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Exhibit E-Preliminary Statement PRELIMINARY OFFICAL STATEMENT E X H I I T E PRELIMINARY OFFICIAL STATEMENT DATED ----,2000 NEW ISSUE - BOOK-ENTRY ONLY See "Ratings" herein In the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, under existing law, (i) assuming continuing compliance by the City with certain covenants and the accuracy of certain representations, interest on the Series 2000 Bonds is excluded from gross income for federal income tax purposes and is not an item aftax preference for purposes afthe federal alternative minimum tax imposed on individuals and corporations; and (ii) the Series 2000 Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198. Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Interest on the Series 2000 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 the tax aspects, see the discussion under the heading "Tax Matters" herein. $ * CITY OF MIAMI BEACH, FLORIDA STORMW ATER REVENUE BONDS SERIES 2000 Dated: _, 2000 Due: 1, as sbowu below The Series 2000 Bonds will be delivered initially in book-entry fonn, 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 Series 2000 Bonds. Purchasers will not receive certificates representing their ownership interest in the Series 2000 Bonds purchased. Interest on the Series 2000 Bonds will accrue from the dated date and is payable semiannually on _, 20_ and on each _ I and _ I thereafter. See 'THE SERIES 2000 BONDS - Book-Entry Only System." The Series 2000 Bonds are being issued by the City for the purpose of providing funds, together with other availahle moneys, to (i) construct certain improvements to its Stormwater Utility (the "Project") and (ii) pay the costs of issuing the Series 2000 Bonds, including the premiums for the Series 2000 Bond Insurance Policy and the Series 2000 Reserve Account Insurance Policy. The Series 2000 Bonds are subject to redemption by the City prior to maturity as set forth herein. The Series 2000 Bonds are payable from and secured by a first lien on and a pledge of certain revenues and investment income derived from the operation of the Stormwater Utility of the City; subject, however, to the prior payment from revenues of the expenses of operation and maintenance of the Stonnwater Utility. Such first lien and pledge of such revenues and investment income granted by the City in favor ofthe Series 2000 Bonds shall be on a parity with the first lien and pledge of such revenues and investment income that may be granted by the City in favor of Additional Bonds, Refunding Bonds, Alternative Parity Debt and certain Short-Term Indebtedness. See "SECURITY FOR THE SERIES 2000 BONDS" herein. THE CITY IS NOT OBLIGATED TO PAY THE SERIES 2000 BONDS OR THE INTEREST THEREON EXCEPT FROM THE PLEDGED REVENUES AND NEITHER THE FAITH AND CREDIT NOR ANY PHYSICAL PROPERTIES OF THE CITY ARE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2000 BONDS, THE ISSUANCE OF THE SERIES 2000 BONDS DOES NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE CITY TO LEVY ANY FORM OF TAXATION WHATEVER THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT EXCEPT FROM THE PLEDGED REVENUES. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, MIAMI-DADE COUNTY, FLORIDA, THE STATE OF FLORlPA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO PAYMENT OF THE SERIES 2000 BONDS. The scheduled payment of principal of and interest on the Series 2000 Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Series 2000 Bonds by Financial Guaranty Insurance Company. [Insurer Logo 1 For a discussion of the terms and provisions of such policy, including the limitations thereof, see "MUNICIPAL BOND INSURANCE" herein. Maturity Amount* Interest Rate MATUFUTYSCHEDULE $ 'Serial Bonds Price or Yield Maturity Amount* Interest Rate Price or Yield $ $ ._% Term Bonds due . % Term Bonds due - (Dlus accrued interest) 1,20_, Price_% l,20-,Price_% TIllS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. rr IS NOT A SUMMARY OF TIllS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OJITAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. The Series 2000 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 Dubhin, City Attorney. Certain legal matters will be passed upon for the Underwriters by Greenberg Traurig, P.A., Miami, Florida and Dennis Scholl, P.A., Coral Gables, Florida. It is expected that the Series 2000 Bonds, in book-entry form, will be available for delivery in New York, New York on or about . 2000. Bear, Stearns and Co. Inc. Dated: ,2000 William R. Hough & Co. Morgan Stanley & Co. Incorporated Ramirez & Co., Inc. .Preliminary, subject to change. .. = "C .. " .= ..., " .::. ~.~ ~ ~ I Z u 0 ;::S_ ~.;3=~~g U .s ~ u _ 't;i - oS '" "0 0 ~.....~ - '" " 0',: .... .... IE E-< P>!!:! 000 ..., 0 = u tiia.gig, ~~~].] p:l .. O' " ~].~ (/)1 ~ >-I!l ..: ~ ~ ~..6~~.s] <.s=..c::'"d~ ~~j~~:~ ~O~ofi~g ~ >-~";E '" gje]~].s t; .g .S 0 >- CI = "-< ='-.0 ~ "'" 0 .9 U "'" ~- -"B ..,. 5l ~~,tO oS ..., " ~ '" E-< OJ) E-<.o. '': .-= Z - = = Ei O 0:.= ''"'"I 0 0 c: Q) >. '.::l '"' U >- ~ a.~ P> !lI "",M 5 ~ ~ .S .~ ;::; E=:~ ~.~" ~S~S-5~ Q:l"51Q:l;::S~ o rnO rn;::s og"o,,""~ ~N~~~~ ~.~ I!l~ ~ S us5-'.g ~t/)OU'.l~_ ~ ].= ".., eo ~ E-< ".;3'g ~ ~ 0'-0= . = 0 11) 0 i:IJ .... (1) tII 0 U QJ """1 (I) (1) E=:1l~.;3.;3 ~ O;:J ~ tl.S ~ Z . oS ""'.;3 '" E-< = " s'- "";:Jt:.o ~ ~o<Eesl!l ~ E 1 .s .~ .~ '" '> t;:l = t;:l .= ;;> ~.- l:: --l E-<'S ~ ~ 0 ::SZ'"d 1-4 0"] U~~8~.~ -;:;: >. E! ~CI;':::: >-= E: ~ZQ)=Oo o '"d ~ ',p p.. ~ '" 0 '" !3 >- :::g .- - 1;l 'il ~ <: c ~ 'So u -< ~ ""-< e " ~o~~B.s ~5~,,""t;fr ~ E=: '" g 'R ~ c.c:: ~ 'u ',p "'; 0 ~-'-" ",,,,. ~O:<..~::- '" '" 0'" oS oS - ~ .- - = ~OQ)o=!p E-< u.;3 '" =. CITY OF MIAMI BEACH MAYOR Neisen O. Kasdin VICE MAYOR Nancy Liebman CITY COMMISSION Matti Herrera Bower Luis R. Garcia, Jr. Simon Cruz David Dermer Jose Smith CITY MANAGER Jorge M. Gonzalez CITY ATTORNEY Murray H. Dubbin FINANCE DIRECTOR Patricia Walker CITY CLERK Robert E. Parcher ASSISTANT CITY MANAGER AND ACTING PUBLIC WORKS DIRECTOR Matthew D. Schwartz FINANCIAL ADVISOR Dain Rauscher Incorporated BOND COUNSEL Squire, Sanders & Dempsey L.L.P. CONSULTING ENGINEERS CH2M Hill RATE CONSULTANT CH2M Hill 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 Series 2000 Bonds other than those contained in this Official Statement, and if given or made, such information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell nor the solicitation of an offer to buy, nor shall there be any sale of the Series 2000 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the City of Miami Beach, Florida and other sources which are believed to be reliable. In accordance with their responsibilities under the federal securities laws, the Underwriters have reviewed the information in this Official Statement but do not guarantee its accuracy or completeness. 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. OTHER THAN WITH RESPECT TO INFORMATION CONCERNING FINANCIAL GUARANTY INSURANCE COMPANY ("THE BOND INSURER" OR "fiNANCIAL GUARANTY"), ITS SERIES 2000 BOND INSURANCE POLICY AND ITS SERIES 2000 RESERVE ACCOUNT INSURANCE POLICY CONTAINED UNDER THE CAPTION "MUNICIPAL BOND INSURANCE" AND "SECURITY FOR THE SERIES 2000 BONDS - RESERVE ACCOUNT - SERIES 2000 RESERVE ACCOUNT INSURANCE POLICY" HEREIN, NONE OF THE INFORMATION IN THIS OFfiCIAL STATEMENT HAS BEEN SUPPLIED OR VERIFIED BY THE BOND INSURER AND THE BOND INSURER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO (1) THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION; (il) THE VALIDITY OF THE SERIES 2000 BONDS; OR (Iii) THE TAX-EXEMPT STATUS OF THE INTEREST ON THE SERIES 2000 BONDS. No registration statement relating to the Bonds has been filed with the Securities and Exchange Conun\ssion (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 SERIES 2000 BONDS, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 2000 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. TABLE OF CONTENTS Page SUMMARY STATEMENT ........................................................................................................................................ iii INTRODUCTION ...............................................................................................................................................,.........5 PURPOSE OF THE SERIES 2000 BONDS .................................................................................................................5 ESTIMATED SOURCES AND USES OF FUNDS......................................................................................................6 THE SERIES 2000 BONDS .......................................................................................................................................... 7 Genera!.......... ............ ................... ..................................................................... ................. .................................7 Book-Entry Only System.. ............................ .......... ...................................... ................. .......................... '"'''''''' 7 Optional Redemption of Series 2000 Bonds .......................................................................................................9 Mandatory Sinking Fund Redemption ................................ ................................. ...................... .........................9 Redemption Notice............................................................................................................................................10 SECURITY FOR THE SERIES 2000 BONDS...........................................................................................................11 General........... ........... ......................... ....................................... .......................... .................... ......................... .11 Flow of Funds ........ ............... ........................................................................ .................. ..................................12 Reserve Account ............ ......................................................................... ................. ................................... ...... 13 Rate Covenant ............ ..................... ...................................................................... ................... ..........,............. .15 Additional Bonds... .............. ........................................................................... .................. ................................ t 6 Refunding Bonds........... ........................................................................... ................... ............................... .......17 Other Indebtedness... ............,....... ................................................. ........................ ........................ .................. ..17 MUNICIPAL BOND INSURANCE ...........................................................................................................................18 Bond Insurance ........... ............................. .............................................. .................... ................................... .....18 Rights of the Bond Insurer ..........................................................................................,.....................................19 THE STORMW A TER UTILITY ................................................................................................................................ 19 Genera!.......... ............ ..................... ....................................................................... ..................... ...................... .19 The Public Works Department ....................................................................... ................... ................................ 19 Description of the Existing Stormwater Utility........................................ ................... ............................., ........21 The Capital Improvement Program.............. ........... ........................ .... ................. ........................ ................... ..21 Governmental Regulation........ ......................................................................... .................... .............................24 Rates, Fees and Charges.... ...................................................,...................... ................... ................,........... .......25 Billing and Collection ........................................................................... .................. ........................ ................. .25 DEBT SERVICE SCHEDULE....................................................................................................................................26 HISTORICAL AND FORECASTED SCHEDULE OF NET REVENUE, DEBT SERVICE AND DEBT COVERAGE..........................................,...........................................................................27 LITIGATION ..............................................................................................................................................................29 TAX MATTERS .........................................................................................................................................................29 ORIGINAL ISSUE DISCOUNT ................................,...................................................,............................................30 EXPERTS ....................................................................................................................................................................30 UNDERWRITING ........................................................................................................................................,.............30 FINANCIAL STATEMENTS .....................................................................................................................................31 FINANCIAL ADVISOR .............................................................................................................................................31 RATINGS .................................................................................................................................,..................................31 LEGAL MA TIERS.....................................................................................................................................................31 CONTINUING DISCLOSURE ............................................,......................................................................................31 DISCLOSURE PURSUANT TO SECTION 517.051, FLORIDA STATUTES......................,..................................31 MISCELLANEOUS ........................................,...........................................................................................................32 CERTIFICATE CONCERNING THE OFFICIAL STATEMENT.........................................................................,...32 APPENDIX A - General Information Regarding the City APPENDIX B - Report of Consulting Engineers APPENDIX C - Financial Statements of the City APPENDIX D - The Bond Resolution APPENDIX E - Form of Continuing Disclosure Connnitment APPENDIX F - Specimen Copy of Municipal Bond Insurance Policy APPENDIX G - Form of Approving Opinion of Bond Counsel A-I B-1 C-l D-l E-l F-l G-l ii SUMMARY STATEMENT The following is subject in all respects to more complete information contained in this Official Statement and Appendices hereto. Defmed tenns have the same meaning herein as elsewhere in the text. The City ........................................,....................... The City of Miami Beach, Florida is located in Miami-Dade County, Florida (the "County") on the southeast coast of Florida and has an area of approximately 7.5 square miles. The City is the third largest municipality in Miami-Dade County, with an estimated 2000 population of approximately 95,881. The Stormwater Utility ........................................ The City's Stormwater Utility (the "Stormwater Utility") is managed by the City's Public Works Department. The City Commission has the exclusive authority to determine rates, fees and charges for the services provided by the Stormwater Utility. The Series 2000 Bonds will be the only long-term debt of the Stormwater Utility at the time of the delivery of the Series 2000 Bonds. Capital Improvement Program.............................. The stormwater capital improvement projects included within the City's Capital Improvement Program cover a six year period from FY 2000 through FY 2006 with an estimated total cost of $60,446,224. Proceeds from the Series 2000 Bonds are expected to fund $57,806,517 of the planned improvements to the Stormwater Utility that are scheduled for design and/or construction in FY 2001 through FY 2005. Purpose of the Bonds ............................................ The Series 2000 Bonds are being issued for the purpose of providing funds, together with other available moneys, to (i) construct certain improvements to the Stormwater Utility, and (ii) pay certain costs of issuance of the Series 2000 Bonds, including the premiums for the Series 2000 Bond Insurance Policy and the Series 2000 Reserve Account Insurance Policy. Security for the Bonds """""'''''''''''''''''''''''''''''''' The Series 2000 Bonds are payable from and secured by a lien on and pledge of Net Revenues of the Stormwater Utility, and from all moneys held in the Funds and Accounts established under the Bond Resolution, other than the Rebate Fund and the Subordinated Indebtedness Account; subject, however to the prior payment from revenues of the expenses of operation and maintenance of the Stormwater Utility. Upon the satisfaction of certain requirements set forth in the Bond Resolution, the City may issue Additional Bonds, Refunding Bonds, Alternative Parity Debt and certain Short-Term Indebtedness on a parity with the Series 2000 Bonds. The City is not obligated to pay the Series 2000 Bonds or the interest thereon except from the Net Revenues, and neither the faith and credit nor any physical properties of the City are pledged to the payment of the Series 2000 Bonds. The issuance of the Series 2000 Bonds does not directly or indirectly or contingently obligate the City to levy any form of taxation whatever therefor or to make any appropriation for iii their payment except from the Net Revenues. Neither the full faith and credit nor the taxing power of the City, the State of Florida or any political subdivision thereof is pledged to the payment of the Series 2000 Bonds. Redemption........................................................... Certain of the Series 2000 Bonds are subject to redemption by the City prior to maturity. See "THE SERIES 2000 BONDS" herein. Municipal Bond Insurance .................................... The scheduled payment of principal of and interest on the Series 2000 Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Series 2000 Bonds by Financial Guaranty Insurance Company. For a discussion of the tenus and provisions of that policy, including the limitations thereof, see "MUNlCIP AL BOND INSURANCE" herein. Rate Covenant....................................................... The City covenants in the Bond Resolution that it will fIx, charge and collect reasonable rates and charges for the use of the services and facilities furnished by the Stormwater Utility and that from time to time, and as often as it shall appear necessary, it will adjust such rates and charges by increasing or decreasing the same or any selected categories of rates and charges so that the Net Revenues (excluding from the computation of Current Expenses for any Fiscal Year any amount received from any source other than Revenues and applied to the payment of Current Expenses in such Fiscal Year) will be sufficient to provide an amount in each Fiscal Year at least equal one hundred ten percent (11 0%) of the Principal and Interest Requirements for such Fiscal Year and one hundred percent (100%) of all amounts required to be deposited to the Reserve Account, Rate Stabilization Account and Subordinated Indebtedness Account for such Fiscal Year. Additional Bonds """""""""""'''''''''''''''''''''''''''' Subject to satisfaction of certain specifIc requirements set forth in the Bond Resolution, the City may issue Additional Bonds on a parity with the Series 2000 Bonds, if either (i) the percentage derived by dividing the Net Revenues projected for the Stormwater Utility for the Fiscal Year following the Fiscal Year in which the Completion Date of the Improvements to be financed by the Additional Bonds is expected to occur, adjusted as permitted by the Bond Resolution, by the Maximwn Principal and Interest Requirements, including the Principal and Interest Requirements with respect to the Additional Bonds then to be delivered, for any future Fiscal Year is not less than 110%; or (ii) the percentage derived by dividing the Net Revenues for any period of twelve consecutive months selected by the City out of the previous eighteen months, by the Maximwn Principal and Interest Requirements, including the Principal and Interest Requirements with respect to the Additional Bonds then to be delivered, for any future Fiscal Year is not less than 110%. See "SECURITY FOR THE SERIES 2000 BONDS-- Additional Bonds" herein. iv OFFICIAL STATEMENT RELATING TO $ . CITY OF MIAMI BEACH, FLORIDA STORMW A TER REVENUE BONDS, SERIES 2000 INTRODUCTION The purpose of this Official Statement, including the cover page and all appendices, is to set forth certain information in connection with the sale by the City of Miami Beach, Florida (the "City") of its $ · aggregate principal amount of Stormwater Revenue Bonds, Series 2000 (the "Series 2000 Bonds"). The Series 2000 Bonds, and any Additional Bonds and Refunding Bonds issued ou a parity therewith, are collectively referred to as the "Bonds". The Series 2000 Bonds are being issued pursuant to the Constitution and Laws of the State of Florida, including Chapter 166, Florida Statutes, and the City of Miami Beach Charter (collectively, the "Act") and other applicable provisions of law and pursuant and subject to the terms and conditions of a resolution adopted by the City Commission (the "Commission") on October 18, 2000 (as the same may be amended or supplemented from time to time, the "Bond Resolution" or "Resolution"). All capitalized terms used in this Official Statement and not otherwise defined herein have the same meaning as provided in Appendix D attached hereto. Descriptions of the Series 2000 Bonds, the Bond Resolution, and other agreements and documents contained herein constitute sununaries of certain provisions thereof, and do not purport to be complete. Reference is made to the Bond Resolution and such other agreements and documents for a more complete description of such provisions, copies of which are on file at the offices of the City. PURPOSE OF THE SERIES 2000 BONDS The Series 2000 Bonds are being issued for the purpose of providing funds, together with other available moneys, to (i) construct certain improvements to the Stormwater Utility and (ii) pay the costs of issuing the Series 2000 Bonds, including the premiums for the insurance policy guaranteeing the scheduled payment of principal of and interest on the Series 2000 Bonds (the "Series 2000 Bond Insurance Policy" or the "Municipal Bond Insurance Policy") to be issued by Financial Guaranty Insurance Company ("Financial Guaranty") and the reserve account insurance policy in satisfaction of the portion of the Reserve Account Requirement attributable to the Series 2000 Bonds, to be issued by Financial Guaranty (the "Series 2000 Reserve Account Insurance Policy" or the "Reserve Account Insurance Policy"). The improvements to the Stormwater Utility to be made with the proceeds of the Series 2000 Bonds are part of the improvements to be made pursuant to the Capital Improvement Program for the Stormwater Utility. See "THE STORMW A TER UTILITY - The Capital Improvement Program" · Preliminary, subject to change. 5 ESTIMATED SOURCES AND USES OF FUNDS The fol1owing table sets forth the estimated sources and uses of funds (exclusive of accrued interest) from the proceeds of the Series 2000 Bonds: Sources of Funds Principal Amount of Series 2000 Bonds Original Issue Discount Equity Contribution Total Estimated Sources of Funds $ $ Uses of Funds Deposit to Series 2000 Construction Account" Costs orIssuance, including Series 2000 Bond Insurance Policy Premium, Series 2000 Reserve Account Insurance Policy Premium and Underwriters' Discount Total Estimated Uses of Funds $ $ . Includes $ for capitalized interest. 6 THE SERIES 2000 BONDS General The Series 2000 Bonds wiIl be dated _' 2000. The Series 2000 Bonds wiIl bear interest at the rates or yields, and wiIl mature on the dates and in the amounts set forth on the cover page of this Official Statement. Interest on the Series 2000 Bonds is payable semiannuaIly on_ 1, 20_ and each_ 1 and_l thereafter. First Union National Bank, Miami, Florida, is acting as bond registrar for the Series 2000 Bonds (the "Bond Registrar"). Book-EntfY Onlv Svstem The Series 2000 Bonds wiIl be issued in registered book-entry form only. Beneficial Owners (hereinafter defined) of the Series 2000 Bonds wiIl not receive delivery of bond certificates. The Depository Trust Company ("DTC"), New York, New York, wiIl act as securities depository for the Series 2000 Bonds. The Series 2000 Bonds wiIl be issued as fuIly registered securities in the name of Cede & Co. (DTC's partnership nominee). One fully registered bond wiIl be issued for each maturity of the Series 2000 Bonds, in the aggregate principal amount of such maturity and wiIl be deposited with DTC. THE FOLLOWING DESCRIPTION OF THE PROCEDURES AND RECORDKEEPING WITH RESPECT TO BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2000 BONDS, PAYMENT OF INTEREST AND PRINCIPAL ON THE SERIES 2000 BONDS TO DTC PARTICIPANTS (AS HEREINAFTER DEFINED) OR BENEFICIAL OWNERS OF THE SERIES 2000 BONDS, CONFIRMATION AND TRANSFER OF BENEFICIAL OWNERSHIP INTERESTS IN THE SERIES 2000 BONDS AND OTHER RELATED TRANSACTIONS BY AND BETWEEN DTC, THE DTC PARTICIPANTS AND BENEFICIAL OWNERS OF THE SERIES 2000 BONDS IS BASED SOLELY ON INFORMATION FURNISHED BY DTC TO THE CITY FOR INCLUSION IN THIS OFFICIAL STATEMENT. ACCORDINGLY, THE CITY NEITHER MAKES NOR CAN MAKE ANY REPRESENTATIONS CONCERNING THESE MATTERS. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2000 BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE BONDHOLDERS OR REGISTERED OWNERS OF THE SERIES 2000 BONDS SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2000 BONDS. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Connnercial 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 (the "Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book- entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants (the "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 Conunission. Purchases of the Series 2000 Bonds under the DTC system must be made by or through Direct Participants, which wiIl receive a credit for the Series 2000 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2000 Bond (the "Beneficial Owner") is in turn to be recorded on the Participants' records. Beneficial Owners wiIl not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as weIl as periodic statements of their 7 holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2000 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 Series 2000 Bonds, except in the event that use of the book-entry system for the Series 2000 Bonds is discontinued. To facilitate subsequent transfers, all Series 2000 Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Series 2000 Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2000 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2000 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. For every transfer and exchange of the Series 2000 Bonds, the Beneficial Owner may be charged a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor Cede & Co. will consent or vote with respect to Series 2000 Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible afler the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2000 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 2000 Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on each payment 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 such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Bond Registrar or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the City or the Bond Registrar, 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. The City cannot and does not give any assurances that DTC, Participants or others will distribute payments of principal of or interest on the Series 2000 Bonds paid to DTC or its nominee, as the registered owner, or any notices, to the Beneficial Owner or that they will do so on a timely basis or will service and act in a manner described in this Official Statement. Neither the City nor the Bond Registrar is responsible or liable for the failure of DTC, Participants or others to make any payment or give any notice to a Beneficial Owner in respect of the Series 2000 Bonds or any error or delay relating thereto. When reference is made to any action which is required or permitted to be taken by the Beneficial Owners, such reference shall only relate to those permitted to act (by statute, regulation or otherwise) on behalf of such Beneficial Owners for such purposes. When notices are given, they shall be sent by the City or the Bond Registrar, as applicable, only to DTC. DTC may discontinue providing its services as securities depository with respect to the Series 2000 Bonds at any time by giving reasonable notice to the City or the Bond Registrar. Under such circumstances, in the event that a successor securities depository is not obtained, the Series 2000 Bonds are required to be prepared in definitive form and delivered to the Beneficial Owners. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, the Series 2000 Bonds will also be prepared in definitive form and delivered to the Beneficial Owners. See "APPENDIX D - The Bond Resolution" 8 herein for the provisions of the Bond Resolution relating to registration, transfer, exchange and payment of the Series 2000 Bonds, if the book-entry only form of registration is terminated. Ootional Redemotion of Series 2000 Bonds The Series 2000 Bonds maturing prior to , 20_ are not redeemable prior to their stated dates of maturity. The Series 2000 Bonds maturing on , 20_ or thereafter may be redeemed prior to their stated dates of maturity at the option of the City as a whole or in part at any time on or after , 20_, and if in part in any order of maturity selected by the City and by lot or by such other manner as the Bond Registrar shall deem appropriate within a maturity if less than a full maturity is to be redeemed, at the following redemption prices (expressed as a percentage of principal amount), plus accrued interest to the redemption date: Redemption Period (Dates Inclusive) Redemption Price Mandatorv Sinkinl! Fund Redemotion The Series 2000 Bonds maturing on , 20_ are subject to mandatory sinking fund redemption prior to maturity in part by lot or by such other manner as the Bond Registrar shall deem appropriate, on 20_ and on each thereafter at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premiwn, from Amortization Requirements as follows: Year Principal Amount $ . Final Maturity The Series 2000 Bonds maturing on , 20_ are subject to mandatory sinking fund redemption prior to maturity in part by lot or by such other manner as the Bond Registrar shall deem appropriate, on 20_ and on each thereafter, at a redemption price equal to the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premiwn, from Amortization Requirements as follows: 9 Principal Amount Year $ . Final Maturity Redemntion Notice At least thirty (30) days, but not more than sixty (60) days, before the redemption date, a notice of any such redemption, either in whole or in part, ( a) shall be filed by the City with the Bond Registrar, and (b) shall be mailed by the Bond Registrar, first class mail, postage prepaid, to all registered owners of Series 2000 Bonds (which, so long as DTC shall act as securities depository for the Series 2000 Bonds, shall be Cede & Co.) to be redeemed at their last addresses as they appear on the registration books kept by the Bond Registrar, but failure so to mail any such notice shall not affect the validity of the proceedings for such redemption. No assurance can be given by the City that DTC and DTC Participants will promptly transmit notices of redemption to Beneficial Owners. After such redemption date, interest will no longer accrue on such Series 2000 Bonds called for redemption, so long as the required funds are on deposit for their redemptions. Owners of such Series 2000 Bonds should thereafter look solely to such funds for payment. 10 SECURITY FOR THE SERIES 2000 BONDS General The Bonds issued under the Resolution are limited obligations of the City, solely payable from and secured by a lien upon and pledge of Net Revenues and, to the extent provided in the Bond Resolution, from Impact Fees and Special Assessments, and all moneys held in the respective Funds and Accounts established under the Bond Resolution other than the Subordinated Indebtedness Account and the Rebate Fund (collectively, the "Pledged Revenues"). See Appendix D hereto for a further description of the Pledged Revenues. The Series 2000 Bonds are payable from and secured by the Pledged Revenues on a parity with any Additional Bonds and Refunding Bonds that may be issued from time to time under the Resolution and Alternative Parity Debt and certain Short-Term Indebtedness that may be issued from time to time. With respect to the Series 2000 Bonds, there will be no Special Assessments or Impact Fees available to pay principal of and interest on the Series 2000 Bonds, and therefore, as applied to the Series 2000 Bonds, "Pledged Revenues" shall not be deemed to include Special Assessments or Impact Fees. "Net Revenues" is defined in the Bond Resolution as being, for any particular period, the amount of Revenues for such period less Current Expenses for such period. "Revenues" is defmed in the Bond Resolution as all moneys received by the City in connection with or as a result of its ownership or operation of the Stormwater Utility, including the income derived by the City from the provision of stormwater management utility services, any proceeds of use and occupancy insurance on the Stormwater Utility or any part thereof, payments made to the City under Interest Rate Swap arrangements, income from investments made under the Resolution and, except for certain purposes related to the issuance of Additional Bonds under the Bond Resolution, amounts transferred or to be transferred from the Rate Stabilization Account; provided, however, Revenues shall not include grants, contributions or donations, investment income from investments of moneys on deposit in the Construction Fund, the Subordinated Indebtedness Account, the Impact Fee Account and the Special Assessment Account, proceeds of insurance (except use and occupancy insurance) and condemnation awards, moneys held in the Subordinated Indebtedness Account and in any Arbitrage Rebate Fund created pursuant to the Bond Resolution, proceeds of sales of property constituting a part of the Stormwater Utility, Special Assessments, the proceeds of Bonds or other Utility Debt and Impact Fees. "Current Expenses" is defmed in the Bond Resolution as the City's reasonable and necessary current expenses of maintenance, repair and operation of the Stormwater Utility and shall include, without limiting the generality of the foregoing, all ordinary and usual expenses of maintenance and repair, which may include expenses not annually recurring, any reasonable payments to pension or retirement funds properly chargeable to the Stormwater Utility, insurance premiums, engineering expenses relating to maintenance, repair and operation, fees and expenses of the Bond Registrar, legal and accounting expenses, any fees, fines, or penalties lawfully imposed on the Stormwater Utility, any taxes which may be lawfully imposed on the Stormwater Utility or its income or operations and reserves for such taxes, annual fees for the maintenance of Credit Facilities, Liquidity Facilities, Reserve Account Insurance Policies, Reserve Account Letters of Credit or Interest Rate Swaps (other than payments due under an Interest Rate Swap on a parity with interest due on the Bonds and termination payments thereunder), and any other expenses required to be paid by the City in connection with the Stormwater Utility under the provisions of the Resolution or by law, including any amounts required from time to time to pay arbitrage rebate to the United States of America or to fund the Arbitrage Rebate Fund, but shall not include any reserves for extraordinary maintenance or repair, or any allowance for depreciation, or any administrative expenses payable to the City's General Fund, or any deposits or transfers to the credit of the Debt Service Account, the Reserve Account, the Rate Stabilization Account, the Subordinated Indebtedness Account, the Impact Fee Account or the Special Assessment Account. "Impact Fees" is defmed in the Bond Resolution as all nomefundable (except at the option of the City) capital recovery charges, pollution control fees, capacity charges and other similar fees and charges separately imposed by the City as a nonuser capacity charge for the proportionate share of the cost of expanding, oversizing, separating or constructing Improvements to the Stormwater Utility and any investment earnings from the investment of funds on deposit in the Impact Fee Account, but excluding any charges imposed by the City on persons connecting 11 to the Stormwater Utility for the cost of physically connecting thereto, such as the costs of excavation, plumbing and landscaping. The Series 2000 Bonds will have a fIrst lien on the Pledged Revenues on a parity with any Additional Bonds, Refunding Bonds, Alternative Parity Debt and certain Short-Term Indebtedness that may hereafter be issued from time to time. There are currently no other outstanding obligations of the City with any lien on the Pledged Revenues. The City is not obligated to pay the Series 2000 Bonds or the interest thereon except from the Pledged Revenues and neither the faith and credit nor any physical properties of the City are pledged to the payment of the Series 2000 Bonds. The issuance of the Series 2000 Bonds does not directly or indirectly or contingently obligate the City to levy any form of taxation whatever therefor or to make any appropriation for their payment except from the Pledged Revenues. Neither the full faith and credit nor the taxing power of the City, Miami-Dade County, Florida (the "County"), the State of Florida or any political subdivision thereof is pledged to the payment of the Series 2000 Bonds. Flow of Funds The City maintains a special fund designated the "Stormwater Utility Fund" (the "Enterprise Fund"). The Bond Resolution establishes within the Enterprise Fund the Debt Service Account (and within the Debt Service Account, the Bond Service Subaccount and Redemption Subaccount), Reserve Account, Rate Stabilization Account, Subordinated Indebtedness Account, Impact Fee Account and Special Assessment Account. The Bond Resolution also establishes the Construction Fund. All such funds and accounts will be held by the City, and no independent trustee has been appointed to hold the moneys in such funds for the benefIt of the Bondholders. The City will deposit all Revenues collected from the Stormwater Utility's operations into the Enterprise Fund. Not later than the 20th day of each month, the City will withdraw from the Enterprise Fund (except for an amount equal to the next two month's Current Expenses under the Annual Budget, which amount shall be held for the payment of Current Expenses) and deposit the funds withdrawn in the following order: (a) To the Bond Service Subaccount of the Debt Service Account, an amount which, together with amounts concurrently deposited therein from Impact Fees pursuant to the Bond Resolution and from Special Assessments pursuant to the Bond Resolution, will equal one-sixth (1/6) of interest payable on the Bonds of each Series on the next Interest Payment Date, plus one-twelfth (1/12) (or, if principal is payable semiannually, one-sixth (1/6)) of the next maturing installment of principal on all Serial Bonds then Outstanding; such amounts to be adjusted in each month intervening betweeu the date of delivery of the Bonds and the next succeeding Interest Payment Date or principal payment date to add to the required deposit an additional amount which, when multiplied by the number of deposits to the credit of the Bond Service Subaccount required to be made will equal the amount needed to pay principal and interest on such Bonds when such payments are due on the next Interest Payment Date or principal payment date; (b) To the Redemption Subaccount of the Debt Service Account, an amount which, together with amounts concurrently deposited therein from Impact Fees pursuant to the Bond Resolution and from Special Assessments pursuant to the Bond Resolution, will equal one-twelfth (1/12) (or, if any Bonds are retired semiannually, one-sixth (1/6)) of the principal amount of Term Bonds of each Series to be retired for such Fiscal Year; (c) To the Reserve Account, if necessary, the amount needed to make the amount deposited to the credit of the Reserve Account in such month equal to the Reserve Account Deposit Requirement for such month; provided, however, that if the Reserve Account Deposit Requirement is being satisfIed by the restoration of any amounts drawn or paid under a Reserve Account Insurance Policy or a Reserve Account Letter of Credit, there shall be paid to the provider thereof such amount, if any, of any balance remaining after the deposits under clauses (a) and (b) above, as may be required to cause the Reserve Account Deposit Requirement to be satisfied; 12 (d) To the Rate Stabilization Account, amounts determined from time to time by the Commission; and (e) To the Subordinated Indebtedness Account, one.twelfth (1/12) of the amount required to satisfY the principal, redemption premium, if any, and interest requirements of Subordinated Indebtedness for the succeeding twelve month period and the amount, if any, required to be deposited in any special reserve subaccount established within the Subordinated Indebtedness Account. Impact Fees are required to be deposited to the Impact Fee Account, and Special Assessments are required to be deposited to the Special Assessment Account, and the amounts in such accounts are required to be used for the specific purposes for which such Impact Fees or Special Assessments have been levied. See Appendix D hereto for a further description of such Accounts. Reserve Account General. Under the Resolution, the City has established the Reserve Account within the Enterprise Fund. The Reserve Account is held for the benefit of all Bonds Outstanding except that the Series Resolution for one or more particular Series of Bonds may establish a separate subaccount within the Reserve Account for such particular Series of Bonds and, in such event, such Series of Bonds shall be secured only by the moneys held for the credit of such subaccount and by no other amounts held for the credit of the Reserve Account, and the Bonds outstanding of any other Series will have no claim whatsoever on the moneys held for the credit of such separate subaccount in the Reserve Account. No separate subaccount is being established with respect to the Series 2000 Bonds. The Reserve Account Requirement under the Resolution is an amount equal to the lesser of (i) the Maximum Principal and Interest Requirements for all outstanding Bonds, or (ii) the maximum amount allowed to be funded from Bond proceeds under the Code; provided that if the Series Resolution corresponding to a Series of Bonds provides for the establishment of a separate subaccount in the Reserve Account to secure only such Series of Bonds (with such Series of Bonds having no claim on the other moneys deposited to the credit of the Reserve Account), the Reserve Account Requirement for such Series of Bonds shall be calculated as set forth in the corresponding Series Resolution. Upon the issuance of a Series of Bonds, unless funded from the proceeds of such Series of Bonds, the City is required to make deposits to the Reserve Account from the Enterprise Fund each month (after making the deposits to the Debt Service Account and Redemption Account) of one-twelfth (1/12) of the increase in the Reserve Account Requirement resulting from the issuance of such Series of Bonds until the amount on deposit therein equals the Reserve Account Requirement, unless the Series Resolution for such Series of Bonds establishes a separate subaccount in the Reserve Account to secure only such Series of Bonds (with such Series of Bonds having no claim on the other moneys deposited to the credit of the Reserve Account). If the Reserve Account or any separate subaccount therein for any Series contains less than the Reserve Account Requirement, then the City is required to make deposits therein from the Enterprise Fund each month (after making deposits to the Debt Service Account and Redemption Account), of one-twelfth (1/12) of the deficiency, until the Reserve Account Requirement is met. Moneys held for the credit of the Reserve Account will first be used for the purpose of paying the interest on and the principal of the Bonds whenever and to the extent that the moneys held for the credit of the Bond Service Subaccount (after any transfers thereto from the Rate Stabilization Account) shall be insufficient for such purpose and thereafter for the purpose of making deposits to the credit of the Redemption Subaccount in respect of such Bonds whenever and to the extent that withdrawals from the Enterprise Fund (including transfers from the Rate Stabilization Account) are insufficient for such purposes; provided, however, that moneys held for the credit of a separate subaccount in the Reserve Account shall be applied to the foregoing purposes and in the foregoing manner, but only for the benefit of the Series of Bonds for which such separate subaccount was established. Unless otherwise specified by resolution of the Commission, if the moneys held in the Reserve Account exceed the Reserve Account Requirement, such excess is required to be withdrawn and deposited to the credit of the Enterprise Fund. 13 The Resolution permits the City to satisfY all or a portion of the Reserve Account Requirement by depositing in the Reserve Account (or any subaccount therein) a Reserve Account Insurance Policy or Reserve Account Letter of Credit, in lieu of any required deposits into, or in substitution for the amounts on deposit in, the Reserve Account (or the applicable subaccount therein). The entity providing such facility must, at the time of so providing, be of sufficient credit quality to enable debt backed by its facility to be rated in one of the two highest rating categories (without regard to any gradations within such categories) by either Fitch, Inc., Standard & Poor's Ratings Services or Moody's Investors Service, Inc. Series 2000 Reserve Account Insurance Policv. Concurrently with the issuance of the Series 2000 Bonds, Financial Guaranty will issue its Series 2000 Reserve Account Insurance Policy. The Series 2000 Reserve Account Insurance 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 City, provided that the aggregate amount paid under the Series 2000 Reserve Account Insurance Policy may not exceed the maximwn amount set forth in the Series 2000 Reserve Account Insurance Policy, [$ ]. Financial Guaranty will make such payments to the Bond Registrar for the Bonds 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 shall have received telephonic or telegraphic notice subsequently confIrmed in writing or written notice by registered or certifIed mail from the Bond Registrar of the nonpayment of such amount by the City. 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 Series 2000 Reserve Account Insurance Policy is non-cancellable and the premiwn will be fully paid at the time of delivery of the Series 2000 Bonds. The Series 2000 Reserve Account Insurance Policy covers failure to pay principal of the Bonds on their respective stated maturity dates, or dates on which the same shall have been called for mandatory sinking fund redemption, and not on any other date on which the Bonds may have been accelerated, and covers the failure to pay an installment of interest on the stated date for its payment. The Series 2000 Reserve Account Insurance Policy shall terminate on the scheduled fmal maturity date of the Series 2000 Bonds. Generally, in connection with its issuance of a debt service reserve policy, such as the Series 2000 Reserve Account Insurance Policy, Financial Guaranty requires, among other things, (i) that, so long as it has not failed to comply with its payment obligations under the debt service reserve policy, it be granted the power to exercise any remedies available at law or under the authorizing docwnent other than (A) acceleration of the bonds or (B) remedies which would adversely affect holders in the event that the issuer fails to reimburse Financial Guaranty for any draws on the debt service reserve policy; and (ii) that any amendment or supplement to or other modifIcation of the principal legal docwnents be subject to Financial Guaranty's consent. The specifIc rights, if any, granted to Financial Guaranty in connection with its issuance of the debt service reserve policy are set forth in the description of the principal legal docwnents appearing elsewhere in this Official Statement. Reference should be made as well to such description for a discussion of the circumstances, if any, under which the issuer of the Series 2000 Bonds is required to provide additional or substitute credit enhancement, and related matters. This Official Statement contains a section regarding the ratings assigned to the Series 2000 Bonds and reference should be made to such section for a discussion of such ratings and the basis for their assignment to the Series 2000 Bonds. The Series 2000 Reserve Account Insurance Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law or by the Florida Insurance Guaranty Association (Florida Insurance Code, ~~ 631.50 et seq.). 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 fmancial guaranty insurer domiciled in the State of New York and subject to regulation by 14 the State of New York Insurance Department. As of June 30, 2000, the total capital and surplus of Financial Guaranty was approximately $1.293 billion. Financial Guaranty prepares fmancial 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 25 Beaver Street, New York, New York 10004-2319, Attention: Financial Condition Property/Casualty Bureau (telephone number: 212-480-5187). The Series 2000 Reserve Account Insurance Policy does not insure against nonpayment caused by the insolvency or negligence of the Bond Registrar. Rate Covenant The City has covenanted in the Bond Resolution that it will fIx, charge and collect reasonable rates and charges for the use of the services and facilities furnished by the Stormwater Utility and that from time to time, and as often as it shall appear necessary, it will adjust such rates and charges by increasing or decreasing the same or any selected categories of rates and charges so that the Net Revenues (excluding from the computation of Current Expenses for any Fiscal Year any amount received from any source other than Revenues and applied to the payment of Current Expenses in such Fiscal Year) will be sufficient to provide an amount in each Fiscal Year at least equal to one hundred ten percent (110%) of Principal and Interest Requirements on all Bonds for such Fiscal Year and 100% of all amounts required to be deposited to the Reserve Account (or paid to the provider of a Reserve Account Insurance Policy or Reserve Account Letter of Credit), Rate Stabilization Account and Subordinated Indebtedness Account for such Fiscal Year. If the City has covenanted to levy Special Assessments or Impact Fees against property to be benefIted by any Improvements (which levy is done in accordance with State law), and if, in the case of Special Assessments, the City has pledged such Special Assessments to the payment of Bonds or portions thereof and if, in the case of Impact Fees, such Impact Fees are legally available for application with respect to the payment of Bonds or portions thereof, then the Net Revenues in any Fiscal Year for purposes of the rate covenant shall be increased by the amount which the Consulting Engineers estimate will be received from the levy of said Special Assessments or Impact Fees, as the case may be, during such Fiscal Year, said amount to be the installment payments on the Special Assessments or Impact Fees, as the case may be, plus, in the case of Special Assessments, any interest payable on the unpaid portion of the Special Assessments during such Fiscal Year. If in any Fiscal Year the Net Revenues are less than the amount required under the preceding paragraphs, within 30 days of the receipt of the audit report for such Fiscal Year (which, under the Bond Resolution, maybe the provisions of the City's Consolidated Audited Financial Report relating to the Stormwater Utility), the City is required to either cause the Finance Director, or employ a Rate Consultant, to review and analyze the fInancial status and operations of the Stormwater Utility, and to submit, within 60 days thereafter, a written report to the City recommending revisions of the rates, fees and charges of the Stormwater Utility and the methods of operation of the Stormwater Utility that will result in producing the amount so required in the following Fiscal Year. Promptly upon its receipt of such recommendations, the City is required to transmit copies thereof to the City Manager and Finance Director and to revise its rates, fees and charges, or alter its methods of operation and take such other action as will conform with such recommendations. If the City fails to comply with the recommendations of the Finance Director or Rate Consultant, as applicable, the registered owners of not less than 10% in principal amount of all Bonds then Outstanding may institute and prosecute an action or proceeding in any court or before any board or commission having jurisdiction to compel the City to comply with the recommendations and the requirements of the preceding paragraph. If the City complies with all recommendations of the Finance Director or Rate Consultant, as applicable, in respect to its rates, fees, charges and methods of operation, the failure of Net Revenues to meet the rate covenant described above will not constitute an Event of Default so long as the Revenues, together with available moneys in 15 the Funds and Accounts created under the Bond Resolution, are sufficient to pay in cash the Current Expenses and to pay the Principal and Interest Requirements on all Outstanding Bonds and other Utility Debt for such Fiscal Year. Additional Bonds Additional Bonds of the City may be issued under and secured by the Bond Resolution, on a parity as to the pledge of the Net Revenues of the Stormwater Utility with the Series 2000 Bonds and any Additional Bonds, Refunding Bonds, Alternative Parity Debt and Short-Term Indebtedness issued on a parity therewith and secured by the Bond Resolution and then Outstanding, subject to the conditions described below, from time to time, for the purpose of paying all or any part of the Cost of any Improvements and the funding of the Reserve Account and/or the Rate Stabilization Account. Before any Additional Bonds are permitted to be issued under the Bond Resolution, there shall be filed with the City, among other things, the following: (a) a certificate of the Finance Director, an Accountant or the Rate Consultant, demonstrating that either (i) the percentage derived by dividing the Net Revenues projected for the Stormwater Utility for the Fiscal Year following the Fiscal Year in which the Completion Date of the hnprovements to be financed by the Additional Bonds then to be delivered is expected to occur, as certified by the Rate Consultant, adjusted as permitted below, by the Maximum Principal and Interest Requirements, including the Principal and Interest Requirements with respect to the Additional Bonds then to be delivered, for any future Fiscal Year is not less then one hundred ten percent (110%); or (ii) the percentage derived by dividing the Net Revenues for any period of twelve consecutive months selected by the City out of the eighteen months preceding the delivery of such certificate, by the Maximum Principal and Interest Requirements, including the Principal and Interest Requirements with respect to the Additional Bonds then to be delivered, for any future Fiscal Year is not less than 1\0% (the period during which Net Revenues are determined being referred to hereinafter as the "Measurement Period"); and (b) if the certificate described in (a)(i) above is being delivered, a certificate of the Rate Consultant setting forth the projected Net Revenues for the Fiscal Year following the Fiscal Year in which the Completion Date of the Improvements to be financed by the Additional Bonds then to be delivered is expected to occur; and (c) a certificate of the Finance Director to the effect that no event of default under the Bond Resolution and no event which with the passage of time, the giving of notice or both would become an event of default, has occurred within the twelve consecutive calendar months prior to the date of such certificate and is continuing, or, if any such event or events has occurred and is continuing, that the issuance of such Series of Additional Bonds will cure the same. In determining whether to execute and deliver the certificate mentioned in paragraph (a) above, the following adjustments to Net Revenues may be made: (I) If the City, prior to the issuance of the proposed Additional Bonds, shall have increased the rates, fees, rentals or other charges for the services of the Stormwater Utility, the Net Revenues for the Measurement Period shall be adjusted to show the Net Revenues which would have been derived from the Stormwater Utility in such Measurement Period as if such increased rates, fees, rentals or other charges for the services of the Stormwater Utility had been in effect during all of such Measurement Period. (2) If the City shall have acquired or has contracted to acquire any privately or publicly owned existing stormwater management utility system, then the Net Revenues derived from the Stormwater Utility during the Measurement Period shall be increased by addition to the Net Revenues for the Measurement Period of the Net Revenues which would have been derived from said existing stormwater management utility system as if such existing stormwater management utility system had been a part of the Stormwater Utility during the Measurement Period. For the purposes of this paragraph, the Net Revenues derived from said existing stormwater management 16 utility system during the Measurement Period shall be adjusted by deducting the cost of operation and maintenance of said existing stormwater management utility system from the gross revenues of said existing stormwater management utility system in the same manner provided in the Resolution for the detennination of Net Revenues. (3) If the City, in connection with the issuance of Additional Bonds, shall enter into a contract (with a duration not less than the fmal maturity of such Additional Bonds) with any public or private entity whereby the City agrees to furnish services in connection with any stormwater management utility system then the Net Revenues of the Stormwater Utility during the Measurement Period shall be increased by the least amount which said public or private entity shall guarantee to pay in anyone year for the furnishing of said services by the City, after deducting therefrom the proportion of operating expenses and repair, renewal and replacement cost attributable in such year to such services. Such payments shall be deemed to be Net Revenues of the Stormwater Utility and pledged for the Bonds in the same manner as other Net Revenues of the Stormwater Utility. (4) If the City has covenanted to levy Special Assessments or Impact Fees against property to be benefited by any Improvements (which levy must be done in accordance with State law), and if, in the case of Special Assessments, the City has pledged or pledges such Special Assessments to the payment of Bonds or portions thereof and if, in the case of Impact Fees, such Impact Fees are legally available for application with respect to Bonds or portions thereof, then solely for purposes of clauses (a) and (b) above the Net Revenues during the Measurement Period shall be increased by the amount which the Consulting Engineers estimate will be received from the levy of said Special Assessments or Impact Fees, as the case may be, during any Fiscal Year occurring within three years of the date of the sale of such Additional Bonds, said amount to be the installment payments on the Special Assessments or Impact Fees, as the case may be, plus, in the case of Special Assessments, any interest payable on the unpaid portion of the Special Assessments during such Fiscal Year. Refundinl! Bonds Under the provisions of the Bond Resolution, Refunding Bonds of the City may be issued under and secured by the Bond Resolution, on a parity with the Series 2000 Bonds, and any Additional Bonds, Refunding Bonds, Alternative Parity Debt and Short-Term Indebtedness issued on a parity therewith, for the purpose of refunding all or any portion of the Series 2000 Bonds or such additional parity Bonds Outstanding, funding the Reserve Account and/or the Rate Stabilization Account and paying any expenses in connection with such refunding; provided that, before such Additional Bonds are permitted to be issued, there shall be filed with the City Clerk, among other things, either (i) a certificate of the Finance Director that the issuance of the Refunding Bonds will result in a decrease in total Principal and Interest Requirements for all Bonds outstanding, or (ii) the certificates required by (a), (b) and (c) under the caption "Additional Bonds" above; provided, however, that with respect to the certificates required by (a) and (b), the projected Net Revenues shall be computed for the Fiscal Year immediately following the issuance of the Refunding Bonds. Other Indebtedness The City may also issue other types of indebtedness as provided in the Bond Resolution, including certain Short-Term Indebtedness and Alternative Parity Debt on a parity with the Series 2000 Bonds. Such Short-Term Indebtedness may be issued without meeting any parity test. For a description of such other types of indebtedness and the tests applicable to the issuance thereof, see Appendix D hereto (Sections 211 and 212 of the Original Resolution). 17 MUNICIPAL BOND INSURANCE Bond Insurance Coucurreutly with the issuance of the Series 2000 Bouds, Financial Guarauty will issue the Series 2000 Boud Insurance Policy for the Series 2000 Bonds. The Series 2000 Bond Insurance Policy unconditionally guarantees the payment of that portion of the principal of and interest on the Series 2000 Bonds which has become due for payment, but shall be unpaid by reason of nonpayment by the City of the Series 2000 Bonds. 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 shall have received telephonic or telegraphic notice, subsequently confirmed in writing, or written notice by registered or certified mail, from an owner of Series 2000 Bonds or the Bond Registrar of the nonpayment of such amount by the City. The Fiscal Agent will disburse such amount due on any Series 2000 Bond to its owner upon receipt 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 Series 2000 Bond includes any payment of principal or interest made to an owner of a Series 2000 Bond which has been recovered from such owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with a fmal, nonappealable order of a court having competent jurisdiction. The Series 2000 Bond Insurance Policy is non-cancellable and the premium will be fully paid at the time of delivery of the Series 2000 Bonds. The Series 2000 Bond Insurance Policy covers failure to pay principal of the Series 2000 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 Series 2000 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. Generally, in connection with its insurance of an issue of municipal securities, Financial Guaranty requires, among other things, (i) that it be granted the power to exercise any rights granted to the holders of such securities upon the occurrence of an event of default, without the consent of such holders, and that such holders may not exercise such rights without Financial Guaranty's consent, in each case so long as Financial Guaranty has not failed to comply with its payment obligations under its insurance policy; and (ii) that any amendment or supplement to or other modification of the principal legal documents be subject to Financial Guaranty's consent. The specific rights, if any, granted to Financial Guaranty in connection with its insurance of the Series 2000 Bonds are set forth in the description of the principal legal documents appearing elsewhere in this Official Statement. Reference should be made as well to such description for a discussion of the circumstances, if any, under which the City is required to provide additional or substitute credit enhancement, and related matters. This Official Statement contains a section regarding the ratings assigned to the Series 2000 Bonds and reference should be made to such section for a discussion of such ratings and the basis for their assignment to the Series 2000 Bonds. The Series 2000 Bond Insurance Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. Ril!hts of the Bond Insurer Under the provisions of the Resolution, the Bond Insurer is to be treated as the holder of all the Series 2000 Bonds, in lieu of the registered owners of the Series 2000 Bonds, for purposes of consenting to the adoption of any supplemental resolution and exercising any rights and remedies granted to the holders of the Series 2000 Bonds upon 18 the occurrence of an Event of Default. By purchasing the Series 2000 Bonds, the owners thereof, on their own behalf and on behalf of aU subsequent owners of the Series 2000 Bonds, will have consented to such provisions. THE STORMWATER UTILITY The foUowing is intended to provide only a summary description of the Stormwater Utility. For a more detailed description, see the report of CH2M Hill annexed hereto as Appendix B. General The City instaUed the current stormwater coUection and disposal system beginning in the early 1940s. The infrastructure consisted of a network of catch basins, conveyance piping, and positive outfaUs that discharge stormwater into the surrounding waterways. The instaUation of the Stormwater Utility paraUeled development of the City and was focused initiaUy in the South Beach and Mid-Beach areas. In addition to the City's drainage network, the Florida Department of Transportation has instaUed several independent drainage systems within the City. On June 18, 1991, through the adoption of Ordinance 91-66, the Board of County Commissioners of Miami-Dade County established a county-wide stormwater utility. On September 2, 1992, the City adopted Resolution No. 92-20579, which authorized the execution of an Intedocal Agreement with the County. The Intedocal Agreement formalized the relationship between the County and the City and established responsibilities for the planning, control, operation, construction, maintenance, repair, and enhancement of stormwater systems within the limits of the City. In March 1996, the City, through Commission Resolution 96-21923, notified the County ofits desire to be excluded from the County stormwater utility and through the adoption of Ordinance No. 96-3051, on September II, 1996, established an independent Stormwater Utility for the City. Currently, the City owns the Stormwater Utility within its geographical boundary, which covers an area of approximately 4,500 acres, including a number of discrete islands located in Biscyane Bay. The City is divided into 167 drainage basins. The stormwater system within those basins is comprised of approximately 59 miles of piping, 6,000 inlets, 3,000 manholes, and 350 positive outfaUs. The Stormwater Utility is responsible for protecting the waterways from poUution and removal of stormwater from the roadways. The Stormwater Utility manages and controls the amount of runoff that is discharged in the stormwater system. It is also responsible for maintaining the stormwater conveyance system, relieving flooding conditions, and complying with National PoUutant Discharge System ("NPDES") permit requirements. The City exercises exclusive jurisdiction, control and supervision over the Stormwater Utility. The Commission has the legal authority to fix, charge and coUect from its customers, rates, fees, and charges, and to acquire, construct, fmance and operate the Stormwater Utility, without supervision or regulation by any other commission, board, bureau, agency or other political subdivision of the County or State (provided, however, that environmental impacts are regulated as described herein under "THE STORMW A TER UTILITY - Governmental Regulation"). The Public Works Denartment Operation and maintenance of the stormwater system is provided by the City's Public Works Department, which includes the foUowing divisions: Administration; Engineering; Construction Management; Environmental Resources Management; Water, Sewer, and Stormwater; and Street and Streetlights. The Public Works Director reports to the City Manager and is responsible for operational, administrative and fiscal control of the Stormwater Utility. The Stormwater Utility is operated and maintained by the Sewer/Stormwater Section of the Water, Sewer and Stormwater Division of the Public Works Department. The Sewer/Stormwater Section has 17 employees of which II are assigned to respond to customer complaints and emergencies related to the Stormwater Utility. The City is currently in the process of replacing its Director of Public Works. In the interim, the Assistant City Manager, Matthew Schwartz, is overseeing the Department with the assistance of Michael Alvarez, Assistant Public Works Director. 19 The following table identifies those management officials of the City who are responsible for the operation of the Stonnwater Utility: Name Title Jorge M. Gonzalez City Manager Matthew D. Schwartz Assistant City Manager and Acting Public Works Director Patricia D. Walker Finance Director 20 Exnerience Jorge M. Gonzalez was selected on JWle 7, 2000 to serve as the City Manager of the City and began serving the City on August 21, 2000. Prior to his appointment as the City Manager, Mr. Gonzalez served as Senior Assistant Chief Administrative Officer in Montgomery COWlty, Maryland. From 1995-1999, he served as an Assistant County Manager in Arlington COWlty, Virginia. Prior to that post, he served as the Assistant Director of Administration for the Center for the Fine Arts in Miami-Dade County and as the Management Consultant for the Audit and Management Services Department in Miami-Dade County. Mr. Gonzalez received both his Bachelor of Arts degree in Politics and Public Affairs and his Masters degree in Public Administration from the University of Miami. Matthew D. Schwartz has over 30 years experience as an urban planner. Mr. Schwartz was a Mellon Fellow at the University of Wisconsin where he obtained a M.S. in Urban and Regional Planning. During a 24-year tenure at the City of Miami, he served in numerous planning and development positions including Director of the Southeast OvertownlPark West Redevelopment Project; Deputy Director of Development and Executive Director of the Downtown Development Authority (1988-1994). Mr. Schwartz served as Principal for Planning for Carr Smith Corradino, a national engineering, architectural and planning firm. Recently, he established and served as Executive Director of the Waterway Development Authority in Tacoma, Washington. Appointed Finance Director for the 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 COWlty Aviation Department, 1980-1990, Chief Accountant, 1978-1980; Senior Accountant, Price Waterhouse & Co., 1973-1978. Education: Florida State University, B.S. AccoWlting; Florida International University, M.S.M. Accounting. Certification: Certified Public Accountant, Florida 1974. The Public Works Department is supported by other departments within the City. The City Manager provides managerial and administrative guidance. The Finance Department performs the utility billing function, and processes invoices for all consultant and construction coutracts. The Procurement Department handles all requests for payments of invoices received by the Pnblic Works Department, advertises and awards all construction contracts, handles all requests for proposals for engineering consultant contracts, and makes all required equipment purchases. The City's Office of Management and Budget approves all spending requests and allocates funding for all water, wastewater and stormwater operations. The Parks Department handles greenspace restoration. Fleet Maintenance and Property Management performs vehicle fleet maintenance and building maintenance. The Hwnan Resources Department handles all personnel functions. Description of the Existinl! Stormwater Utility The Stormwater Utility is responsible for protecting the waterways from pollution and flood protection or the removal of stormwater from the roadways. The Stormwater Utility meets its flood protection objectives through three methods: filling land and constructing new buildings and improvements at elevations above the anticipated flood elevation; lowering the water table through the construction of canals; and the construction of storm sewers and other stormwater collection and conveyance systems to remove stormwater from the land surface and discharge into the surrounding waterways or into the groundwater. The filling or elevating of land prior to the improvement of property is accomplished by maintaining building codes that require all new construction to be completed with a finished floor elevation above the 100-year flood stage elevation. A canal network is also ntilized as part of the City's stormwater management program. The canals are constructed along natural drainage features and connect salt water bodies at the same elevation. Continuous concrete bnlkheads (sea-walls) were used in the coustruction process to reduce erosion of soil of the adjacent filled lands. Water movement through these canals is accomplished by tidal flushing action only. The Collins Canal connects the southern end of Indian Creek Waterway with Biscayne Bay at Belle Island. Stormwater runoff enters this canal from Dade Boulevard to the north and from various street-ends to the south. The canals are designed in conjunction with the storm sewer system and reportedly were sized to handle a 2S-year storm having a 24-hour duration. The third method of stormwater management is through the use of storm sewers and other stormwater collection and conveyance devices. Storm sewers serve to collect and dispose of excess water after a rainfall event through contaimnent and/or rapid disposal by positive gravity-driven outlets. Storm sewers are comprised of a complex system of collection devices (typically catch basins), pipes, and outfalls that collect, convey and discharge stormwater runoff directly into surface water bodies. The CaDital ImDrovement Prol!ram The City's Comprehensive Stormwater Management Master Plan ("SWMP") identified 34 of the 169 drainage basins as high priority basins. The Capital Improvement Program presented in the SWMP consists of the following improvements to the Stormwater Utility: repair, replacement or installation of curbs and gutters; pavement regarding; repair, replacement or installation of collection systems; repair or upgrade of existing outfalls; and installation of gravity or pressurized drainage wells. The total cost of the projects included within the Capital Improvement Program, to be funded from proceeds of the Series 2000 Bonds and other available funds of the City, is estimated al $60,446,224 as shown in the following lable: 21 TABLE I CITY OF MIAMI BEACH, FLORIDA STORMW ATER UTILITY CAPITAL IMPROVEMENT PROGRAM AND FUNDING FY 2000-2006 FY 2000 . FY 2006 Improvement FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 Total Citywide Improvements $0 $1,000,000 $1,000,000 $1,000,000 $1,000.000 $1,000,000 $1.000,000 $6.000,000 Stormwater CIP South Painte Phase I $92,880 $1,088,120 $1.181,000 Washington Avenue $80,000 $984,000 $1,064,000 Sunset Harbor $60,000 $320,870 $380,870 Nautilus (Middle Beach $259,Q91 $1,526.112 $1,562,448 $3,347,651 Phase 1) North Bay Road $106,957 $1,255,304 $1,362,261 Normandy Shores $3,711,391 $3,711,391 Palm & Hibiscus Islands $176,230 $2,076,077 $2,252,307 Sunset Islands $32.087 $504,000 $536,087 Venetian Islands $100,000 $3,896,000 $3.996,000 South Poiute Phase II $105,245 $1,239,840 $1,345,085 Normandy Isle South $42,783 $252,000 $258,000 $552,783 Flamingo Park South $474,971 $2,796,108 $2,861,134 $6,132,213 Flamingo Park North $286,643 $1,728,600 $1,768,800 3,784,043 Bayshore (Middle Beach $313,444 $1,845,216 $1,888,128 4,046,788 Phase II) South Pointe Phase III $185,735 $2,186,808 $2,372,543 Flamingo Park East $132,621 $1,560,619 $1,693,240 Convention Center $268,362 $3,153,600 $3,421,962 Flamingo Drive $78,361 $922,608 $1,000,969 West Ave. West (5th St. $99,610 $1,172,160 $1,271,770 to 15~ St.) South Painte Phase IV $74,125 $872,256 $946,381 Flamingto Park West $132,621 $1,596,087 $1,728,708 Le Groce Park $36,157 $425,543 $461,700 Lakeview Drive $64,106 $753,828 $817,934 South Painte Phase V $92,744 $1,115,040 $1,207,784 Program/Construction $841,935 $685,333 $1,129.979 $1,012,310 $592,908 $111,504 $4,373,969 Management City Internal $46,832 $291,758 $237,175 $352,163 $317,534 $177,872 $33,451 $1,456,785 Mananagement Costs $1,456,785 Total Improvements $379,712 $13,143,11 $9,828,352 $14,220,90 $12,914,31 $7,699,838 $2,259,995 $60,446,22 0 7 0 4 Source of Funding Series 2000 Bond $13,143,11 $9,828,352 $14,220.90 $12,914,31 $7,699,838 $0 $57,806,51 Proceeds and Investment 0 7 0 7 Earnings Cash Reserves/Current $379,712 $0 $0 $0 $0 $0 $2,259,995 $2,639,707 Revenues Total Funding $379,712 $13,143,11 $9,828,352 $14,220,90 $12,914,31 $7.699,838 $2,259,995 $60,446,22 0 7 0 4 22 Source: City of Miami Beach, Florida 23 The planned improvements are expected to be funded through a combination of bond proceeds and current revenues and reserves. Proceeds from the Series 2000 Bonds are expected to fund $57,806,517 of the planned improvements to the system that are scheduled for design and/or construction in FY 2001 through FY 2005. The residual $2.3 million of improvements which are scheduled for design or construction in FY 2006 will be funded from current revenues and cash reserves generated over the projection period. Included in the Capital Improvement Program is an allowance of $1,000,000 annually for currently unidentified City-wide stormwater system improvements. Governmental Rel!ulation The Stormwater Utility is subject to federal, state and local regulation. Federal. The U.S. Environmental Protection Agency ("EPA") was mandated by the U.S. Congress through Section 405 of the Water Quality Act of 1987 to promulgate an NPDES permitting program for municipal stormwater discharges. The NPDES permitting program required that each EP A region detennine thresholds, by population, for counties/municipalities to be included in the NPDES Program. Region N detennined, because of population, that 8 counties in Florida prepare applications including Miami-Dade, Broward, Palm Beach, Hillsborough, Pinellas, and Duval counties. To ease the burden of preparing individual reports and collecting redundant data, interlocal agreements were signed between Miami-Dade County and 16 municipalities within the County including the City of Miami Beach. A joint permit application was submitted and a permit was issued in 1996. Under the conditions of the NPDES permit, each of the co-applicants is required to perform a number of activities including preparing a comprehensive master plan, perfonning an inventory of the stormwater system, creating stormwater ordinances, establishing a stormwater utility, educating the public on the stormwater collection system, preventing construction site runoff, identifying illicit connections to the stormwater system, sampling the system during dry weather flow, and preparing annual reports summarizing the accomplishments of the applicant. The current NPDES permit expires in 2001. State. When the permit is up for renewal, the Florida Department of Environmental Protection ("FDEP") will take over the NPDES program. It is anticipated that the permit will be renewed without much effort by the applicant. However, it is also anticipated that FDEP will begin to mandate proactive modifications to the existing stormwater collection systems. If this change in philosophy occurs, the City may be mandated to perform modifications in their system to reduce the pollutants being discharged into Biscayne Bay. Local. For any stormwater project the City undertakes, there may be as many as 4 permits required. The permitting process begins with Miami-Dade County Department of Environmental Resources Management ("DERM"). Any modifications to the existing system (with some exception) require an Environmental Resource Permit ("ERP") to be issued from DERM. Additionally, if the stormwater improvements are connected to a positive outfall (a pipe that discharges water into a navigable surface water body) DERM must also issue a Class II permit. The Class II Permit is issued from the same permit application package and requires a higher level of review on water quality issues and a permit fee based on a percentage of construction cost. If the proposed improvements contain drainage wells as a method for stormwater disposal or treatment, the plans and calculations must also be submitted to the FDEP in West Palm Beach. The plans are reviewed by the Underground Injection Control ("UTC") Division to evaluate the project's impact on groundwater quality. Finally, if the plans are approved, the drilling contractor must apply for a Well Construction Permit from the South Florida Water Management District. 24 Rates. Fees and Char!!es The Stormwater Utility's current rate of $2.50 per month per ERU has been in effect since 1995. [The City considered adjustments to the current rates at public bearings on September 27,2000 and October 18, 2000. At the public hearings, the City adopted a rate adjustment schedule that increases the Stormwater Utility's rates by 30 percent to $3.25 per month. In the beginning ofFY 2002, the rates will be increased by another 23 percent to $4.00 per month, and then raised to $5.50 per month at the beginning of FY 2003. The rates will subsequently rise to $5.80 per month at the beginning ofFY 2004. Under this rate adjustment schedule, the stormwater fees will remain at this level through FY 2006. L Dillin!! and Collection A stormwater utility fee is assessed against each property in the City based on existing City Utility accounts, application for service, and the Miami-Dade County Tax Assessor property infonnation. Each account is assigned a number of ERUs that are used to determine the stonnwater utility fee. The ERU is the estimated average horizontal impervious area of residential developed property per dwelling unit. This estimated average is calculated by dividing the total estimated impervious area of four residential categories (single family, mobile home, multifamily and condominium) hy the estimated total number of dwelling units. The current stormwater utility rate is $2.50 per ERU. The City currently has four billing cycles monthly for different areas within the City. Monthly charges for water, wastewater, stormwater and sanitation services appear on the same bill. The Finance Department is responsible for preparing and issuing one itemized bill for water, sewer, stormwater, and garbage disposal services provided by the City. Payments of all bills, except those to the U.S. Army and federal agencies, must be received in the cashier's office of the Finance Department within 15 days after the billing date. A ten percent penalty is added to all bills if not paid within 15 days. If payment is not made 2 months after the due date the Finance Department will mail and/or hand deliver a notice of cut-off of water service to the property owner or occupant. A disconnection charge is assessed to the account of the property owner when water service is cut-off and a reconnection fee is also charged to re-establish service. Unpaid services may result in a lien against the property. Partial undesignated payments are applied first to stormwater, then to sanitation, then to wastewater and last to water. 25 DEBT SERVICE SCHEDULE The table below shows the debt service payable on the Series 2000 Bonds. Year Ended 30 Principal Interest Total 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 TOTAL $ $ $ 26 HISTORICAL AND FORECASTED SCHEDULE OF NET REVENUE, DEBT SERVICE AND DEBT COVERAGE The information in the following table sets forth the forecasted revenues, expenditures and debt service coverage of the Stonnwater Utility. The revenues and expenditures for the fiscal years ended September 30, 2000 through September 30, 2006, have been projected by the Rate Consultant. The following tables must be read in conjunction with the report prepared by the Consulting Engineers, attached hereto as Appendix B. HISTORICAL FINANCIAL RESULTS 11 Months Annualized FY1993 FY1994 FYt995 FY1996 FY19978 FY19989 FY1999 FY2000(d) Operating Revenues Charges for Services $586,939 $2,430,738 $2,525,027 $2,588,272 $2,971,023 $2,948,298 $2,603,766 $4,504,522 Miscellaneous Operating Income $102,104 $347,241 $179,142 $36,119 Total Operating Revenues $586,939 $2,430,738 $2,525.027 $2,690.376 $2,971,023 $3,295,539 $2,782,908 $4,540,641 Operating Expenses Personal Services $76,706 $128,913 $225,109 $334,982 $409,060 $543,042 $466,213 $511,559 Operating Supplies $782 $3,389 $53,587 $10.904 $23,180 $90.039 $88,327 $471,632 Contractual Services(a) $203,727 $353,514 $275.547 $387,792 $592,608 $509,238 $191,210 $248,752 Utilities $128 $0 $0 $0 $50 $124 $174 $131 Internal Charges $1,626 $51,017 $84,863 $129,519 $232,283 $257,712 $238,358 $310,433 Depreciation $14,979 $55,342 $92,897 $97,408 $95,837 $93,238 $130,000 Administrative Fees(b) $99,999 $200.000 $300,000 $200,000 $200,000 $250,000 $250,000 $250,000 Other Operating Expenses ($28,706 $23,326 $21,116 $0 $26,962 $1,159 $328 $11,993 Total Operating Expenses $354,262 $775,138 $1,015,564 $1,156,094 $1,581,551 $1,747,151 $1,327,848 $1,934,500 Operating Income (loss) $232,677 $1,655,600 $1.509,463 $1,534,282 $1,389,472 $1,548,388 $1,455,060 $2,606,141 NonOperating Revenue (Expenses) Interest and Fiscal Charges Disposal of Assets ($1,129) ($79,896) ($784) Interest Income $159 $35,821 $51,487 $73.371 $93,562 $118,661 $144,505 $145,923 Total NonOperating Revenue (Expense) $159 $35,821 $51,487 $72,242 $13,666 $117,877 $144,505 $145,923 Income (loss) Before Operating Transfers $232.836 $1,691,421 $1,560,950 $1,606,524 $1,403,138 $1,666,265 $1,599,565 $2,752,065 Operating Transfers In (out)(e) $0 ($828.706) ($1,110,297 ($930,297) ($1,063,223) ($637,999) ($650,157) $10,970 ) Net Income (loss) $232,836 $862.715 $450,653 $676,227 $339,915 $1,028.266 $949,408 $2,763,035 Residual Equity Transfer/Depreciation on Contributed Capital ($2,650) ($122,001) $10.247 $12,430 ($92,524) $12,680 $0 Retained Earnings, End of Year $232,836 $1,092,901 $1,421,553 $2,108,027 $2,460,372 $3,396,114 $4.358,202 $7,121,237 Source: City of Miami Beach Consolidated Annual Financial Reports (CAFR) for FY 1993 thru FY 1999, and Revenue Report and ExpenditureslEncumbrances for the Month Ended and Year to Date August 31, 2000. Note: aj Contractual services in FY 1996-97 and FY 1997-98 include $572,177 and $495,556 respectively, for capital related expenditures. b) Prior to FY 1995 administrative fees were treated as nonoperating expenses in CAFR. e) Prior to FY 2000, transfers out included $252,000 annually for debt service on Lincoln Road project, transfer to sanitation fund for street sweeping services, and pension transfers. In FY 2000 these expenses are included in operating expenses. d) FY 2000 figures are for II months, annualized, 27 ACTUAL AND PROJECTED OPERATING RESULTS 11 Months Actuals Annualized Budgeted FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 Revenues Operating $2,782,90 $4,540,641 $4,205,000 $5,227,000 $7,259.000 $7,731,000 $7,809,000 $7,887,000 8 NonOperating ~ $129.000 $243.000 $127.000 $148.000 $190000 $250.000 $299.000 Total Revenues $2,927,41 $4,669.641 $4,448,000 $5,354,000 $7,407,000 $7,921,000 $8,059,000 $8,186,000 3 Operating Expense $1.327,84 $1,934,500 $1,988,586 $2,249,500 $2,443.500 $2,622,500 $2,978,000 $3,253,500 8 Less: Depreciation $93,238 $130,000 $130,000 $138,000 $147,000 $157.000 $167,000 $178,000 Less: Administration Fee $250 000 $250.000 $250.000 $266.000 $283.000 $301.000 $321.000 ,llibQQQ Adjusted Operating Expenses $984,610 $1.554,500 $1,608.586 $1,845,500 $2,013,500 $2,164,500 $2,490,000 $2,733.500 Net Revenues $1,942,80 $3,115.141 $2,839,414 $3,508,500 $5,393,500 $5.756,500 $5,569.000 $5,462,500 3 Annual Revenue Bond Debt Service <a> $0 $0 $0 $2,265,245 $3,703,365 $3,703,965 $3,703,690 $3,706,615 Revenue Bond Debt Coverage (b) 1.55 1.46 1.55 1.50 1.47 Funds Available for Subordinated Debt/Admin Fee/Transfers $1,942.80 $3,115,141 $2,839,414 $1,243,255 $1,690,135 $2,052,535 $1.865,310 $1,745.885 3 Annual Subordinated Debt Service $252,000 $252,000 $252,000 $252,000 $252.000 $252,000 $252,000 $252,000 Administration Fee $250,000 $250.000 $250,000 $266,000 $283,000 $301,000 $321,000 $342,000 Transfers Out (c) $650.157 llQ.21Q $10.970 llLQQQ $11.000 $11.000 llLQQQ $11.000 Funds Available After Subordinated Debt, Admin Fee, & Transfers Out $790,646 $2,602,171 $2,326,444 $714,255 $1.144,135 $1,488,535 $1,281,310 $1,140,885 a) FY2001 revenue bond debt service and portion of FY 2002 revenue bond debt service is paid from bond proceeds. Figures shown are net of bond proceeds used for debt repayment. b) Revenue Bond Debt Coverage Requirement: 1.10 c) Transfers out in FY 1999 include Lincoln Road Debt payment and payment to sanitation fund for street sweeping services that are included in operating expenses in FY 2000 and beyond. 28 LITIGATION In the opinion of the City Attorney, 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 or, to the best of the knowledge of the City Attorney, 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 in connection with the sale, issuance and delivery of the Series 2000 Bonds; or (iii) the delivery, validity or enforceability of the Series 2000 Bonds or contesting the power of the City to execute and deliver the Series 2000 Bonds or to consummate the transactions contemplated therein or in this Official Statement, or (iv) contesting in any way the completeness or accuracy of this Official Statement, or (v) wherein an unfavorable decision, ruling or fmding would materially and adversely affect the validity or enforceability of the Series 2000 Bonds or the Bond Resolution; or (vi) which would have a material adverse effect upon the financial condition or the operations of the Stonnwater Utility or the City. TAX MATTERS In the opinion of Squire, Sanders & Dempsey L.L.P., Bond Counsel, under existing law, (i) interest on the Series 2000 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), and is not an item of tax preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on individuals and corporations; and (ii) the Series 2000 Bonds and the income thereon are exempt from taxation under the laws of the State of Florida, except estate taxes imposed by Chapter 198, Florida Statutes, as amended, and net income and franchise taxes imposed by Chapter 220, Florida Statutes, as amended. Bond Counsel will express no opinion as to any other tax consequences regarding the Series 2000 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 that are intended to evidence and assure the foregoing, including that the Series 2000 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 verity the accuracy of those certifications and representations. 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 require future or continued compliance after issuance of the obligations 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 may cause the interest on the Series 2000 Bonds to be included in gross income for federal income tax purposes and thus to be subject to federal income tax retroactively to their date of issuance. The City has covenanted to take the actions required of it for the interest on the Series 2000 Bonds to be and remain excluded from gross income for federal income tax purposes, and not to take any actions that would adversely affect that exclusion. Under Code provisions applicable only to certain corporations (as defmed for federal income tax purposes), a portion of the excess of adjusted current eamings (which includes interest on all tax-exempt obligations, including the Series 2000 Bonds) over other alternative minimum taxable income is included in alternative minimum taxable income that rnay be subject to a corporate alternative minimum tax. In addition, interest on the Series 2000 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 may have certain adverse federal income tax consequences on items of income, deduction or credit for certain taxpayers, including financial institutions, certain insurance companies, recipients of Social Security and Railroad Retirement benefits, those that are deemed to incur or continue indebtedness to acquire or carry tax-exempt obligations, and individuals otherwise eligible for the earned income tax credit. The applicability and extent of these or other tax consequences will depend upon the particular tax status or other tax items of the owner of the Series 2000 Bonds. Bond Counsel will express no opinion regarding those consequences. 29 Purchasers of the Series 2000 Bonds at other than their original issuance at the respective prices indicated on the cover of this Official Statement should consult their own tax advisers regarding other tax considerations such as the consequences of market discount. From time to time, there are legislative proposals pending in Congress that, if enacted, could alter or amend one or more of the federal income tax matters described in this Official Statement or adversely affect the market value of the Series 2000 Bonds. It cannot be predicted whether or in what form any such proposal may be enacted or whether, if enacted, it would apply to obligations (such as the Series 2000 Bonds), issued prior to enactment. ORIGINAL ISSUE DISCOUNT The Series 2000 Bonds maturing in the years _ and _ (collectively, the "Discount Bonds") are being offered and sold to the public at an original issue discount ("OlD"). OlD is the excess of the stated redemption price at maturity (the principal amount) of a Discount Bond over the "issue price" of such 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 yield method, compounded semiannually (or over a 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 other interest on the Series 2000 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 Series 2000 Bond to maturity will realize no gain or loss upon the retirement of that Series 2000 Bond. Owners of Discount Bonds (or book entry interests in them) should consult their own tax advisers as to the determination for federal income tax purposes of the amount of OlD properly accruable in any period with respect to the Discount Bonds and as to other federal tax consequences and the treatment of OlD for state and local tax purposes. EXPERTS The references herein to the Report of CH2M Hill, as the Consulting Engineers have been approved by said fIrm, but do not purport to be complete in all respects, and the Report of the Consulting Engineers, included as Appendix B to this Official Statement, should be read in its entirety for complete information with respect to the subjects discussed therein. The Report of the Consulting Engineers has been included in this Official Statement in reliance upon and with the authorization of said fIrm as expert in such fIelds. UNDERWRITING The Series 2000 Bonds are being purchased by the Underwriters, subject to certain tenus 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 or the Stormwater Utility from that set forth in the Official Statement. The Series 2000 Bonds are being purchased at a purchase price of $ (representing $ in aggregate principal amount less underwriters' discount of $ and less original issue discount of $ ). The Series 2000 Bonds are offered for sale to the public at the prices or yields set forth on the cover page of this Official Statement. The Series 2000 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. 30 FINANCIAL STATEMENTS The financial statements of the City for the year ended September 30, 1999 included as Appendix C to this Official Statement have been audited by KPMG LLP, independent auditors, whose report made reference to the audit of other auditors, as stated in their report appearing in Appendix C. FINANCIAL ADVISOR Dain Rauscher Incorporated, Miami, Florida, has acted in the capacity of Financial Advisor to the City with respect to the issuance of the Series 2000 Bonds. RATINGS Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service, Inc. and Fitch, Inc. are expected to assign their ratings of"_," u_" and "_'\ respectively, to the Series 2000 Bonds based on the issuance of the Bond Insurance Policy concurrently with the issuance of the Series 2000 Bonds. Such ratings reflect only the views of such rating agencies and an explanation of the significance of such ratings may be obtained from such rating agencies. There is no assurance that such ratings given to the Series 2000 Bonds will be maintained for any period of time or that the ratings may not be lowered or withdrawn entirely by such rating agencies if, in their judgment, circumstances so warrant. Any such downward change or withdrawal of such ratings may have an adverse effect on the market price of the Series 2000 Bonds. LEGAL MATTERS Certain legal matters incident to the authorization and issuance of the Series 2000 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 Series 2000 Bonds. The proposed form of such opinion is attached hereto as Appendix G. Certain legal matters will be passed upon for the City by Murray H. Dubbin, City Attorney. Certain legal matters will be passed upon for the Underwriters by Greenberg Traurig, P.A., Miami, Florida and Dennis Scholl, P.A., Coral Gables, Florida, Co-Counsel to the Underwriters. CONTINUING DISCLOSURE The City has agreed for the benefit of the Bondholders and the Beneficial Owners of Series 2000 Bonds to provide certain fmancial information and operating data relating to the City and the Series 2000 Bonds in each year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated material events. Such agreement will apply only as long as the Series 2000 Bonds remain outstanding under the Resolution and the City remains an obligated person with respect to the Series 2000 Bonds under S.E.C. Rule 15c2-12(b)(5) (the "Rnle"). The agreement will also cease upon the termination of the continuing disclosure requirements of the Rule by legislative, judicial or administration action. The Annual Report will be filed by the City with each Nationally Recognized Mnnicipal Securities Information Repository (the "NRMSIR's"), as well as any state information depository that is subsequently established in the State of Florida (the "SID"). The notices of material events will be filed by the City with the NRMSIR's or the Municipal Securities Rulemaking Board, and with the SID. The specific nature of the information to be contained in the Annual Report and the notices of material events are described in "Appendix E - Form of Continuing Disclosure Corrunitment," which shall be executed by the City at the time of issuance of the Series 2000 Bonds. With respect to the Series 2000 Bonds, no party other than the City is expected to provide any continuing disclosure information. DISCLOSURE PURSUANT TO SECTION 517.051, FLORIDA STATUTES Rule 3E-400.003, Rules of Government Securities, promulgated by the Florida Deparbnent of Banking and Finance, Division of Securities, under Section 517.051(1), Florida Statutes ("Rule 3E-400.003"), requires the City to disclose each and every default as to the payment of principal and interest with respect to obligations issued by the 31 City after December 31, 1975. Rule 3E-400.003 further provides, however, that if the City in good faith believes that such disclosures would not be considered material by a reasonable investor, such disclosures may be omitted. The Series 2000 Bonds do not constitute a general debt, liability or obligation of the City, but instead are secured by a pledge of the Net Revenues and other security described herein. Accordingly, the City, in good faith, believes that the disclosure of any default on bonds with respect to which the City was merely a conduit issuer and which are secured by payments of the borrower under a loan agreement, lease agreement or other installment sale agreement, will not be considered material by a reasonable investor. Although the City is not aware of the existence of any payment defaults on obligations for which it is a conduit issuer, the City is not obligated to pay debt service on such defaulted obligations except from payments made from borrowers under their respective agreements. MISCELLANEOUS All of the sununaries or portions of the Bond Resolution and the Stormwater Utility's operating records are made subject to all of the detailed provisions of such 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 documents. CERTIFICATE CONCERNING THE OFFICIAL STATEMENT Concurrently with the delivery of the Series 2000 Bonds, the City will furnish a certificate of its Mayor and City Manager to the effect that, to the best of their knowledge, this Official Statement as of its date and as of the date of the delivery of the Series 2000 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. This Official Statement has been duly executed and delivered by the Mayor, the City Manager and the City Clerk of City of Miami Beach, Florida. CITY OF MIAMI BEACH, FLORIDA By: Mayor By: City Manager Attest: City Clerk MIAMllDUTRACJlI671601p014011.00C/10l12l00 32 GENERAL INFORMATION REGARDING THE CITY OF MIAMI BEACH AND MIAMI- DADE COUNTY, FLORIDA The following information pertaining to the City of Miami Beach, Florida (the "City") and Miami-Dade County, Florida (the "County") is set forth for purposes of background only. INTRODUCTION The City comprises seven square miles of land area and ten square miles of Biscayne Bay. The City is a group of islands between Biscayne Bay and the Atlantic Ocean and is connected to the mainland by four causeways. 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. Employment is concentrated on two industries: hospitality/tourism and healthcare. Entertainment industry employment comprises approximately 6% of the City's jobs (2,700 out of 47,000). For fiscal year 1998, room rents, food and beverage sales accounted for an estimated $686 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 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 City's population for 1998 is estimated at 93,464 permanent residents. 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 Miami-Dade County Planning Department, was 2,043,316 for 1998 and the County estimates growth to 2,292,000 by 2000. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK) A-I Population Projection, City of Miami Beach and Miami-Dade County 1970 - 2010 City of Percent Miami-Dade Percent fi!!: .Mi!mL Chan2e County Chan2e Beach 1970 87,072 (1) 1,267,800 (J) 1980 96,298 (J) 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) 13.1% Source: (1) U. S. Census (2) City Department of Economic Development (3) Miami-Dade Planning Department Population Breakdown by Age City of Miami Beach, 1980 - 2000 A2e Groun 00-14 15-24 25-44 45-64 65-74 75+ Median Age: 1980 6.5% 7.2% 13.7% 22.0% 24.4% 26.2% 65.3 !22!!. 12.0% 9.8% 28.8% 19.3% 11.5% 18.6% 44.5 2000 20.6% 8.2% 21.5% 23.2% 10.4% 16.2% 43.7 Source: Miami-Dade County Planning Department [BALANCE OF PAGE INTENTIONALLY LEFf BLANK] A-2 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 Attomey. 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 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 Jorge Gonzalez Jorge Gonzalez was selected on June 7, 2000 to serve as the City Manager of the City. Prior to his appointment as the City Manager, Mr. Gonzalez served as Senior Assistant Chief Administrative Officer in Montgomery County, Maryland. From 1995-1999, he served as an Assistant County Manager in Arlington County, Virginia. Prior to that post, he served as the Assistant Director of Administration for the Center for the Fine Arts in Miami-Dade County and as the Management Consultant for the Audit and Management Services Department in Miami-Dade County. Mr. Gonzalez received both his Bachelor of Arts degree in Politics and Public Affairs and his Masters degree in Public Administration from the University of Miami. Matthew Schwartz, Assistant City Manager and Acting Public Works Director Matthew D. Schwartz has over 30 years experience as an urban planner. Mr. Schwartz was a Mellon Fellow at the University of Wisconsin where he obtained a M.S. in Urban and Regional Planning. During a 24-year tenure at the City of Miami, he served in numerous planning and development positions including Director of the Southeast OvertownlPark West Redevelopment Project; Deputy Director of Development and Executive Director of the Downtown Development Authority (1988-1994). Mr. Schwartz served as Principal for Planning for Carr Smith Corradino, a national engineering, architectural and planning firm. Recently, he established and served as Executive Director of the Waterway Development Authority in Tacoma, Washington. Patricia D. Walker, City Finance Director Patricia D. Walker was appointed Finance Director of the City of Miami Beach in March 1997 and served as Director of Airports for Broward County, Florida from 1994 through 1997. Ms. Walker served as the Deputy Director of the Broward County Aviation Department from 1992 through 1994 and also served as the Director of Finance in 1992 and the Executive Assistant to the Aviation Director in 1991 for the Broward County Aviation Department. Ms. Walker also served as the Comptroller for the Dade County Aviation Department from 1980 through 1990. Ms. Walker was also Chief Accountant and Senior Accountant for Price Waterhouse & Co. from 1973 through 1980. She received her B.S. in Accounting from the Florida State University and received her M.S.M., in Accounting from Florida International University. Ms. Walker received her Florida certification as a Certified Public Accountant in 1974. A-3 SCOPE OF SERVICES The City provides a full range of municipal services, including police, fire, parks, water, sewer, sanitation and zoning through its twelve (12) departments. The total workforce has remained approximately 1,620 for the past several years; however, significant changes have occurred in the personnel assigned to various activities. ECONOMIC AND DEMOGRAPIDC 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 Miami-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 Miami-Dade County by 18 percent, while in 1980, they were almost even. MEAN FAMILY INCOMES 1980 -1990 Miami Beach 1980 $23,324 1990 $44,738 % CHANGE 91.8% Miami-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 Per Capita Personal Income (Current Dollars) 1987 - 1996 Miami-Dade County Florida United States Current Current Current Xill Dollars % of U.S. Dollars % of U.S. Dollars 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 20,362 93.8 21,767 100.3 21,696 1995 21,058 90.8 23,031 99.3 23,196 1996 22,370 91.5 24,198 99.0 24,436 1997 21,688 85.8 24,799 98.1 25,288 Source: City of Miami Beach Comprehensive Annual Financial Report September 30,1999 EMPLOYMENT City of Miami Beach Employment 1993 -1999 1m ~ 1995 ~ 1997 ~ 1999 Labor Force Employed 39,600 40,150 40,070 40,108 40,604 40,744 41,427 Labor Force Unemployed 3,917 4,112 3,443 3,710 3,669 3,317 3,218 Total Labor Force 43,517 44,262 43,513 43,818 44,273 44,061 44,696 Unemployment Rate 9.0% 9.3% 7.9% 8.5% 8.3% 7.5% 7.2% Source: The City of Miami Beach Statistical Abstract 2000 [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-5 Major Employers in Miami Beach Rank Employer Service Number Employed I Mount Sinai Medical Hospital 3,200 Center 2 City of Miami Beach Government 1,650 3 Fountainb1eau Hilton Hotel 1,200 4 Miami Heart Institute Hospital 950 5 South Shore Hospital Hospital 850 6 Loew's Miami Beach Hotel 800 7 Eden Roc Resort & Spa Hotel 470 8 Island Outpost Hotels 320 9 Radisson Deauville Hotel 270 Source: The City of Miami Beach Statistical Abstract 2000 Major Entertainment Industry Employers in Miami Beach Rank Employer Number Employed 1 USA BroadcastingIW AMI 159 2 Sony Music International 130 3 The Box Music Television 110 4 Yupi.com 100 5 Estefan Enterprises 100 6 MTV Latin America 93 7 Cisneros Television Group 90 8 Onboard Media 75 Source: The City of Miami Beach Statistical Abstract 2000 A-6 Ten Largest Public and Private Employers Located in Miami-Dade County Public Emplovers Miami-Dade County Public Schools Miami-Dade County Federal Government State of Florida Jackson Memorial Hospital City of Miami Florida International University Miami V A Medical Center Miami-Dade Cornmunity College City of Miami Beach 34,310 28,000 18,700 18,400 8,209 3,400 2,465 2,400 2,210 1,800 Private Emplovers American Airlines University of Miami Baptist Health Systems of South Florida Precision Response Corporation BellSouth. Florida Power & Light Co. Publix Super Markets K-Mar! Mount Sinai Medical Center Wino-Dixie Stores, Inc. Source: The Beacon Council, Miami Business Profile, 1999. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-7 9,304 7,517 5,285 5,000 3,792 3,745 3,653 3,000 3,000 2,672 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 1990 -1999 New Additions, Xm Construction Rehabilitations. Etc. Total Value 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 1997 96,643,651 82,576,295 179,219,946 1998 74,513,600 177,283,873 251,797,473 1999 211,236,200 107,085,431 318,321,631 Source: City of Miami Beach Comprehensive Annual Financial Report September30, 1999. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK) A-8 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. City of Miami Beach, Florida Direct and Overlapping Tax Rates ($1 per $1,000 of Assessed Value) For Tax Years 1990 Through 1999 Deht Tax General Service City School Year(1) Fund Funds Total District County Other Total 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 8.413 0.702 28.642 1996 7.499 1.862 9.361 10.390 7.946 0.687 28.384 1997 7.499 1.879 9.378 10.366 7.582 0.710 28.036 1998 7.499 1.711 9.210 10.462 7.268 0.747 27.687 1999 7.499 1.484 8.983 10.160 7.194 0.744 27.081 Source: City of Miami Beach Comprehensive Annual Financial Report September 30,1999. (1) Assessments as of January 1 of the year listed; bills mailed in October of that year; taxes become delinauent at the end of April of the subseauent Year. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK) A-9 City of Miami Beach, Florida Property Tax Levies and Collections Fiscal Years 1989 -1998 Assessed Valuation (2) Tax Including Excluding Total Collected Percent Year(l) Homestead Homesteads Tax Levv in Year (3) Collected 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 IOU % 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% 1996 7,161,079,764 6,015,307,002 54,155,090 55,496,245 102.4% 1997 7,635,026,033 6,413,421,868 57,447,414 57,193,099 99.6% 1998 8,168,481,094 6,861,524,119 60,374,366 60,611,944' 100.4% (I) Assessments as of January I 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. . Unaudited Source: City of Miami Beach Comprehensive Annual Financial Report September 30, 1999. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-10 City of Miami Beach Ten Largest Taxpayers 1998 Owner Tvoe of Pronertv Assessed Value Hotelerama Assoc., Ltd. Hotel $88,051,861 Morton Towers Apts. LP Apartments 44,750,000 Gunernick Family Inv. No. I Ltd. Apartments 37,273,000 South Beach Ocean Parcel, Ltd. Offices 36,610,430 Roney Plaza Associates, Ltd. Apartments 36,400,000 IHC/Miami Beach Corp. Hotel 31,973,391 Eden Roc Acquisition LP Hotel 29,500,000 National Omni Associates LP Apartments 26,350,000 Tri-County Carom. Hospital, Inc. Health Care 25,800,000 Menacla, Inc. Apartments 24,000,000 $379,893,642 Source: The City of Miami Beach Comprehensive Annual Financial Report, September 30, 1999 and Miami-Dade County, Florida; Department of Property Appraisal; City of Miami Beach Valuation Roll, 1999 FILM AND PRINT INDUSTRY The film, fashion and print industries have become an important part of the Miami Beach economy. These industries spend approximately $58 million a year in the City for the production of movies and fashion photographs on public property. (Source: The City of Miami Beach Statistical Abstract 2000). Many international talent and model agencies have located in the City. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK) A-Il Film and Print Industry Permits Issued and Production Budgets For the Calendar Years 1990 - 1998 Fiscal Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Permits Production Issued Bud!!ets 1281 $57,111,250 1604 43,570,250 1901 49,547,200 1871 59,119,950 1827 52,363,600 1939 58,512,750 1900 59,961,610 1936 58,449,200 1861 45,105,700 1781 57,956,052 Sources: The City of Miami Beach Statistical Abstract 2000 and City of Miami Beach Office of Film and Print for 1990 through 1998 CONVENTION AND MEETING ACTIVITY Miami-Dade County and the Miami Beach Convention Center host a large number of conventions each year. Miami-Dade County Convention Activity for the Ten Years ended December 31,1998 Number of Number of Number of Total Year Conventions Delegates Room Nights Expenditures 1989 515 600,000 1,500,000 $405,330,000 1990 525 650,000 1,750,000 439,107,000 1991 500 620,000 1,674,000 428,000,000 1992 525 680,000 1,850,000 469,404,000 1993 550 704,000 1,970,000 690,624,000 1994 616 1,155,954 2,521,120 1,055,395,000 1995 660 1,405,950 2,952,495 1,351,118,000 1996 N/A 1,445,825 3,036,232 1,463,174,900 1997 N/A 1,100,200 2,500,800 1,100,200,00 1998 N/A 856,000 2,341,900 937,990,410 Source: Greater Miami Convention and Visitors Bureau A-12 TOURISM AND VISITOR ACTIVITY DOMESTIC AND INTERNATIONAL OVERNIGHT VISITORS TO GREATER MIAMI AND THE BEACHES, 1994 - 1998 Oriein ~ 1995 ~ 1997 1998 Caribbean 900,600 844,800 746,900 766,900 732,300 Central America 719,800 464,200 396,100 404,900 395,100 South America 1.937.400 1.948.400 1.969.200 2.034.900 2.038.800 Total Latin 3,557,800 3,257,400 3,112,200 3,206,700 3,166,200 America Europe: England 201,200 244,400 264,000 N/A N/A Germany 158,200 373,400 398,700 N/A N/A Other Europe 579.700 521.300 617.300 N/A N/A Total Europe 939,100 1,139,100 1,280,000 1,324,300 1,359,200 Canada 406,200 501,300 593,100 610,900 579,500 Other International 125.600 163.800 127 .800 136.800 163.300 Total International 5,028,700 5,061,600 5,113,100 5,278,700 5,268,200 Total Domestic 3.728.600 4.317.600 4.462.000 4.564.600 4.468.700 Total Overnight 8 757.300 9379200 9575100 9 843.300 9.736900 Expenditures: Domestic $2,513,470,000 $3,291,134,000 $4,300,000,000 N/A N/A International 4.402.705.000 5.078.716.000 6.600.000.000 N/A N/A Total Expenditures $6916.175000 $8.369 850 000 $10 900 000 000 $11.629 995 000 $12058800 000 Source: Greater Miami Convention and Visitors Bureau, 1997 and 1998; Miami Business Profile; 1997-98 Beacon Council [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-13 Overnight Visitors hy Region 1994 1995 ~ 1997 1998 Miami Beach 33.7% 32.3% 33.2% 35.8% 39.0% Downtown Miami 15.1% 15.3% 14.3% 13.0% 11.6% North Dade/Sunny Isles 19.0% 19.1% 13.7% 13.8% 13.5% Airport Area 17.3% 14.4% 18.0% 20.2% 18.4% South Dade 8.7% 10.8% 10.7% 9.1% 8.3% Coconut Grove/Coral 6.1% 8.2% 10.1% 8.1% 9.2% Gables/Key Biscayne Source: Greater Miami Convention and Visitors Bureau 1998 Profile of Visitors to Greater Miami and the Beaches 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 specializes in trailer and container cargo. From 1990 to 1999, the total cargo bandied increased from 3.5 million tons to nearly 7 million tons, an increase of nearly 100%. 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 ten years is presented below: [BALANCE OF PAGE INTENTIONALLY LEFT BLANK] A-14 PASSENGERS AND CARGO HANDLED BY PORT OF MIAMI 1990-1999 Year Ended Cruise Cargo September 30 Passengers (in tons) 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 6,002,744 1997 3,191,885 6,735,388 1998 2,960,264 7,056,634 1999 3,112,355 6,930,372 Source: Miami-Dade County Florida Seaport Department; The Port of Miami, 1999 Five separate airports owned and operated by Miami-Dade County are within easy reach of the City. Miami International Airport ranks 7th in the nation and 12th in the world in the number of passengers using its facilities. It ranks third in the nation and third in the world in the movement of domestic and international air cargo. In 1998 the airport served 33.9 million passengers and handled over 1.9 million tons of cargo. Statistics from 1989 - 1998 are presented below: [BALANCE OF PAGE INTENTIONALLY LEFf BLANK] A-IS PASSENGERS AND CARGO HANDLED BY MIAMI INTERNATIONAL AIRPORT 1989-1998 Year Ended Cargo September 30 Passengers (in tons) 1989 23,422,000 869,612 1990 25,294,000 945,773 1991 26,709,000 951,328 1992 26,125,000 1,073,429 1993 28,246,000 1,215,553 1994 29,351,000 1,402,979 1995 32,852,000 1,703,367 1996 33,504,000 1,885,232 1997 34,533,268 1,946,841 1998 33,935,491 1,976,857 Source: Miami-Dade County, Florida Aviation Department, Miami International Airport 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 nurnber 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 ofBiscayne Bay from 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. A-16 MIAMUDUTRACllI784SS/~1 !.DOCIIO/12l00 A-I?