposit or Time Deposits, State or Municipal obligations, Commercial Paper and Repurchase Agreements. These investments are held in trust in the name of the City by an agent of the City and are therefore included in risk category 1 as defined in GASB code section 1.50. In addition to the investments below, the City has $4,831,904 of FGIC Capital Market funds with a trustee which is not risk categorized as these investments are not evidenced by physical securities. The City's cash management investments at year end (including restricted cash and cash with paying agent) are shown below: Market Value U.S. Treasury Obligations Certificate of Deposit Repurchase Agreements Total City Cash Management Investments City Funds Managed by Others and Cash on Hand Total Cash and Investments $ 154,443,905 2,233,277 18.030.853 $ 174,708,035 68.504.141 $ 243.212.176 Carrying Amount $151,685,956 2,233,277 17.986.154 $171,905,387 68.733.813 $240.639.200 The City has adopted ordinances which govern the investment of funds for all of the Employee's Retirement systems. These investments include U.S. Treasury Obligations, loans guaranteed by Government agencies, General Obligation or Revenue Bonds issued by States and Municipalities, dividend paying stocks of domestic corporations, bonds, notes or other interest bearirjg obligations of domestic corporations, and shares and accounts of savings and loan associations. The investments of the Retirement Systems are presented below: Cost Common Stock Corporate Bonds Money Market U. S. Government Securities Common and Commingled Trust Funds Other Bonds Cash on hand Total Cash and Investments $ 194,984,032 103,983,800 8,954,156 119,509,137 9,685,534 19,437,248 299.267 $ 456.853.174 B-35 J ..,..~""""'r'.-' Market Value $ 276,297,824 104,709,613 8,954,156 118.725,479 9,584,841 19,390,828 299.267 $ 537.962.008 CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30,1996 (Continued) B. Enterprise Fund Indebtedness PARKING FUND The parking Revenue Fund had the following changes in its current and long term debt outstanding for the year ended September 30, 1996: . Indebtedness Balance 10/1/95 Debt Issued Debt . Reoaid Balance 9/30/96 Special Obligation Bonds $ 9.680,000 $ 10.795.000 $ 10.190.000 $ 10.285.000 Parking Revenue Fund indebtedness at September 30, 1996, is comprised of the following issued indebtedness: $10,795,000 1996 Special Obligation Refunding Bonds due in annual installments through 2009: interest at 3.2% and 5.0% $ 10.285.000 On March 19,1996 the City of Miami Beach advance refunded $9,680,000 in Parking Revenue Special Obligation Bonds by placing the proceeds of the new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. The transaction resulted in a $1,244,810 deferred charge to be amortized over the life of the new debt. The trust assets and the liability for the deferred bonds are not included in the City's Finance Statements. At September 30, 1996, $10 million of bonds outstanding are considered defeased. The aggregate maturities of Long Term Debt as of September 30, 1996, are as follows: Year Ending Seotember 30 Bonded Debt Princioal Interest 1997 1998 1999 2000 2001 2002-2006 2007-2009 $ 615,000 640,000 660,000 685,000 715,000 4,055,000 2.915.000 $ 10.285.000 $ 450,795 429,885 406,205 381,125 353,725 1,281,950 290.250 $ 3.593.935 Total $ 1,065,795 1,069,885 1,066,205 1,066,125 1,068,725 5,336,950 3.205.250 $ 13.878.935 This refunding has resulted in an economic gain of $696,158 and a reduction of $1,030,788 in future debt service payments. Water and Sewer Fund The Water & Sewer Fund issued $59,060,000 in Water and Sewer Revenue Bonds, Series 1995, on June 8, 1995. The bonds will be repaid solely from pledged revenues of the Water and Sewer system. They are registered transcripts, and insured. The bonds were issued to construct various improvements and extensions to the Water and Sewer utility. Therefore, indebtedness of the Water and Sewer Fund at September 30, 1996 is as follows: $59,060,0001995 Special Obligation Bonds Due in annual installments through 2015: Interest at 4.20% - 5.40% $57.325.000 B-32 .-'V""~''''''{_.,l.~l, .. ~ ~..." CITY OF MIAMI BEACHt FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JOt 1996 (Continued) The aggregate maturities of Long Term Debt as of September 30, 1996, are as follows: Year Ending Bonded Debt Seotember 30 Princioal Interest Total 1997 $ 1,900,000 $ 2,932,039 $ 4,832,039 1998 1,985,000 2,849,389 4,834,389 1999 2,070,000 2,761,056 4,831,056 2000 2,165,000 2,667,906 4,832,906 2001 2,265,000 2,568,316 4.833,316 2002-2006 13,065,000 11,104,815 24,169,815 2007 -2011 16,800,000 7,366,519 24,166,519 2012-2015 16.985.000 2.341.888 19.326.888 $ 57.235.000 $34.591.928 $ 91.826.928 Less: Unamortized Bond Discount: 1.151.885 1.151.885 $ 56.083.115 $34.591.928 $ 90.675.043 7. Interfund Payables and Receivables Interfund payables and receivables at September 30, 1996, are as follows: tl!D.Q Receivables Payables General Fund $ 2.679.078 $ 4.063 Special Revenue Funds: FEMA Grant Fund Bass Museum Fund Warehouse Operations Fund State of Florida Ship Program Home Investment Partnership Resort Tax Fund Miami Beach Redevelopment Agency Community Development Block Grant Total Special Revenue Funds 33 435,000 20,000 155,000 33,636 97,370 1,231,828 5,500,000 49.320 7.522.154 3,935 33.764 37.732 Gulf Breeze Special Obligation Debt Service Fund 2.434.039 North Shore Bond Fund 2.434.039 Internal Service Funds: Property Maintenance Central Services Communications Self Insurance Fund Total Internal Service Funds 31 3,484 5,856 5.500.036 5.509.407 450,000 250,000 Total Receivables and Payables $ 10.660.256 700.000 $10.660.256 B-33 .:"'. '"'-_.~''' CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 1996 (Continued) Pension Obligation Bonds The City of Miami Beach issued $57,710,000 in taxable Series 1994 Special Obligation Bonds on March 1, 1995, for the purpose of eliminating the unfunded pension liability of three of the City's pension systems. These bonds are issued under the City's pledge and obligation to appropriate sufficient funds annually to fully satisfy the debt service on this issue. By eliminating the unfunded pension liability the City expects to realize an ongoing savings equivalent to the difference between the pension systems' assumed rates of return and the interest paid on this debt issue. Indebtedness from this issue at September 30, 1996, is as follows: $57,710,000 1994 Special Obligation Bonds Due in Annual Installments through 2021: Interest at 6.60% - 8.62% $54.325.000 The aggregate maturities of Long Ter' n Debt related to this issue, as of September 30, 1996, are as follows: Year Ending Bond Debt Seotember 30: Princioal Interest Total 1997 $ 850,000 $ 4,576,987 $ 5,426,987 1998 920,000 4,513,238 5,433,238 1999 990,000 4.441,937 5,431,937 2000 1,480,000 4,364,718 5,844,718 2001 1,600,000 4,248,168 5,848,168 2002-2006 7,610,000 19,289,637 26,899,637 2007-2011 8,880,000 16,133,237 25,013,237 2012-2016 14,215,000 11,526,498 25,741,498 2017-2021 17.780.000 4.248.400 22,028.400 $54.325.000 $73.342.820 $127.667.820 The City has entered into a ten-year interest rate swap agreement for its variable-rate 1994 Series Special Obligation Bonds. The City entered into this agreement to help stabilize it's interest cost. Based on the swap agreement the City owes interest calculated at a fixed rate of 8.27% to the counterparty to the swap. In return, the counterparty owes the City interest based on a variable rate that matches the rate required by the bonds. Only the net difference of $1.68 million in interest payments were actually received from the counterparty. The $57.7 million in bond principal is not exchanged; it is only the basis on which the interest payments are calculated. This agreement is terminated in the 1996-97 fiscal year. Advance Refunding of Soecial Obligation Bonds On July 3,1996 Dade County, Florida advance refunded the 1987 Dade County'Special Obligation and Refunding Bonds in the amount of $40,235,000 and the 1989 City of Miami Beach Subordinate Special Obligation Bonds in the amount of $6,495,000. Both of the issues had been carried on the books of the City, as the pledged income stream, (3% Convention Development Tax), was received by the City's trustee and utilized to service the debt under an interlocal agreement between Dade County and the City. However, the interlocal agreement was amended in July 1996, whereby the City relinquished control over tax collections dedicated to debt service in return for the advance refunding by Dade County, Florida, of the debt described above. The newly issued debt, therefore, became an obligation of Dade County, Florida, and was removed from the City's books. Removal of this debt is reflected as "debt repaid" in the long term debt footnotes. B-30 ;"f'~-","".~:;", ,'P'~"'i~T~~-"" CITY OF MIAMI BEACHt FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JOt 1996 (Continued) In addition, the City defeased $4,095,000 of Resort Tax Refunding Special Obligation Bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust assets and the liability for the defeased bonds are not included in the City's Financial Statements. At September 30, 1996, $4 million of bonds outstanding are considered defeased. Debt Service Reauirements to Maturity The annual requirements to amortize all General Long Term Debt excluding accrued compensated absences ou~tanding at September 30, 1996 including interest payments of $144,984,202 are as follow: General Long Term Debt Year Ending General Special Other Seotember Obligations Obligations Obligations Total 1997 10,043,583 13,841,399 53,468 23,938,450 1998 9,618,133 13.876,040 23,494,173 1999 9,284,183 13,876,354 23,160,537 2000 7,118,883 14,404,306 21,523,189 2001 5,371,883 14,507,412 19,879,295 2002-2006 9,903,353 69,685,575 79,588,928 2007-2011 63,007,276 63,007,276 2012-2016 56,390,192 56,390,192 2017-2021 46,634,704 46,634,704 2022-2023 11.799.609 11.799.609 Principal & Interest 51,340,018 318,022,867 53,468 369,416,353 Less: Interest ( 8.005.018) (136.977.867) ( 1.317) (144.984.202) Principal Only $ 43.335.000 $ 181.045.000 $ 52.151 $ 224.432.151 . The debt limit of the City of Miami Beach is specified in the City Charter as 15% of the assessed taxable valuation (excluding Tax Increment Revenue Bonds): Taxable Assessed Valuation Percentage applicable Debt Limit General Obligation Bonds outstanding at September 30, 1996 Legal Debt margin $ 5,639,006,884 15% 845,851,032 43.335.000 $ 802.516.032 B-31 . : >.'.. ',"':'{~;I-"~'.'-:"."" CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JO, 1996 (CoDtinuf'd) 6. Long Term Debt A. General Long Term Debt The City had the following changes in the general long term debt aCCOunt group for the year ended September 30, 1996: Balance Debt l~bt Balance Indebtedness 10/1/95 Issued --B.el)aid 9/30/96 General Obligation Bonds $ 51,055,000 $ $ 7,':'~O.000 $ 43,335,000 Special Obligation Bonds 187,735,000 49,300,000 5S,~90,OOO 181,045,000 Due to Developer 8,705,884 7,532,897 16,238,781 Parking & Environmental Contingency 3,600,000 ~75.000 2,625,000 Leases and Other 151,840 ~9,689 52,151 Accrued Compensated Absences 8.978.851 748410 --\l.1M2Q 8.807.436 $260.226.575 $ 57.581.307 $ 65."1'\'\4.514 $252.103.368 Amount "Due to Developer" represents a litigated award of damages plus '~ed interest on a disputed parcel of Redevelopment Agency property, where the developer was denl~1 certain development rights which resulted in a financial loss to the developer. This amount does not C\'nstitute a leasehold interest on the part of the Redevelopment Agency. Parking and Environmental Contingency represents the Miami BeaC't\ Redevelopment Agency's maximum financial exposure for parking facilities and environmental c1ea"~lp under an agreement with the developers. The General Obligation Bonds outstanding at September 30, 1996 consi"t of the following: Bonds Year Final Origin., Outstanding Issue Name Interest Rates ~ Maturity ~ 9/30/96 General Obligations 7.10-7.25 1986 1997 11,500,000 2,200,000 General Obligations 3.30-5.30 1992 2003 54,36{\OOO 39,935,000 General Obligations 3.75-6.35 1987 2002 3.0QQ~ 1.200.000 Total General Obligation Bonds $ 68.8t\\.),09.2 $ 43.335.000 B-28 - CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JO, 1996 (Continued) Soecial Obligation Bond Summary As of September 30, 1996 the outstanding principal of special obligation bond issues and repayment sources were as follows: ~ Reoayment Source Total Outstanding Princioal 1996 Resort Tax Revenue Refunding 1:10nds 1985 Gulf Breeze VRDS 1994 Sunshine State VRDS 1994 Pension Obligation Bonds 1989 Tax Increment Revenue Bonds 1993 Tax Increment Revenue Bonds 1996 Tax Increment Revenue Bonds 2% Resort Tax $ 4,095,000 Annual Appropriation Annual Appropriation Annual Appropriation RDA Tax Increment Revenue RDA Tax Increment Revenue RDA Tax Increment Revenue 20,315,000 27,810,000 54,325,000 5,220,000 24,075,000 45.205.000 $181.045,000 Additional information on these issues (i.e., interest rates, call date, prior maturities and current fiscal year activity) is located in the General Long Term Debt Account Group section of this report. Redevelooment Agency Tax Increment Revenue Bonds On August 1,1996, the Miami Beach Redevelopment Agency issued $37,500,000 (Series 1996A) and $7,705,000 (Series 1996B) in tax increment bonds. These bonds are secured by a lien upon and pledge of the Pledged Funds, which include (a) the Net Trust Fund Revenues received by the Agency from the Redevelopment Area, (b) the portion of the proceeds of the City's municipal resort tax levied and collected by the City and received by the Trustee, and (c) moneys and investments in the funds and accounts created under the resolution. The Series 1996A bonds were issued with interest rates of 7.86 percent to 8.95 percent payable semiannually on each June 1 and December 1, and will mature serially through December 1, 2022. The Series1996B bonds were issued with interest rates df 4 percent to 6 percent payable semiannually on each June 1 and December 1, and will mature serially through December 1, 2022. The bonds are subject to a trust indenture which requires that annual debt service requirements be fully funded upon receipt of Trust Fund Revenue and Supplemental Revenue, and that any shortage shall be funded based on the Supplemental Revenue Resolution. The combined annual debt service costs are presented below. Years ending Total Seotember 30. Princioal Interest Requirement 1997 $ 600,000 $ 3,086,952 $' 3,686,952 1998 545,000 3,669,320 4,214,320 1999 585,000 3,629.292 4,214,292 2000 635,000 3,585,626 4,220,626 2001 680,000 3,538,237 4,218,237 Thereafter 42.160.000 50.612.793 92.772.793 Total $45.205.000 $68.122.220 $113.327220 B-29 "";;;.Z';' .;...,.~",..,,^.,. . . CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30,1996 (Continued) Total estimated (using 10/1/95 valuation updated) pension benefit obligations applicable to the City employee members were overfunded by $37,536,418 at October 1, 1996 as follows: Pension Benefit Obligation: . Retirees and Beneficiaries currently receiving benefits and terminated employees not yet receiving benefits Current employees - Employee contributions Employer financed vested Employer financed non-vested Total pension benefit obligation Net assets available for benefits for valuation purposes at market $ 142,254,440 $ 21,368,715 33,224,247 34.562.106 89.155.068 231,409,508 267.431.548 Overfunded pension benefit obligation $ 36.022.040 3. Actuarially Determined Contribution Reouirements and Contributions Made The System's funding policy provides for actuarially determined periodic contributions that will provide sufficient assets to pay benefits when due. The members' contribution rate is fixed by the Laws of Florida and the City's contribution rate is actuarially determined by the "Frozen Entry Age Normal Actuarial Cost Method". The System has adjusted the City's contribution rate to eliminate the unfunded liability over 30 years using the straight-line method of amortization. The significant actuarial assumptions used to compute the City's contribution requirement are the same as those used to compute the Pension Benefit Obligation above. The contribution to the Systems for fiscal 1996 was $7,555,672 in accordance with actuarially determined requirements computed in the actuarial valuations as of 10/1/95. The contribution consisted of $6,781,203 normal costs (24.7% of current covered payroll). The City contributed $4,015,343 (11.8% of current covered payroll); employees contributed $3,540,329 (12.9% of current covered payroll). 4. Trend Information Trend information gives an indication of the progress made In the accumulation of assets to pay benefits when due. The trend information may be found in the Trust Fund Section of this report following the individual Financial Statements of the System. For the three years ended September 30,1994,1995, and 1996 respectively, available assets were sufficient to fund 80.3%,104.9%, and 106.5% of the Pension Benefit Obligation. Overfunded/(Unfunded) Pension Benefit Obligation represented (177.7%),42.8%, and 53.4% in 1994, 1995, and 1996, respectively, of annual payroll for employees covered by the System. Showing the unfunded Pension Benefit as a percentage of annual payroll approximately adjusts for the effects of inflation for analysis purposes. In addition, for the three years ended September 30, 1994, 1995 and 1996 the City's contributions to the System, made in accordance with actuarially determined requirements, were 39.5%, 210.1 %, and 11.4% respectively, of annual covered payroll. B-26 CITY OF MIAMI BEACHt FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JO, 1996 (Continued) E. Combined Selected Single Emoloyer PER Financial and Statistical Information Actuarial information presented in these tables are shown for evaluation dates of October 1, 1995, based on latest actuarial reports available. F. Defined Contribution Plan-401A The City offers all new non-civil service and civilian employees the option to participate in a defined contribution (401A) plan instead of the amended defined benefit plans, discussed previously, which took effect for new non-civil service employees on October 17, 1992 and on various dates for civilian employees. The employee is required to contribute 10% of his salary and the City matches with 10%. The 401A plan of each employee is the immediate property of the employee and investment of these funds is directed by the employee amongst choices of investment vehicles offered by two plan administrators. For the fiscal year ended September 30, 1996, the City contributed $540,150 to employee 401A plans covering 212 employees. The City's contribution represents $5,401,500 of covered payroll out of $62,387,939 total covered payroll cost for the City. G. Post Retirement Benefits The City paid $1,799,972 for health, life and dental insurance coverage for its 1293 participating retirees and beneficiaries during the fiscal year ended September 30, 1996. Under City ordinances, retirees are entitled to 50% of the cost of health, life and dental insurance to be paid by the City. Dependent coverage must be borne entirely by the retirees. These expenditures are considered current costs and no provision for future funding has been made. 8-27 .. CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JO, 1996 (Continued) 2. Funding Status and Progress The amount shown below as the "Pension Benefit Obligation" is a standardized measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of the System on a going concern basis, assess the progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among employers. The measure is the actuarial present value of credited projected benefits and is independent of the funding method used to determine contributions to the System. The pension benefit obligation was computed as a part of an actuarial valuation as of October 1, 1995. Significant actuarial assumptions used in the valuation include (A) a rate of return on the investment of present and future assets of 9% a year after administrative expenses, (B) projected salary increases of 6% a year compounded annually, (C) normal retirement at earlier of age 50 and 20 years of service or age 65, (0) 1983 Group Annuity Mortality Table and (E) Post-retirement benefit increases of 1.5% per year. Administrative expenses of the System are paid out of the pension fund. At October 1, 1995, the total pension benefit obligation applicable to the City employees (non-civil service) were as follows: Pension Benefit Obligation: Retirees and Beneficiaries currently receiving benefits and terminated employees not yet receiving benefits Current employees - Employee contributions including allocated investment income Employer financed vested Employer financed non-vested Total pension benefit obligation Net assets available for benefits for valuation purposes at market Overfunded pension benefit obligation $ 24,596,949 $ 4,428,414 12,231,891 910.967 17.571.272 42,168,221 48.520.887 $ 6.352.666 3. Actuarially Determined Contribution Requirements and Contributions Made The System's funding policy provides for actuarially determined periodic contributions that will provide sufficient assets to pay benefits when due. The members' contributions rate is fixed by the authorizing ordinance and the City's contribution rate is actuarially determined by the "Frozen Entry Age Actuarial Cost Method". The System had adjusted the City's contribution rate to eliminate the unfunded liability over 30 years using the straight-line method of amortization. The significant actuarial assumptions used to compute the City's contributed requirement are the same as those used to compute the Pension Benefit Obligation above. The contribution to the System for fiscal 1996 was $1,323,112 and was made in accordance with the actuarially determined requirements computed in the actuarial valuation as of October 1, 1994. The contribution consisted of City contributions of $602,174 (8.9% of current covered payroll); employees contributed $720,938 (10.62% of current covered payroll). B-24 CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JO, 1996 (Continued) 4. Trend Information Trend information gives an indication of the progress made in the accumulation of assets to pay benefits when due. The trend information may be found in the Trust Fund Section of this report following the individual Financial Statements of the System. For the years ended September 30, 1993, 1994, and 1995 respectively, available assets were sufficient to fund 97.3%, 95.8%, and 114.9% of the Pension Benefit Obligation. The Overfunded/(Unfunded) pension benefit obligation for 1993,1994, and 1995, respectively, represented (13.6%), (23.6%), and 92.6% of annual payroll for employees covered by the System. Showing the unfunded Pension Benefit as a percentage cf annual payroll approximately adjusts for the effects of inflation for analysis purposes. In addition, for the three years ended September 30, 1993, 1994, and 1995 the City's contributions to the System made in accordance with actuarially determined requirements, were 29.7%,23.1%, and 98.2% respectively of annual covered payroll. D. Retirement System for Police and Fire 1. Plan Oescriotion The Retirement Systems for Police and Fire are Single Employer Defined Benefit Pension Systems that cover substantially all Policemen and Firemen of the City, as established by Chapter 23414, Laws of Florida, Special Acts of 1945 (as amended through November 7, 1989) and Ordinance 89- 2640 (as amended through May 19,1993). The Plan covers 455 active employees and 377 retirees and beneficiaries. The City's payroll for employees covered by the System for the year endelj September 30,1996 was $28,064,685 out of a $62,387,939 total covered payroll cost for the Ci~. Employee members of the System prior to May 19, 1993 vest upon attaining 10 years of creditable service. Members are eligible to retire at age 50 at a benefit of 3% of final average salary for the first 15 years and 4% thereafter, based on the highest 2 years salary times years of service to a maximum of 90% of average monthly salary. Employee members are required to contribute 10 percent of salary. New employee members on or after May 19, 1993 will receive the same benefit levels except that retirement age will be 55, and the maximum benefit will be 80% of average monthly salary based on the three highest paid years' salary. The benefit provisions and all other requirements are established by legal requirement. 2. Funding Status and Progress The amount shown below as the "Pension Benefit Obligation" is a standardized measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-ratl3 benefits, estimated to be payable in the future as a result of employee service to date. The measun3 is intended to help users assess the funding status of the System on a going concern basis, assess the progress made in accumulating sufficient assets to pay benefits when due, and makl3 comparisons among employers. The measure is the actuarial present value of credited projected benefits and is independent of the funding method used to determined con!ributions to the System. The pension benefit obligation was computed as a part of an actuarial valuation presumed as of October 1, 1995. Significant actuarial assumptions used in the valuation, include (A) a rate of return on the investment of present and future assets of 8.5% a year compounded annually, (B) projected salary increases of 6% a year compounded annually, and (C) normal retirement occurs between ages 50-65. B-25 CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JO, 1996 (Continued) beneficiaries as of the last actuary report. The City's payroll for employees covered by the System for the year ended September 30, 1996, was $17,642,866 out of $62,387,939 total payroll cost for the City. Generally, employee members of the System vest after 5 years. Members are eligible to retire at age 50 at a benefit of 3% of final average salary based on the highest two years salary for the first 15 years of service and 4% of final average salary thereafter to a maximum of 90%. However, certain employees who are members of the labor union "AFSCME" employed on or after April 30, 1993, employees in the classification of "Other" (non-unionized classified employees), employed on or after August 1, 1993, and employees who are members of the labor union "CWA" employed on or after February 21, 1994, vest after 10 years of service and are eligible to retire at age 60 with 10 years creditable service at a benefit level of 3% of their highest three years' average salary times years of service to a maximum of 80%. These benefit provisions and all other requirements are established by City Ordinance. City employee members are required to contribute 10% of salary. 2. Fundino Status and Progress The amount shown below as the "Pension Benefit Obligation" is a standardized measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of the System on a going concern basis, assess the progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among employers. The measure is the actuarial present value of credited projected benefits and is independent of the funding method used to determine contributions to the System. The pension benefit obligation was computed as a part of an actuarial valuation presumed as of September 30, 1996. Significant actuarial assumptions used in the valuation include (A) a rate of return on the investment of present and future assets of 8.5% a year compounded annually, (B) projected salary increases of 6% a year compounded annually, (C) normal retirement occurs at the earlier of age 50 and 27 years of service or age 65, and (D) post-retirement benefit increases of 1.5% per year. Total pension benefit obligations applicable to the City employee members at October 1, 1995 is as follows: Pension Benefit Obligation: Retirees and Beneficiaries currently receiving benefits and terminated employees not yet receiving benefits Current employees - Employee contributions Employer financed vested Employer financed non-vested Total pension benefit obligation Net assets available for benefits for valuation purposes at market (cost of $145.8 million) $113,104,968 $ 10,743,821 37,138,881 2.047.096 49.929.798 163,034,766 177.266.560 $14,231.794 Overfunded pension benefit obligation B-22 "''''"'~''''''''-'_:\'''.'~~ CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JOt 1996 (Continued) 3. Actuarially Determined Contribution Reauirements and Contributions Made The System's funding policy provides for actuarially determined periodic contributions that will provide sufficient assets to pay benefits when due. The members' contributions rate is fixed by the authorizing ordinance and the City's contribution rate is actuarially determined by the "Frozen Entry Age Actuarial Cost Method". The significant actuarial assumptions used to compute the City's contribution requirements are the same as thpse used to compute the Pension Benefit Obligation above. The contribution is attributable to the plan's normal cost and unfunded liability. The contribution to the system for fiscal 1996 was $5,350,039 and was made in accordance with the actuaricllly determined requirements computed in the actuarial valuation as of October 1, 1994. The City contributed $3,549,633 (21.3% of current covered payroll); employees contributed $1,800,406 (10.8% of current covered payroll). 4. Trend Information Trend information gives an indication of the progress made in the accumulation of assets to ~'ay benefits when due. The trend information may be found in the Trust Fund Section of this report following the individual Financial Statements of the System. For the years ended September :30, 1993,1994, and 1995 respectively, available assets were sufficientto fund 112%,99% and 108.G% of the Pension Benefit Obligation respectively. In 1993,1994, and 1995, respectively, the Systl~m was overfunded/(underfunded) by 119.8%, (9.6%) and 83.8% based on actuary's use of the bCiok value of assets as a percentage of annual covered payroll. Showing the unfunded or overfunc ed Pension Benefit as a percentage of annual payroll approximately adjusts for the effects of inflation for analysis purposes. In addition, for the three years ended September 30, 1993, 1994, and 1~195 the City's contributions to the System, made in accordance with actuarially determined requirements, were 12.8%, 9.6% and 14.2% of annual covered payroll. C. Retirement System For Non-Civil Service Employees 1. Plan Oescriotion The Retirement System for Non-Civil Service Employees is a Single Employer Defined Benefit Pension System that covers all non-civil service employees of the City except for Policemen clnd Firemen as established by City Ordinance #88-2603. This Plan was established April 1, 1988 clnd covers 141 active employees and 90 retirees and beneficiaries, as of the last actuary report. The City's payroll for employees covered by the System for the year ended September 30, 1996 was $6,795,656 out of $62,387,939 total covered payroll cost of the City. Employee members of the System prior to October 18, 1992 vest after 5 years. Members are eligible to retire at age 50 with 5 years creditable service at a benefit of 4% of final average salary times years of service to a maximum of 90%. New employee members of the System on or after October 18, 1992 vest after 10 years. Members are eligible to retire at age 60 with 10 years creditable service at a benefit of 3% of final three years average salary times years of service to a maximum of 80%. These benefit provisions and all other requirements are established by City Ordinance. City employee members are required to contribute 10% of salary. B-23 .~, CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JO, 1996 (Continued) Central Service Fund _ This fund had a deficit balance in retained earnings of $246,880. Management estimates that this deficit will be eliminated during the next fiscal year by increased user charges; Property Maintenance Fund - This fund had a deficit balance in retained eamings of $392,435. Management estimates that this deficit will be eliminated during the next fiscal year by increased user charges; and Self-Insurance Fund _ This fund had a deficit fund balance of $3,291,464. Management estimates that this deficit will be eliminated over the next three years through increased funding. 3. f3udaetary Statements The accompanying Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual _ General, Special Revenue and Debt Service Fund Types presents comparisons of the legally adopted budget (more fully described in Note 1) with actual data on a budgetary basis. The City has not adopted budgets for all of its special revenue funds because most were under a multi-year budget, except for the Bass Museum and Resort Tax Revenue Funds. The City has adopted a budget for the General Obligation Debt Service Fund. Since accounting principles applied for the purposes of developing data on a budgetary basis differ from those used to present financial statements in conformity with generally accepted accounting principles, a reconciliation of timing and entity differences in the excess (deficiency) of revenues and other sources of financial resources over expenditures and other uses of financial resources for the year ended September 30, 1996 is presented below: Special Debt General Revenue Service Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (budgetary basis) $55,572,701 $( 341.207) $ 154,701 Adjustments: To adjust for current year encumbrances 446,185 3,625.247 Excess of revenues and other financing sources over expenditures and other financing uses related to non-budgeted funds 958.012 667.520 Excess of revenues and other financing sources over expenditures and other financing uses (GAAP basis) ~56.018.886 ~ 4.242.052 ~ 822.221 4. fixed Assets A. The following are the changes in general fixed assets for the year ended September 30, 1996: Land Buildings Permanent improvements Furniture and fixtures Equipment Construction in progress Balance 10/1/95 $ 75,706,064 31,779,437 63,158,158 683,522 2,634,046 27 956 946 ~201.918.173 Additions 4,455,938 Deletions Balance 9/30/96 80,162,002 31,779,437 64,325,265 716,458 2,713,920 47.033.125 226.730.207 1,167,107 39.591 266,990 Z8.160 263 ~.Oa9.889 6,655 187,116 ~.084.084 9.277.855 B-20 CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBERJO,1996 (Continued) B. A summary of proprietary fund type property, plant. and equipment at September 30, 1996, follows: Balance Balance 10/1195 Additions Deletions 09/30/96 Mains and lines $ 35,832,161 441,697 998 36,272,860 Land 17,070,909 3,044,461 20,115,370 Buildings and structures 159,197,038 4,663,323 15,160 163,845,201 Meters and hydrants 8,773,722 1,128,357 1,208 9,900,871 Furniture, equipment and vehicles 40,826,881 5,694,982 2,647,252 43.874,611 Improvements other than buildings 2.700.558 972,938 1.727,620 264,401,269 14,972,820 3,637,556 275,736.533 Less accumulated depreciation 78.790.311 8.329.610 2.379,930 84.739,991 185,610,958 6,643,210 1,257,626 190,996,542 Construction in progress 11.731.642 7.694.846 2.550.176 16876,312 Net property, plant and equipment $197.342.600 14.338.056 3.807.802 207 872,854 5. Emoloyee Retirement A. 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 for distribution to employees until termination, retirement, death or unforeseeable emergency. All amounts of compensation deferred under the Plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid ot made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the Provisions 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's Fiduciary responsibilities include "due care" in facilitating the transfer and investment of employee contributions and selecting the third-party administrators. Revenue sources are voluntary payroll deductions from employees and earnings on investments. As of September 30, 1996, there were 631 participants in the Deferred Compe'nsation Plan with a:ssets at a carrying and market value of $22,400,523. It is the opinion of counsel that the City has no liability for losses under the Plan and the City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. B. Retirement Svstem For General Emolovees 1. Plan Descriotion The Retirement System for General Employees is a Single Employer Defined Benefit Pension System that covers all civil service employees of the City except for Policemen and Firemc~n as established by City Ordinance #1901. This Plan covers 563 active employees and 960 retirees and B-2\ . CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 1996 (Continued) 2. Transactions to reimburse a fund for expenditures made by it for the benefit of another fund are recorded as expenditures in the disbursing fund and as a reduction of expenditures in the receiving fund. 3. Transactions which are recurring annual transfers between two or more budgetary funds are recorded as transfers in and out. 4. Transactions recording equity contributions between funds: the receiving fund records such transactions as transfers in and additions to fund balances or, in the case of proprietary funds to a contribution account. The disbursing fund records the transaction as a transfer out and a reduction of fund balance or, in the case of proprietary fund, as a reduction of equity. P. Encumbrances Encumbrance accounting, under which purchase order commitments for the expenditures of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extens ion of formal budgetary integration in the general and special revenue funds, capital project funds and expendable trust fund. Encumbrances outstanding at year-end are reported as reservations of fund balances, since they do not constitute expenditures or liabilities. Q. Reclassifications Comparative total data for the prior year, which has been reclassified to conform with the current year presentations, has been presented in the accompanying financial statements in order to provide an understanding of changes in the City's individual fund statements. R. 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, results of operations or cash flows in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in aggrHgation of this data. S. Prepaid Exoenses Expenditures made for services that will benefit periods beyond September 30, 1996 are recorded as prepaid items and accordingly a portion of fund balance has been reserved to indicate that these funds are not available for appropriation. . T. Risk Management - JudQements and Claims The City is exposed to various risks of loss from civil liability to other parties (automobile liability, general liability, police professional liability, public official liability); statutory workers' compensation benefits for injured employees; and the theft or accidental damage to City property (buildings and business contents). During FY 1985/86, the City established an intemal service Self-Insurance Fund to account for and fund the above risks. The Self-Insurance Internal Service Fund pays for all claims and judgements made against the City for accidental losses for which the City is self-insured. The Fund pays the premium costs for insurance policies to protect the City's ultimate self-insured exposures. Workers' compensation excess insurance provides coverage for individual claims above $550,000. All-Risk property insurance (exclusive of windstorm coverage) provides coverage for losses to City buildings above various deductible amounts. There were no settlements in excess of applicable insurance. B-18 , -~":,1',~,"~~;:r~~'~' CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30,1996 (Continued) The Fund derives revenue from all City departments through an allocation formula and from investment income earned on reserved funds. The required funding levels of reserves and future needs is determined by an annual actuarial report produced by an external actuarial firm. The City funds and reserves on an "occurrence" basis, reserving for anticipated and known claims when they occur, regardless of the ultimate date of payment or disposition. Changes in the funds' claims liability amount during 1996 were: Unpaid ~Iaims, 10/1/95 Incurrea Claims (includes incurred but not reported claims) Less: Claim payments Unpaid claims, 9/30/96 $ 15,107,000 3,286,000 4.135.000 $ 14.258.000 U. Fund BalanceRestatement The City has restated it's fund balance as of October 1, 1996 for the Special Revenue Funds. The Miami Beach Visitor and Convention Authority and the Miami Beach Health Facilities Authority were accounted for in the primary government totals as of September 30, 1995 in a blended presentation. As of October 1, 1996, these component units are presented in a discrete presentation. Combining Special Revenue Fund Deficit as of September 30, 1995 Less: Miami Beach Visitor & Convention Authority Miami Beach Health Facility Authority Fund Deficit restated as of October 1, 1996 $( 3,114,355) 325,652 20.590 $( 3.460.597) V. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management's estimates. 2. Individual Fund Deficits in Fund Balance/Retained Earnings The following funds had a deficit at September 30, 1996 in fund balance/retained earnings: Miami Beach Redevelopment Agency Fund - This fund had a deficit balance of $5,190,349. Management anticipates the elimination of this deficit during Fiscal 1997 through the issuance of Tax Increment Revenue bonds and subsequent repayment of Agency indebtedness to the City; Bass Museum Fund - This fund had a deficit fund balance of $16.969. This deficit will be eliminated by grant revenues in Fiscal 1997; FEMA Fund - This fund had a deficit balance of $688,835. The City has adopted a conservative approach on FEMA funding and has chosen not to recognize funds committed but not yet received on individual projects which have not been completed but for which expenditures have been incurred. It is anticipated that this deficit will be eliminated during the year as the City receives additional funds from FEMA to cover these expenditures; Sanitation Fund - This fund had a deficit balance in retained earnings of $203,818. Management estimates that this deficit will be eliminated through reduced operating expenses and increased user charges during the next two years; B-)9 CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JO, 1996 (Continued) 7. Accrued Interest Receivable - This amount represents the interest earned but not collected on City investments at year end. G. Due From and Due to Other Funds During the course of its operations, the City has numerous transactions between funds to finance operations, provide services, construct assets and service debt. To the extent that certain transactions between funds have not been paid or received as of September 30, balances of interfund amounts receivable or payable have been reflected. All amounts receivable from or payable to other funds are to be settled with expendable, available financial resources. H. Inventories Inventories are stated at cost. Cost is determined principally by the average cost method, which approximates the first-in, first-out method. Inventories are accounted for on the consumption basis. Fund balance has been reserved for the amount of inventories since they are not available for appropriation and expenditure as of September 30, 1996. I. Fixed Assets 1. General Fixed Asset Account Group The General Fixed Assets Account Group provides physical and dollar value accountability. Depreciation of General Fixed Assets is not recognized in the City's accounting system. The costs of purchasing or constructing by the various Governmental and Fiduciary funds are recorded as expenditures in those funds. These expenditures are capitalized in the general fixed assets account group at historical cost. Gifts or contributions of property received are recorded at their estimated fair market value at the time of receipt by the City. Public domain (infrastructure) general fixed assets consisting of certain improvements other than buildings, including roads, bridges, curbs, gutters, streets and sidewalks, drainage systems and lighting systems are capitalized along with other general fixed assets. Interest costs on bond funds are capitalized into construction work in progress. 2. Proprietary Funds The fixed assets recorded in these funds are recorded at historical cost or at valuations which approximate cost. Depreciation of all exhaustible fixed assets used by proprietary funds is charged as an expense against operations. Accumulated depreciation is reported on proprietary fund balance sheets. Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows: Buildings Improvements Equipment 30-80 years 10-80 years 2-20 years J. Deferred Revenue In the City's General and Debt Service Funds, the balance of delinquent property taxes not collected within 60 days of year end and City billings for fines and assessments at September 30 are offset by Deferred Revenues. Such amounts do not meet the revenue recognition criteria since they are measurable but not available. B-16 CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JO, 1996 (Continued) K. Accrued Comoensated Absences The City accounts for compensated absences by accruing a liability for employees' compensation for future absences according to the guidelines of Governmental Accounting Standards Board (GASB) Statement No. 16, Accounting for Compensated Absences. The City's vacation and sick leave policies grant a specific number of days of vacation and sick leave with pay. In addition, these policies provide for paying a regular employee after a six-month probationary period for accumulated, unused vacation and sick leave upon termination up to a maximum of 2,088 hours. For certqin employees, sick pay to be paid upon termination is limited to a maximum of one half of the amount aCcumulated. These hours are payable at the employee's current pay rate. The liability for this obligation is recorded in the general long term debt account group since the nature of the liability will not require the use of available resources. L. LonQ Term Debt Long term debt obligations, either General Obligation or Revenue Bonds, used to finance proprietary fund operations and payable from revenue of the proprietary funds are recorded in the applicable fund. General Obligation Bonds and other forms of long term debt supported by general revenues are obligations of the City as a whole and not its individual constituent funds. Accordingly, such unmatured obligations of the City are accounted for in the General Long Term Debt Account Group. M. Fund Balances 1. Reserved Fund Balance - A fund balance reservation indicates that this portion of fund equity has been segregated for specific or legal purposes or is not otherwise available for appropriation. 2. Designated Fund Balance - A fund balance designation indicates that this portion of fund equity has been segregated based on tentative plans of the City. 3. Undesignated Fund Balance - This portion of fund equity is available for any lawful use by the City. N. PropertY Taxes Property values are assessed (levied) at fair market value (100%) by the Dade Oounty Property Assessor as of January 1 of each year, at which time taxes become an enforceable lien on property. State of Florida Amendment #10 to the Florida Constitution known as "Save our Homes" limits assessment increases on homestead property to the lessor of 3% or the Consumer Price Jndex. Tax bills are mailed in October and are payable upon receipt with discounts at the rate of 4% if paid in November, decreasing by 1 % per month with no discount available if paid in the month of March. Taxes become delinquent on April 1 of the year following the year of assessment and State law provides for enforcement of collection of personal property taxes by seizure of the property or by the sale of the property or by thl~ sale of interest bearing tax certificates to satisfy unpaid property taxes. The procedures result in the collection of essentially all taxes prior to June 30 of the year following the year of assessment. O. Interfund Transfers Following is a description of the four basic types of interfund transactions made during the year and th e related accounting policies: 1. Transactions for service rendered or facilities provided are recorded as revenue in the receiving fun d and expenditures in the disbursing fund. B-17 I >t- CITY OF MIAMI BEACH, FLORIDA NOn~s TO FINANCIAL STATEMENTS YEAR ~NDED SEPTEMBER JO, 1996 (Continued) Proorietarv Fund Tyoes Proprietary Funds are accounted tor on an economic resources measurement focus. The government applies all applicable FASB prtJ{1ouncements issued on or before November 30, 1989 in accounting and reporting for its proprietary o~tions. In accordance with Government Accounting Standards, the City has elected not to apply FASB pronouncements issued after that date to its proprietary operations. All assets and all liabilities (whetht'f current or non-current) associated with their activity are included on their Balance Sheets. Their reported fund equity (net total assets) is segregated into contributed capital and retained earnings compont'nts. Proprietary fund measurement focus is on determination of net income, financial position, and changes in cash flows. The generic funds in this category are Enterprise and Internal Service Funds. Fiduciary Fund Tyoes Fiduciary Fund Types account tor assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other Governments and other funds. These include Expendable Trusts, Pension Trusts and AgencY Funds. Expendable Trust Funds are accounted for in essentially the same manner as Governmental Funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve the measu~ment of results of operations. The two account groups in this nnancial report are used to provide accounting control and accountability for the City's General Fixed ~ts and General Long Term Debt Group. These two account groups are: General Fixed Assets This account group is established to account for all fixed assets of the City, other than those accounted for in the Propl'ietary Funds. General Long Term Debt This account group of is e~tablished to account for all long term debt of the City other than those accounted for in the Propdetary Funds. C. Basis of Accounting The accrual basis of accounting is used for all funds except for the Governmental Fund types, Expendable Trust Funds and Agency Funds which use the modified accrual basis of accounting. Modifications from the accrual basis to present the modified accrual basis are as follows: 1. Revenues are recognized when they become both measurable and available to finance expenditures of the current period. property taxes and intergovernmental revenues are the significant revenue sources considered susceptible to accrual. 2. Purchases of capital assets providing future benefits are considered expenditures and are accounted for in the General Fixed Assets account group. Appropriations for capital projects are carried forward until such time as the projeCt is completed or terminated. 3. Interest on General Long-Term Indebtedness is not accrued but is recorded as an expenditure on its due date. I I I: " j I 4. Outstanding encumbrances at year end are excluded from current year expenditures and reported as reservations of fund equity. I J l B-14 CITY OF MIAMI BEACHt FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JOt 1996 (Continued) D. Budgetary Data At least 45 days prior to the close of the fiscal year, the City Commission is presented with a proposed budget The proposed budget includes proposed expenditures and the means of financing them. AftE!r Commission review and public hearings, the budget is adopted prior to October 1. Budgets are approved on a fund by fund basis and management may transfer amounts between line items or departments as long as the transfer does not result in an increase in total fund budget The budget presented is the final adopted budget which has been amended during the year. Budgets are considered a management control and planning tool and as such are incorporated into the accounting system of the City. Budgets are adopted on the modified accrual basis of accounting wit, the inclusion of encumbrances as reductions in the budgetary amount available (Budgetary Basis). Appropriations not encumbered lapse at year end. Outstanding encumbrances at year end are reported as a reservation of fund equity. The Statement of Revenues and Expenditures, Budget and Actual is presented for the funds which have annual budgets. Funds and Grants that have multi-year project budgets are not presented in that statement. There were 3 supplemental budgetary appropriations during the past fiscal year. E. Cash and Investments City investments and equity in cash clearing are held in cash deposits, certificates of deposit, savings deposits, United States Treasury Obligations and repurchase arrangements. The investments are stated at cost which approximates market. Retirement system investments are held in United States Treasury Obligations, common stocks, commercial paper, mortgages and cash equivalents. The investments are stated at market as determined by closing market prices at the end of the fiscal year. For the purpose of the Statement of Cash Flows for the Proprietary Funds, cash equivalents mean short term, highly liquid investments with an original maturity of three months or less. F. Receivables Following are the significant components of the receivables due to the City at September 30, 1996. ~ 1. Water, Sewer and Waste Fees ~ This amount represents the unpaid, billed charges for various fines and municipal services. 2. Fines and Assessments - This amount represents the unpaid, billed charges for various fines and assessments levied for violations of various City code provisions. 3. Notes Receivable - This amount represents amounts due as evidenced by loan agreements from two special revenue and one capital projects fund to outside entities. 4. Other Receivable - This amount represents the accrual of revenues that meet the criteria of both measurable and available at the fiscal year end. 5. Taxes Receivable - This amount represents the amount of levied but uncollected current property taxes outstanding at September 30, 1996. 6. Delinquent Taxes Receivable - This amount represents the amount of levied but uncollected delinquent property taxes outstanding at September 30, 1996. B-15 CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 1996 1. Summary of Sionificant Accounting Policies The City of Miami Beach, Florida (the "City") records its transactions in the various individual funds and account groups to comply with the limitations and restrictions placed both on the resources made available to the City and the services provided. The more significant of the City's accounting policies are described below. A. Reoorting Entity The City was incorporated as a municipal corporation on March 26,1915 and was created by the Florida Legislature. The City is governed by an elected mayor and six member commission. In accordance with Governmental Accounting Standards Board (GASB) pronouncements, the City's financial statements include all funds, account groups, departments, agencies, boards, and other organizations over which City officials are considered to be financially accountable. Financial accountability includes such aspects as appointment of governing body members, budget review, approval of property tax levies, outstanding debt secured by City full faith and credit or revenues, and responsibility for funding deficits. As a result of applying the entity definition criteria of the Governmental Accounting Standards Board, certain organizations have been included or excluded from the City's financial statements. Miami Beach Redevelooment Agency The Miami Beach Redevelopment Agency was created under the Community Redevelopment Act of 1969, enacted by the Florida Legislature. The Agency's Board of Directors is the City Commission. The Agency's executive director is the City Manager. The Agency's budget is adopted by its directors and approximately 50% of the Agency's operating revenue is derived from the City's tax increment contributions. The Agency is accounted for as a blended component unit. Miami Beach Health Facilities Authority ~ The Miami Beach Health Facilities Authority was created under the Health Facilities Authorities Law, Chapter 154, Part III of the Florida Statutes. The Authority is appointed by the City Commission, serves four-year terms and is subject to reappointment. The revenue of the Authority is derived from fees generated from the sale of bonds to finance health facilities within Miami Beach. The City receives all funds of the Authority in excess of operational needs of the Authority. Debt issued under the purview of the Authority is not debt of the City or the Authority and therefore is not included in the accompanying financial statements. The Authority is accounted for as a discrete component unit. Miami Beach Visitor and Convention Authority The Miami Beach Visitor and Convention Authority was created under Chapter 67-930, Section 8 of the Florida Statutes. The Authority is appointed by the City Commission to administer a portion of the collections of the municipal resort tax to promote tourism and convention business. Operating costs of the Authority are paid by the City. The Authority is accounted for as a discrete component unit. Complete financial statements for the component units may be obtained at the entity's offices: Miami Beach Redevelopment Agency 1700 Convention Center Drive Miami Beach, Florida 33139 8-12 ,"""";";''':":-'' CITY OF MIAMI BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER JO, 1996 (Continued) Miami Beach Health Facilities Authority 1700 Convention Center Drive Miami Beach, Florida 33139 Miami Beach Visitor and Convention Authority 555 Hank Meyer Boulevard Miami Beach, Florida 33139 Condensed Financial Statements ,'. The Miami Beach Visitor and Convention Authority ("MBVCA") and the Miami Beach Health Facilities Authority ("MBHFA") are discretely presented component units in the combining financial statements. The following are condensed financial statements for both component units as of September 30, 1996: Condensed Balance Sheet Current assets Current liabilities Fund balances Total liabilities and fund balances MBVCA $ 1.346.893 $ 647.875 $ 699.018 $ 1.346.893 MBHFA $ 20.859 $ - $ 20.859 $ 20.859 Condensed Statement of Revenues, Expenditures and Changes in Fund Balance Operating revenues Operating expenditures Net income Fund balance at October 1 Fund balance at September 30 B. Basis of Presentation and Measurement Focus MBVCA $ 5.327.423 $ 5.263.052 $ 64,371 $ 634.647 $ 699.018 MBHFA $ 269 $ $ 269 $ 20.590 $ 20.859 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, expenditures, or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into three broad fund categories composed of seven generic funds plus two account groups. These broad fund categories are: Governmental Fund Tvoes Governmental Fund Types are accounted for on a current financial resources measurement focus. Only current assets and current liabilities are generally included on their balance sheet Their operating statements present sources (revenues and other financing sources) and uses (expenditures and other financing uses) of available spendable resources during the period. The generic funds in this category are General, Special Revenue, Debt Service and Capital Projects. , . ", B-13 CITY OF MIAMI BEACH, FLORIDA COMBINED STATEMENT OF CASH FLOWS-ALL PROPRIETARY FUND TYPES For the Year Ended September 30,1996 Totals Internal (Memorandum Enterprise Service Only) Cash flows from operating activities: Cash received from customers $ 44,340.030 $ 14,268.286 $ 58,608,316 Cash paid to suppliers (39,355,745) (9.515.991) (48,871,736) Cash paid to employees (11,231,073) (3,403,155) (14,634,228) Cash paid for claims and judgements (4,706,566) (4,706,566) Miscellaneous revenues 9,723,769 1,146,710 10,870,479 Net cash provided by (used in) operating activities __ 3.476.981 (2,210,716) 1,266,265 Cash flows for non-capital financing activities: Interfund advances 600.000 600,000 Repayment of interfund advances 5.410.000 5.410,000 Transfers in 9,491,999 9.491,999 Transfers out (1.228,252) (1,228,252) Contributions to other funds (1,922,635) (1,922,635) Contributions to other govemments (11,500,000) (11,500,000) Net cash provided by non-capital financing activities 251,112 600,000 851,112 Cash flows from capital and related financial activities: Proceeds of debt issuance 10,795,000 10,795,000 Payments on defeasance of bonds (9,680,000) (9,680,000) Interest and fiscal charges (3,605,475) (25,972) (3,631,447) Bond payments-principal (2,335,000) (2,335,000) Purchase of fixed assets (8,286.552) (2,516,381) (10,802,933) Proceeds from sale of fIXed assets 18,200 39,447 57,647 Net cash used for capital and related financial activities (13,093.827) (2,502,906) (15.596,733) Cash flows from investing activities: Interest on investments 3,771.235 702,135 4,473,370 Net cash provided by investing activities 3,771,235 702,135 4,473,370 Net decrease in cash and cash equivalents (5,594,499) (3,411,487) (9,005,986) Cash and cash equivalents - beginning of year 77,097,273 15,563,387 92,660,660 Cash and cash equivalents - end of year $ 71.502,774 $ 12,151,900 $ 83,654.674 Non-cash transactions affecting financial position: Capital contributions of fixed assets $ 5,879,450 $ 1,687,480 $ 7,566,930 Total non-cash transactions affecting financial position $ 5.879.450 $ 1.687,480 $ 7.566.930 See notes to financial statements B I () CITY OF MIAMI BEACH, FLORIDA COMBINED STATEMENT OF CASH FLOWS-ALL PROPRIETARY FUND TYPES RECONCILIATION OF NET OPERATING LOSS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES For the Year Ended September 30,1996 Totc,ls Internal (Memorandum Enterprise Service _~ On_~fl.__ Net operating loss $ (1,961,724) $ (3,025,503) ~____(~L~I~7,??7) Adjustments to reconcile net operating loss to cash provided by (used in) operating activities: Depreciation and amortization 5,337,095 2,326,187 7,6G3,282 Provision for uncollectible accounts (167,304) (41,056) (208,360) Changes in assets and Iiablities: (Increase) decrease in inventories (243,349) 37,531 (205,818) (Increase) decrease in accounts receivable 112,915 (279,515) (1156,600) Decrease in due from other funds 2,215 2,215 Decrease in due from other governments 1,252,137 1 ,2!;2, 137 Increase in prepaid expense (1,128,849) (167,885) (1,2n6,734) Decrease in accounts payable (318,630) (264,235) (5B2,865) Increase in accrued compensated absences 76,297 37,151 1'13,448 Decrease in pending insurance claims (2,428,000) (2,4:~8,000) Increase in insurance claims incurred but not reported 1,579,000 1,5?9,000 Increase in accrued expenses 420,377 13,394 \ 4:13,771 Increase in deposits 624,268 6:~4,268 Increase in due to other governments 113,264 1'13,264 Decrease in revenues collected in advance (639,516) @;19,5~ Total adjustments 5,438,705 814,787 6,2~i3,492 Net cash provided by (used in) operating activities $ 3.476,981 $ (2,210,716) $ 1,2ElQ,265 See notes to financial statements B-II "".'.:;.:.: 'Co, ",,'-" .' 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B~"" .:l -'I 0'.1 .....' ~- ] 011 .....' i ~I '-':1 ..! 8.1 ~i ~, ;:1)' " i' I "',1 ~i ~I ~'! I I ",I II II ...:: 0" \0,1 ",. ........i ...., ....., ",-, '" ..'I ..... ~:I 0' ~-I ......:: II .., ~i ;;S~ .~ J ., li E !! !! ., Ci -0 c: .. .a .E ., !! g ~ CITY OF MIAMI BEACH, FLORIDA COMBINED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS/FUND BALANCE - ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS For the Year Ended September 30,1996 Proprietary Fund Types Intemal Enterprise Service Operating revenues: Charges for services $ 44,870,387 $ 14,576,475 Contributions Interest and dividends Net appreeiation in fair value of investments . Miscellaneous revenues 8.471,632 1,115,~ Total operating revenues 53,342,019 __u!.~!~92 .c~96_ Operating expenses: Personal services 11.358.656 3,453,700 Operating supplies 1,725,744 1.807,140 Contractual services 25,364,540 2,620,406 Utilities 2,263,051 1,148,731 Intemal charges 2,622,320 653,541 Depreciation 5,161,137 2,326,187 Administrative fees 6.494,896 871,094 Insurance 126,989 602,098 Amortization 175,958 Claims and judgements 3,857.566 Benefits paid Contributions refunded Other 10,452 1,377,336 Total operating expenses 55,303,743 18.717,799 Operating income (loss) (1,961,724) (3,025,503) Non-operating revenues (expenses): Interest expense and fiscal charges (3,576,679) (35,147) Contributions to other govemments (11,500,000) Disposal of assets (90,705) (80,622) Interest income 4,061,545 1,163,685 Total non-operating revenues (expenses) (11,105,839) 1.047,916 Income (loss) before operating transfers (13,067,563) (1,977,587) Operating transfers in 9,491,999 Operating transfers out (1,228,252) Net operating transfers 8,263,747 Net income (loss) (4,803,816) (1.977,587) Add: Depreciation on contributed capital (Note 12) 3,436,404 1,978,024 Retained eamingslfund balances at beginning of year 38.253,449 5,902,523 Retained eamings/fund balances at end of year $ 36,886,037 $ 5,902,960 See notes to financial statements B-9 Fiduciary Fund Types Pension Trust $ 14,228,823 22,038,665 41,002,293 _-.l2~~~,78!. 25.710,697 533,524 3,230,754 29,474,975 47,794,806 47,794,806 47,794,806 ~93,218,995 $ 541,013,801 $ Totals _ (Memorandum Only) 59,446,862 14,228,823 22,038,665 41.002,293 9,587,453 ..__.J..!6, 304. Q.~~ 14,812,356 3.532,884 27,984,946 3.411.782 3,275.861 7.487,324 7,365,990 729,087 175,958 3,857,566 25.710,697 533,524 4,618,542 103,496,517 42,807,579 (3,611,826) (11,500,000) (171,327) 5,225,230 (10,'cl57,923) 32.749,656 9,491,999 (1,228,252) 8,263,747 41,013,403 5,414.428 537,374,967 $ 583,802,798 (J) ZO -z (/):.:. UJw a... z(J) <t:::J :J:O: u....(J) 00:>- z<t;z", <{~:Jcn cri~l-e UJ (J) z - ~~u;~~ ii:>-~Oo> oo>-o..c ...JZf-::EE u..woO,! r.-o.zug. Ll~:lliJcn <( _L<. 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CIl 'M~ Peat MarwlCk LLP Honorable Mayor and Members of the City Commission City of Miami Beach, Florida In our opinion, based on our audit and the reports of other auditors, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Miami Beach, Florida as of September 30, 1996, and the results of its operations and cash flows of its proprietary fund types for the year then ended, in conformity with generally accepted accounting principles. In accordance with Governmental Auditing Standards, we have also issued a report, dated January 3], 1997, on our consideration of the City of Miami Beach, Florida's internal contro) structure, and a report dated January 31, 1997 on its compliance with laws and regulations. l'; f M b ? 4f 1-.:1 {./, f' January 31, 1997 B-2 B-3 [This page intentionally left blank] ,."-<:'".,.."-:....~~,,'i''!\~ APPENDIX H lP"DGII)Peat Marwick LLP l~ 1897-1997 One Biscayne Tower Suite 2900 2 South Blscayne Boulevard Miami. FL 33131 Telephone 305 358 2300 Telefax 305 577 0544 Indepedent Auditors' Report Honorable Mayor and Members of the City Commission City of Miami Beach, Florida: We have audited the accompanying general purpose financial statements of the City of Miami Beach, Florida as of and for the year ended September 30, 1996. These general purpose financial statements are the responsibility of the management of the City of Miami Beach, Florida. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We did not audit the financial statements of the Retirement System for General Employees, a pension trust fund which reflects 33 percent and 28 percent, respectively, of the assets and revenue of the Fiduciary fund type; the Retirement System for Policemen and Firemen, a pension trust fund which reflects 52 percent and 54 percent, respectively, of the assets and revenue of the Fiduciary fund type; and the Retirement System for Unclassified Employees and Elected Officials, a pension trust fund which reflects 10 percent and 16 percent, respectively, of the assets and revenue of the Fiduciary fund type. We also did not audit the financial statements of the Visitors and Convention Authority which reflects 13 percent and 13 percent, respectively, of the assets and revenue of the Special Revenue fund and the Miami Beach Convention Center and Jackie Gleason Theater of the Performing Arts as managed by Spectacor Management Group, which reflects 1 percent and 10 percent, respectively, of the assets and revenue of the Enterprise funds. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the Retirement System for General Employees, the Retirement System for Policemen and Firemen, the Retirement System for Unclassified Employees and Elected Officials, the Visitors and Convention Authority, and the Miami Beach Convention Center and Jackie Gleason Theater of the Performing Arts as managed by Spectacor Management Group, is based solely on the reports of other auditors. We conducted our audit in accordance with generally accepted auditing standards and Governmental Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. The financial statements of the Pension Trust Funds were not audited in accordance with Governmental Auditing Standards issued by the Comptroller General of the United States, and, accordingly, are not covered by our report in accordance with Governmental Auditing Standards. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinion. B-1 1I11 Membe,r"mol KPMG Internallonal South FlOrida BUSiness Unll MIami Fort Lauderdale West Palm Beach PASSENGERS AND CARGO HANDLED BY PORT OF MIAMI 1988-1996 Year Ended Cruise Cargo September 30 Passenaers (in tons) 1988 2,502,411 2,602,556 1989 3,100,055 3,206,417 1990 2,734,816 3,590,937 1991 2,928,532 3,882,284 1992 3,095,487 4,596,481 1993 3,157,130 5,198,292 1994 2,967,081 5,574,252 1995 2,974,703 5,840,815 1996 3,052,450 5,859,538 Source: Dade County Seaport Department Five separate airports owned and operated by Dade County are within easy reach of the City. Miami International Airport ranks 6th in the nation and 10th in the world in the number of passengers using its facilities. It ranks third in the nation and third in the world in the movements of domestic and international air cargo. In 1996 the airport served 33.5 million passengers and handled over 1.8 million tons of cargo. Statistics from 1988 are presented below: [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-14 ."....';;:..'F....~..,...~_ PASSENGERS AND CARGO HANDLED BY MIAMIINTERNA TIONAL AIRPORT 1988-1996 Year Ended Passengers Cargo SeDtember 30. (In Thousands) (in tons) 1988 24,210 773,599 1989 23,422 869,612 1990 25,294 945,773 1991 26,709 951,328 1992 26,125 1,073,429 1993 28,246 1,215,553 1994 29,351 1,402,979 1995 32,852 1,703,367 1996 33,497 1,847,838 Source: Dade County Aviation Department RECREATION There are numerous parks and playgrounds in the City of Miami Beach. Each park provides different amenities, from tennis and bocci a courts to swimming pools and tot lots, to Vita courses and barbecue pits. There are four Vita courses, two swimming pools, and numerous tennis courts, including the Holtz Tennis Stadium which houses championship, professional and amateur tournaments. Offshore, the Gulf stream provides a variety of game fish, while the Miami Beach Marina , provides an abundance of space to house boats as well as direct access to the Atlantic Ocean and Gulf stream. The Marina is a private development on City owned bay front land in the South Pointe area. Renovation has increased the number of boat slips to 388 making the Marina the largest in the area and a first class facility. In the north part of the City, the public can enjoy a leisurely sail in the quiet waters of Biscayne Bay from the Miami Beach Sailport. The facility, though open to all ages, was specially designed to teach young adults the basic art of sailing on small prams. The City owns two championship golf courses and one Par 3 course that are open to the public. The two championship courses, Bayshore and Normandy, offer a clubhouse complete with a restaurant, lounge and pro shop. F. IA TTOILEVL ID ISCLOSEIAPPEND.A A-IS TOURISM AND VISITOR ACTIVITY DOMESTIC AND INTERNATIONAL OVERNIGHT VISITORS DADE COUNTY 1994 -1996 Origin ~ ~ 1996 Latin America: 900,600 844,800 746,000 Caribbean 719,800 464,200 396,000 Central America 1.937.400 1.984.400 2.000.000 Total Latin America 3,557,800 3,293,400 3,142,000 Europe: England 201,200 244,400 264,000 Germany 158,200 373,400 398,700 Other Europe 579.700 521.300 617.300 Total Europe 939,100 1,139,100 1,280,000 Canada 406,200 501,300 593,000 Other International 125.600 163.800 85.000 Total International 5,028,700 5,097,600 5,100,000 Total Domestic 3.728.600 4.317.600 4.500.000 Total Overnight 8.757.300 9.415.200 9.600.000 Expenditures: Domestic $2,513,470,000 $3,291,134,000 4,300,000,000 International 4.402.705.000 5.078.716.000 6.600.000.000 Total Expenditures $6.916.175.000 $8.369,850.000 $10.900.000.000 Source: Greater Miami Convention and Visitors Bureau A-12 Overnight Visitors by Region 1994 1995 1996 Miami Beach 32.9% 32.3% 32.8% Downtown Miami 15.1% 15.3% 14.3% North Dade 18.4% 18.1% 13.7% Airport Area 17.3% 14.4% 18.3% South Dade 8.7% 10.8% 10.8% Grove/Gables/Key Biscayne 6.2% 8.2% 10.1% Other 1.4% 0.9% 0.0% Source: Greater Miami Convention and Visitors Bureau TRANSPORT A liON The City is located within two hours by air from the major population centers of the northeastern United States and is also at the terminus of a highway network. The Port of Miami has become the world's largest passenger port. The Port estimates that more than 80% of these cruise ship passengers arrive and depart Miami by air. The Port specializes in trailer and container cargo. From 1988 to 1995, the total cargo handled increased from 2.6 million tons to over 5.8 million tons, an increase of 123%. The Port has become the nation's leading port for exports to Latin America and the Caribbean. The summary of the growth in passengers and cargo for the previous five years IS presented below: [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-13 City of Miami Beach Ten Largest Taxpayers 1996 Owner Tyee of Proeerty Assessed Value Hotelrama Assoc. Ltd. Hotel $105,089,064 Roney Plaza Assoc. Ltd. Apartments 46,500,000 Richard and Alan Morton Towers Apartments 37,378,298 Tri-County Community Hospital Health Care 25,800,000 5600 Collins Corp. Apartments 21,370,790 OBR Limited Hotel 21,100,500 Portofino Real Estate Fund Offices 20,622,089 Suncoast Towers South Assoc. Apartments 18,800,000 Miami Beach Healthcare Health Care 17,745,000 Forte Towers South Inc. Apartments 17.000.000 $331.405.741 Source: Metropolitan Dade County; Department of Property Appraisal; City of Miami Beach Valuation Roll, 1996 FILM AND PRINT INDUSTRY The film and print industry has become an important part of the Miami Beach economy. This industry spends approximately $60 million a year in the City for the production of movies and fashion photographs. Many international talent and model agencies have located in the City. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-IO Film and Print Industry Permits Issued and Production Budgets For the Calendar Years 1990 - 1997 Fiscal Permits Production Year Issued Budgets 1990 1,281 $57,111,250 1991 1,604 43,570,250 1992 1,901 49,547,200 .1993 1,871 59,119,950 1994 1,827 52,363,600 1995 1,939 58.512,750 1996 1,900 59,961,610 1997(1) 1,232 36,017,950 Source: City of Miami Beach, Office of Public Information, Film and Print Division (1 ) Six months ended June 30, 1997. CONVENTION AND MEETING ACTIVITY Dade County and the Miami Beach Convention Center host a large number of conventions each year. Dade County Convention Activity for the Ten Years ended December 31, 1996 Number of Number of Number of Total Year Conventions Deleaates Room Niahts Expenditures 1987 425 475,000 1,176,000 $285,000,000 1988 475 546,000 1,380,000 368,400,000 1989 515 600,000 1,500,000 405,300,000 1990 525 650,000 1,750,000 439,000,000 1991 500 620,000 1,674.000 428,000,000 . 1992 525 680,000 1,850,000 469,404,000 1993 550 704,000 1,970,000 485,971,200 1994 616 857,578 2,401,218 600,304,600 1995 660 929,603 2,597,288 958,210,800 1996 NA 1,445,825 3,036,232 1,463,174,900 Source: Greater Miami Convention and Visitor's Bureau A-I J City of Miami Beach, Florida Direct and Overlapping Tax Rates ($1 per $1,000 of Assessed Value) For Tax Years 1987 Through 1996 Debt Tax General Service City - School Year (1) Fund Funds Total District County Other Total 1987 9.666 4005 13.671 7.558 8.579 0.513 30.321 1988 9.966 3.705 13.671 7.551 8.965 0.564 30.751 1989 9.966 3.705 13.671 7.693 8.213 0.587 30.164 1990 9.966 3705 13.671 9.001 7.368 0.602 30.642 1991 9.966 3.200 13.166 9.104 7.368 0.600 30.238 1992 9.743 2.200 11.943 9.528 8.795 0.599 30.865 1993 9.302 2.545 11.847 9.923 9.236 0.648 31.654 1994 8.238 2.311 10.549 10.266 9.202 0.652 30.669 1995 7.143 2.039 9.182 10.345 9.214 0.696 29.437 1996 7.499 1.862 9.361 10.389 7.946 0.687 28.383 Source: City of Miami Beach, Comprehensive Annual Financial Report; City of Miami Beach; Adopted Budget 1995/96 Fiscal Year; Dade County Tax Collector (1 ) Assessments as of January 1 of the year listed; bills mailed in October of that year; taxes become delinquent at the end of April of the subsequent year. [BALANCE OF P AGE INTENTIONALLY LEFT BLANK] A-8 City of Miami Beach, Florida Property Tax Levies and Collections Fiscal Years 1988 -1997 (Tax Years 1987 -1996) Assessed Valuation (1) Tax Including Excluding Total Collected Percent Year (2) Homesteads Homesteads Tax Levy in Year (3) Collected 1987 $3,617,648,031 $3,009,079,061 $41,137,120 $41,100,410 99.9 1988 3,786,641,043 3,105,045,655 42,449,079 41,266,273 97.2 1989 3,939,311,340 3,269,628,413 44,699,090 43,872,953 98.1 1990 4,376,417,088 3,632,426,183 47,824,523 46,497,571 97.2 1991 4,654,936,873 3,863,597,605 46,142,946 45,196,736 97.9 1992 4,726,911,403 3,932,985,608 45,610,535 46,102,609 101.1 1993 5,354,688,618 4,444,391,552 45,477,364 45,933,970 101.0 1994 6,369,445,913 5,286,640,108 47,359,133 46,885,783 99.0 1995 6,713,103,433 5,639,006,894 51,698,797 51,834,737 100.3 Source: City of Miami Beach, Comprehensive Annual Financial Report (1) Assessments are at 100% of fair market value. (2) Assessments as of January 1 of the year listed; bills mailed in October of that year; taxes become delinquent at the end of April of the subsequent year. (3) Actual collections of current and delinquent Real and Personal Property Taxes. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-9 Major Employers on Miami Beach Rank EmDloyer Service Number Employed 1 Mount Sinai Medical Center Hospital 3,300 2 City of Miami Beach Government 1,625 3 Fountainbleu Hilton Hotel 1,200 4 Miami Heart Institute Hospital 1,200 5 South Shore Hospital Hospital 742 6 Eden Roc Resort & Spa Hotel 415 7 Doral on the Beach Hotel 350 8 Ramada Resort Deauville Hotel 250 9 Alexander Hotel Hotel 230 10 Shawnee Beach Resort Hotel 140 Source: Personnel Divisions of Companies Ten Largest Public and Private Employers Located in Dade County Public Emoloyers Private Employers Dade County Public Schools 32,474 American Airlines 8,200 Metropolitan Dade County 28,000 University of Miami 7,481 Federal Agencies 18,000 BellSouth Telcommunications 5,000 State of Florida Agencies 17,400 Florida Power & Light 3,589 Jackson Memorial Hospital 7,216 Burdines Department Stores 3,400 City of Miami 3,189 Baptist Health Systems of Florida 3,275 Miami-Dade Community College 2,668 K-Mart 3,000 Florida International University 2,627 Publix Supermarkets 3,000 Veterans Affairs Medical Center 2,610 Mount Sinai Medical Center of Fla. 2,800 City of Miami Beach 1,620 Winn-Dixie Stores 2,672 Source: The Beacon Council, Annual Miami Business Profile, 1996-1997 A-6 BUILDING PERMITS The following is a calculation of the total value of the Building Permits issued by the City during the past 10 years. City of Miami Beach, Florida Value of Building Permits Issued Calendar Years 1987 -1996 New Additions, Year . Construction Rehabilitations. Etc. Total Value 1987 $3,804,616 $69,897,353 $73,701,969 1988 17,835,490 36,334,701 54,170,191 1989 55,422,320 51,804,525 107,226,845 1990 62,594,905 34,366,872 96,961,777 1991 32,863,120 40,545,996 73,409,116 1992 9,544,515 40,398,741 49,943,256 1993 150,549,661 81,156,235 231,705,896 1994 91,566,442 68,358,627 159,925,069 1995 147,712,100 56,564,305 204,276,405 1996 137,664,400 60,538,264 198,202,264 Source: City of Miami Beach Building Department, 1996 DIRECT AND OVERLAPPING TAX RATES The following table summarizes the direct and overlapping tax (millage) rates for the past ten years. The Florida Constitution and statutes provide that the maximum millage (tax rate) that municipalities, counties and school districts in Florida may each levy, without a referendum, is $10.00 per $1,000 of assessed valuation (10 mills). As shown in the following table, the City has reduced its tax rates over the past 10 years. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-7 the number of City Departments has been reduced from twenty to twelve. The total workforce has remained approximately the same at 1,500; however, significant changes have occurred in the personnel assigned to various activities. ECONOMIC AND DEMOGRAPHIC DATA INCOME The mean family income for Miami Beach increased by almost 92 percent, from $23,324 in 1980 to $44,738 in 1990. This compares well to growth rates experienced by Dade County, which experienced a mean family growth rate of approximately 59 percent during the same period. In 1990, the mean family income for Miami Beach exceeded that of Dade County by 18 percent, while in 1980, they were almost even. MEAN FAMILY INCOMES 1980 -1990 1980 1990 % CHANGE Miami Beach $23,324 $44,738 91.8% Dade County $23,846 $37,903 58.9% Source: u. S. Bureau of the Census, 1980 and 1990 [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-4 " .C^ ':e'~<'-::.'.'-'i',"":"."" Per Capita Personal Income (Current Dollars) 1980 - 1994 Dade County Florida United States Current Current Current Year Dollars % of U.S. Dollars % of U.S. Dollars 1980 9,541 100.5 9,245 94.4 9,494 1985 13,992 100.6 13,898 99.9 13,910 1990 17,823 95.3 18,539 99.2 18,696 . 1991 18,252 95.6 18,985 99.4 19,091 1992 17,340 86.2 19,797 98.5 20,105 1993 19,779 95.1 20,828 100.1 20,800 1994 20,362 93.8 21,677 99.4 21,807 Source: Florida Statistical Abstract 1996, University Press of Florida and Miami Business Profile 96-97, the Beacon Council, 1996 EMPLOYMENT Employment figures by type of employment are not currently available for individual cities They are only available at the county and state levels. City of Miami Beach Employment 1991 - 1996 1991 1992 1993 1994 1995 1996 Labor Force Employed 38,618 38,355 39,600 40,150 40,070 40,108 Labor Force Unemployed 4,415 5,040 3,917 4,112 3,443 3,710 Total Labor Force 43,033 43,395 43,517 44,262 43,513 43,818 Unemployment Rate 10.3% 11.6% 9.0% 9.3% 7.9% 8.5% Source: Florida Department of Labor [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-5 ,'-,::",. ~-; Population Projection, City of Miami Beach and Dade County 1980 - 2010 City of Percent Dade Percent Year Miami Beach Change County Change 1970 87,072 (1) 1,267,800 (1) 1980 96,298 (1) 10.6% 1,625,598 (1) 28.2% 1990 92,639 (1) (3.8)% 1,937,094 (1) 19.2% 2000 95,881 (2) 3.5% 2,260,000 (3) 16.7% 2010 98,757 (2) 3.0% 2,557,000 (3) 131% Source: (1) U. S. Census (2) City Department of Economic Development (3) Metro-Dade Planning Department Population Breakdown by Age, City of Miami Beach, 1980 - 2000 Aae Group 1980 1990 2000 00-14 6.5% 12.0% 20.6% 15-24 7.2% 9.8% 8.2% 25-44 13.7% 28.8% 21.5% 45-64 22.0% 19.3% 23.2% 65-74 24.4% 11.5% 10.4% 75+ 26.2% 18.6% 16.2% Median Age: 65.3 44.5 43.7 Source: Metro-Dade County Planning Department GOVERNMENT The City of Miami Beach is organized under the Commission-City Manager form of government. The governing body is an elected City Commission of six members and an elected Mayor. The City Commission sets policy for the administration of the City and appoints a City Manager and a City Attorney. The City Attorney appoints his staff and the City Manager is A-2 responsible for the appointment of the balance of the employees of the City. The City Commissioners are elected to staggered four year terms and the Mayor is elected every two years. Both the City Attorney and the City Manager serve at the pleasure of the City Commission. The City Manager carries out the policies of the City Commission, directs the operations of the City and, with the exception of the City Attorney's Office, has the power to appoint or remove all heads of the various Departments. CERTAIN CITY STAFF MEMBERS Jose Garcia-Pedrosa, City Manager Appointed City Manager May 18, 1995; Managing Partner, Tew, Garcia-Pedrosa & Beasley, 1990 - 1995; Partner, Tew, Jorden & Schulte, 1984 - 1990; Miami City Attorney, 1982 - 1984 Education: Harvard College, B. A; Harvard Law School, J. D. Sergio Rodriguez, AICP, Deputy City Manager Appointed Deputy City Manager August 1995; Assistant City Manager, City of Miami, 1987-1995; Chief Planner, The Maryland-National Capital Park and Planning Commission, Prince George's County, Maryland. Education: University of Florida, B.A; University of North Carolina at Chapel Hill, M.A Patricia D. Walker, City Finance Director Appointed Finance Director, City of Miami Beach, in March 1997; Director of Airports, Broward County, Florida, 1994-1997; Deputy Director, Broward County Aviation Department 1992-1994, Director of Finance, 1992, Executive Assistant to the Aviation Director, 1991-1992; Comptroller, Dade County Aviation Department, 1980-1990, Chief Accountant, 1978-1980; Senior Accountant, Price Waterhouse & Co., 1973-1978. Education: Florida State University, B.S., Accounting; Florida International University, M.S.M., Accounting Certification: Certified Public Accountant, Florida 1974 SCOPE OF SERVICES The City provides a full range of municipal services, including police, fire, parks, water, sewer, sanitation and zoning. The City is continuing a process of "rightsizing," a process of adjusting the size of the government to the needs of the community. As a result of this process, A-3 This Official Statement has been duly executed a delivered by the Mayor, the City Manager and the City Clerk of the City of Miami Beach, rida. By: City Manager Attest ~cr-f~ /s/ Robert Parcher City Clerk By: 50659.11 APPROvED AS TO fORM & LANGUAGE & FOR EXECUTION ~$-~ 18 APPENDIX A GENERAL INFORMATION REGARDING THE CITY OF MIAMI BEACH AND DADE COUNTY, FLORIDA The following information pertaining to the City of Miami Beach, Florida (the "City") and Dade County, Florida (the "County") is set forth for purposes of background only. The Series 1997 Bonds are payable only from Net Revenues of the Parking System, as described in this Official Statement. The Series 1997 Bonds do not constitute a debt, liability or obligation or a pledge of the faith, credit or taxing power of the City, County, the State of Florida, or any political subdivision thereof. . INTRODUCTION The City comprises seven square miles of land area and ten square miles of Biscayne Bay. The climate is tropical with an average annual temperature of 75 degrees fahrenheit, 24 degrees celsius. The City is the home of the Art Deco Historic District, consisting of one of the greatest concentrations of this style of architecture in the United States. Within this Historic District is the world famous Ocean Drive, which has been called the "Riviera" of Florida. The economy of the area is based on tourism. For fiscal year 1996, room rents, food and beverage sales accounted for an estimated $569 million in sales within the City. The population demographics of the City have drastically changed over the last fifteen years. In the 1980 Census, the average age of the population was 65.3 years old. In the 1990 Census the average age had declined to 44.5 and 2000 estimates place it at 43.7 years old. The City is a group of islands between Biscayne Bay and the Atlantic Ocean and is connected to the mainland by four causeways. The County is the largest county in the southeastern United States in terms of population and one of the largest in terms of land area. The County consists of 2,042 square miles of land area. The population is clustered mainly along the coast, with the western area of the County comprising a part of the Everglades. There are numerous incorporated municipalities in the County, which include Miami, Hialeah and Coral Gables, as well as the City. POPULATION The U.S. Bureau of the Census estimated the population of the City at 91,848 as 'of January 1, 1996. According to estimates of the City's Department of Economic and Community Development, the population is expected to increase to 95,881 by the year 2000 based on Census information. The County's population, as estimated by the Metro-Dade County Planning Department, was 2,057,000 for 1996 and the County estimates growth to 2,291,452 by 2000. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] Owners of Discount Bonds should consult their own tax advisers as to the determination for federal income tax purposes of the amount of 010 properly accruable in any period with respect to such Bonds and as to other federal tax consequences and the treatment of 010 for state and 10c~1 tax purposes. UNDERWRITING The Bonds are being purchased by the Underwriters, subject to certain terms and conditions set forth in the purchase contract between the City and the Underwriters, including the approval of certain legal matters by Bond Counsel and the existence of no material adverse change in the condition of the City from that set forth in the Official Statement. The Bonds are being purchased at a purchase price of $14,842,140.25 (representing a principal amount of $15,000,000 less an underwriters' discount of $1 01,850.00 less original issue discount of $56,009.75), plus accrued interest. The Bonds are offered for sale to the public at the prices or yields set forth on the cover page of this Official Statement. The Bonds may be offered and sold to certain dealers at prices lower than such offering prices, and such public offering prices may be changed from time to time by the Underwriters. FINANCIAL ADVISOR, Rauscher Pierce Refsnes, Inc., Miami, Florida is serving as financial advisor to the City. RATINGS Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's ("S&P") which have assigned ratings to the Bonds, have done so with the understanding that, upon delivery of the Bonds, the Financial Guaranty Policy will be issued by Financial Guaranty. In addition, Moody's and S&P have assigned ratings of "A3" and "A" respectively, to the City's unenhanced general obligation debt. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same, at the following addresses: Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007 and Standard & Poor's, 25 Broadway, New York, New York 10004. Generally, a rating agency bases its rating on the infol"ll1ation and materials furnished to it and on investigations, studies and assumptions of its own. There is not assurance that any such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agency concerned, if in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of any such ratings may have an adverse effect on the market price of the Bonds. LEGAL MATTERS Certain legal matters incident to the authorization and issuance of the Bonds are subject to the approval of Squire, Sanders & Dempsey L.L.P., Miami, Florida, Bond Counsel, whose approving opinion will be available at the time of delivery of the Bonds. The proposed form of 16 such opinion is attached hereto as Appendix F. Certain legal matters will be passed upon for the City by Murray H. Dubbin, City Attorney, and for the Underwriters by Eckert Seamans Cherin & Mellott, LC, Miami, Florida, Counsel to the Underwriters. CONTINUING DISCLOSURE The City will covenant for the benefit of Bondholders to provide certain financial information and operating data relating to the City and the ad valorem taxes not later than 240 days following the end of each Fiscal Year (the "Annual Report"), and to provide, or cause to be provided, notices of tpe occurrence of certain enumerated events. The Annual Report will be filed by the City with each Nationally Recognized Municipal Securities Information Repository and with any state information depository with which filings are required to be made by the City. The notices of material events will be filed by the City with the Muhicipal'Securities Rulemaking Board or each Nationally Recognized Municipal Securities Information Repository and with any state information depository with which filings are required to be made by the City. The specific nature of the information to be contained in the Annual Report or the notices of material events is contained in "APPENDIX D - Continuing Disclosure Commitment." These covenants have been made in order to assist the Underwriters in complying with S.E.C. Rule 15c2-12(b)(5). OT 2A a3VOOq~ DISCL~ FLORIDA BLUE SKY REGULATIONS Florida law requires that the qty make a full and fair disclosure of any bonds or other debt obligations which it has issued or 'guarameed and which are or have been in default as to principal or interest ale ~y ~Ii after~lI~er 31, 1975 (including bonds or other debt obligations for whiCifi:tf]has served~'tco'tiduit issuer). The City is not and has not been in default as to principal and interest on bonds or other debt obligations which it has issued as the principal obligor or has guaranteed. MISCELLANEOUS All of the summaries or portions of the Resolution, the Act and any other documents' described herein are made subject to all of the detailed provisions of such acts or documents, to which reference is hereby made for further information. The foregoing summaries do not purport to be complete statements of any of the provisions of such acts or documents. CERTIFICATE CONCERNING THE OFFICIAL STATEMENT Concurrently with the delivery of the Bonds, the City will furnish its certificate, executed by the Mayor, to the effect that, to the best of his knowledge, this Official Statement as of its date and as of the date of the delivery of the Bonds, does not contain an untrue statement of a material fact and does not omit any material 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 statements contained therein, in light of the circumstances under which they were made, not misleading. 17 One effect of the amendment was the termination of a development agreement involving certain parcels of land near the Miami Beach Marina (the "Marina"). The Marina is owned by the City and is leased to a private operator. As a result of the termination of that development agreement, the City may be required to construct a parking garage for the Marina, because one of the parking lots presently leased to the Marina is to be transferred to a private developer, pursuant to ~ertain provisions which survived the termination of the development agreement. At this time the City is unable to ascertain the impact, if any, of the Charter amendment on the City's financial position, property values within the City, or future development within the City. However, as the Bonds are payable from ad valorem taxes levied specifically for the payment of such Bonds, the effect, if any, on the City's financial position will not impact the City's ability to pay the Bonds. TAX EXEMPTION In the opinion of Bond Counsel, under existing law, (i) interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103(a) of the Internal Revenue Code of 1986, as amended (the "Code"); (ii) interest on the Bonds is not an item of tax preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on individuals and corporations, and (iii) the Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except for estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended, on interest, income or profits on debt obligations owned by "corporations," "banks" and "savings associations" as such terms are defined in said Chapter 220. Bond Counsel will express no opinion as to any other tax consequences regarding the Bonds. The opinion on federal tax matters will be based on and will assume the accuracy of certain representations and certifications and compliance with certain covenants of the City to be contained in the transcript of proceedings and which are intended to evidence and assure the foregoing, including that the Bonds are and will remain obligations the interest on which is excluded from gross income for federal income tax purposes. Bond Counsel will not independently verify the accuracy of the certifications and representations made by the City. The Code prescribes a number of qualifications and conditions for the interest on state and local obligations to be and to remain excluded from gross income for federal income tax purposes, some of which, including provisions for potential payments by the City to the federal government, require future or continued compliance after issuance in order for the interest to be and to continue to be so excluded from the date of issuance. Noncompliance with these requirements by the City could cause the interest on the Bonds to be included in gross income for federal income tax purposes and thus to be subject to federal income tax retroactively to the date of their issuance. The City will covenant to take actions required of it for the interest on the Bonds to be and to remain excluded from gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion. 14 Under Code provisions applicable only to certain corporations (as defined for federal income tax purposes), a portion of the excess of adjusted current earnings (which includes interest on all tax-exempt bonds, including the Bonds) over other alternative minimum taxable income is included in alternative minimum taxable income which may be subject to a corporate alternative minimum tax. In addition, interest on the Bonds may be subject to a branch profits tax imposed on certain foreign corporations doing business in the United States and to a tax imposed on excess net passive income of certain S corporations. Under the Code, the exclusion of interest from gross income for federal income tax purposes can have certain adverse federal incomf3 tax consequences on items of income, deductions or creditS for certain taxpayers, including among them financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations and individuals otherwise eligible for the earned income credit. The applicability and extent of these or other tax consequences will depend upon the particular tax status or other tax items of the owner of the Bonds. Bond Counsel will express no opinion regarding such consequences. From time to time, there are legislative proposals in Congress which, if enacted, could alter or amend one or more of the federal income tax matters referred to herein or adversely affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to obligations (such as the Bonds) issued prior to enactment. The discussion of tax matters in this Official Statement applies only in the case of purchasers of the Bonds at their original issuance and at the respective prices indicated on the cover. It does not address any other tax consequences such as, among others, the consequence of the existence of any market discount to subsequent purchasers of the Bonds. Original Issue Discount The Bonds maturing after September 1, 1998 (collectively, the "Discount Bonds"), have been offered and sold to the public at an original issue discount ("OlD"). OlD is the excess of the stated redemption price at maturity (original principal amount) over the "issue price" of such Discount Bond. The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity are sold pursuant to that offering. For federal income tax purposes, OlD accrues to the owner of a Discount Bond over the period to maturity based on the constant interest rate method, compounded semiannually (or over such shorter permitted compounding interval selected by the owner). The portion of OlD that accrues during the period of ownership of a Discount Bond (i) is interest excludable from the owner's gross income for federal income tax purposes to the same extent and subject to the same considerations discussed above as to other interest on the Bonds, and (ii) is added to the owner's tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Bond. A purchaser of a Discount Bond at its issue price in the initial public offering who holds that Discount Bond to maturity will realize no gain or loss upon the retirement of that Discount Bond. 15 City of Miami Beach, Florida Summary of Direct and Overlapping Debt As of September 30, 1996 Financial Parameters Population (1995) Total Assessed Valuation - City of Miami Beach (Tax Year 1996) Total Taxable Valuation - City of Miami Beach (Excluding Homestead) (Tax Year 1996) SOURCE: City of Miami Beach, Florida, Finance Department. (Unaudited) Financial Ratios 1996 Percent of Assessed Valuation Percent of Taxable Valuation DIRECT DEBT Ad Valorem Non-self-supporting 0.56 2.29 0.67 2.76 Total Direct Debt Total Overlapping Debt Total Direct and Overlapping Debt 2.85 1.60 3.43 1.92 4.45 5.35 VALUATION Total Assessed Valuation Total Taxable Valuation SOURCE: City of Miami Beach, Florida, Finance Department. (Unaudited) [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] 12 93,681 $7,366,942,524 $6,114,562,295 Per Capita $ 440 1,800 $2,240 1.256 3,496 $78,639 65,270 DEBT SERVICE REQUIREMENTS The table below shows the debt service payable on the Bonds and the City's outstanding general obligation bonds. Fiscal Outstanding The Bonds Total Year Debt Service Principal Interest Total Debt Service 1997 $10,043,582.50 $ 0 $ 0 $ 0 $10,043,582.50 1998 9,618,132.50 50,000.00 576,400.00 626,400.00 10,244,532.50 1999 9,284,182..50 50,000.00 626,950.00 676,950.00 9,961,132.50 2000 7,118,882.50 1,100,000.00 625,050.00 1,725,050.00 8,843,932.50 2001 5,371,882.50 1,900,000.00 582,150.00 2,482,150.00 7,854,032.50 2002 3,227,332.50 3,525,000.00 506,150.00 4,031,150.00 7,258,482.50 2003 6,676,020.00 0 361,625.00 361,625.00 7,037,645.00 2004 0 4,525,000.00 361,625.00 4,886,625.00 4,886,625.00 2005 0 2,850,000.00 167,050.00 3,017,050.00 3,017,050.00 2006 0 500,000.00 44,500.00 544,500.00 544,500.00 2007 0 500,000.00 22,500.00 522,500.00 522,500.00 $51,340,015.00 $15,000,000.00 $3,874,000.00 $18,874,000.00 $70,214,015.00 SOURCE: City of Miami Beach, Florida, Finance Department. LITIGATION There is no litigation or other proceedings, of any nature now pending with regard to which the City has received service of process or, to the actual knowledge of the City, threatened against the City, with regard to which an unfavorable decision, ruling or finding (i) would v materially and adversely affect the validity or enforceability of the Bonds, or (ii) would have a material adverse effect on the levy and collection of the ad valorem taxes pledged to the payment of the Bonds. CHARTER AMENDMENT On June 3, 1997, a majority of voters in the City approved a Charter amendment which was initiated by a citizen's petition drive. This Charter amendment requires a City-wide referendum prior to the approval of any increase in the permitted floor area ratio on any waterfront property located in the City. Prior to the approval of this Charter amendment, citizens were able to participate in public hearings with regard to increases in floor area ratio on parcels of waterfront land within the City, but there was no requirement of a referendum as a condition for approval of such increases. 13 The table below shows ad valorem tax rates and ad valorem tax levies for general government operations and debt service. City of Miami Beach, Florida Statement of Tax Levies and Tax Rates Fiscal Years 1987 through 1996 Fiscal General Fund Debt Service Fund Total Year Tax Levy Millaqe Tax Levy Millaqe Tax Levy Millaqe 1987 $29,009,372 9.666 $12,019,719 4.005 $41,029,091 13.671 1988 29,988,467 9.966 11,148,653 3.705 41,137,120 13.671 1989 30,944,855 9.966 11,504,194 3.705 42,449,049 13.671 1990 32,585,114 9.966 12,113,976 3.705 44,699,090 13.671 1991 36,200,773 9.966 11,623,750 3.200 47,824,523 13.166 1992 37,642,954 9.743 8,499,992 2.200 46,142,946 11.943 1993 35,812,374 9.302 9,798,161 2.545 45,610,535 11.847 1994 35,514,506 8.238 9,962,858 2.311 45,477,364 10.549 1995 36,629,597 7.143 10,729,536 2.039 47,359,133 9.182 1996 41,330,511 7.499 10,368,286 1.862 51,698,797 9.361 SOURCE: Comprehensive Annual Financial Report, 1996, City of Miami Beach, Florida. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] 10 City of Miami Beach, Florida Computation of Direct and Overlapping Debt September 30, 1996 DIRECT DEBT General obligation indebtedness Public improvement bonds (net of amount available) $ 41,166,288 Non-self-supporting i!'ldebtedness: (1) Resort Tax Revenue Refunding Bonds, Series 1996 Gulf Breeze Government Loan Program Sunshine State Loan Pool Pension Obligation Bonds Tax Increment Revenue Bonds (2) Less: Reserve funds $ 4,095,000 20,315,000 27,810,000 54,325,000 74,500,000 181,045,000 12,376,291 Total non-self-supporting indebtedness 168,668,709 $209,834,997 Total direct indebtedness OVERLAPPING DEBT (3) Dade County Total general obligation indebtedness Percent applicable to City - 6.93% (4) Total school district obligation indebtedness Percent applicable to City - 6.93% (4) Total net non-self-supporting indebtedness Percent applicable to City - 6.93% (4) 390,976,000 27,094,637 934,455,000 64,757,732 372,497,000 Total overlapping debt 25,814,042 117,666,411 $327,501 ,408 TOTAL DIRECT AND OVERLAPPING DEBT SOURCE: Comprehensive Annual Financial Report, 1996, City of Miami Beach, Florida. (1) Excludes self-supporting debt obligations. (2) Such bonds are secured by the tax increment revenues from the City Center/Historic Convention Village Redevelopment Area and a secondary pledge of the City's Resort Taxes. (3) All debt listed as Overlapping Debt is secured either solely from a tax source or from a combination of self- supporting revenues and a tax source. (4) Based upon 1995 assessed valuation figures for the City and Dade County. 11 City of Miami Beach, Florida Property Tax Levies and Collections Fiscal Years 1986 through 1995 Assessed Valuations (2) Total Tax Including Excluding Total Collected Percent Year (1) Homesteads Homesteads Tax LevY In Year (3) Collected 1986 $3,751,470,889 $3,001,176,711 $41,029,091 $40,776,251 99.4% 1987 3,617,648,031 3,009,079,061 41,137,120 41 ,100,410 99.9 1988 3,786,641,043 3,105,045,655 42,449,079 41,266,273 97.2 1989 3,939,311,340 3,269,628,413 44,699,090 43,872,953 98.1 1990 4,376,417,088 3,632,426,183 47,824,523 46,497,571 97.2 1991 4,654,936,873 3,863,597,605 46,142,946 45,196,736 97.9 1992 4,726,911,403 3,932,985,608 45,610,535 46,102,609 101.1 1993 5,354,688,618 4,444,391,552 45,477,364 45,933,970 101.0 1994 6,369,445,913 5,286,640,108 47,359,133 46,885,783 99.0 1995 6,713,103,433 5,639,006,884 51,698,797 51,834,737 100.3 SOURCE: Comprehensive Annual Financial Report, 1996, City of Miami Beach, Florida. (1) Assessments as of January 1 of the year listed; bills mailed in October of that year; taxes become delinquent at the end of April of the subsequent year. (2) Assessments are at 100% of fair market value. (3) Actual collections of current and delinquent Real and Personal Property Taxes. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] 9 annum. The tax certificates must be for an amount not less than the taxes due, plus interest from April 1 to the date of sale at 18% per annum, together with the cost of advertising and expense of the sale. Each tax certificate is awarded to the bidder paying the above amounts who accepts the lowest interest to be borne by the certificate after its sale. If there are no bidders, the county must hold, but not pay for, such tax certificates. Thereafter, the county may sell such tax certificates to the public at any time at the principal amount thereof plus interest at 18% per annum and a fee. With respect to personal property tax delinquencies, such delinquent taxes must be advertised within 45 days after delinquency and, after May 1, the property is subject to warrant, levy, seizure and sale. The proceeds of the sale of the tax certificates are distributed to the respective taxing agencies. Tax certificates held by persons other than the county may be redeemed and cancelled by any person prior to the time a tax deed is issued upon payment of the face amount of the certificate plus interest, costs and other charges. Holders of tax certificates, other than the county, which have not been redeemed, may at any time after two years but prior to seven years from date of issuance, file an application for a tax deed with the tax collector upon payment of all other outstanding tax certificates on such property plus interest, any omitted taxes plus interest, and delinquent taxes plus interest covering the real property. Thereafter, the property is advertised for pUblic sale at auction to the highest bidder, subject to certain minimum bids. If there are no other bidders, the holder of the tax certificate receives title to the land. If the tax certificate is held by the county and the county has not succeeded in selling it within two years, the county applies for a tax deed upon payment of all applicable costs and fees but not any amount to redeem the certificate. Such property is then also advertised for public sale to the highest bidder, subject to certain minimum bids. If there are no other bidders, the county may purchase the land for the minimum bid. In the case of unsold lands, after seven years the county will take title to such lands. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] 8 appraiser of each county shall prepare an assessment roll for all taxing units within the county and shall levy such millage, subject to constitutional limitations, as determined by each taxing unit, and the county tax collector shall collect all ad valorem taxes for all taxing units in the same manner as county taxes are collected. Municipalities are not permitted to levy ad valorem taxes at a rate of more than ten mills for all municipal purposes; however, there is no limitation as to rate or amount of ad valorem taxes levied for the purpose of paying general obligation bonds such as the Bonds. Real and personal property valuations are determined each year as of January 1 by the county property appraiser's office. State law requires, with certain exceptions, that property be assessed at fair market value; however, $25,000 of the assessed valuation of a homestead is exempt from taxation for a residence occupied by the owner on a permanent basis and who has filed for and received a homestead exemption. On November 3, 1992, the voters of the State approved an amendment to Article VII, Section 4 of the State Constitution establishing a limitation of the lesser of 3% or the increase in the consumer price index during the relevant year, on the annual increase in assessed valuation of homestead property, except in the event of a sale of such property during such year, and except as to improvements to such property during that year. Assessments as of January 1, 1995 are subject to the foregoing limitation. The amendment did not alter any caps on millage rates otherwise set forth in the State Constitution. Since the City has authority to increase the millage levy for general obligation debt such as the Bonds, to the amount necessary to satisfy the related debt service requirements, the limitation on increases in assessed value will not affect the ability of the City to pay the principal of and interest on the Bonds. The tax on personal property covers only tangible personal property and exempts, among other things, household goods and personal effects and inventory. The county property appraiser's office prepares the assessment roll and gives notice to each property owner of the proposed taxes. The property owner then has the right to file an appeal with the value adjustment board, which considers petitions relating to assessments and exemptions. The value adjustment board certifies the assessment roll upon completion of the hearings of all appeals so filed. Millage rates are then computed by the various taxing authorities and certified to the county property appraiser who applies the millage rates to the assessment roll. The taxes of all taxing units, including the City, are billed together by the county tax collector and each property owner is required to pay all such taxes without preference. Tax Collection All ad valorem taxes become due and payable on November 1 and become delinquent on the following April 1, at which time they bear interest at 18% per annum until a tax certificate is sold with respect to real property taxes and until paid with respect to personal property taxes. Discounts are allowed for early payment of 4% if paid in November, 3% if paid in December, 2% if paid in January, and 1 % if paid in February. All taxes collected are distributed by the county tax collector to the applicable taxing units. It is the tax collector's duty on or before June 1 of each year to advertise and sell tax certificates on real property tax delinquencies extending from the previous April 1. Delinquent taxes may be paid by the property owner prior to sale of tax certificates upon payment of all costs, delinquent taxes and interest at the rate of 18% per 7 by the Fiscal Agent of evidence satisfactory to the Fiscal Agent of the owner's right to receive payment of the principal and interest due for payment and evidence, including any appropriate instruments of assignment, that all of such owner's rights to payment of such principal and interest shall be vested in Financial Guaranty. The term "nonpayment" in respect of a Bond includes any payment of principal or interest made to an owner of a Bond which has been recovered from such owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. The Policy is non-cancellable and the premium will be fully paid at the time of delivery of the Bonds. The Policy covers failure to pay principal of the Bonds on their respective stated maturity dates or dates on which the same shall have been duly called for mandatory sinking fund redemption, and not on any other date on which the Bonds may have been otherwise called for redemption, accelerated or advanced in maturity, and covers the failure to pay an installment of interest on the stated date for its payment. This Official Statement contains a section regarding the ratings assigned to the Bonds and reference should be made to such section for a discussion of such ratings and the basis for their assignment to the Bonds. Reference should be made to the description of the Issuer for a discussion of the ratings, if any, assigned to such entity's outstanding parity debt that is not secured by credit enhancement. The Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation (the "Corporation"), a Delaware holding company. The Corporation is a subsidiary of General Electric Capital Corporation ("GE Capital"). Neither the Corporation nor GE Capital is obligated to pay the debts of or the claims against Financial Guaranty. Financial Guaranty is a monoline financial guaranty insurer domiciled in the State of New York and subject to regulation by the State of New York Insurance Department. As of March 31,1997, the total capital and surplus of Financial Guaranty was approximately $1,123,724,061. Financial Guaranty prepares financial statements on'the basis of both statutory accounting principles and generally accepted accounting principles. Copies of such financial statements may be obtained by writing to Financial Guaranty at 115 Broadway, New York, New York 10006, Attention: Communications Department (telephone number: 212-312-3000) or to the New York State Insurance Department at 160 West Broadway, 18th Floor, New York, New York 10013, Attention: Financial Condition Property/Casualty Bureau (telephone number: 212-602-0389). AD VALOREM TAXATION Tax Assessment The laws of the State of Florida provide for a uniform procedure to be followed by all counties, municipalities, school districts and special districts for the levy and collection of ad valorem taxes on real and personal property. The law provides that the county property 6 and written instructions as to the details of the transfer of such Bond. The Bond Registrar shall register the transfer in the registration books and deliver a new registered Bond or Bonds of the same maturity and the same interest rate, in authorized denominations, for the same aggregate principal amount registered in the name of the transferee. The City and the Bond Registrar may charge the Holder of the Bonds an amount sufficient to reimburse them for any tax, fee or any other governmental charge required with respect to the registration of such transfer. The City, the Bond Registrar, and the Paying Agent may deem and treat the registered owner of any Bond as the absolute owner of such Bond for the purpose of receiving payment of the principal of and interest thereon. SECURITY FOR THE BONDS The Bonds are payable from ad valorem taxes assessed, levied and collected on all taxable property in the City (excluding exemptions as required by law) without limitation as to rate or amount. The direct annual property tax provided to pay the Bonds is required to be levied upon all taxable property within the corporate limits of the City, except property of such nature as may be exempt from taxation under the provisions of the Constitution and laws of the State of Florida (the "State"). The taxes so levied and collected shall be in addition to all other taxes so collected, shall be in an amount sufficient to .pay the principal of and interest on the Bonds as the same shall become due and shall be assessed, levied and collected in the same manner and at the same time as other taxes. The proceeds of such tax shall be applied solely to the payment of the principal of and interest on the Bonds. See "AD VALOREM TAXATION" herein. The full faith, credit and taxing power of the City are irrevocably pledged to the punctual payment of the principal of and interest on the Bonds as the same shall become due and payable. The City has covenanted to diligently enforce its right to receive such taxes and to enforce and collect such taxes. The City has further covenanted that it will not take any action that would impair or adversely affect its rights to levy, collect and receive such taxes, or impair or adversely affect in any manner the pledge made in the Resolution or the rights of the holders of the Bonds. MUNICIPAL BOND INSURANCE Concurrently with the issuance of the Bonds, Financial Guaranty Insurance Company ("Financial Guaranty") will issue its Municipal Bond New Issue Insurance Policy for the Bonds (the "Policy"). The Policy unconditionally guarantees the payment of that portion of the principal of and interest on the Bonds which has become due for payment, but shall be unpaid by reason of nonpayment by the issuer of the Bonds (the "Issuer"). Financial Guaranty will make such payments to State Street Bank and Trust Company, N.A., or its successor as its agent (the "Fiscal Agent"), on the later of the date on which such principal and interest is due or on the business day next following the day on which Financial Guaranty will have received telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from an owner of Bonds or the Paying Agent of the nonpayment of such amount by the Issuer. The Fiscal Agent will disburse such amount due on any Bond to its owner upon receipt 5 Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor Cede & Co. will consent or vote with respect to Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. 's consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus P~oxy). Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants accounts on payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor Securities Depository is not obtained, certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to the Beneficial Owners of the Bonds or their designees. The information in this section concerning DTC and DTC's book-entry system has been obtained from DTC. The City makes no representation as to the accuracy or correctness of the information provided in this section. Registration, Transfer and Exchange So long as the Book-Entry Only system is in place for the Bonds, the registered owner of the Bonds for all purposes will be Cede & Co., see "Book-Entry Only System" herein. In the event that the Book-Entry Only system is discontinued, the Beneficial Owners shall receive certificated bonds which will be subject to registration of transfer or exchange as set forth in this section. Transfer of any Bond may be registered upon the registration books maintained by the Bond Registrar upon delivery of such Bond to the Bond Registrar together with a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Bondholder or his attorney-in-fact or legal representative 4 Book-Entry Only System DTC will act as securities depository for the Bonds. The Bonds will be issued as fully- registered securities registered in the name of Cede & Co. as DTC's partnership nominee. One fully-registered Bond certificate for each maturity will be issued for the Bonds in the aggregate principal amount of such maturity as set forth on the cover page of this Official Statement, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization"within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book- entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries mad~ on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the .lame of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. I' I I:. " , I I' 3 PURPOSE OF THE BONDS The Bonds are being issued to provide funds to (i) construct, renovate and rebuild parks and recreation facilities within the City's park system (the "Project") and (ii) pay the costs of issuance of the Bonds, including a premium for municipal bond insurance. THE PROJECT The Project involves the construction, renovation and rebuilding of City parks and other community recreational facilities as approved by a majority of qualified voters of the City on November 8, 1994. ESTIMATED SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of funds from the proceeds of the Bonds: Sources of Funds Principal Amount of Bonds Accrued Interest on the Bonds Original Issue Discount $15,000,000.00 22,706.67 (56,009.75) $14.966,696.92 Total Estimated Sources of Funds Uses of Funds Deposit to Construction Account Deposit to Principal and Interest Account Cost of Issuance, including Municipal Bond Insurance Premium Underwriter's Discount $14,685,000.00 22,706.67 157,140.25 101,850.00 Total Estimated Uses of Funds $14.966.696.92 THE BONDS Description of the Bonds The Bonds will bear interest at the rates and mature in the amounts and on the dates as set forth on the cover page of this Official Statement. The Bonds will be dated October 1, 1997 and will bear interest therefrom payable semi-annually on March 1 and September 1 of each year, commencing March 1, 1998, until maturity. First Union National Bank, Miami, Florida, is acting as Paying Agent and Bond Registrar for the Bonds. The Bonds are not subject to redemption prior to maturity. 2 OFFICIAL STATEMENT RELATING TO $15,000,000 CITY OF MIAMI BEACH, FLORIDA GENERAL OBLIGATION BONDS, SERIES 1996 (Park Improvement Projects) INTRODUCTION The purpose of this Official Statement, including the cover page and all appendices, is to furnish information with respect to the issuance and sale by the City of Miami Beach, Florida (the "City") of $15,000,000 aggregate principal amount of General Obligation Bonds, Series 1996 (Park Improvement Projects) (the "Bonds"). On September 8, 1994, the Mayor and City Commission of the City (the "Commission") adopted Resolution No. 94-21284 calling for a referendum relating to the issuance of not to exceed $15,000,000 of the City's general obligation bonds to construct, renovate and rebuild parks and recreation facilities within the City's park system. An election was held on November 8, 1994 at which the issuance of the Bonds was approved by the electorate. The Bonds are being issued pursuant to Resolution No. 96-22210 adopted by the Commission on November 20, 1996 (the "Resolution") and the Constitution and laws of the State of Florida, including, without limitation, Article VII, Section 12 of the Constitution, Chapter 166, Florida Statutes, as amended, and the City of Miami Beach Charter, as amended (the "Act"). The Bonds will be payable from ad valorem taxes assessed, levied and collected, without limitation as to rate or amount, on all taxable property within the corporate limits of the City (excluding exemptions as provided by applicable law). Such taxes shall be in addition to all other taxes collected and shall be in an amount sufficient to pay the principal of and interest on the Bonds as the same shall become due. The full faith, credit and taxing power of the City have been irrevocably pledged to the punctual payment of the principal of and interest on the Bonds as the same shall become due and payable. See "AD VALOREM TAXES" herein. Payment of the principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy to be issued by Financial Guaranty Insurance Company ("Financial Guaranty") simultaneously with the delivery of the Bonds. See "MUNICIPAL BOND INSURANCE" herein. For a complete description of the terms and conditions of the Bonds, reference is made to the proceedings authorizing the issuance of the Bonds. The description of the Bonds and of the documents authorizing and securing the same contained herein constitute summaries of certain provisions thereof, and do not purport to be comprehensive or complete. Reference is made to the Resolution, a copy of which is attached hereto as Appendix C, and to such other documents, copies of which are on file at the offices of the City, for a more complete description of such provisions. TABLE OF CONTENTS PAGE INTRODUCTION ..................................................... 1 PURPOSE OF THE BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .' 2 THE PROJECT ............................ ........................ 2 ESTIMATED SOURCES AND USES OF FUNDS. .' ......................... 2 THE BONDS . .'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2 Description of the Bonds ............ . . . . . . . . . . . . . . . . . . . . . . . . .. 2 Book-Entry Only System ................. . . . . . . . . . . . . . . . . . . . .' 3 Registration, Transfer and Exchange . . . . . . . . . . .' 4 SECURITY FOR THE BONDS ...................... ................... 5 MUNICIPAL BOND INSURANCE ......................................... 5 AD VALOREM TAXATION .............................................. 6 Tax Assessment ................................................ 6 Tax Collection ........................ . . . . . . . . . . . . . . . . . . . . . . . . .. 7 DEBT SERVICE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., 13 LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., 13 CHARTER AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .' 13 TAX EXEMPTION .................................................... 14 Original Issue Discount ................. ......................... 15 UNDERWRITING ............................. . . . . . . . . . . . . . . . . . . . . . . ., 16 FINANCIAL ADVISOR ..................... .......................... 16 RATINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., 16 LEGAL MA TIERS .................................................... 16 CONTINUING DISCLOSURE .................. . . . . . . . . . . . . . . . . . . . .' 17 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ............... 17 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .' 17 CERTIFICATE CONCERNING THE OFFICIAL STATEMENT. . . . . . . . . . . . . . . . . . . ., 17 APPENDIX A _ GENERAL INFORMATION REGARDING THE CITY OF MIAMI BEACH AND DADE COUNTY, FLORIDA. . . . . . . . . . . . . . . . . . . . . . . . . A-1 APPENDIX B _ GENERAL PURPOSE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING SEPTEMBER 30, 1996 .................................... B-1 APPENDIX C _ THE RESOLUTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., C-1 APPENDIX 0 _ CONTINUING DISCLOSURE COMMITMENT. . . . . . . . . . . . . . . . . . .' D-1 APPENDIX E _ SPECIMEN COpy OF MUNICIPAL BOND INSURANCE POLICY . . . . . . E-1 APPENDIX F _ FORM OF APPROVING OPINION OF BOND COUNSEL ............ F-1 II No dealer, broker, salesman or other person has been authorized by the City or the Underwriters to give any information or to make any representations with respect to the Bonds other than those contained in this Official Statement, and if given or made, such information or representations must not be relied upon a" 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 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from City of Miami Beach, FloridA and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, the l:Jnderwriters. 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. No registration statement relating to the Bonds has been filed with the Securities and Exchange Commission (the "SEC") or with any state securities agency. The Bonds have not been approved or disapproved by the SEC or any state securities agency, nor has the SEC or any state securities agency 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 BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTiONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH BONDS OFFERED HEREBY AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. Sy Eisenberg CITY MANAGER Jose Garcia-Pedrosa CITY OF MIAMI BEACH MAYOR Seymour Gelber VICE MAYOR Martin Shapiro CITY COMMISSION Susan F. Gottlieb Nancy Liebman FINANCE DIRECTOR Patricia D. Walker FINANCIAL ADVISOR Rauscher Pierce Refsnes, Inc. Neisen O. Kasdin David T. Pearlson CITY ATTORNEY Murray H. Dubbin, Esq. CITY CLERK Robert Parcher BOND COUNSEL Squire, Sanders & Dempsey L.L.P. NEW ISSUE=-~6QQKEN..JB_Y..::9NLY RATINGS: Moody's: Aaa Standard & Poor's: AAA UNDERLYING RATINGS: Moody's: A3 Standard & Poor's: A In the opinion of Bond Counsel, under eXlstll1g law, (I) assLlmll1g contll1U1ng compliance by the City wilh certain covenants, II1terest on the Bonds is excluded from gross II1come for federalll1come tax pUlposes; (Ii) interest on the Bonds is not an item of tax preference for purposes of the alternative rmnimum tax Imposed on II1dividuals and corporations, and (Iii) the Bonds and the income thereon are exempt from taxation under the laws of the State of Flonda, except for estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net mcome and franchise taxes imposed by Chapter 220, Florida Statutes, as amended, on interest, mcome or profits on debt obligations owned by "corporations", "banks" and "savmgs associations", as defined therein. Interest on the Bonds may be subject to certain federal taxes imposed only on certam corporations, including the corporate alternatIVe minimum tax on a portion of that mterest. For a more complete discussion of other tax consequences of ownership of the Bonds, see the discussion under the heading "Tax ExemptIOn" herein. $15,000,000 CITY OF MIAMI BEACH, FLORIDA General Obligation Bonds, Series 1996 {Park Improvement Projects} m Dated: October 1,1997 Due: September 1, as shown below The Bonds (the "Bonds") will be initially delivered in book-entry form. registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York, which will act as securities depository for the Bonds. Purchasers will not receive certificates representing their ownership interest in the Bonds purchased. Interest on the Bonds will accrue from the dated date and is payable semiannually on March 1. 1998 and each September 1 and March 1 thereafter. See "The Bonds-Book-Entry Only System." The Bonds are being issued to provide funds to (i) construct. renovate and rebuild parks and recreation facilities within the City's park system and (ii) pay the costs of issuance of the Bonds, including a premium for municipal bond insurance. In each year in which the Bonds are outstanding there shall be assessed, levied and collected a tax, without limitation as to rate or amount, on all taxable property within the City (excluding exemptions as provided by applicable law) sufficient in amount to pay the principal of and interest on the Bonds as the same become due. Such tax shall be assessed, levied and collected in the same manner and at the same time as other City taxes are assessed, levied and collected. THE FULL FAITH, CREDIT AND TAXING POWER OF THE CITY HAVE BEEN PLEDGED FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS. Payment of the principal of and interest on the Bonds when due will be insured by a muniCipal bond insurance policy to be issued by Financial Guaranty Insurance Company simultaneously With the delivery of the Bonds. - Fillarwial Cllar'alllv Ill"III'all'''' FGIC, <:Olllp;lll~ I '(. II. ,._ .. 1"~I_h,,,',1 "., ",-, "..., ~ "",.1 I" 1',,,_.,,, 1_.11."", .."" .I i ,1...,.-,1 "..I. .." \ I The Bonds are not subject to redemption prior to maturity MATURITIES, AMOUNTS, INTEREST RATES AND PRICES Interest Rate 3.70% 3.80 3.90 4.00 4.10 $15,000,000 Serial Bonds Price or Yield 3.90 4.00 4.10 4.15 (Accrued Interest to be added) -------..---------'------ This cover page contains certain information for qUick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain Information essential to making an Informed investment decision. The Bonds are offered when, as and If Issued and accepted by the Underwnters subject to the unqualified approval of legality by Squire, Sanders & Dempsey L.L.P, Miami, Florida. Bond Counsel. Certarn legal matters will be passed upon for the City by Murray H. Dubbin, City Attorney and for the Underwriters by Eckert Seamans Cherin & Mellott, LC, Miami, Florida. Rauscher Pierce Refsnes. Inc. has served as FinanCial AdVisor to the City In connection with the issuance of the Bonds. It IS expected that the Bonds, in book-entry form. Will be available for delivery In New York on or about October 14. 1997 Maturity 1998 1999 2000 2001 2002 Principal Amount Interest Rate 4.30% 4.30 4.40 4.50 Price or Yield 10001c, Maturity -- .-~-.-----. 2004 2005 2006 2007 Principal Amount $ 50,000 50,000 1,100,000 1,900,000 3,525,000 $4,525,000 2,850,000 500,000 500,000 4.35% 4.40 4.50 4.55 Smith Barney Inc. William R. Hough & Co. PaineWebber Incorporated Goldman, Sachs & Co. Dated September 26, 1997 C/ IN WITNESS WHEREOF, the City of Miami Beach, Florida, has issued this Bond and has caused the same to be signed by its Mayor and attested by its City Clerk, either manually or with their facsimile signatures, and its seal to be affixed hereto or a facsimile of its seal to be reproduced hereon. 0ko ~~ City Clerk (SEAL) ATTESTED: By: 4 INCUMBENCY AND SIGNATURE CERTIFICATE I, Robert Parcher, the undersigned City Clerk of the City of Miami Beach, Florida (the IICityll), DO HEREBY CERTIFY as follows: 1. I am the qualified, duly appointed City Clerk of the City and as such am familiar with the books, resolutions, budget and records of the City. 2. The City is a duly incorporated municipal corporation of the State of Florida, and the following persons constitute the duly qualified, elected or appointed members of the City Commission for the periods indicated below: BEGINNING DATE OF ENDING DATE OJ: COMMISSIONER CURRENT TERM CURRENT TERM Seymour Gelber November 1995 November 1997 (Mayor) Martin Shapiro November 1995 November 1999 (Vice Mayor) Sy Eisenberg November 1993 November 1997 Susan F. Gottlieb November 1995 November 1999 Neisen O. Kasdin November 1993 November 1997 Nancy Liebman November 1993 November 1997 David T. pearlson November 1995 November 1997 3. The persons named below are, on the date hereof, the duly qualified officers of the City and the signatures appearing at the right of their respective names are the genuine signatures of said officers: Title Name Mayor Seymour Gelber City Manager Jose Garcia-Pedrosa Finance Director patricia D. Walker City Clerk Robert Parcher DOA: (04548.DOCS.MIA180062JCD-CERT-INCUMBENCY 4. All proceedings of the Mayor and City Commission and of the City relating to the authorization, issuance and sale of $15,000,000 aggregate principal amount of the City of Miami Beach, Florida, General Obligation Bonds, Series 1996 (Park Improvement Projects) (the "Bonds"), including the adoption of Resolution No. 94-21284, adopted September 8, 1994, Resolution No. 94-21400, adopted November 9, 1994, and Resolution No. 96-22210, adopted November 20, 1996, are, as of this date, in full force and effect as taken or adopted without any modification or change whatever. 5. Seymour Gelber, Mayor, has caused each of the Bonds to be executed by his manual signature and said Seymour Gelber was on the date his manual signature was affixed on the Bonds and is now the duly elected and qualified Mayor of the City. 6. The official seal of the City has been impressed on each of the Bonds; I have caused said seal to be attested to by my manual signature and I was on the date my manual signature was affixed on the Bonds and am now the duly qualified City Clerk of the City. 7. The seal which has been impressed on the Bonds and upon this Certificate is the legally adopted, proper and only seal of the City. IN WITNESS WHEREOF, I have hereunto set my hand and affixed hereto the corporate seal of the City this 14th day of October, 1997. (SEAL) CITY OF MIAMI BEACH, FLORIDA ~! pf~~ City Clerk APPROVED AS TO FORM & LANGUAGE & FOR EXECUTION M I:ftt~ Ci1y Attorney (0IU?7 fD e 2 DOA: [04548.DOCS.MIA180062]CD-CERT-INCUMBENCY APPENDIX B GENERAL PURPOSE FINANCIAL STATEMENTS FOR FISCAL YEAR ENDING SEPTEMBER 30, 1995 MIAMI:F:IDOCSIJLOIREI50659.4: 11113/96(8: 14am) MIAMI:F:\DOCS\JLOIRE\50659.4: 11/13/96(8: 14am) APPENDIX C THE RESOLUTION APPENDIX D CONTINUING DISCLOSURE COMMITMENT MIAMI:F:\DOCS\JLOIRE\50659.4: 1 1113/96(8: 14am) APPENDIX E SPECIMEN COpy OF MUNICIPAL BOND INSURANCE POLICY MIAMI:F:\DOCS\JLOIRE\50659.4: 1 1/13/96(8: 14am) APPENDIX F FORM OF APPROVING OPINION OF BOND COUNSEL MIAMI:F :\DOCS\JLOIRE\50659 .4: 11/13/96(8: 14am)