Res 62-04 RESOLUTION NO. 62-04
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY
BEACH, FLORIDA, AUTHORIZING THE COMPETITIVE SALE OF CITY
OF DELRAY BEACH, FLORIDA, GENERAL OBLIGATION BONDS,
SERIES 2004 (RECREATIONAL AND CULTURAL PROSECTS), IN THE
INITIAL AGGREGATE PRINCIPAL AMOUNT OF NOT EXCEEDING
$24,000,000; ESTABLISHING THE MATURITY SCHEDULE AND
REDEMPTION TERMS IN CONNECTION WITH THE BONDS,
AUTHORIZING THE CITY MANAGER OR FINANCE DIRECTOR TO
PUBLISH A SUMMARY NOTICE OF SALE AND TO RECEIVE BIDS
PURSUANT TO A COMPETITIVE SALE OF SAID BONDS TO THE
RESPONSWE BIDDER OFFERING THE LOWEST TRUE INTEREST COST
TO THE CITY WHICH SHALL NOT EXCEED SIX PERCENT; APPOINTING
A PAYING AGENT AND BOND REGISTRAR; AUTHORIZING THE
REGISTRATION OF THE BONDS UNDER A BOOK-ENTRY SYSTEM;
APPROVING THE FORM OF A SUMMARY NOTICE OF SALE, AN
OFFICIAL NOTICE OF BOND SALE AND BID FORM, PRELIMINARY
OFFICIAL STATEMENT AND AUTHORIZING THE EXECUTION AND
DELIVERY OF AN OFFICIAL STATEMENT RELATING TO THE BONDS;
AUTHORIZING THE USE BY THE SUCCESSFUL BIDDER OF THE
OFFICIAL STATEMENT RELATING TO THE BONDS; APPROVING THE
FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A
PAYING AGENT AND REGISTRAR AGREEMENT RELATING TO THE
BONDS; PROVIDING FOR A BOND INSURANCE POLICY FOR THE
BONDS PROVIDED BY MBIA INSURANCE CORPORATION;
AUTHORIZING THE PROPER OFFICERS OF THE CITY TO DO ALL
OTHER THINGS DEEMED NECESSARY OR ADVISABLE AS TO THE
SALE AND DELIVERY OF THE BONDS; AND PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, the City Commission of Delray Beach, Florida (the "Commission") did, on
this date, adopt Resolution No. 61-04 (the "Authorizing Resolution") authorizing the issuance of
not exceeding $24,000,000 in initial aggregate principal amount of General Obligation Bonds,
Series 2004 (Recreational and Cultural Projects) (the "Bonds"), for the purpose of financing all
or a portion of the costs of certain capital projects particularly described in Resolution No. 72-03
(the "Projects"), adopted by the Commission on October 21, 2003; and
Resolution No. 62-04
WHEREAS, any term not otherwise defined in this Resolution shall have the meaning
ascribed to such term in the Authorizing Resolution; and
WItEREAS, the City deems it to be in the best economic interest of the City that the
Bonds be sold at a public sale in order to accomplish the stated purposes of the Bonds; and
WHEREAS, it is necessary: (i) to fix the date, denominations, amount and maturities of
the Bonds, (ii) to authorize the publication (including publication on the Intemet) of a summary
notice of sale, (iii) to approve the form and the use (including use over the Intemet) of an
Official Notice of Bond Sale and Official Bid Form, Preliminary Official Statement and a final
Official Statement, (iv) to authorize the City Manager or the Finance Director of the City to
award the Bonds to the best bidder upon the terms and conditions and subject to the limitations
set forth herein and the Official Notice of Bond Sale, (v) to appoint a Bond Registrar and Paying
Agent and (vi) to select bond insurance to guarantee the payment of scheduled debt service on
the Bonds; and
WHEREAS, the City's financial advisor has recommended in a letter, attached hereto as
Exhibit D, that the principal and interest on the Bonds be insured by a municipal bond insurance
policy (the "Bond Insurance Policy") to be issued by MBIA Insurance Corporation (the "Bond
Insurer") pursuant to the terms and provisions of the commitment of such Bond Insurer to
provide the Bond Insurance Policy attached hereto as Exhibit E (herein, the "Commitment"); and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS:
Resolution No. 62-04
SECTION 1. DEFINITIONS. That all capitalized terms used in this Resolution not
otherwise defined shall have the meanings ascribed to such terms in the Authorizing Resolution
unless the context clearly indicates otherwise.
SECTION 2. AUTHORIZATION OF THE BONDS AND PURPOSE. Subject
and pursuant to the provisions of the Act, this Resolution and the Authorizing Resolution, the
City hereby authorizes the Bonds to be known as "General Obligation Bonds, Series 2004
(Recreational and Cultural Projects)," to be issued pursuant to the terms and provisions of the
Authorizing Resolution and this Resolution in the aggregate principal amount of not exceeding
Twenty-Four Million Dollars ($24,000,000) (herein referred to as the "Bonds"), for the purpose
of (i) financing the Projects and all incidental costs relating thereto and (ii) paying the costs of
issuing the Bonds, including the premium for the Bond Insurance Policy.
SECTION 3. FORM OF BONDS. The text of the Bonds shall be in substantially
the form set forth in the Authorizing Resolution.
SECTION 4. TERMS AND DETAILS OF THE BONDS. The Bonds shall be
dated the date of issuance, shall be issued in the denomination of $5,000 each or integral
· multiples thereof, shall bear interest payable February 1, 2005 and semi-annually therea~er on
August 1 and February 1 in each year and shall mature or be subject to mandatory sinking fund
redemption at the election of the successful bidder on February 1 in the years 2005 through 2024.
The Bonds maturing on February 1, 2015 and thereai'~er are subject to redemption at the
option of the City prior to maturity on or after February 1, 2014, in whole at any time or in par~
f~om time to time on the first day of any month in such manner as shall be det~nined by the
Resolution No. 62-04
City, at a redemption price equal to the principal amount of the Bonds to be redeemed, together
with accrued interest to the date fixed for redemption.
Notwithstanding the foregoing, if the City's financial advisor, upon consultation with the
Finance Director, determines that market conditions require different or no optional redemption
provisions for the Bonds or for certain maturities of the Bonds, such different optional
redemption provisions or the exclusion of certain or all maturities of the Bonds from such
optional redemption provisions will be deemed approved by the Commission without the need of
further proceedings so long as the maximum redemption premium does not exceed 1% and the
first optional redemption period is not more than twelve (12) years from the date of issuance of
the Bonds.
If less than all of the Bonds are called for redemption, the Bonds to be redeemed shall be
selected in such manner as the City, in its discretion, shall determine, and if less than all of a
maturity shall be called for redemption, the Bonds to be redeemed shall be selected by lot within
such maturity.
Notice of redemption of the Bonds shall be mailed, postage prepaid, by the Bond
Registrar (herein defined) at least thirty (30) and not more than sixty (60) days before the date
fixed for redemption to the registered owners of any of the Bonds or portions of the Bonds which
are to be redeemed, at their addresses as they appear fifteen (15) days prior to the date such
notice is mailed on the registration hooks of the City kept by the Bond Registrar.
The Bond Registrar also shall mail Coy certified mail, return receipt requested) a copy of
such notice for receipt not less than the second business day prior to the date notice of
Resolution No. 62-04
redemption is mailed to the Bondholders to the following (or the most current address): The
Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530; Midwest
Securities Trust Company, Capital Structures - Call Notification, 440 South LaSalle Street,
Chicago, Illinois 60605; Philadelphia Depository Trust Company, Reorganization Division, 1900
Market Street, Philadelphia, Pennsylvania 19103; Attention: Bond Department; provided,
however, that such mailing shall not be a condition precedent to such redemption and failure to
mall any such notice shall not affect the validity of any proceedings for the redemption of the
Bonds. The Bond Registrar shall also provide notice, at the same time notice of redemption is
given to the Bondholders, to Kenny Information Systems Notification Service, 65 Broadway,
16th Floor, New York, New York 10006, and Standard & Poor's Called Bond Record, 25
Broadway, New York, New York 10004 (or the most current address); provided, however, that
such mailing shall not be a condition precedent to such redemption and failure to mall any such
notice shall not affect the validity of any proceedings for the redemption of the Bonds.
A second notice of redemption shall be given sixty (60) days after the redemption date in
the manner required above to the registered owners of redeemed Bonds which have not been
presented for payment within thirty (30) days after the redemption date.
Such notice of redemption shall set forth (i) the date fixed for redemption, (ii) the
redemption price to be paid, (iii) the name and address of the Bond Registrar, (iv) if less than all
of the Bonds shall be called for redemption, the distinctive numbers, letters and CUSIP
identification numbers, if any, of such Bonds to be redeemed, (v) in the case of Bonds to be
redeemed in part only, the portion of the principal amount thereof to be redeemed, and (vi) any
Resolution No. 62-04
other information the City or the Bond Registrar deems relevant. Subject to the rules of the
Securities Depository, in ease any Bond is to be redeemed in part only, the notice of redemption
that relates to such Bond shall state also that on or after the redemption date, upon surrender of
the Bond, a new Bond or Bonds of the same maturity, bearing interest at the same rate and in
aggregate principal amount equal to the unredeemed portion of such Bond, will be issued.
Failure of the registered owner of any Bonds which are to be redeemed to receive any such
notice shall not affect the validity of the proceedings for the redemption of Bonds for which
proper notice has been given. Interest shall cease to accrue on any of the Bonds duly called for
prior redemption if payment of the redemption price has been duly made or provided for.
Notwithstanding any of the foregoing, no notice of redemption that relates to the Bonds
shall be given unless there are sufficient moneys for such redemption on deposit in the Sinking
Fund or unless such redemption shall be paid for with the proceeds of refunding bonds.
SECTION 5. SALE OF BONDS. The Finance Director is hereby authorized and
directed to sell the Bonds at public sale by competitive bid and to publish the Summary Notice of
Sale attached hereto as Exhibit A in The Bond Buyer and on the World Wide Web at least ten
(10) days prior to the date of sale, which date of sale shall be determined by the Finance
Director, in consultation with the City's financial advisor, in an effort to achieve the lowest
interest rate cost for the City.
The Official Notice of Bond Sale and Official Bid Form attached hereto as Exhibit B and
the Preliminary Official Statement attached hereto as Exhibit C are each hereby approved and
authorized to be used in connection with the sale of the Bonds. The Preliminary Official
Resolution No. 62-04
Statement, upon advice of the Finance Director, is hereby deemed final for purposes of the Rule.
The Preliminary Official Statement, as amended on the date of sale of the Bonds to delete the
preliminary language and as further amended to retiect the actual interest rates and reoffering
terms and any changes of maturities or amounts and with such additional correcting and
conforming changes as shall be approved by the Finance Director, is hereinafter referred to as the
"Official Statement" and as promptly as possible following the sale and within seven (7)
business days of the date of sale of the Bonds, the City agrees to make available to the purchaser
of the Bonds a sufficient number of copies of the Official Statement as necessary to enable such
purchaser to comply with the Rule. The Mayor (or in his absence, the Vice Mayor) is authorized
to execute the Official Statement on behalf of the City with such changes, completions and
amendments as they shall determine are necessary or desirable. The purchaser of the Bonds is
hereby authorized to use the Official Statement in connection with confirming the sale of the
Bonds.
The Finance Director is hereby delegated the authority to award the Bonds to the
responsive bidder offering to purchase the Bonds at the lowest annual interest cost to the City
computed on a true interest cost basis, which in no event shall exceed six percent (6.00%) per
annum. True interest cost shall be calculated as provided in the Official Notice of Bond Sale.
As a further condition for the Finance Director to award the Bonds, the reoffering price for the
Bonds may not be less than 99% of the principal amount of the Bonds for any single maturity
thereof, and the aggregate purchase price as certified by the City's financial advisor, may not be
less than 100% of the aggregate principal amount of the Bonds.
Resolution No. 62-04
SECTION 6. BOND REGISTRAR; PAYING AGENT. Wells Fargo Bank,
National Association is hereby appointed the Bond Registrar and Paying Agent for the Bonds.
SECTION 7. BOOK ENTRY BONDS. That the City hereby determines that the
registration of the Bonds be by the book entry system of registration provided by the Securities
Depository.
SECTION 8. BOND INSURANCE POLICY AND PROVISIONS RELATING
THERETO. That, based on the recommendations of the City's financial advisor, set forth in a
letter attached hereto as Exhibit D with respect to the Bonds, the Commission finds that
obtaining the Bond Insurance Policy provided by the Bond Insurer is in the best interests of the
City, and the Commission hereby directs that the premium due on the Bond Insurance Policy be
paid in accordance with the terms thereof. To the extent not reflected in the Authorizing
Resolution and this Resolution, the terms and provisions of the Commitment f~om MBIA
Insurance Corporation to provide the Bond Insurance Policy attached hereto as Exhibit E are
accepted and incorporated herein as though such terms and provisions were set forth herein
(herein, the "Commitment").
A. In the event that, on the second Business Day, and again on the Business Day,
prior to the payment date on the Bonds, the Paying Agent has not received sufficient moneys to
pay all principal of and interest on the Bonds due on the second following or following, as the
ease may be, Business Day, the Paying Agent shall immediately notify the Bond Insurer or its
designee on the same Business Day by telephone or telel~'aph, confirmed in writing by registered
or certified mail, of the amount of the deficiency.
Resolution No. 62-04
B. If the deficiency made up in whole or in part prior to or on the payment date, the
Paying Agent shall so notify the Bond Insurer or its designee.
C. In addition, if the Paying Agent has notice that any Bondholder has been required
to disgorge payments of principal or interest on the Bonds to a trustee in bankruptcy or creditors
or others pursuant to a final judgment by a court of competent jurisdiction that such payment
constitutes an avoidable preference to such Bondholder within the meaning of any applicable
bankruptcy laws, then the Paying Agent shall notify the Bond Insurer or its designee of such fact
by telephone or telegraphic notice, confirmed in writing by registered or certified mail.
D. The Paying Agent is hereby irrevocably designated, appointed, directed and
authorized to act as attorney-in-fact for Holders of the Bonds as follows:
1. If and to the extent there is a deficiency in mounts required to pay interest
on the Bonds, the Paying Agent shall (a) execute and deliver to U.S. Bank Trust National
Association, or its successors under the Bond Insurance Policy (the "Insurance Paying
Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the
Bond Insurer as agent for such Holders in any legal proceeding related to the payment of
such interest and an assignment to the Bond Insurer of the claims for interest to which
such deficiency relates and which are paid by the Bond Insurer, (b) receive as designee of
the respective Holders (and not as Paying Agent) in accordance with the tenor of the
Bond Insurance Policy payment from the Insurance Paying Agent with respect to the
claims for interest so assigned, and (e) disburse the same to such respective Holders; and
Resolution No. 62-04
2. If and to the extent of a deficiency in mounts required to pay principal of
the Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent
in form satisfactory to the Insurance Paying Agent an instrument appointing the Bond
Insurer as agent for such Holder in any legal proceeding relating to the payment of such
principal and an assignment to the Bond Insurer of any of the Bonds surrendered to the
Insurance Paying Agent of so much of the principal amount thereof as has not previously
been paid or for which moneys are not held by the Paying Agent and available for such
payment (but such assignment shall be delivered only if payment from the Insurance
Paying Agent is received), (b) receive as designee of the respective Holders (and not as
Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment
therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders.
E. Payments with respect to claims for interest on and principal of Bonds disbursed
by the Paying Agent from proceeds of the Bond Insurance Policy shall not be considered to
discharge the obligation of the City with respect to such Bonds, and the Bond Insurer shall
become the owner of such unpaid Bonds and claims for the interest in accordance with the tenor
of the assignment made to it under the provisions of this subsection or otherwise.
F. Irrespective of whether any such assignment is executed and delivered, the City
and the Paying Agent hereby agree for the benefit of the Bond Insurer that:
1. They recognize that to the extent the Bond Insurer makes payments,
directly or indirectly (as by paying through the Paying Agent), on account of principal of
or interest on the Bonds, the Bond Insurer will be subrogated to the rights of such
Resolution No. 62-04
Holders to receive the mount of such principal and interest fi.om the City, with interest
thereon as provided and solely from the sources stated in this Indenture and the Bonds;
and
2. They will accordingly pay to the Bond Insurer the mount of such
principal and interest (including principal and interest recovered under subparagraph (ii)
of the first paragraph of the Bond Insurance Policy, which principal and interest shall be
deemed past due and not to have been paid), with interest thereon as provided in this
Resolution and the Bonds, but only from the sources and in the manner provided herein
for the payment of principal of and interest on the Bonds to Holders, and will otherwise
treat the Bond Insurer as the owner of such rights to the amount of such principal and
interest.
G. Copies of any amendments made to the documents executed in connection with
the issuance of the Bonds which are consented to by the Bond Insurer shall be sent to Standard &
Poor's.
H. The Bond Insurer shall receive notice of the resignation or removal of the Paying
Agent and the appointment of a successor thereto.
I. The Bond Insurer shall receive copies of all notices required to be delivered to
Bondholders and, on an annual basis, copies of the City's audited financial statements and
Annual Budget.
J. Any notice that is required to be given to a holder of the Bonds or to the Paying
Agent pursuant to the Authorizing Resolution or this Resolution shall also be provided to the
Resolution No. 62-04
Bond Insurer. All notices required to be given to the Bond Insurer under the Authorizing
Resolution or this Resolution shall be in writing and shall be sent by registered or certified mail
addressed to MBIA Insurance Corporation, ll3 King Street, Armonk, New York 10504,
Attention: Surveillance.
K. The City agrees to reimburse the Bond Insurer immediately and unconditionally
upon demand, to the extent permitted bylaw, for all reasonable expenses, including attorneys'
fees and expenses, inenrred by the Bond Insurer in connection with (1) the enforcement by the
Bond Insurer of the Bonds, or the preservation or defense of any rights of the Bond Insurer,
under the Authorizing Resolution or this Resolution and any other document executed in
ennnection with the issuance of the Bonds, and (ii) any consent, amendment, waiver or other
action with respect to the Authorizing Resolution or this Resolution, whether or not granted or
approved, together with interest on all such expenses from and including the date incurred to the
date of payment at Citibank's Prime Rate plus 3% or the maximum interest rate permitted bylaw,
whichever is less. In addition, the Bond Insurer reserves the right to charge a fee in connection
with its review of any such consent, amendment or waiver, whether or not granted or approved.
L. The City agrees not to use the Bond Insurer's name in any public document
including, without limitation, a press release or presentation, annonneement or forum without the
Bond Insurer's prior consent provided however, such prohibition on the use of the Bond
Insurer's name shall not relate to the use of the Bond Insurer's standard approved form of
disclosure in public documents issued in connection with the current Bonds to be issued in
accordance with the terms of the Commitment and provided further such prohibition shall not
Resolution No. 62-04
apply to the use of the Bond Insurer's name in order to comply with public notice, public
meeting or public reporting requirements.
M. The City shall not enter into any agreement nor shall it consent to or participate in
any arrangement pursuant to which Bonds are tendered or purchased for any purpose other than
the redemption and cancellation or legal defeasance of such Bonds without the prior written
consent of the Bond Insurer.
SECTION 9. FURTHER AUTHORIZATIONS; RATIFICATION OF PRIOR
ACTS. That the Mayor, the Vice Mayor, the City Manager, the Finance Director, the Treasurer,
the City Attorney, and any other proper official of the City, be and each of them is hereby
authorized and directed to execute and deliver any and all documents and instruments, including,
but not limited to, any paying agent and registrar agreement, and to do and cause to be done any
and all acts and things necessary or proper for carrying out the transactions contemplated by this
Resolution, including, but not limited to, complying with any conditions to obtain the Bond
Insurance Policy. All actions heretofore taken and documents prepared or executed by or on
behalf of the City by any of its authorized officers in connection with the transactions
contemplated hereby are hereby ratified, confirmed, approved and adopted.
SECTION 10. SEVERABILITY OF INVALID PROVISIONS. If any one or more
of the covenants, agreements or provisions of this Resolution should be held contrary to any
express provision of law or contrary to the policy of express law, though not expressly
prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such
covenants, agreements or provisions shall be null and void and shall be deemed separate from the
Resolution No. 62-04
remaining covenants, agreements or provisions, and shall in no way affect the validity of any of
the other provisions of this Resolution or of the Bonds.
SECTION 11. REPEALER. That all resolutions or proceedings, or parts thereof, in
conflict with the provisions of this Resolution are to the extent of such conflict hereby repealed.
SECTION12. EFFECTIVE DATE. That this Resolution shall take effect
immediately upon its passage.
PASSED AND ADOPTED in regular session on this the 7th day of September, 2004.
CITY OF DELRAY BEACH, FLORIDA
By: ~
Attest:
Acting City Clerk
The foregoing Resolution is hereby approved by me
as to f~age and execution this 7th day of
Septe b 200 .
Resolution No. 62-04
City of Delray Beach, Florida
General Obligation Bonds, Series 2004
LIST OF EXHIBITS TO RESOLUTION NO. 62-04
EXHIBIT A Summary Notice of Sale
EXHIBIT B Official Notice of Bond Sale and Official Bid Form
EXHIBIT C Draft Preliminary Official Statement
EXHIBIT D City's financial advisor's letter of recommendation for bond insurance
EXHIBIT E Commitment for Bond Insurance Policy from MBIA Insurance
Corporation
Resolution No. 62-04
SUMMARY NOTICE OF SALE
$14,000,000'
City of Delray Beach, Florida
General Obligation Bonds
Series 2004
(Recreational and Cultural Projects)
Bids for the above captioned bonds will be received by the City of Delray Beach,
Florida, (the "City") via Parity until 11:00 a.m. (the "Submittal Deadline"), local Delray
Beach time, on Tuesday, September 21, 2004 or on such other date as may be
established by the Finance Director of the City or his designee no less than ten (10) days
after the date of publication of this notice and communicated by Thomson Municipal
Market Monitor not less than twenty (20) hours prior to the time bids are received (the
"Bid Date").
Such bids are to be opened in public as soon as practical after the Submittal
Deadline on said day for the purchase of the City of Delray Beach, Florida, General
Obligation Bonds, Series 2004 (Recreational and Cultural Projects) (the "Series 2004
Bonds"). The Series 2004 Bonds will mature as specified in the Official Notice of Bond
Sale. Proceeds of the Series 2004 Bonds will be used by the City to (i) finance all or a
portion of the costs of acquisition and construction, reconstruction and equipping of
certain new and existing parks, new and existing recreation centers, a parking garage and
capital improvements as part of the expansion of Old School Square and the furnishings
and fixtures for the new library and (ii) pay the costs of issuance of the Series 2004
Bonds.
The approving opinion of Greenberg Traurig, P.A., West Palm Beach, Florida,
Bond Counsel, will be furnished to the successful bidder at the expense of the City.
Electronic copies of the Preliminary Official Statement, the Official Notice of
Bond Sale and the Official Bid Form relating to the Series 2004 Bonds may be obtained
at the website address www.idealprospectus.com. Printed, bound copies of the
Preliminary Official Statement will be available from the City's financial advisor, Public
Financial Management, 300 South Orange Avenue, Suite 1170, Orlando, FL 32801,
telephone 407-648-2208.
City of Delray Beach, Florida
Joseph M. Safford
Finance Director
Dated: ,2004
*Preliminary, subject to change.
$14~000~000'
CITY OF DELRAY BEACH, FLORIDA
GENERAL OBLIGATION BONDS
SERIES 2004
(Recreational and Cultural Projects)
OFFICIAL NOTICE OF BOND SALE
AND
OFFICIAL BID FORM
The General Obligation Bonds, Series 2004 (Recreational and Cultural Projects) (the "Series 2004 Bonds")
are being offered for sale in accordance with this Official Notice of Bond Sale. Notice is hereby given that bids will
be received by the City of Delray Beach, Florida (the "City" or the "Issuer") for the purchase of the Series 2004
Bonds via the Parity Bidding System ("Parity") until 11:00 a.m. local Deiray Beach time, on Tuesday, September 21,
2004 or on such other date as will be established by the Finance Director or his designee and commuuleated by
Thomson Municipal Market Monitor not less than 20 hours prior to the time the bids are to be received. To the
extent any instructions or directions set forth in Parity conflict with this Official Notice of Bond Sale, the terms of
this Official Notice of Bond Sale shah control. For further information about Parity, and to subscribe in advance of
the bid, potential bidders may contact Parity at (212) 404-8102. The use of Parity shall be at the bidder's risk and
expense, and the City shall have no liability with respect thereto.
,2O04
OFFICIAL NOTICE OF BOND SALE
$14,000,000'
CITY OF DELRAY BEACH, FLORIDA
GENERAL OBLIGATION BONDS
SERIES 2004
(Recreational and Cultural Projects)
BIDS
The City of Delray Beach, Florida General Obligation Bonds, Series 2004 (Recreational and Cultural Projects)
(the "Series 2004 Bonds") are being offered for sale in accordance with this Official Notice of Bond Sale. Notice is
hereby given that bids will be received by the City of Delray Beach, Florida (the "City" or the "Issuer") for the purchase
of the Series 2004 Bonds via Parity until 11:00 a.m. local Delray Beach time, on Tuesday, September 21, 2004, or on
such other date as will be established by the Finance Director or his designee and communicated by Thomson Municipal
Market Monitor not less than 20 hours prior to the time the bids are to be received. To the extent any instructions or
directions set forth in Parity conflict with this Official Notice of Bond Sale, the terms of this Official Notice of Bond
Sale shall control. For further information about Parity, and to subscribe in advance of the bid, potential bidders may
contact Parity at (212) 404-8102. The use of Parity shall be at the bidder's risk and expense, and the City shall have no
liability with respect thereto. Only bids submitted through Parity will be considered. No telephone, telefax, telegraph,
mail, courier delivery or personal delivery bids will be accepted.
BOND DETAILS
The Series 2004 Bonds will be issued initially as fully registered bonds, and when executed and delivered, will
be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company, New
York, New York CDTC"), which will act as securities depository for the Series 2004 Bonds. Individual purchases of
the Series 2004 Bonds may be made only in book-entry form in denominations of $5,000 or integral multiples thereof.
Purchasers of Series 2004 Bonds (the "Beneficial Owners") will not receive physical delivery of bond certificates. As
long as Cede & Co. is the registered owner of the Series 2004 Bonds, as nominee for DTC, payments of principal and
interest with respect to the Series 2004 Bonds will be made to such registered owner who will in turn remit such
principal and interest payments to DTC participants for subsequent disbursement to the Beneficial Owners.
The Series 2004 Bonds will be dated their date of delivery (which is expected to be September 30, 2004) or
such other date as may be communicated by Thomson Municipal Market Monitor not less than 20 hours prior to the time
bids are to be received, and shall bear interest from such date and shall be payable semiannually commencing on
February 1, 2005, and on each August 1 and February 1 thereafter until maturity at the rate or rates specified in such
proposals as may be accepted. The proposed schedule of maturities and amounts are as follows:
MATURITY SCHEDULE
FOR
THE SERIES 2004 BONDS
Princioal Principal
Year Amount* Year Amount*
2005 2015
2006 2016
2007 2017
2008 2018
2009 2019
2010 2020
2011 2021
2012 2022
2013 2023
2014 2024
*Preliminary; Subject to Change
(NOTE: The City reserves the right to modify the maturity schedule shown above. Any such modification will be
communicated through the Thomson Municipal Market Monitor (See, "Adjustment of Principal Amount" below.)
Ad,[ustmant of Principal Amount - The schedule of maturities set forth on the previous page (the "Initial Maturity
Schedule") represents an estimate of the principal amount and maturities of the Series 2004 Bonds that will be sold. The
City reserves the right to change the Initial Maturity Schedule by announcing any such change not later than 2:00 p.m., local
Delray Beach time, on the date immediately preceding the date set for receipt of bids, through Thomson Municipal Market
Monitor. If no such change is announced, the Initial Maturity Schedule will be deemed the schedule of maturities for the
Official Bid Form.
Furthermore, if after final computation of the bids, the City determines in its sole discretion that the funds
necessary to accomplish the purpose of the Series 2004 Bonds is more or less than the proceeds of the sale of all of the
Series 2004 Bonds, the City reserves the right to increase or decrease the principal amount, by no more than 10% of the
principal amount of the Series 2004 Bonds and by no more than 15% within a given maturity of the Series 2004 Bonds (to
be rounded to the nearest $5,000).
In the event of any such adjustment, no rebidding or recalculation of the bids submitted will be required or
permitted; and the Series 2004 Bonds of each maturity, as adjusted, will bear interest at the same rote and must have the
same initial reoffering yield as specified immediately after award of the Series 2004 Bonds of that maturity. However, the
award will be made to the bidder whose bid produces the lowest true interest cost rate, calculated as specified below, solely
on the basis of the Series 2004 Bonds offered, without taking into account any adjustment in the amount of Series 2004
Bonds pursuant to this paragraph.
Optional Redemption - The Series 2004 Bonds maturing on February 1, 2015, and thereafter are subject to redemption,
from any legally available source, at the option oftbe City prior to maturity on or after February 1, 2014, in whole, or in
part at any time, in such manner as shall be determined by the City, at a redemption price equal to the principal amount of
the Series 2004 Bonds to be redeemed together with accrued interest to the date fixed for redemption.
AUTHORIZATION
The Series 2004 Bonds are being issued under the authority of and in full compliance with the Constitution and
laws of the State of Florida, including Chapter 166, Florida Statutes, as amended and supplemented, the City Charter, as
amended and supplemented, and other applicable provisions of law. The Series 2004 Bonds are being issued more
specifically pursuant to Resolution No. 72-03 (the "Referendum Resolution"), adopted by the City Commission of the City
(the "Commission") on October 21, 2003 and Resolution No. 61-04, adopted by the Commission on September 7, 2004 as
supplemented by Resolution No. 62-04, adopted by the Commission on September 7, 2004, which authorized the issuance
by the City of up to $24,000,000 in General Obligation Bonds in one or more series and sets forth the details of the Series
2004 Bonds (the "Series 2004 Resolution" and together with the Referendum Resolution, the "Resolution"). On January
20, 2004, a majority of the qualified electors of the City approved the issuance of the Series 2004 Bonds by the City to
finance the Projects in the principal amounts prescribed in the Referendum Resolution.
PURPOSE
The Series 2004 Bonds will be issued by the City to (i) finance all or a portion of the costs of acquisition and construction,
reconstruction and equipping of certain new and existing parks, new and existing recreation centers, a parking garage and
capital improvements as part of the expansion of Old School Square and the furnishings and fixtures for the new library
(collectively, the "Projects"); and (ii) pay the costs of issuance of the Series 2004 Bonds.
SECURITY FOR THE BONDS
The Series 2004 Bonds will be general obligations of the City, payable from unlimited ad valorem taxes levied on all
taxable property in the City. The full faith, credit and taxing power of the City are pledged for the payment of the principal
and interest on the Series 2004 Bonds.
RATINGS AND BOND INSURANCE
It is expected that Moody's Investors Service ("Moody's") and Standard and Poor's ("S&P") will give the Series
2004 Bonds ratings of "Aaa" and "AAA", respectively based on the understanding that the standard policy of municipal
bond insurance insuring the total payment of principal and interest on the Series 2004 Bonds will be issued by MBIA
Insurance Corporation. Moody's and S&P have assigned the Series 2004 Bonds underlying ratings of "Al" and "AA-",
respectively.
2
CONTINUING DISCLOSURE
The City has committed to provide certain annual information and notices of material events as required by Rule
15c2-12 promulgated by the Securities and Exchange Commission (the "Rule") and as described in the Preliminary Official
Statement.
PURCHASER'S CERTIFICATION REGARDING INITIAL OFFERING PRICE
In order to provide the City with information required to enable it to comply with certain requirements of the
Internal Revenue Code of 1986, as amended, relating to the exclusion of interest on the Series 2004 Bonds from the gross
income of the holders thereof for federal income tax purposes, the successful bidder will be required to complete, execute
and deliver to the City (on the date of delivery of the Series 2004 Bonds) a certificate relating to the manner in which the
Series 2004 Bonds were offered for sale and the offering price for such Series 2004 Bonds, substantially in the form
included in the Official Bid Form. In the event the successful bidder will not reoffer the Series 2004 Bonds for sale or is
unable to sell a substantial amount of the Series 2004 Bonds by the date of delivery, such certificate may be modified in a
manner approved by the City and Greenberg Traurig, P.A., Bond Counsel. It will be the responsibility of the successful
bidder to institute such syndicate or selling group reporting requirements, to make such investigation, or otherwise to
ascertain the facts necessary to enable it to make such certification with reasonable certainty.
LEGAL OPINION AND CLOSING CERTIFICATE
At the time of delivery of the Series 2004 Bonds, the City will deliver to the successful bidder, at the expense of
the City, the approving opinion of Greenberg Traurig, P.A., Bond Counsel, in substantially the form appearing in the
Preliminary Official Statement, a no-litigation certificate and other customary closing certificates relating to the issuance of
the Series 2004 Bonds.
GOOD FAITH DEPOSIT
Each bid must be accompanied by a certified or cashier's check drawn upon an incorporated bank or trust company
dated on or before the date of the bid in the amount of 1% of the aggregate principal amount of the Series 2004 Bonds
($140,000), which check (the "Good Faith Check"), must be payable unconditionally to the order of the "City of Delray
Beach, Florida". Award or rejection of bids will be made on the date above stated for receipt of bids and the Good Faith
Check of unsuccessful bidders will be promptly returned after the award. The Good Faith Check of thc successful bidder
will be cashed as security for thc performance of thc bid, and, in the event such successful bidder should fail to comply with
the terms of its bid, the proceeds will be retained by the City. The retention of such good faith deposit (thc "Deposit") will
constitute fulMiquidated damages for such failure. If the City shall fail to issue and deliver the Series 2004 Bonds, the City
will deliver the Deposit to the successful bidder and the return of such Deposit will constitute a full release of all claims the
bidder might have against the City. Upon delivery of the Series 2004 Bonds, the Deposit will be credited (without interest)
against the net purchase price to be paid by the successful bidder. No interest on the Deposit will accrue to the successful
bidder.
Alternatively, each bidder may submit a financial surety bond (the "Financial Surety Bond") naming thc City as the
obligce in the event of default by the bidder pursuant to the terms and conditions of the Financial Surety Bond. If a
Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Florida
and approved by the City (as of the date of this Official Notice of Bond Sale, only Financial Security Assurance Inc. is
qualified for this purpose). The Financial Surety Bond must identify each bidder whose Deposit is guaranteed by such
Financial Surety Bond. If the Series 2004 Bonds are awarded to a bidder utilizing a Financial Surety Bond, that bidder is
required to submit its Deposit in the form of a wire transfer as instructed by the City. Such Deposit shall be considered due
on the day the Series 2004 Bonds are awarded, and shall be considered delinquent if not received by 3:00 p.m., local Delmy
Beach time, on the next business day following such award. If such Deposit is not received by that time, the Financial
Surety Bond may be drawn down by the City to satisfy the Deposit requirement.
TERMS OF BID AND BASIS OF AWARD
Proposals must be unconditional and for the purchase of all of the Series 2004 Bonds. The reoffering price for the
Series 2004 Bonds may not be less 99% of the principal amount of the Series 2004 Bonds for any single maturity thereof.
The aggregate purchase price, inclusive of original issue discount ("OID"), original issue premium and underwriter's
discount, may not be less than 100% of the principal amount of the Series 2004 Bonds.
The Series 2004 Bonds shall bear interest expressed in multiples of one-eighth (1/8) or one-twentieth (1/20) of one
(1) per centum. The use of split or supplemental interest coupons will not be considered and a zero rate or blank rate will
not be permitted. All Series 2004 Bonds maturing on the same date shall bear the same rate of interest.
3
The Series 2004 Bonds will be awarded to the bidder offering to purchase the Series 2004 Bonds at the lowest
annual interest cost computed on a true interest cost basis (the "TIC"). The annual TIC will be determined by doubling the
semi-annual interest rate necessary to discount the semi-annual debt service payments on the Series 2004 Bonds back to the
Net Bond Proceeds (defined as the par amount of the Series 2004 Bonds plus original issue premium, less any OID and
underwriter's discount on the Series 2004 Bonds calculated on a 360 day year to the Dated Date, as defined below). The
TIC must be calculated to four (4) decimal places.
THE CITY RESERVES THE RIGHT TO REJECT ALL BIDS OR ANY BID NOT CONFORMING TO THIS
OFFICIAL NOTICE OF BOND SALE OR NOT IN THE FORM OF THE OFFICIAL BID FORM. THE CITY ALSO
RESERVES THE RIGHT TO WAIVE, IF PERMITTED BY LAW, ANY IRREGULARITY OR INFORMALITY IN
ANY PROPOSAL. THE CITY SHALL NOT REJECT ANY CONFORMING BID, UNLESS ALL CONFORMING BIDS
ARE REJECTED.
SETI'LEMENT OF BONDS
It is expected that closing for the Series 2004 Bonds will occur in Delray Beach, Florida on September 30, 2004, or
such other date as determined by the City (the "Closing Date"). On such date, the Series 2004 Bonds will be delivered to
DTC as securities depository registered in the name of CEDE & CO., as nominee of DTC through the DTC FAST system of
registration. The successful bidder shall advise the underwriting department of DTC, not less than 7 business days prior to
the closing date, the interest rotes borne by the Series 2004 Bonds, the CUSIP identification numbers and the closing date.
The successful bidder shall also timely obtain CUSIP identification numbers and pay CUSIP Service Bureau charges for
assignment of the numbers. Any delay, error or omission with respect to the CUSIP numbers shall not constitute cause for
failure or refusal by the successful bidder to accept delivery of and pay for the Series 2004 Bonds in accordance with the
terms of this Official Notice of Bond Sale.
FULL PAYMENT OF THE PURCHASE PRICE (DEFINED AS THE BID PRICE, AS MAY BE ADJUSTED,
LESS THE GOOD FAITH DEPOSIT) MUST BE MADE TO THE CITY ON THE CLOSING-DATE BY THE
SUCCESSFUL BIDDER IN FEDERAL FUNDS OR IMMEDIATELY AVAILABLE FUNDS WITHOUT COST TO THE
CITY.
BLUE SKY LAWS
The successful bidder(s) will be responsible for the clearance or exemption with respect to the status of the Series
2004 Bonds for sale under the securities or "Blue Sky" laws of the several states and the preparation of any surveys or
memoranda in connection with such sale.
OFFICIAL STATEMENT
The City's Preliminary Official Statement ("POS"), Official Notice of Bond Sale and Official Bid Form are
available for viewing in electronic format at www.idealorosoectus.com or by calling the City's financial advisor, Public
Financial Management (thc "Financial Advisor" or "PFM"), 300 South Orange Avenue, Suite 1170, Orlando, Florida
32801, (407) 648-2208.
The Preliminary Official Statement shall be deemed by the Issuer to be final as of its date, for purposes of SEC
Rule 15C2-12(b)(1) under the Securities Exchange Act of 1934, except for the omission of information concerning the
offering price(s), interest rate(s), and any other lerms or provisions to be determined from the successful bid or depending
on such matters, and thc identity of the underwriter(s). The Preliminary Official Statement is, however, subject to such
further revisions, amendments and completion in a final Official Statement as may be necessary.
The City shall provide the successful bidder with 150 conformed copies of the final Official Statement within
seven (7) business days following the date of acceptance of the bid.
CHOICE OF LAW
Any litigation or claim arising out of any bid submitted (regardless of the means of submission) pursuant to this
Official Notice of Bond Sale shall be governed by and construed in accordance with the laws of the State of Florida. The
venue situs for any such action shall be the state courts of the Fifteenth Judicial Circuit in and for Palm Beach County,
Florida.
4
MANDATORY STATE FILING
Section 218.38(1)(b)1, Florida Statutes, as amended, requires that the City file, within 120 days after the delivery
of the Series 2004 Bonds, an information statement with the Division of Bond Finance of the Board of Administration of the
State containing the following information: (a) the name and address of the managing underwriter, if any, connected with
the bond issue; (b) the name and address of any attorney or financial consultant who advised the City with respect to the
bond issue; (c) any fee, bonus, or gratuity paid by any underwriter or financial consultant, in connection with the bond issue,
to any person not regularly employed or engaged by such underwriter or consultant; and (d) any other fee paid by the City
with respect to the bond issue, including any fee paid to attorneys or financial consultants. The successful bidder is
expected to provide to the City the information mentioned in (a) and (c) above when the Series 2004 Bonds are delivered,
but in no event later than ninety (90) days as required by Section 218.38(1)(b)2. Such information provided pursuant to the
cited statute shall be maintained by the Division of Bond Finance and by the City as a public record.
Additionally, Section 218.386, Florida Statutes, as amended, requires the Official Statement for the Series 2004
Bonds to include disclosure of any finder's fees paid in connection with the sale of the Series 2004 Bonds.
CITY OF DELRAY BEACH, FLORIDA
/s/Jeff Perlman
Jeff Perlman
Mayor
/s/David T. Harden
David T. Harden
City Manager
OFFICIAL BID FORM
$14,000,000'
CITY OF DELRAY BEACH, FLORIDA
GENERAL OBLIGATION BONDS, SERIES 2004
(Recreational and Cultural Projects)
City of Defray Beach ,2004
100 NW 1st Avenue
Defray Beach, Florida 33444
Ladies and Gentlemen:
On behalf of the undersigned and any underwriting syndicate which we have formed and lead, and in accordance
with the terms and conditions of the attached Official Notice of Bond Sale, dated ,2004, which is hereby made a
part of this proposal, we offer to purchase all of $14,000,000' City of Delray Beach, Florida, General Obligation Bonds,
Series 2004 (the "Series 2004 Bonds"). We will pay as the purchase price thereof, the aggregate sum of
Dollars ($_ _) m in immediately available
Federal Funds. The Series 2004 Bonds will be dated as of ,2004, and shall bear interest from such date and shall
be payable semiannually commencing on February 1, 2005, and on each August I and February 1 thereafter until maturity
or prior redemption. The Series 2004 Bonds shall mature in the years and bear interest at the respective interest rates per
annum, all as stated in the following schedule:
Principal Interest Price or Principal Interest Price or
Year Amount* Rate Yield Year Amount* Rate Yield
2005 2015
2006 2016
2007 2017
2008 2018
2009 2019
2010 2020
2011 2021
2012 2022
2013 2023
2014 2024
Subject to your acceptance of our Official Bid, we agree to make a bona fide public offering of all the Series 2004
Bonds at yields not lower than those set forth in the above Schedule of Maturities, Principal Amounts, Interest Rates and
Prices or Yields. Our calculation, made as provided in the Official Notice of Bond Sale, of the true interest cost to the City
is %. This estimate is for information purposes only and is not binding on the City or the undersigned.
Preliminary, subject to change.
Subject to adjustment as provided in the Official Notice of Bond Sale.
In accordance with the Official Notice of Bond Sale (check one of the following):
We enclose herewith a Cashier's or Certified Check payable to the order of City of Delray Beach, Florida.
We are an authorized principal of a Financial Surety Bond with respect to this Bid as described in the
attached Notice of Bond Sale and, if this bid is accepted, we will submit our Good Faith Deposit in the form of a wire
transfer as instructed by the Issuer no later than 3:00 p.m. local Delray Beach time on the next business day following
said bid acceptance.
The Good Faith Deposit will be applied or retumod in accordance with the provisions of the Official Notice of Bond
Sale.
It shall be a condition of our obligation as the successful bidder to accept delivery of, and pay for, the Series
2004 Bonds that, contemporaneously with, or before accepting, the Series 2004 Bonds and paying for them, we shall
receive the Closing Documents specified in the Official Notice of Bond Sale.
We hereby acknowledge receipt of the Preliminary Official Statement for the Series 2004 Bonds "deemed
final" (except for permitted omissions) by the City of Delray Beach, Florida.
We hereby request that 150 copies of the Official Statement (and any supplement thereto) be furnished to us in
accordance with the Official Notice of Bond Sale.
We agree to provide a list of all syndicate members by facsimile transmission upon notification of our
successful bid. Receipt of such list shall be a condition to award the Series 2004 Bonds.
It is understood and agreed that an award will be made for all or none of the Series 2004 Bonds and that the
principal amount of the Series 2004 Bonds and our purchase price as bid may be adjusted as provided in the Official
Notice of Bond Sale, the terms of which are incorporated herein by reference.
If the foregoing is acceptable to you, please signify by signing and returning a copy of this Official Bid Form to
the undersigned bidder whereupon it will become a binding agreement between us.
Respectfully submitted,
Accepted and agreed to Bidder
City of Delray Beach, Florida
By:
Title:
(No addition or alteration, except as provided above, is to be made to this Official Bid Form and it must not be detached
from the attached Official Notice of Bond Sale)
TRUTH-IN-BONDING STATEMENT
In compliance with Section 218.385, Florida Statutes, as amended, the bidder submits the following Truth-In-
Bonding Statement with respect to the Series 2004 Bonds (NOTE: For state law purposes only and not a part of the
bid):
The City is proposing to issue $14,000,000' of debt or obligation for the purpose of financing a portion of the
costs of the Projects as more fully described in the Official Notice of Bond Sale. At a forecasted interest rate of
%, total interest paid over the life of the debt or obligation will be $.
The Series 2004 Bonds will be general obligations of the City, payable from unlimited ad valorem taxes levied on all
taxable property in the City and therefore since the Series 2004 Bonds are voter approved debt, the issuance thereof will
not result in any less ad valorem taxes the City will be able to levy and collect.
Preliminary, subject to change.
CERTIFICATE WITH RESPECT TO "ISSUE PRICE"
· acting on behalf of itself and the syndicate selling group, if any, created by it as
purchaser (the "Purchaser") of the $14,000,000' General Obligation Bonds, Series 2004 (the "Series 2004 Bonds") of
Delray Beach, Florida (the "City"), in order to establish the initial offering price(s) of the Series 2004 Bonds for the purpose
of determining the "issue price'· of the Series 2004 Bonds within the meaning of Section 148 of the Internal Revenue Code
of 1986, as amended, DOES HEREBY CERTIFY, as follows:
1. The Purchaser, as of the date the Series 2004 Bonds were awarded to the Purchaser, (a) made a bona fide public
offering of the Series 2004 Bonds to the general public at a price equal to % of the principal amount thereof
(the "Public Offering Price"), and (b) sold a substantial amount of such Series 2004 Bonds for cash or to the extent
not so sold, reasonably expected, as of the date the Series 2004 Bonds were awarded to the Purchaser, to sell such
Series 2004 Bonds for cash to the general public at the Public Offering Price.
2. The Purchaser retained and did not reoffer $_ principal amount of the Series 2004 Bonds.
3. The Public Offering Price (with respect to any principal amount of the Series 2004 Bonds that was not reoffered,
the price bid by the Purchaser to the City) does not exceed the fair market value of the Series 2004 Bonds as of the
date the Series 2004 Bonds were awarded to the Purchaser.
4. For the purpose of this certificate, "General Public" means the general public excluding bond houses, brokers or
similar persons or organizations acting in the capacity of underwriters or wholesalers.
Dated:
By:
Title:
* Preliminary, subject to change.
Preliminary Official Statement Dated August __, 2004
RATINGS: S&P: "AAA" Moodys: "Aaa"
NEW ISSUE: FULL BOOK ENTRY RATINGS: (See "Ratings" herein)
In the opinion of Bond Counsel under existing law, and assuming compliance with the tax covenant described herein,
interest on the Series 2004 Bonds (as defined below) is excluded.from gross income for federal income tax purposes, and is not
a specific preference item for purposes of the federal alternative minimum tax. See however, "TAX EXEMPTION" herein for a
description of certain other taxes imposed on corporations. Bond Counsel is also of the opinion that interest on the Series 2004
Bonds is exempt from taxation under existing laws of the State of Florida, except as to estate taxes and taxes imposed by
Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, banks and savings
associations.
CITY OF DELRAY BEACH, FLORIDA
$. '
General Obligation Bonds, Series 2004
(Recreational and Cultural Projects)
Dated: __, 2004 Due: February 1, as shown on the Inside Cover
The City of Delray Beach, Florida General Obligation Bonds, Series 2004 (Recreational and Cultural Projects) (the
"Series 2004 Bonds") will be issued as fully registered bonds without coupons in the principal denomination of $5,000 or any
integral multiples thereof. The Series 2004 Bonds will be registered in the name of Cede & Co., as nominee for the Depository
Trust Company, New York, New York ("DTC"), and DTC will act as securities depository for the Series 2004 Bonds. So long
as Cede & Co. is the registered owner of the Series 2004 Bonds. principal of and interest on the Series 2004 Bonds will be paid
directly to Cede & Co., as nominee for DTC, by Wells Fargo Bank, National Association, having a designated corporate trust
office in Minneapolis, Minnesota, as Paying Agent for the Series 2004 Bonds (the "Paying Agent"). Interest on the Series
2004 Bonds is payable semi-annually, commencing February I, 2005 and each August 1 and February 1 thereafter.
The Series 2004 Bonds are subject to redemption prior to maturity as described herein. See "Description of the Series
2004 Bonds - Redemption Provisions," herein.
The proceeds of the Series 2004 Bonds will be used by the City of Delray Beach, Florida (the "City") to (i) finance all
or a portion of the costs of acquisition and equipping of the Projects (as herein defined) and (ii) pay the cost of issuing the
Series 2004 Bonds, including the premium for the municipal bond insurance policy (the "Bond Insurance Policy").
The Series 2004 Bonds and the interest on such Series 2004 Bonds are general obligations of the City. In each
year while any of the Series 2004 Bonds are outstanding and unpaid, the City is irrevocably and unconditionally
obligated to levy and collect ad valorem taxes without limitation as to the rate or amount on all the taxable property
within the City, sufficient to pay the interest on the Series 2004 Bonds as it becomes due, and to provide for the payment
of the principal of the Series 2004 Bonds at maturity.
The scheduled payment of principal of and interest on the Series 2004 Bonds when due will be guaranteed under the
Bond Insurance Policy to be issued concurrently with the delivery of the Series 2004 Bonds by:
For a discussion of the terms and provisions of such the Bond Insurance Policy, including the limitations, see "BOND
INSURANCE," herein.
This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must
read the entire Official Statement to obtain information essential to the making of an informed investment decision.
The Series 2004 Bonds are offered subject to prior sale when, as and if issued by the City and accepted by the
Underwriter, and subject to approval as to legality by Greenburg Traurig, P.A., West Palm Beach, Florida, Bond Counsel to the
City, and certain other conditions. Certain legal matters will be passed on for the City by its City Attorney, Susan A. Ruby,
Esq. Public Financial Management, Inc. Orlando, Florida, served as financial advisor to the City in connection with the
issuance of the Series 2004 Bonds. It is expected that the Series 2004 Bonds in definitive form will be available for delivery
through the facilities of DTC in New York, New York, on or about __, 2004.
* Preliminary, subject to change.
Sealed bids for the Series 2004 Bonds will be received by the City of Delray Beach, Florida, via Parity as set forth in
the Official Notice of Sale until 11:00 A.M. Eastern Time, on , 2004 or such other date and time as will be
established by the Finance Director or his designee and communicated by Thomson Municipal Market Monitor not less than
20 hours prior to the time bids are to be received. This Preliminary Official Statement is "deemed final" by the City as of its
date for purposes of, and except for certain omissions permitted by, SEC Rule 15-c-12(B)(2).
Dated: _, 2004
MATURITIES, AMOUNTS,* INTEREST RATES,
PRICES OR YIELDS AND INITIAL CUSIP NUMBERS
INITIAL
Principal Interest CUSIP
Matu~ty Amount* Rate Price or Yield NUMBERS**
2005
2006
2007
2008
2009
20t0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Preliminary, subject to change.
City is not responsible for the use of CUSIP numbers, nor is any representation made as to their
correctness. They are included solely for the convenience of the readers of this Official Statement.
CITY OF DELRAY BEACH, FLORIDA
CITY COMMISSION
Jeff Perlman, Mayor
Alberta Perry McCarthy, Vice Mayor
/on R. Lcvinson, Deputy Vice Mayor
Patricia Archer, Commissioner
Bob Costin, Conunissioncr
CITY OFFICIALS
David T. Harden, City Manager
Joseph M. Safford, Finance Director
Rebecca S. O'Connor, Treasurer
Richard C. Hasko, Director of Environmental Services
Randall Krejcarek, City Engineer
Chcvelle Nubin, Acting City Clerk
CITY ATTORNEY
Susan A. Ruby, Esquire
BOND COUNSEL
Greenberg Traurig, P.A.
West Palm Beach, Florida
FINANCIAL ADVISOR
Public Financial Management, Inc.
Orlando, Florida
No dealer, broker, salesperson or other person has been authorized by the City or the
Underwriter to give any information or to make any representations with respect to the Series
2004 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 is not to be construed as a contract or agreement between the
City or the Underwriter and the purchasers or owners, from time to time, of any of the Series
2004 Bonds. This Official Statement does not constitute an offer to sell or the solicitation of an
offer to buy, nor shall there be any sale of the Series 2004 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 public documents, records and
other sources which are believed to be reliable but it is not guaranteed as to accuracy or
completeness. The City makes no representation as to any information from sources other than
the information provided by the City. The information and expressions of opinion herein are
subject to change without notice, and, neither the delivery of this Official Statement nor any sale
of Series 2004 Bonds, under any circumstances, create any implication that there has been no
change in any information set forth herein since the date hereof or the date as of which particular
information is given, if earlier.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE SERIES 2004 BONDS AT LEVELS ABOVE THAT WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
The following Official Statement contains a general description of the Series 2004 Bonds
and sets forth certain information about the City. All summaries and descriptions herein of
documents, instruments and agreements, including the Series 2004 Bonds, are qualified in their
entirety by reference to the complete, definitive forms of the Series 2004 Bonds and such
documents, instruments and agreements, copies of which are on file at the office of the Paying
Agent.
THE SERIES 2004 BONDS HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACT. THE
REGISTRATION OR QUALIFICATION OF THE SERIES 2004 BONDS IN ACCORDANCE
WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF CERTAIN STATES,
IF ANY, IN WHICH THE SERIES 2004 BONDS HAVE BEEN REGISTERED OR
QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN
CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION
THEREOF. NEITHER THESE STATES NOR ANY OF THE1R AGENCIES HAVE PASSED
UPON THE MERITS OF THE SERIES 2004 BONDS OR THE ACCURACY OR
COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE
CONTRARY MAY BE A CRIMINAL OFFENSE.
Other than with respect to information concerning MBIA Insurance Corporation
contained under the caption "BOND INSURANCE" and Appendix D "Specimen Municipal
Bond Insurance Policy" herein, none of the information in this Official Statement has been
supplied or verified by MBIA Insurance Corporation and MBIA Insurance Corporation makes no
representation or warranty, express or implied, as to (i) the accuracy or completeness of such
information; (ii) the validity of the Series 2004 Bonds; or (iii) the tax-exempt status of the
interest on the Series 2004 Bonds.
TABLE OF CONTENTS
Pa~
INTRODUCTION .......................................................................................................................... 1
PURPOSE OF SERIES 2004 BONDS ......................................................................................... 1
SOURCES AND USES OF FUNDS ............................................................................................. 2
Sources of Funds ................................................................................................................ 2
Uses of Funds ...................................................................................................................... 2
DESCRIPTION OF THE SERIES 2004 BONDS ....................................................................... 3
General ................................................................................................................................ 3
Book-Entry Only System ................................................................................................... 3
Negotiability, Registration and Cancellation .................................................................. 6
Transfer and Exchange ..................................................................................................... 7
Redemption Provisions ...................................................................................................... 7
SECURITY FOR THE SERIES 2004 BONDS ........................................................................... 8
Pledge of Ad Valorem Taxes ............................................................................................. 8
Assessments ........................................................................................................................ 8
Collections ........................................................................................................................... 9
Delinquent Taxes ................................................................................................................ 9
BOND INSURANCE ................................................................................................................... 13
Bond Insurance Policy ..................................................................................................... 13
The MBIA Insurance Corporation Insurance Policy ................................................... 13
MBIA ................................................................................................................................. 14
MBIA Information ........................................................................................................... 15
Financial Strength Ratings of MBIA ............................................................................. 15
THE CITY .................................................................................................................................... 16
Location and Size ............................................................................................................. 16
Brief Description .............................................................................................................. 16
Budgeting, Accounting and Auditing ............................................................................. 16
Operating Budget for Fiscal Year Ended September 30, 2003 .................................... 17
State Assessment Cap ...................................................................................................... 17
LEGAL DEBT LIMITATIONS ................................................................................................. 18
The Florida Constitution ................................................................................................. 18
DEBT SUMMARY ...................................................................................................................... 18
Selected Debt Data ........................................................................................................... 19
RATINGS ..................................................................................................................................... 21
LEGALITY .................................................................................................................................. 21
TAX EXEMPTION ..................................................................................................................... 21
UNDERWRITING ....................................................................................................................... 23
CONTINUING DISCLOSURE UNDERTAKING ................................................................... 23
ENFORCEABILITY OF REMEDIES ...................................................................................... 26
LITIGATION ............................................................................................................................... 26
GENERAL PURPOSE FINANCIAL STATEMENTS ............................................................27
FINANCIAL ADvIsOR ............................................................................................................. 27
MISCELLANEOUS .................................................................................................................... 27
AUTHORIZATION OF AND CERTIFICATION CONCERNING OFFICIAL
STATEMENT .............................................................................................................................. 28
APPENDIX A GENERAL INFORMATION CONCERNI~NG THE CITY OF DELRAY
BEACH, FLORIDA AND PALM BEACH COUNTY
APPENDIX B CITY OF DELRAY BEACH, FLORIDA GENERAL PURPOSE
FINANCIAL STATEMENTS AND OTHER INFORMATION FOR THE
FISCAL YEAR ENDED SEPTEMBER 30, 2003
APPENDIX C FORM OF APPROVING OPINION OF BOND COUNSEL
APPENDIX D SPECIMEN MUNICIPAL BOND INSURANCE POLICY
ii
OFFICIAL STATEMENT
$ *
The City of Delray Beach, Florida
General Obligation Bonds, Series 2004
(Recreational and Cultural Projects)
INTRODUCTION
The purpose of this Official Statement, which includes its cover page and certain
enclosed Appendices, is to furnish information with respect to the issuance by the City of Delray
Beach, Florida (the "City") of its General Obligation Bonds, Series 2004 (Recreational and
Cultural Projects) (the "Series 2004 Bonds") in the aggregate principal amount of $
The Series 2004 Bonds are being issued under the authority of and in full compliance
with the Constitution and laws of the State of Florida, including Chapter 166, Florida Statutes, as
amended and supplemented, the City Charter, as amended and supplemented, and other
applicable provisions of law. The Series 2004 Bonds are being issued more specifically pursuant
to Resolution No. 72-03 (the "Referendum Resolution"), adopted by the City Commission of the
City (the "Commission") on October 21, 2003 and Resolution No. 61-04, adopted by the
Commission on September 7, 2004 as supplemented by Resolution No. 62-04, adopted by the
Commission on September 7, 2004, which authorized the issuance by the City of up to
$24,000,000 in General Obligation Bonds in one or more series and sets forth the details of the
Series 2004 Bonds (the "Series 2004 Resolution" and together with the Referendum Resolution,
the "Resolution"). On January 20, 2004, a majority of the qualified electors of the City approved
the issuance of the Series 2004 Bonds by the City to finance the Projects (as defined below) in
the principal amounts prescribed in the Referendum Resolution.
Capitalized terms not otherwise defined in this Official Statement shall have the same
meanings assigned to such terms in the Series 2004 Resolution. The description of the Series
2004 Bonds, the Resolution, the description of certain statutory provisions and the information
from various reports and statements contained in this Official Statement are not comprehensive
or definitive. All references to such documents, reports and statements are qualified by the
actual content of such documents, reports and statements, copies of which may be obtained by
contacting the Director of Finance, City of Delray Beach, Florida, 100 NW First Avenue, Delray
Beach, FL 33444, (561) 243-7116 or during the offering period of the Series 2004 Bonds from
Public Financial Management, Inc., financial advisor to the City, (407) 648-2208.
PURPOSE OF SERIES 2004 BONDS
The Series 2004 Bonds will be issued by the City to (i) finance all or a portion of the
costs of acquisition and construction, reconstruction and equipping of new and certain existing
parks (in the principal amount not exceeding $9,000,000), new and existing recreation centers (in
the principal amount not exceeding $7,000,000), a parking garage and capital improvements as
part of the expansion of Old School Square (in the principal amount not exceeding $7,000,000)
and the furnishings and fixtures for the new library (in the principal amount not exceeding
* Preliminary, subject to change.
$1,000,000) (collectively, the "Projects"); and (ii) pay the costs of issuance of the Series 2004
Bonds, including the premium fee for the Bond Insurance Policy.
SOURCES AND USES OF FUNDS
The proceeds to bc received from the sale of the Series 2004 Bonds are expected to be
applied as follows:
Sources of Funds
Principal Amount of Series 2004 Bonds ................................................... $
[Original Issue Premium] .........................................................................
Total Sources of Funds ..........................................
Uses of Funds
Deposit to Capital Projects Fund .............................................................. $
Underwriter's Discount .............................................................................
Costs of Issuance O) ...................................................................................
Total Uses of Funds ............................................... $
Includes the premium for the Bond Insurance Policy.
[Remainder of page intentionally left blank].
DESCRIPTION OF THE SERIES 2004 BONDS
General
The Series 2004 Bonds will be dated the date of delivery and will mature on February 1
of the years and in the principal amounts set forth on the inside cover page hereof. The Series
2004 Bonds will be initially issued only in the form of fully registered bonds in denominations of
$5,000 or any integral multiple thereof. Interest on the Series 2004 Bonds is payable
semiannually commencing February 1, 2005, and each August 1 and February 1 thereafter at the
rates per annum set forth on thc inside cover page hereof. Wells Fargo Bank, National
Association, having a designated corporate trust office in Minneapolis, Minnesota, will serve as
bond registrar (thc "Bond Registrar") and paying agent (the "Paying Agent") for the Series 2004
Bonds. Thc Series 2004 Bonds will be issued as fully registered Bonds and, when issued, will be
registered in the name of Cede & Co., as nominee of the Depository Trust Company, New York,
New York ("DTC').
So long as the Series 2004 Bonds shall be in book-entry form, the principal of and
interest on such Series 2004 Bonds is payable by check or draft mailed or wire transfer to Cede
& Co., as nominee of DTC and registered owners thereof for redistribution by DTC to the DTC
Participants (as herein defined) and in turn to Beneficial Owners (as herein defined) as described
below under "Book-Entry Only System."
Book-Entry Only System
The Depository Trust Company ("DTC'), New York, New York, will act as securities
depository for the Series 2004 Bonds under a book-entry system with no physical distribution of
the Series 2004 Bonds made to the public. The Series 2004 Bonds will initially be issued as
fully-registered securities, registered in the name of Cede & Co. (DTC's partnership nominee),
or such other name as may be requested by an authorized representative of DTC. One fully-
registered Series 2004 Bond certificate will be issued for the aggregate principal amount of each
maturity of the Series 2004 Bonds and will be deposited with DTC.
DTC, the word's largest depository, is a limited-purpose trust company organized under
the New York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S, equity
issues, corporate and municipal debt issues, and money market instruments from over 85
countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates
the post-trade settlement among Direct Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry changes in
Direct Participants' accounts, thereby eliminating the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S, securities brokers and dealers,
banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-
owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is
owned by a number of its Direct Participants and members of the National Securities Clearing
Corporation, Government Securities Clearing Corporation, MBS Cleating Corporation and
Emerging Markets Clearing Corporation (NSCC, GSCC, MBSCC and EMCC, also subsidiaries
of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange,
LLC and the National Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as both U.S. and non-U.S, securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The roles applicable to DTC and its Direct and
Indirect Participants are on file with the Securities and Exchange Commission. More
information about DTC can be found at www.dtcc.com.
Purchases of the Series 2004 Bonds under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Series 2004 Bonds on DTC's records. The
ownership interest of each actual purchaser of each Series 2004 Bond ("Beneficial Owner") is in
turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as periodic statements
of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Series 2004 Bonds are to be
accomplished by entries made on the books of Direct and Indirect Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in the Bonds, except in the event that use of the book-entry system for the
Series 2004 Bonds is discontinued.
To facilitate subsequent transfers, all Series 2004 Bonds deposited by Direct Participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other
name as may be requested by an authorized representative of DTC. The deposit of Series 2004
Bonds with DTC and their registration in the name of Cede & Co., or such other DTC nominee,
does not effect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Series 2004 Bonds; DTC's records reflect only the identity of the
Direct Participants to whose accounts such Bonds are credited, which may or may not be the
Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2004
Bonds may wish to take certain steps to augment transmission to them of notices of significant
events with respect to the Series 2004 Bonds, such as redemptions, tenders, defaults and
proposed amendments to the Series 2004 Bond documents. For example, Beneficial Owners of
Series 2004 Bonds may wish to ascertain that the nominee holding the Series 2004 Bonds for
their benefit has agreed to obtain and transmit notices to Beneficial Owners, or in the alternative,
Beneficial Owners may wish to provide their names and addresses to the Paying Agent and
request that copies of the notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Series 2004 Bonds within
an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of
each Direct Participant in such issue to be redeemed.
4
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with
respect to the Series 2004 Bonds unless authorized by a Direct Participant in accordance with
DTC's procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Paying
Agent as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the Series 2004 Bonds
are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Series 2004 Bonds will be made to Cede & Co., or
such other nominee as may be requested by an authorized representative of DTC. DTC's
practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding
detail information from the City or Paying Agent, on the payable date in accordance with their
respective holdings shown on DTC's records. Payments by Direct and Indirect 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 Direct and Indirect Participants and not of DTC (or
its nominee), the City or the Paying Agent subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal, premium, if any, and interest to Cede
& Co. (or such other nominee as may be requested by an authorized representative of DTC) is
the responsibility of the Paying Agent, disbursement of such payments to Direct Participants
shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners
shall be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the
Series 2004 Bonds at any time by giving reasonable notice to the City or the Paying Agent.
Under such circumstances, in the event that a successor securities depository is not obtained,
Series 2004 Bond certificates are required to be prepared, executed and delivered.
Pursuant to the procedures of DTC, the City may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor securities depository). In that event, either
a successor securities depository will be selected by the City or Series 2004 Bond certificates
will be prepared, executed and delivered.
In the event of insolvency of DTC, if DTC has insufficient securities in its custody (e.g.,
due to theft or loss) to satisfy the claims of its Direct Participants with respect to deposited
securities and is unable by application of (i) cash deposits and securities pledged to DTC to
protect DTC against losses and liabilities, (ii) the proceeds of insurance maintained by DTC
and/or its Direct Participants or Indirect Participants or (iii) other resources, to obtain securities
necessary to eliminate the insufficiency, no assurances can be given that Direct Participants will
be able to obtain all of their deposited securities.
THE CITY, THE BOND REGISTRAR AND THE PAYING AGENT WILL NOT
HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS,
BENEFICIAL OWNERS OR OTHER NOMINEES OF SUCH BENEFICIAL OWNERS
FOR (A) SENDING TRANSACTION STATEMENTS; (B) MAINTAINING,
SUPERVISING OR REVIEWING THE ACCURACY OF ANY RECORDS
MAINTAINED BY DTC OR ANY DTC PARTICIPANT OR OTHER NOMINEES OF
SUCH BENEFICIAL OWNERS; (C) PAYMENT OR THE TIMELINESS OF PAYMENT
BY DTC TO ANY DTC PARTICIPANT, OR BY ANY DTC PARTICIPANT OR OTHER
NOMINEES OF BENEFICIAL OWNERS TO ANY BENEFICIAL OWNER, OF ANY
5
AMOUNT DUE IN RESPECT OF THE PRINCIPAL OF OR REDEMPTION PREMIUM,
IF ANY, OR INTEREST ON BOOK-ENTRY SERIES 2004 BONDS; (D) DELIVERY OR
TIMELY DELIVERY BY DTC TO ANY DTC PARTICIPANT, OR BY ANY DTC
PARTICIPANT OR OTHER NOMINEES OF BENEFICIAL OWNERS TO ANY
BENEFICIAL OWNERS, OF ANY NOTICE (INCLUDING NOTICE OF
REDEMPTION) OR OTHER COMMUNICATION WHICH IS REQUIRED OR
PERMITTED UNDER THE TERMS OF THE SERIES 2004 RESOLUTION TO BE
GIVEN TO HOLDERS OR OWNERS OF BOOK-ENTRY SERIES 2004 BONDS;
(E) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN
THE EVENT OF ANY PARTIAL REDEMPTION OF BOOK-ENTRY SERIES 2004
BONDS, OR (F)ANY ACTION TAKEN BY DTC OR ITS NOMINEE AS THE
REGISTERED OWNER OF THE BOOK-ENTRY SERIES 2004 BONDS.
The information in this section concerning DTC and DTC's book-entry system has been
obtained from DTC and other sources that the City believes to be reliable, but the City takes no
responsibility for the accuracy thereof.
Negotiability, Registration and Cancellation
Subject to the provisions of the Series 2004 Resolution, at the option of any registered
owner of the Series 2004 Bonds and upon surrender at the designated corporate trust office of the
Bond Registrar, with a written instrument of transfer satisfactory to the Bond Registrar duly
executed by the registered holder of a Series 2004 Bond or his duly authorized attorney, and
upon payment by such holder of any charges which the Bond Registrar or the City may make as
provided in this Section, the Series 2004 Bonds may be exchanged for Series 2004 Bonds of the
same series and maturity of any other authorized denominations.
The Bond Registrar shall keep books for the registration of Series 2004 Bonds and for the
registration of transfers of Series 2004 Bonds as provided in the Series 2004 Resolution. The
Series 2004 Bonds shall be transferable by the registered owner thereof in person or by his
attorney duly authorized in writing only upon the books of the City kept by the Bond Registrar
and only upon surrender thereof together with a written instrument of transfer satisfactory to the
Bond Registrar duly executed by the registered holder or his authorized attorney. Upon the
transfer of any such Series 2004 Bond, the City shall issue in the name of the transferee a new
Series 2004 Bond or Series 2004 Bonds.
The City, the Paying Agent and the Bond Registrar shall deem and treat the person in
whose name any Series 2004 Bond shall be registered upon the books kept by the Bond Registrar
as the absolute holder of such Series 2004 Bond, whether such Series 2004 Bond shall be
overdue or not, for the purpose of receiving payment of, or on account of, the principal of,
premium, if any, and interest on such Series 2004 Bond as the same become due and for all other
purposes. All such payments so made to any such holder or upon his order shall be valid and
effectual to satisfy and discharge the liability upon such Series 2004 Bond to the extent of the
sum or sums so paid, and neither the City, the Paying Agent, nor the Bond Registrar shall be
affected by any notice to the contrary.
[Remainder of page intentionally left blank].
6
Transfer and Exchange
Subject to the provisions of the Series 2004 Resolution, in all cases in which the privilege
of exchanging Series 2004 Bonds or transfen-ing Series 2004 Bonds is exercised, the City shall
execute and thc Bond Registrar shall authenticate and deliver Series 2004 Bonds in accordance
with the provisions of the Series 2004 Resolution. All Series 2004 Bonds surrendered in any
such exchanges or transfers shall forthwith be delivered to the Bond Registrar and cancelled by
the Bond Registrar in the manner provided by the Series 2004 Resolution. There shall be no
charge for any such exchange or transfer of Series 2004 Bonds, but the City or the Bond
Registrar may require payment of a sum sufficient to pay taxes, fees or other governmental
charges required to be paid with respect to such exchange or transfer. Neither the City nor the
Bond Registrar shall be required to (a) transfer or exchange Series 2004 Bonds for a period from
the Record Date to the next ensuing interest payment date on such Series 2004 Bonds, or fifteen
(15) days next preceding any selection of Series 2004 Bonds to be redeemed or thereafter until
the mailing of any notice of redemption; or (b) to transfer or exchange any Series 2004 Bonds
called for redemption.
Redemption Provisions
Optional Redemption. The Series 2004 Bonds maturing on February 1, 2015 and
thereafter are subject to redemption, at the option of the City prior to maturity on or after
February 1, 2014, in whole at any time or in part from time to time on the first day of any month
in such manner as shall be determined by the City, at a redemption price equal to the principal
amount of the Series 2004 Bonds to be redeemed together with accrued interest to the date fixed
for redemption.
If less than all of the Series 2004 Bonds are called for redemption, the Series 2004 Bonds
to be redeemed shall be selected in such manner as the City, in its discretion, shall determine,
and if less than all of a maturity shall be called for redemption, the Series 2004 Bonds to be
redeemed shall be selected by lot within such maturity.
Mandatory Redemption. The Series 2004 Bonds shall be subject to mandatory sinking
fund redemption, at the election of the successful bidder, on February 1 in the years 200_
through 20__.
Notice of Redemption. Notice of redemption of the Series 2004 Bonds shall be mailed,
postage prepaid, by the Bond Registrar at least thirty (30) and not more than sixty (60) days
before the date fixed for redemption to the registered owners of any of the Series 2004 Bonds or
portions of the Series 2004 Bonds which are to be redeemed, at their addresses as they appear
fifteen (15) days prior to the date such notice is mailed on the registration books of the City kept
by the Bond Registrar.
Such notice of redemption shall set forth (i) the date fixed for redemption, (ii) the
redemption price to be paid, (iii) the name and address of the Bond Registrar, (iv) if less than all
of the Series 2004 Bonds shall be called for redemption, the distinctive numbers, letters and
CUSIP identification numbers, if any, of such Series 2004 Bonds to be redeemed, (v) in the case
of Series 2004 Bonds to be redeemed in part only, the portion of the principal amount thereof to
be redeemed, and (vi) any other information the City or the Bond Registrar deems relevant.
Subject to the rules of the Securities Depository, in case any Series 2004 Bond is to be redeemed
7
in part only, the notice of redemption that relates to such Series 2004 Bond shall state also that
on or after the redemption date, upon surrender of the Series 2004 Bond, a new Series 2004
Bond or Series 2004 Bonds of the same maturity, bearing interest at the same rate and in
aggregate principal amount equal to the unredeemed portion of such Series 2004 Bond, will be
issued. Failure of the registered owner of any Series 2004 Bonds which are to be redeemed to
receive any such notice shall not affect the validity of the proceedings for the redemption of
Series 2004 Bonds for which proper notice has been given. Interest shall cease to accrue on any
of the Series 2004 Bonds duly called for prior redemption if payment of the redemption price has
been duly made or provided for.
SECURITY FOR THE SERIES 2004 BONDS
Pledge of Ad Valorem Taxes
The Series 2004 Bonds are general obligations of the City for which its full faith and
credit have been irrevocably pledged. The Series 2004 Bonds are payable from unlimited ad
valorem taxes levied on all taxable property located in the City (excluding homestead
exemptions) as required by applicable law. The taxes assessed, levied and collected for the
security and payment of the Series 2004 Bonds are required, pursuant to the terms of the Series
2004 Resolution, to be assessed, levied and collected and the proceeds of said taxes, except as
described above and in the Series 2004 Resolution, are to be applied solely to the payment of the
principal of and interest on the Series 2004 Bonds. All ad valorem taxes collected for the Series
2004 Bonds shall be deposited in a special fund known as the "Sinking Fund" which was created
and established by the Series 2004 Resolution. Moneys on deposit in the Sinking Fund will be
used solely for the payment of principal and redemption premium, if any, of and interest due on
the Series 2004 Bonds.
Assessments
Under Florida law, all taxable real property and personal property must be assessed at fair
market value, with some exceptions. Real and personal property valuations are determined each
year as of January 1 by the Palm Beach County Property Appraiser's office. The assessment roll
for real property is prepared between January and July 1, and each taxpayer is given notice by
mail of its proposed assessed property value.
The property owner has the right to £~le an appeal with the Value Adjustment Board,
which considers petitions relating to assessments and exemptions. A property owner who objects
to a determination by the Value Adjustment Board may file an appeal in Circuit Court. The
Value Adjustment Board certifies the assessment roll upon completion of the hearing of all
appeals, other than those to the Circuit Court. Millage rates are then computed by the various
taxing authorities and certified to the Property Appraiser, who applies the millage rates to the
assessment roll to create the tax roll. The tax roll is then turned over to the Tax Collector for
collection.
The Florida Constitution entitles each real property owner who is a permanent resident of
the State as of January 1 to a $25,000 homestead exemption on his or her primary residential
property. In addition, the following uses of real property are generally exempt from ad valorem
taxation: religious, educational, charitable, scientific, literary and governmental. There are also
special exemptions for widows, aged persons and disabled veterans. The tax on personal
8
property covers only tangible personal property and exempts, among other things, household
goods and personal effects and inventory.
Collections
All real and personal property taxes are due and payable on November i of each year, or
as soon thereafter as the tax roll is certitied and delivered to the Tax Collector. A notice is mailed
to each property owner on the tax roll for taxes levied by the County, school board and other
taxing authorities. Taxes may be paid upon receipt of such notice, with discounts at the rate of
4% if paid in the month of November; 3% if paid in the month of December, 2% if paid in the
month of January; and 1% if paid in the month of February. Taxes paid during the month of
March are without discount. All unpaid real and personal property taxes become delinquent on
April 1 of the year following the year in which the taxes are levied.
Delinquent Taxes
In the event of a delinquency in the payment of taxes on real property, the County Tax
Collector is required to sell tax certificates on such property to the person who pays the
delinquent taxes and interest and certain costs and charges relating thereto, and who accepts the
lowest interest rate per annum to be borne by the certificates (which shall in no event be more
than eighteen percent (18%) per annum). Delinquent taxes may be paid by a taxpayer prior to the
date of sale of a tax certificate by the payment of such taxes, together with interest and all costs
and charges relating thereto. Tax certificates are sold by public bid, and in case there are no
bidders, the certificate is issued to the County without payment of the delinquent taxes in which
the assessed lands are located. Proceeds from the sale of tax certificates are required to be used to
pay taxes, interest, costs and charges on the land described in the certificate.
County-held tax certificates may be purchased, and any tax certificate may be redeemed,
in whole or in part, by any person at any time before a tax deed is issued or the property is placed
on the list of lands available for sale, at a price equal to the face amount of the certificate or
portion thereof, together with all interest, costs, and charges due. The proceeds of such a
redemption are paid to the County Tax Collector who transmits to the holder of the certificate
such proceeds less service charges, and the certificate is cancelled. Any holder, other than the
County, of a tax certificate which has not been redeemed has seven (7) years from the date of
issuance of the tax certificate during which to act against the land that is the subject of the tax
certificate.
After an initial period ending two (2) years from April 1 of the year of issuance of a tax
certificate, during which period actions against the land are held in abeyance (except with respect
to County-held certificates) to allow for sales and redemptions of tax certificates, the holder of a
certificate may apply for a tax deed to the subject land. The applicant, other than the County, is
required to pay to the County Tax Collector all amounts required to redeem or purchase ail
outstanding tax certificates not held by the applicant covering the land, any omitted taxes or
delinquent taxes, current taxes, and interest if due, covering the land. If the County holds a tax
certificate and has not succeeded in selling it, the County must apply for a tax deed within two
(2) years after April 1 of the year of issuance. The County pays costs and fees to the County Tax
Collector but not any amount to redeem any other outstanding certificates covering the land.
Thereafter, the property is advertised for public sale.
In any such public sale, the private holder of the tax certificate who is seeking a tax deed
for non-homestead property is deemed to submit a minimum bid equal to the amount required to
redeem the tax certificate, charges for the cost of sale, redemption of other tax certificates on the
land, and the amount paid by such holder in applying for the tax deed, plus interest thereon. In
the case of homestead property, the bid is also deemed to include an amount equal to one-half
(1/2) of the latest assessed value of the homestead. If there are no higher bidders, the holder
receives title to the land and the amounts paid for the certificate and in applying for a tax deed
are credited towards the purchase price. If there are higher bidders, the holder may enter the
bidding. The highest bidder is awarded title to the land. The portion of the proceeds of such sale
needed to redeem the tax certificate (and all other amounts paid by such holder in applying for a
tax deed), plus interest, are forwarded to the holder thereof or credited to such holder if such
holder is the successful bidder. Excess proceeds are distributed first to satisfy governmental liens
against the land and then to the former title holder of the property (less service charges),
lienholders of record, mortgagees of record, vendees of recorded contracts for deeds, and other
lienholders and any other person to whom the land was assessed on the tax roll for the year in
which the land was assessed, all as their interests may appear.
If there are no bidders at the public sale, the County may at any time within ninety (90)
days from the date of offering for public sale purchase the land for a statutorily prescribed
minimum bid. After ninety (90) days have passed, any person, or governmental unit may
purchase the land by paying the amount of the minimum bid. Seven (7) years from the date of
offering for public sale, unsold lands escheat to the County.
For a discussion of the consfitutonal limitation on the annual increase in assessed
valuation of homestead (primary residence) property, see "THE CITY-State Assessment Cap"
herein.
[Remainder of page intentionally left blank.]
10
PRINCIPAL TAXPAYERS (UNAUDITED)
Percentage
2003 of Total
Taxpayer Taxes Levied Taxes Levied(1)
Linton Delray LLC $ 856,346 2.67%
Citation Club 825,074 2.57%
Office Depot, Inc. 728,366 2.27%
Delray Intracoastal 594,689 1.85%
Realty Associates Fund V 560,007 1.74%
Ocean Property LTD 523,327 1.63%
Depot Realty 479,365 1.49%
Summit Properties Partnership LP 461,226 1.44%
125 Via Deste Aprtmts Invstrs LLC 457,515 1.43%
Palm Beach County Health Facilities 419,714 1.31%
$5,905,629 18.39%
Source: Comprehensive Annual Financial Report of the City dated September 30, 2003.
(~) Total taxes levied for fiscal year 2003 are $32,069,034.
CITY OF DELRAY BEACH, FLORIDA
ASSESSED VALUE OF TAXABLE PROPERTY (UNAUDITED)
LAST TEN FISCAL YEARS
Personal
Fiscal Real Property Property Centrally Total
Year Ended Assessed Value Assessed Value Assessed Value Assessed Value
1994 $2,273,414,571 $161,191,710 $ 874,344 $2,435,480,625
1995 2,285,093,258 182,359,842 1,080,285 2,468,533,385
1996 2,345,831,009 194,562,246 1,190,016 2,541,583,271
1997 2,415,411,016 214,958,684 1,180,501 2,631,550,201
1998 2,526,205,305 231,129,006 1,602,085 2,758,936,396
1999 2,726,830,716 235,458,142 1,538,111 2,963,826,969
2000 2,908,069,980 260,128,321 1,625,553 3,169,823,854
2001 3,108,896,577 283,054,206 1,622,853 3,393,573,636
2002 3,468,430,111 289,581,133 1,589,665 3,759,600,909
2003 3,866,677,077 283,162,580 1,623,001 4,151,462,658
2004 4,438,122,578 265,666,772 2,013,779 4,705,803,129
Source: Palm Beach County Property Appraiser's Office.
11
CITY OF DELRAY BEACH, FLORIDA
PROPERTY TAX LEVIES AND COLLECTIONS (UNAUDITED)
Fiscal Total Total Outstanding
Year Current Percent Delinquent Pmpe~ty Collections Outstanding Delinquent
Ended Net Tax Tax Of Levy Tax Tax as a % of Delinquent Taxes of % of
9/30 Levym Collections Collected Collections Collections Current Levy Taxes Current Levv
1994 $18,888,080 $18,712,867 99.07% $ 61,001 $18,773,868 99.40% $708,344 3.75%
1995 18,994,194 18,837,457 99.17% 113,520 18,950,977 99.77% 727,734 3.83%
1996 19,422,203 19,297,375 99.36% 76,933 19,374,308 99.75% 770,330 3.97%
1997 20,004,670 19,9t0,114 99.53% 36,456 19.946,570 99.71% 824,842 4.12%
1998 20,821,315 20,731,763 99.57% 323,954 21,055.717 101.12% 590,440 2.83%
1999 22,099,064 21,996,762 99.54% 35,853 22,032,615 99.70% 652,726 2.95%
2000 23,465,518 23,345,095 99.49% 84.164 23,429,259 99.85% 678,916 2.89%
2001 26,105,220 25,968,855 99.48% 74,076 26,042,931 99.76% 729,262 2.79%
2002 29,084,111 28,938,206 99.50% 73,040 29,011.246 99.75% 792,294 2.72%
2003 32,099,240 31,953,508 99.55% 115,526 32,069,034 99.91% 822,259 2.56%
Soume: Comprehensive Annual Financial Report of Dekay Beach, September 30, 2003.
Note: All property taxes are assessed and collected by Palm Beach County without charge to
the City, and collections are distributed in full as collected.
ti) Tax Levy net of allowable discounts.
CITY OF DELRAY BEACH, FLOR/DA
PROPERTY TAX RATES OF ALL OVERLAPPING GOVERNMENTS (UNAUDITED)
Last Ten Fiscal Years
(Per $1,000 of Assessed Value)
Palm
Fiscal Beach South Florida
Year Palm Health Water
Ended General Debt City School Beach Care Management
Sept. 30 Fund Service Total District County District District Total
1994 6.8600 1.1400 8.0000 10.0630 4.5499 1,4750 0.5970 24.6849
1995 6.8800 1.0700 7.9500 10.1850 4.5193 1.4500 0.5970 24.7013
1996 6.8700 1.0300 7.9000 9.8170 4.5191 1.4500 0.6470 24.3331
1997 6.9500 0.9000 7.8500 9.7880 4.5191 1.2000 0.6720 24.0291
1998 6.9500 0.8500 7.8000 9.5570 4.6000 1.1600 0.6970 23.8140
1999 6.9100 0.7900 7.7000 9.6820 4.6000 1.0500 0.6970 23.7290
2000 6.9100 0.7400 7.6500 9.0430 4.6000 0.9750 0.6970 22.9650
2001 7.2600 0.6900 7.9500 8.9180 4.6000 1.0250 0.6970 23.1900
2002 7.3700 0.6300 8.0000 8.9480 4.5500 1.1500 0.6970 23.3450
2003 7.4400 0.5600 8.0000 8.7790 4.5000 1.1300 0.6930 23.1020
Tax rate limits: Ten mills per Florida Statute 200.081 (one mill is $1 per
$1,000 assessed value).
Scope of tax rate limit No municipality shall levy ad valorem taxes for real and
tangible personal property in excess of ten mills of the assessed
value, except for special benefits and debt service on
obligations issued with the approval of those taxpayers subject
12
to ad valorem taxes.
Taxes due: March 31
Taxes delinquent: April 1
Discount Allowed: 4% November, 3% December, 2% January, 1% March
Penalties for delinquency: 3% plus advertising costs after April 1
Tax Collector: Palm Beach County
Tax Collector's Commission: None
Source: Comprehensive Annual Financial Report of Delray Beach, September 30, 2003, and
Finance Department of the City.
BOND INSURANCE
Bond Insurance Policy
Concurrently with the issuance of the Series 2004 Bonds, MBIA Insurance Corporation
("MBIA") will issue its Municipal Bond Insurance Policy for the Series 2004 Bonds (the
"Policy"). The Policy guarantees the scheduled payment of principal of and interest on the
Series 2004 Bonds when due as set forth in the form of the Policy included as in Appendix D to
this Official Statement.
The Policy is not covered by any insurance security or guaranty fund established under
New York, California, Connecticut or Florida insurance law.
The MBIA Insurance Corporation Insurance Policy
The following information has been furnished by MBIA for use in this Official
Statement. Reference is made to Appendix D for a specimen of MBIA's policy.
MBIA's policy unconditionally and irrevocably guarantees the full and complete
payment required to be made by or on behalf of the City to the Paying Agent or its successor of
an amount equal to (i) the principal of (either at the stated maturity or by an advancement of
maturity pursuant to a mandatory sinking fund payment) and interest on, the Series 2004 Bonds
as such payments shall become due but shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of mandatory or optional redemption or
acceleration resulting from default or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments guaranteed by MBIA's policy shall
be made in such amounts and at such times as such payments of principal would have been due
had there not been any such acceleration); and (ii) the reimbursement of any such payment which
is subsequently recovered from any owner of the Series 2004 Bonds pursuant to a final judgment
by a court of competent jurisdiction that such payment constitutes an avoidable preference to
such owner within the meaning of any applicable bankruptcy law (a "Preference").
MBIA's policy does not insure against loss of any prepayment premium which may at
any time be payable with respect to any Series 2004 Bond. MBIA's policy does not, under any
circumstance, insure against loss relating to: (i) optional or mandatory redemptions (other than
13
mandatory sinking fund redemptions); (ii) any payments to be made on an accelerated basis; (iii)
payments of the purchase price of Series 2004 Bonds upon tender by an owner thereof; or (iv)
any Preference relating to (i) through (iii) above. MBIA's policy also does not insure against
nonpayment of principal of or interest on the Series 2004 Bonds resulting from the insolvency,
negligence or any other act or omission of the Paying Agent or any other paying agent for the
Series 2004 Bonds.
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
writing by registered or certified mail, or upon receipt of written notice by registered or certified
mail, by MBIA from the Paying Agent or any owner of a Series 2004 Bond the payment of an
insured amount for which is then due, that such required payment has not been made, MBIA on
the due date of such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account with U.S. Bank
Trust National Association, in New York, New York, or its successor, sufficient for the payment
of any such insured amounts which are then due. Upon presentment and surrender of such Series
2004 Bonds or presentment of such other proof of ownership of the Series 2004 Bonds, together
with any appropriate instruments of assignment to evidence the assignment of the insured
amounts due on the Series 2004 Bonds as are paid by MBIA, and appropriate instruments to
effect the appointment of MBIA as agent for such owners of the Series 2004 Bonds in any legal
proceeding related to payment of insured amounts on the Series 2004 Bonds, such instruments
being in a form satisfactory to U.S. Bank Trust National Association, U.S. Bank Trust National
Association shall disburse to such owners or the Paying Agent payment of the insured amounts
due on such Series 2004 Bonds, less any amount held by the Paying Agent for the payment of
such insured amounts and legally available therefor.
MBIA is the principal operating subsidiary of MBIA Inc., a New York Stock Exchange
listed company (the "Company"). The Company is not obligated to pay the debts of or claims
against MBIA. MBIA is domiciled in the State of New York and licensed to do business in and
subject to regulation under the laws of all 50 states, the District of Columbia, the Commonwealth
of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands of the
United States and the Territory of Guam. MBIA has three branches, one in the Republic of
France, one in the Republic of Singapore and one in the Kingdom of Spain. New York has laws
prescribing minimum capital requirements, limiting classes and concentrations of investments
and requiring the approval of policy rates and forms. State laws also regulate the amount of both
the aggregate and individual risks that may be insured, the payment of dividends by MBIA,
changes in control and transactions among affiliates. Additionally, MBIA is required to maintain
contingency reserves on its liabilities in certain amounts and for certain periods of time.
MBIA does not accept any responsibility for the accuracy or completeness of this Official
Statement or any information or disclosure contained herein, or omitted herefrom, other than
with respect to the accuracy of the information regarding the policy and MBIA set forth under
the heading "BOND INSURANCE." Additionally, MBIA makes no representation regarding the
Series 2004 Bonds or the advisability of investing in the Series 2004 Bonds.
14
MBIA Information
The following documents filed by the Company with the Securities and Exchange
Commission (the "SEC") are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended December 31,
2003; and
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2004.
Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act of 1934, as amended, after the date of this Official Statement and prior to the
termination of the offering of the Series 2004 Bonds offered hereby shall be deemed to be
incorporated by reference in this Official Statement and to be a part hereof. Any statement
contained in a document incorporated or deemed to be incorporated by reference herein, or
contained in this Official Statement, shall be deemed to be modified or superseded for purposes
of this Official Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this Official Statement.
The Company files annual, quarterly and special reports, information statements and
other information with the SEC under File No. 1-9583. Copies of the SEC filings (including (1)
the Company's Annual Report on Form 10-K for the year ended December 31, 2003, and (2) the
Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2004 and June 30,
2004) are available (i) over the Internet at the SEC's web site at http://www.sec.gov; (ii) at the
SEC's public reference room in Washington D.C.; (iii) over the Intemet at the Company's web
site at http://www.mbia.com; and (iv) at no cost, upon request to MBIA Insurance Corporation,
113 King Street, Armonk, New York 10504. The telephone number of MBIA is (914) 273-
4545.
As of December 31, 2003, MBIA had admitted assets of $9.9 billion (audited), total
liabilities of $6.2 billion (audited), and total capital and surplus of $3.7 billion (audited)
determined in accordance with statutory accounting practices prescribed or permitted by
insurance regulatory authorities. As of June 30, 2004 MBIA had admitted assets of $10.5 billion
(unaudited), total liabilities of $6.7 billion (unaudited), and total capital and surplus of $3.8
billion (unaudited) determined in accordance with statutory accounting practices prescribed or
permitted by insurance regulatory authorities.
Financial Strength Ratings of MBIA
Moody's Investors Service, Inc. rates the financial strength of MBIA "Aaa."
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. rates the financial
strength of MBIA "AAA."
Fitch Ratings rates the financial strength of MBIA "AAA."
15
Each rating of MBIA should be evaluated independently. The ratings reflect the
respective rating agency's current assessment of the creditworthiness of MBIA and its ability to
pay claims on its policies of insurance. Any further explanation as to the significance of the
above ratings may be obtained only from the applicable rating agency.
The above ratings are not recommendations to buy, sell or hold the Series 2004 Bonds,
and such ratings may be subject to revision or withdrawal at any time by the rating agencies.
Any downward revision or withdrawal of any of the above ratings may have an adverse effect on
the market price of the Series 2004 Bonds. MBIA does not guaranty the market price of the
Series 2004 Bonds nor does it guaranty that the ratings on the Series 2004 Bonds will not be
revised or withdrawn.
The insurance provided by this policy is not covered by the Florida Insurance Guaranty
Association created under chapter 631, Florida Statutes.
THE CITY
Location and Size
The City, located on Florida's Gold Coast in Palm Beach County with an estimated
population of 62,578 (as of 2003) and sixteen square miles within its municipal boundaries.
Lying 18 miles south of West Palm Beach and 50 miles north of Miami along the Atlantic
Ocean, the City has been able to participate in the growth of South Florida and benefit from the
economic growth of this area in general.
Brief Description
The City is primarily a resort and residential community of well-kept homes and recent
developments of condominium apartments. The City has many recreational facilities including
tennis, golf, boating, fishing, water sports, and lawn bowling. During the winter months, the
hotels, motels, and restaurants fill to capacity with visiting tourists and winter residents. The
City's famous mile-long beach is an attraction for residents and tourists. The Intracoastal
Waterway provides boat dockage, and the Boynton Inlet gives access to the Atlantic Ocean for
salt water drift fishing. Lake Ida, adjacent to the City, also provides fishing and water skiing.
Further information on the City is contained in Appendix A - "General Information
Concerning the City of Delray Beach, Florida and Palm Beach County."
Budgeting, Accounting and Auditing
The City follows these procedures in establishing the budgetary data reflected in its
general purpose financial statements:
1. No later than the first regular Commission meeting in August, the City Manager
submits to the City Commission a proposed operating budget for the fiscal year commencing the
following October 1. The operating budget includes proposed expenditures and the means of
financing them.
2. Public hearings are conducted at City Hall to obtain taxpayer comments.
16
3. The City advises the County Property Appraiser of the proposed millage rate and
the day, time and place of the public hearing for budget acceptance.
4. The public hearing is held to obtain final taxpayer input and to adopt the final
budget.
5. The budget and related millage rates are legally enacted through passage of
separate resolutions.
6. Changes or amendments to the total budgeted expenditures of the City or a
department must be approved by the City Commission; however, changes within a department
which do not affect the total departmental expenditures may be approved at the administrative
level. Accordingly, the legal level of control is at the department level. All unencumbered
balances lapse at year end.
The City reports major governmental funds consisting of a General Fund and a Capital
Improvements Fund, a major Proprietary Fund consisting of a Water and Sewer Fund; as well as
Internal Service Funds and Pension Trust Funds.
Non-appropriated budgets, which are not legally adopted or legally required to be
adopted are prepared for the Law Enforcement Trust Fund, Community Development Fund,
Beautification Fund, Tennis Stadium Fund, Water and Sewer Fund, Delray Beach Municipal
Golf Course Fund, Lakeview Golf Course Fund, City Marina Fund, Sanitation Fund, Stormwater
Utility Fund, Central Garage Fund and the Insurance Fund. The Finance Department monitors
the expenditures of these funds through the use of budgets prepared by management.
Operating Budget for Fiscal Year Ended September 30, 2003
Total budgeted operating revenues and other financing sources for the General Fund for
fiscal year ending September 30, 2003 are $85,360,817. See Appendix B - "City of Delray
Beach, Florida General Purpose Financial Statements and other Information for the Fiscal Year
ended September 30, 2003."
Each month of the current fiscal year, actual revenues and expenditures of the General
Fund are compared with budgeted amounts by line item. Variations of actual revenues and
expenditures compared to budgeted amounts which are unfavorable are referred to the respective
department heads for explanations and possible amendment. A summary report of the status of
the budget is submitted to the City Manager for review and action. At the close of the 2003
fiscal year (September 30, 2003), total revenues were 110% of the annual budget amount and
total expenditures were 108% of the annual budget amount.
State Assessment Cap
On November 3, 1992, the voters of the State of Florida passed an amendment to Article
VII, Section 4 of the Florida constitution establishing a limitation of the lesser of 3% or the
increase in the Consumer Price Index during the relevant year, on the annual increase in assessed
valuation of homestead (primary residence) property, except in the event of a sale thereof during
such year, and except as to improvements thereto during such year. The amendment did not alter
any caps on millage rates otherwise set forth in the Florida Constitution.
17
Suite 1170 407 648-2208
300 Sout~ Orange Avenue 407-648-1323 fax
Orlando, FL www,pfm.com
32801-3470
ublic Financial Management
Financial and Investment Advisors
September 7, 2004
The City Commission of
The City of De[ray Beach, Florida
100 N.W. Is' Avenue
Delray Beach, Florida 33444
Dear Ladies and Gentleman:
In our capacity as financial advisor to the City of De[ray Beach, Horida (the "City') on the City's
General Obligation Bonds, Series 2004 (the "Series 2004 Bonds"), Public Financial Management,
Inc., recommends that the principal and interest on the Series 2004 Bonds be insured by a muMcipal
bond insurance policy (the "Policy") to be issued by MBIA Insurance Corporation (the "Bond
Insurer") pursuant to the terms and provisions of the commitment of such Bond Insurer to provide
the Policy. This recommendation is based on the economic benefit that the City will realize on the
Series 2004 Bonds as a result of procuring the Policy.
Sincerely,
James w. Glover
Public Financial Management, Inc.
Senior Managing Consultant
MEMORANDUM
To: David T. Harden, City Manager
From/;/~ Rebecca S. O'Connor, Treasurer
Thru: ~ Joseph M. Safford, Director of Finance
Subject: Proposed $14,000,000 General Obligation Bonds
Date: September 1,2004
We have attached for Commission approval Resolution# 61-04 and 62-04 relative to the issuance
of proposed General Obligation Bonds. A brief description of each resolution is as follows:
Resolution# 61-04 authorizes the issuance of General Obligation Bonds not to exceed
$14,000,000; providing for the allocation of proceeds consistent with Resolution #72-03
(authorizing certain projects and calling for a referendum), and providing for other matters
deemed necessary and proper in connection with the issuance of the bonds.
Resolution #62-04 authorizes the competitive sale of General Obligation Bonds not to exceed
$24,000,000; establishes the maturity schedule, authorizes the Finance Director to publish a
summary notice of sale and to receive bids pursuant to the responsive bidder offering the lowest
true interest cost which shall not exceed 6%, appointing a paying agent and bond registrar,
approving the form of a summary notice of sale, an official notice of bond sale and bid form,
providing for a bond insurance policy, and authorizing the proper officers to do all other things
necessary to effectuate the sale.
The Finance Department recommends approval of this resolution.
c: R.S. O'Connor, Treasurer
File: commiss04res.doc
RESOLUTION NO. 62-04
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF DELRAY
BEACH, FLORIDA, AUTHORIZING THE COMPETITIVE SALE OF CITY
OF DELRAY BEACH, FLORIDA, GENERAL OBLIGATION BONDS,
SERIES 2004 (RECREATIONAL AND CULTURAL PROJECTS), IN THE
INITIAL AGGREGATE PRINCIPAL AMOUNT OF NOT EXCEEDING
$24,000,000; ESTABLISHING THE MATURITY SCHEDULE AND
REDEMPTION TERMS IN CONNECTION WITH THE BONDS,
AUTHORIZING THE CITY MANAGER OR FINANCE DIRECTOR TO
PUBLISH A SUMMARY NOTICE OF SALE AND TO RECEIVE BIDS
PURSUANT TO A COMPETITIVE SALE OF SAID BONDS TO THE
RESPONSIVE BIDDER OFFERING THE LOWEST TRUE INTEREST COST
TO THE CITY WHICH SHALL NOT EXCEED SIX PERCENT; APPOINTING
A PAYING AGENT AND BOND REGISTRAR; AUTHORIZING THE
REGISTRATION OF THE BONDS UNDER A BOOK-ENTRY SYSTEM;
APPROVING THE FORM OF A SUMMARY NOTICE OF SALE, AN
OFFICIAL NOTICE OF BOND SALE AND BID FORM, PRELIMINARY
OFFICIAL STATEMENT AND AUTHORIZING THE EXECUTION AND
DELIVERY OF AN OFFICIAL STATEMENT RELATING TO THE BONDS;
AUTHORIZING THE USE BY THE SUCCESSFUL BIDDER OF THE
OFFICIAL STATEMENT RELATING TO THE BONDS; APPROVING THE
FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF A
PAYING AGENT AND REGISTRAR AGREEMENT RELATING TO THE
BONDS; PROVIDING FOR A BOND INSURANCE POLICY FOR THE
BONDS PROVIDED BY MBIA INSURANCE CORPORATION;
AUTHORIZING THE PROPER OFFICERS OF THE CITY TO DO ALL
OTHER THINGS DEEMED NECESSARY OR ADVISABLE AS TO THE
SALE AND DELIVERY OF THE BONDS; AND PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, the City Commission of Delray Beach, Florida (the "Commission") did, on
this date, adopt Resolution No. 61-04 (the "Authorizing Resolution") authorizing the issuance of
not exceeding $24,000,000 in initial aggregate principal amount of General Obligation Bonds,
Series 2004 (Recreational and Cultural Projects) (the "Bonds"), for the purpose of financing all
or a portion of the costs of certain capital projects particularly described in Resolution No. 72-03
(the "Projects"), adopted by the Commission on October 21, 2003; and
WHEREAS, any term not otherwise defined in this Resolution shall have the meaning
ascribed to such term in the Authorizing Resolution; and
Resolution No. 62-04
WHEREAS, the City deems it to be in the best economic interest of the City that the
Bonds be sold at a public sale in order to accomplish the stated purposes of the Bonds; and
WHEREAS, it is necessary: (i) to fix the date, denominations, amount and maturities of
the Bonds, (ii) to authorize the publication (including publication on the Interact) of a summary
notice of sale, (iii) to approve the form and the use (including use over the Interact) of an
Official Notice of Bond Sale and Official Bid Form, Preliminary Official Statement and a final
Official Statement, (iv) to authorize the City Manager or the Finance Director of the City to
award the Bonds to the best bidder upon the terms and conditions and subject to the limitations
set forth herein and the Official Notice of Bond Sale, (v) to appoint a Bond Registrar and Paying
Agent and (vi) to select bond insurance to guarantee the payment of scheduled debt service on
the Bonds; and
WHEREAS, the City's financial advisor has recommended in a letter, attached hereto as
Exhibit D, that the principal and interest on the Bonds be insured by a municipal bond insurance
policy (the "Bond Insurance Policy") to be issued by MBIA Insurance Corporation (the "Bond
Insurer") pursuant to the terms and provisions of the commitment of such Bond Insurer to
provide the Bond Insurance Policy attached hereto as Exhibit E (herein, the "Commitment"); and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF DELRAY BEACH, FLORIDA, AS FOLLOWS:
SECTION 1. DEFINITIONS. That all capitalized terms used in this Resolution not
otherwise defined shall have the meanings ascribed to such terms in the Authorizing Resolution
unless the context clearly indicates otherwise.
SECTION 2. AUTHORIZATION OF THE BONDS AND PURPOSE. Subject
and pursuant to the provisions of the Act, this Resolution and the Authorizing Resolution, the
Resolution No. 62-04
City hereby authorizes the Bonds to be known as "General Obligation Bonds, Series 2004
(Recreational and Cultural Projects)," to be issued pursuant to the terms and provisions of the
Authorizing Resolution and this Resolution in the aggregate principal amount of not exceeding
Twenty-Four Million Dollars ($24,000,000) (herein referred to as the "Bonds"), for the purpose
of (i) financing the Projects and all incidental costs relating thereto and (ii) paying the costs of
issuing the Bonds, including the premium for the Bond Insurance Policy.
SECTION 3. FORM OF BONDS. The text of the Bonds shall be in substantially
the form set forth in the Authorizing Resolution.
SECTION 4. TERMS AND DETAILS OF THE BONDS. The Bonds shall be
dated the date of issuance, shall be issued in the denomination of $5,000 each or integral
multiples thereof, shall bear interest payable February 1, 2005 and semi-annually thereafter on
August 1 and February 1 in each year and shall mature or be subject to mandatory sinking fund
redemption at the election of the successful bidder on February 1 in the years 2005 through 2024.
The Bonds maturing on February 1, 2015 and thereafter are subject to redemption at the
option of the City prior to maturity on or after February 1, 2014, in whole at any time or in part
from time to time on the first day of any month in such manner as shall be determined by the
City, at a redemption price equal to the principal amount of the Bonds to be redeemed, together
with accrued interest to the date fixed for redemption.
Notwithstanding the foregoing, if the City's financial advisor, upon consultation with the
Finance Director, determines that market conditions require different or no optional redemption
provisions for the Bonds or for certain maturities of the Bonds, such different optional
redemption provisions or the exclusion of certain or ail maturities of the Bonds from such
optional redemption provisions will be deemed approved by the Commission without the need of
Resolution No. 62-04
further proceedings so long as the maximum redemption premium does not exceed 1% and the
first optional redemption period is not more than twelve (12) years from the date of issuance of
the Bonds.
If less than all of the Bonds are called for redemption, the Bonds to be redeemed shall be
selected in such manner as the City, in its discretion, shall determine, and if less than all of a
maturity shall be called for redemption, the Bonds to be redeemed shall be selected by lot within
such maturity.
Notice of redemption of the Bonds shall be mailed, postage prepaid, by the Bond
Registrar (herein defined) at least thirty (30) and not more than sixty (60) days before the date
fixed for redemption to the registered owners of any of the Bonds or portions of the Bonds which
are to be redeemed, at their addresses as they appear fifteen (15) days prior to the date such
notice is mailed on the registration books of the City kept by the Bond Registrar.
The Bond Registrar also shall mail (by certified mail, return receipt requested) a copy of
such notice for receipt not less than the second business day prior to the date notice of
redemption is mailed to the Bondholders to the following (or the most current address): The
Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530; Midwest
Securities Trust Company, Capital Structures - Call Notification, 440 South LaSalle Street,
Chicago, Illinois 60605; Philadelphia Depository Trust Company, Reorganization Division, 1900
Market Street, Philadelphia, Pennsylvania 19103; Attention: Bond Department; provided,
however, that such mailing shall not be a condition precedent to such redemption and failure to
mail any such notice shall not affect the validity of any proceedings for the redemption of the
Bonds. The Bond Registrar shall also provide notice, at the same time notice of redemption is
given to the Bondholders, to Kenny Information Systems Notification Service, 65 Broadway,
Resolution No. 62-04
16th Floor, New York, New York 10006, and Standard & Poor's Called Bond Record, 25
Broadway, New York, New York 10004 (or the most current address); provided, however, that
such mailing shall not be a condition precedent to such redemption and failure to mail any such
notice shall not affect the validity of any proceedings for the redemption of the Bonds.
A second notice of redemption shall be given sixty (60) days after the redemption date in
the manner required above to the registered owners of redeemed Bonds which have not been
presented for payment within thirty (30) days after the redemption date.
Such notice of redemption shall set forth (i) the date fixed for redemption, (ii) the
redemption price to be paid, (iii) the name and address of the Bond Registrar, (iv) if less than all
of the Bonds shall be called for redemption, the distinctive numbers, letters and CUSIP
identification numbers, if any, of such Bonds to be redeemed, (v) in the case of Bonds to be
redeemed in part only, the portion of the principal amount thereof to be redeemed, and (vi) any
other information the City or the Bond Registrar deems relevant. Subject to the roles of the
Securities Depository, in case any Bond is to be redeemed in part only, the notice of redemption
that relates to such Bond shall state also that on or after the redemption date, upon surrender of
the Bond, a new Bond or Bonds of the same maturity, bearing interest at the same rate and in
aggregate principal amount equal to the unredeemed portion of such Bond, will be issued.
Failure of the registered owner of any Bonds which are to be redeemed to receive any such
notice shall not affect the validity of the proceedings for the redemption of Bonds for which
proper notice has been given. Interest shall cease to accrue on any of the Bonds duly called for
prior redemption if payment of the redemption price has been duly made or provided for.
Resolution No. 62-04
Notwithstanding any of the foregoing, no notice of redemption that relates to the Bonds
shall be given unless there are sufficient moneys for such redemption on deposit in the Sinking
Fund or unless such redemption shall be paid for with the proceeds of refunding bonds.
SECTION 5. SALE OF BONDS. The Finance Director is hereby authorized and
directed to sell the Bonds at public sale by competitive bid and to publish the Summary Notice of
Sale attached hereto as Exhibit A in The Bond Buyer and on the World Wide Web at least ten
(10) days prior to the date of sale, which date of sale shall be determined by the Finance
Director, in consultation with the City's financial advisor, in an effort to achieve the lowest
interest rate cost for the City.
The Official Notice of Bond Sale and Official Bid Form attached hereto as Exhibit B and
the Preliminary Official Statement attached hereto as Exhibit C are each hereby approved and
authorized to be used in connection with the sale of the Bonds. The Preliminary Official
Statement, upon advice of the Finance Director, is hereby deemed final for purposes of the Rule.
The Preliminary Official Statement, as amended on the date of sale of the Bonds to delete the
preliminary language and as further amended to reflect the actual interest rates and reoffering
terms and any changes of maturities or amounts and with such additional correcting and
conforming changes as shall be approved by the Finance Director, is hereinafter referred to as the
"Official Statement" and as promptly as possible following the sale and within seven (7)
business days of the date of sale of the Bonds, the City agrees to make available to the purchaser
of the Bonds a sufficient number of copies of the Official Statement as necessary to enable such
purchaser to comply with the Rule. The Mayor (or in his absence, the Vice Mayor) is authorized
to execute the Official Statement on behalf of the City with such changes, completions and
amendments as they shall determine are necessary or desirable. The purchaser of the Bonds is
Resolution No. 62-04
hereby authorized to use the Official Statement in connection with confirming the sale of the
Bonds.
The Finance Director is hereby delegated the authority to award the Bonds to the
responsive bidder offering to purchase the Bonds at the lowest annual interest cost to the City
computed on a true interest cost basis, which in no event shall exceed six percent (6.00%) per
annum. True interest cost shall be calculated as provided in the Official Notice of Bond Sale.
As a further condition for the Finance Director to award the Bonds, the reoffering price for the
Bonds may not be less than 99% of the principal amount of the Bonds for any single maturity
thereof, and the aggregate purchase price as certified by the City's financial advisor, may not be
less than 100% of the aggregate principal amount of the Bonds.
SECTION 6. BOND REGISTRAR; PAYING AGENT. Wells Fargo Bank,
National Association is hereby appointed the Bond Registrar and Paying Agent for the Bonds.
SECTION 7. BOOK ENTRY BONDS. That the City hereby determines that the
registration of the Bonds be by the book entry system of registration provided by the Securities
Depository.
SECTION 8. BOND INSURANCE POLICY AND PROVISIONS RELATING
THERETO. That, based on the recommendations of the City's financial advisor, set forth in a
letter attached hereto as Exhibit D with respect to the Bonds, the Commission finds that
obtaining the Bond Insurance Policy provided by the Bond Insurer is in the best interests of the
City, and the Commission hereby directs that the premium due on the Bond Insurance Policy be
paid in accordance with the terms thereof. To the extent not reflected in the Authorizing
Resolution and this Resolution, the terms and provisions of the Commitment from MBIA
Insurance Corporation to provide the Bond Insurance Policy attached hereto as Exhibit E are
Resolution No. 62-04
accepted and inco~orated herein as though such terms and provisions were set forth herein
(herein, the "Commitment").
A. In the event that, on the second Business Day, and again on the Business Day,
prior to the payment date on the Bonds, the Paying Agent has not received sufficient moneys to
pay all principal of and interest on the Bonds due on the second following or following, as the
case may be, Business Day, the Paying Agent shall immediately notify the Bond Insurer or its
designee on the same Business Day by telephone or telegraph, confirmed in writing by registered
or certified mail, of the amount of the deficiency.
B. If the deficiency made up in whole or in part prior to or on the payment date, the
Paying Agent shall so notify the Bond Insurer or its designee.
C. In addition, if the Paying Agent has notice that any Bondholder has been required
to disgorge payments of principal or interest on the Bonds to a trustee in bankruptcy or creditors
or others pursuant to a final judgment by a court of competent jurisdiction that such payment
constitutes an avoidable preference to such Bondholder within the meaning of any applicable
bankruptcy laws, then the Paying Agent shall notify the Bond Insurer or its designee of such fact
by telephone or telegraphic notice, confirmed in writing by registered or certified mail.
D. The Paying Agent is hereby irrevocably designated, appointed, directed and
authorized to act as attorney-in-fact for Holders of the Bonds as follows:
1. If and to the extent there is a deficiency in amounts required to pay interest
on the Bonds, the Paying Agent shall (a) execute and deliver to U.S. Bank Trust National
Association, or its successors under the Bond Insurance Policy (the "Insurance Paying
Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the
Bond Insurer as agent for such Holders in any legal proceeding related to the payment of
Resolution No. 62-04
such interest and an assignment to the Bond Insurer of the claims for interest to which
such deficiency relates and which are paid by the Bond Insurer, (b) receive as designee of
the respective Holders (and not as Paying Agent) in accordance with the tenor of the
Bond Insurance Policy payment from the Insurance Paying Agent with respect to the
claims for interest so assigned, and (c) disburse the same to such respective Holders; and
2. If and to the extent of a deficiency in amounts required to pay principal of
the Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent
in form satisfactory to the Insurance Paying Agent an instrument appointing the Bond
Insurer as agent for such Holder in any legal proceeding relating to the payment of such
principal and an assignment to the Bond Insurer of any of the Bonds surrendered to the
Insurance Paying Agent of so much of the principal amount thereof as has not previously
been paid or for which moneys are not held by the Paying Agent and available for such
payment (but such assignment shall be delivered only if payment from the Insurance
Paying Agent is received), (b) receive as designee of the respective Holders (and not as
Paying Agent) in accordance with the tenor of the Bond Insurance Policy payment
therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders.
E. Payments with respect to claims for interest on and principal of Bonds disbursed
by the Paying Agent from proceeds of the Bond Insurance Policy shall not be considered to
discharge the obligation of the City with respect to such Bonds, and the Bond Insurer shall
become the owner of such unpaid Bonds and claims for the interest in accordance with the tenor
of the assignment made to it under the provisions of this subsection or otherwise.
F. Irrespective of whether any such assignment is executed and delivered, the City
and the Paying Agent hereby agree for the benefit of the Bond Insurer that:
Resolution No. 62-04
1. They recognize that to the extent the Bond Insurer makes payments,
directly or indirectly (as by paying through the Paying Agent), on account of principal of
or interest on the Bonds, the Bond Insurer will be subrogated to the fights of such
Holders to receive the amount of such principal and interest from the City, with interest
thereon as provided and solely from the sources stated in this Indenture and the Bonds;
and
2. They will accordingly pay to the Bond Insurer the amount of such
principal and interest (including principal and interest recovered under subparagraph (ii)
of the first paragraph of the Bond Insurance Policy, which principal and interest shall be
deemed past due and not to have been paid), with interest thereon as provided in this
Resolution and the Bonds, but only from the sources and in the manner provided herein
for the payment of principal of and interest on the Bonds to Holders, and will otherwise
treat the Bond Insurer as the owner of such rights to the amount of such principal and
interest.
G. Copies of any amendments made to the documents executed in connection with
the issuance of the Bonds which are consented to by the Bond Insurer shall be sent to Standard &
Poor' s.
H. The Bond Insurer shall receive notice of the resignation or removal of the Paying
Agent and the appointment of a successor thereto.
I. The Bond Insurer shall receive copies of all notices required to be delivered to
Bondholders and, on an annual basis, copies of the City's audited financial statements and
Annual Budget.
Resolution No. 62-04
J. Any notice that is required to be given to a holder of the Bonds or to the Paying
Agent pursuant to the Authorizing Resolution or this Resolution shall also be provided to the
Bond Insurer. All notices required to be given to the Bond Insurer under the Authorizing
Resolution or this Resolution shall be in writing and shall be sent by registered or certified mail
addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504,
Attention: Surveillance.
K. The City agrees to reimburse the Bond Insurer immediately and unconditionally
upon demand, to the extent permitted bylaw, for ail reasonable expenses, including attorneys'
fees and expenses, incurred by the Bond Insurer in connection with (1) the enforcement by the
Bond Insurer of the Bonds, or the preservation or defense of any rights of the Bond Insurer,
under the Authorizing Resolution or this Resolution and any other document executed in
connection with the issuance of the Bonds, and (ii) any consent, amendment, waiver or other
action with respect to the Authorizing Resolution or this Resolution, whether or not granted or
approved, together with interest on ail such expenses from and including the date incurred to the
date of payment at Citibank's Prime Rate plus 3% or the maximum interest rate permitted bylaw,
whichever is less. In addition, the Bond Insurer reserves the right to charge a fee in connection
with its review of any such consent, amendment or waiver, whether or not granted or approved.
L. The City agrees not to use the Bond Insurer's name in any public document
including, without limitation, a press release or presentation, announcement or forum without the
Bond Insurer's prior consent provided however, such prohibition on the use of the Bond
Insurer's name shall not relate to the use of the Bond Insurer's standard approved form of
disclosure in public documents issued in connection with the current Bonds to be issued in
accordance with the terms of the Commitment and provided further such prohibition shail not
Resolution No. 62-04
apply to the use of the Bond Insurer's name in order to comply with public notice, public
meeting or public reporting requirements.
M. The City shall not enter into any agreement nor shall it consent to or participate in
any arrangement pursuant to which Bonds are tendered or purchased for any purpose other than
the redemption and cancellation or legal defeasance of such Bonds without the prior written
consent of the Bond Insurer.
SECTION 9. FURTHER AUTHORIZATIONS; RATIFICATION OF PRIOR
ACTS. That the Mayor, the Vice Mayor, the City Manager, the Finance Director, the Treasurer,
the City Attorney, and any other proper official of the City, be and each of them is hereby
authorized and directed to execute and deliver any and all documents and instruments, including,
but not limited to, any paying agent and registrar agreement, and to do and cause to be done any
and all acts and things necessary or proper for carrying out the transactions contemplated by this
Resolution, including, but not limited to, complying with any conditions to obtain the Bond
Insurance Policy. All actions heretofore taken and documents prepared or executed by or on
behalf of the City by any of its authorized officers in connection with the transactions
contemplated hereby are hereby ratified, confirmed, approved and adopted.
SECTION 10. SEVERABILITY OF INVALID PROVISIONS. If any one or more
of the covenants, agreements or provisions of this Resolution should be held contrary to any
express provision of law or contrary to the policy of express law, though not expressly
prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such
covenants, agreements or provisions shall be null and void and shall be deemed separate from the
remaining covenants, agreements or provisions, and shall in no way affect the validity of any of
the other provisions of this Resolution or of the Bonds.
Resolution No. 62-04
SECTION 11. REPEALER. That all resolutions or proceedings, or parts thereof, in
conflict with the provisions of this Resolution are to the extent of such conflict hereby repealed.
SECTION12. EFFECTIVE DATE. That this Resolution shall take effect
immediately upon its passage.
PASSED AND ADOPTED in regular session on this the 7th day of September, 2004.
CITY OF DELRAY BEACH, FLORIDA
By:
Mayor
Attest:
City Clerk
The foregoing Resolution is hereby approved by me
as to form, language and execution this 7th day of
September, 2004.
By:
City Attorney
Resolution No. 62-04
City of Delray Beach, Florida
General Obligation Bonds, Series 2004
(Recreational and Cultural Projects)
LIST OF EXHIBITS TO RESOLUTION NO. 62-04
EXHIBIT A Summary Notice of Sale
EXHIBIT B Official Notice of Bond Sale and Official Bid Form
EXHIBIT C Draft Preliminary Official Statement
EXHIBIT D City's financial advisor's letter of recommendation for bond insurance
EXHIBIT E Commitment for Bond Insurance Policy from MBIA Insurance
Corporation
Resolution No. 62-04
SUMMARY NOTICE OF SALE
$14,000,000'
City of Delray Beach, Florida
General Obligation Bonds
Series 2004
(Recreational and Cultural Projects)
Bids for the above captioned bonds will be received by the City of Delray Beach,
Florida, (the "City") via Parity until 11:00 a.m. (the "Submittal Deadline"), local Delray
Beach time, on Tuesday, September 21, 2004 or on such other date as may be
established by the Finance Director of the City or his designee no less than ten (10) days
after the date of publication of this notice and communicated by Thomson Municipal
Market Monitor not less than twenty (20) hours prior to the time bids are received (the
"Bid Date").
Such bids are to be opened in public as soon as practical after the Submittal
Deadline on said day for the purchase of the City of Delray Beach, Florida, General
Obligation Bonds, Series 2004 (Recreational and Cultural Projects) (the "Series 2004
Bonds"). The Series 2004 Bonds will mature as specified in the Official Notice of Bond
Sale. Proceeds of the Series 2004 Bonds will be used by the City to (i) finance all or a
portion of the costs of acquisition and construction, reconstruction and equipping of
certain new and existing parks, new and existing recreation centers, a parking garage and
capital improvements as part of the expansion of Old School Square and the furnishings
and fixtures for the new library and (ii) pay the costs of issuance of the Series 2004
Bonds.
The approving opinion of Greenberg Traurig, P.A., West Palm Beach, Florida,
Bond Counsel, will be furnished to the successful bidder at the expense of the City.
Electronic copies of the Preliminary Official Statement, the Official Notice of
Bond Sale and the Official Bid Form relating to the Series 2004 Bonds may be obtained
at the website address www.idealprospectus.com. Printed, bound copies of the
Preliminary Official Statement will be available from the City's financial advisor, Public
Financial Management, 300 South Orange Avenue, Suite 1170, Orlando, FL 32801,
telephone 407-648-2208.
City of Delray Beach, Florida
Joseph M. Safford
Finance Director
Dated: ,2004
*Preliminary, subject to change.
$14,0O0,0O0'
CITY OF DELRAY BEACH, FLORIDA
GENERAL OBLIGATION BONDS
SERIES 2004
(Recreational and Cultural Projects)
OFFICIAL NOTICE OF BOND SALE
AND
OFFICIAL BID FORM
The General Obligation Bonds, Series 2004 (Recreational and Cultural Projects) (the "Series 2004 Bonds")
are being offered for sale in accordance with this Official Notice of Bond Sale. Notice is hereby given that bids will
be received by the City of Delray Beach, Florida (the "City" or the "Issuer") for the purchase of the Series 2004
Bonds via the Parity Bidding System ("Parity") until 11.'00 a.m. local Delray Beach time, on Tuesday, September 21,
2004 or on such other date as will be established by the Finance Director or his designee and communicated by
Thomson Municipal Market Monitor not less than 20 hours prior to the time the bids are to be received. To the
extent any instructions or directions set forth in Parity conflict with this Official Notice of Bond Sale, the terms of
this Official Notice of Bond Sale shall control. For further information about Parity, and to subscribe in advance of
the bid, potential bidders may contact Parity at (212) 404-8102. The use of Parity shall be at the bidder's risk and
expense, and the City shall have no liability with respect thereto.
20O4
OFFICIAL NOTICE OF BOND SALE
$14,000,000'
CITY OF DELRAY BEACH, FLORIDA
GENERAL OBLIGATION BONDS
SERIES 2004
(Recreational and Cultural Projects)
BIDS
The City of Delray Beach, Florida General Obligation Bonds, Series 2004 (Recreational and Cultural Projects)
(the "Series 2004 Bonds") are being offered for sale in accordance with this Official Notice of Bond Sale. Notice is
hereby given that bids will be received by the City of Defray Beach, Florida (the "City" or the "Issuer") for the purchase
of the Series 2004 Bonds via Parity until 11:00 a.m. local Delray Beach time, on Tuesday, September 21, 2004, or on
such other date as will be established by the Finance Director or his designee and communicated by Thomson Municipal
Market Monitor not less than 20 hours prior to the time the bids are to be received. To the extent any instructions or
directions set forth in Parity conflict with this Official Notice of Bond Sale, the terms of this Official Notice of Bond
Sale shall control. For further information about Parity, and to subscribe in advance of the bid, potential bidders may
contact Parity at (212) 404-8102. The use of Parity shall be at the bidder's risk and expense, and the City shall have no
liability with respect thereto. Only bids submitted through Parity will be considered. No telephone, telefax, telegraph,
mail, courier delivery or personal delivery bids will be accepted.
BOND DETAILS
The Series 2004 Bonds will be issued initially as fully registered bonds, and when executed and delivered, will
be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company, New
York, New York CDTC"), which will act as securities depository for the Series 2004 Bonds. Individual purchases of
the Series 2004 Bonds may be made only in book-entry form in denominations of $5,000 or integral multiples thereof.
Purchasers of Series 2004 Bonds (the "Beneficial Owners") will not receive physical delivery of bond certificates. As
long as Cede & Co. is the registered owner of the Series 2004 Bonds, as nominee for DTC, payments of principal and
interest with respect to the Series 2004 Bonds will be made to such registered owner who will in turn remit such
principal and interest payments to DTC participants for subsequent disbursement to the Beneficial Owners.
The Series 2004 Bonds will be dated their date of delivery (which is expected to be September 30, 2004) or
such other date as may be communicated by Thomson Municipal Market Monitor not less than 20 hours prior to the time
bids are to be received, and shall bear interest from such date and shall be payable semiannually commencing on
February 1, 2005, and on each August 1 and February 1 thereafter until maturity at the rate or rates specified in such
proposals as may be accepted. The proposed schedule of maturities and amounts are as follows:
MATURITY SCHEDULE
FOR
THE SERIES 2004 BONDS
Principal Princioal
Year Amount* Year Amount*
2005 2015
2006 2016
2007 2017
2008 2018
2009 2019
2010 2020
2011 2021
2012 2022
2013 2023
2014 2024
*Preliminary; Subject to Change
(NOTE: The City reserves the right to modify the maturity schedule shown above. Any such modification will be
communicated through the Thomson Municipal Market Monitor (See, "Adjustment of Principal Amount" below.)
Ad,iustment of Principal Amount - The schedule of maturities set forth on the previous page (the "Initial Maturity
Scbedale') represents an estimate of the principal amount and maturities of the Series 2004 Bonds that will be sold. The
City reserves the right to change the Initial Maturity Schedule by announcing any such change not later than 2:00 p.m., local
Delray Beach time, on the date immediately preceding the date set for receipt of bids, through Thomson Municipal Market
Monitor. If no such change is announced, the Initial Maturity Schedule will be deemed the schedule of maturities for the
Official Bid Form.
Furthermore, if after final computation of the bids, the City determines in its sole discretion that the funds
necessary to accomplish the purpose of the Series 2004 Bonds is more or less than the proceeds of the sale of all of the
Series 2004 Bonds, the City reserves the right to increase or decrease the principal amount, by no more than 10% of the
principal amount of the Series 2004 Bonds and by no more than 15% within a given maturity of the Series 2004 Bonds (to
be rounded to the nearest $5,000).
In the event of any such adjustment, no rebidding or recalculation of the bids submitted will be required or
permitted; and the Series 2004 Bonds of each maturity, as adjusted, will bear interest at the same rate and mast have the
same initial reoffering yield as specified immediately after award of the Series 2004 Bonds of that maturity. However, the
award will be made to the bidder whose bid produces the lowest true interest cost rate, calculated as specified below, solely
on the basis of the Series 2004 Bonds offered, without taking into account any adjustment in the amount of Series 2004
Bonds pursuant to this paragraph.
Optional Redemption - The Series 2004 Bonds maturing on February 1, 2015, and thereafter are subject to redemption,
from any legally available source, at the option of the City prior to maturity on or after February 1, 2014, in whole, or in
part at any time, in such manner as shall be determined by the City, at a redemption price equal to the principal amount of
the Series 2004 Bonds to be redeemed together with accrued interest to the date fixed for redemption.
AUTHORIZATION
The Series 2004 Bonds are being issued under the authority of and in full compliance with the Constitution and
laws of the State of Florida, including Chapter 166, Florida Statutes, as amended and supplemented, the City Charter, as
amended and supplemented, and other applicable provisions of law. The Series 2004 Bonds are being issued more
specifically pursuant to Resolution No. 72-03 (the "Referendum Resolution"), adopted by the City Commission of the City
(the "Commission") on October 21, 2003 and Resolution No. 61-04, adopted by the Commission on September 7, 2004 as
supplemented by Resolution No. 62-04, adopted by the Commission on September 7, 2004, which authorized the issuance
by the City of up to $24,000,000 in General Obligation Bonds in one or more series and sets forth the details of the Series
2004 Bonds (the "Series 2004 Resolution" and together with the Referendum Resolution, the "Resolution"). On January
20, 2004, a majority of the qualified electors of the City approved the issuance of the Series 2004 Bonds by the City to
finance the Projects in the principal amounts prescribed in the Referendum Resolution.
PURPOSE
The Series 2004 Bonds will be issued by the City to (i) finance all or a portion of the costs of acquisition and construction,
reconstruction and equipping of certain new and existing parks, new and existing recreation centers, a parking garage and
capital improvements as part of the expansion of Old School Square and the furnishings and fixtures for the new library
(collectively, the "Projects"): and (ii) pay the costs of issuance of the Series 2004 Bonds.
SECURITY FOR THE BONDS
The Series 2004 Bonds will be general obligations of the City, payable from unlimited ad valorem taxes levied on all
taxable property in the City. The full faith, credit and taxing power of the City are pledged for the payment of the principal
and interest on the Series 2004 Bonds.
RATINGS AND BOND INSURANCE
It is expected that Moody's Investors Service ("Moody's") and Standard and Poor's ("S&P") will give the Series
2004 Bonds ratings of "Aaa" and "AAA", respectively based on the understanding that the standard policy of municipal
bond insurance insuring the total payment of principal and interest on the Series 2004 Bonds will be issued by MBIA
Insurance Corporation. Moody's and S&P have assigned the Series 2004 Bonds underlying ratings of "Al" and "AA-",
respectively.
CONTINUING DISCLOSURE
The City has committed to provide certain annual information and notices of material events as required by Rule
15c2-12 promulgated by the Securities and Exchange Commission (the "Rule") and as described in the Preliminary Official
Statement.
PURCHASER'S CERTIFICATION REGARDING INITIAL OFFERING PRICE
In order to provide the City with information required to enable it to comply with certain requirements of the
Internal Revenue Code of 1986, as amended, relating to the exclusion of interest on the Series 2004 Bonds from the gross
income of the holders thereof for federal income tax purposes, the successful bidder will be required to complete, execute
and deliver to the City (on the date of delivery of the Series 2004 Bonds) a certificate relating to the manner in which the
Series 2004 Bonds were offered for sale and the offering price for such Series 2004 Bonds, substantially in the form
included in the Official Bid Form. In the event the successful bidder will not reoffer the Series 2004 Bonds for sale or is
unable to sell a substantial amount of the Series 2004 Bonds by the date of delivery, such certificate may be modified in a
manner approved by the City and Greenberg Traurig, P.A., Bond Counsel. It will be the responsibility of the successful
bidder to institute such syndicate or selling group reporting requirements, to make such investigation, or otherwise to
ascertain the facts necessary to enable it to make such certification with reasonable certainty.
LEGAL OPINION AND CLOSING CERTIFICATE
At the time of delivery of the Series 2004 Bonds, the City will deliver to the successful bidder, at the expense of
the City, the approving opinion of Greenberg Traurig, P.A., Bond Counsel, in substantially the form appearing in the
Preliminary Official Statement, a no-litigation certificate and other customary closing certificates relating to the issuance of
the Series 2004 Bonds.
GOOD FAITH DEPOSIT
Each bid must be accompanied by a certified or cashier's check drawn upon an incorporated bank or trust company
dated on or before the date of the bid in the amount of 1% of the aggregate principal amount of the Series 2004 Bonds
($140,000), which check (the "Good Faith Check"), must be payable unconditionally to the order of the "City of Delray
Beach, Florida". Award or rejection of bids will be made on the date above stated for receipt of bids and the Good Faith
Check of unsuccessful bidders will be promptly returned after the award. The Good Faith Check of the successful bidder
will be cashed as security for the performance of the bid, and, in the event such successful bidder should fail to comply with
the terms of its bid, the proceeds will be retained by the City. The retention of such good faith deposit (the "Deposit") will
constitute fall-liquidated damages for such failure. If the City shall fail to issue and deliver the Series 2004 Bonds, the City
will deliver the Deposit to the successful bidder and the return of such Deposit will constitute a full release of all claims the
bidder might have against the City. Upon delivery of the Series 2004 Bonds, the Deposit will be credited (without interest)
against the net purchase price to be paid by the successful bidder. No interest on the Deposit will accrue to the successful
bidder.
Alternatively, each bidder may submit a financial surety bond (the "Financial Surety Bond") naming the City as the
obligee in the event of default by the bidder pursuant to the terms and conditions of the Financial Surety Bond. If a
Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Florida
and approved by the City (as of the date of this Official Notice of Bond Sale, only Financial Security Assurance Inc. is
qualified for this purpose). The Financial Surety Bond must identify each bidder whose Deposit is guaranteed by such
Financial Surety Bond. If the Series 2004 Bonds are awarded to a bidder utilizing a Financial Surety Bond, that bidder is
required to submit its Deposit in the form of a wire transfer as instructed by the City. Such Deposit shall be considered due
on the day the Series 2004 Bonds are awarded, and shall be considered delinquent if not received by 3:00 p.m., local Delray
Beach time, on the next business day following such award. If such Deposit is not received by that time, the Financial
Surety Bond may be drawn down by the City to satisfy the Deposit requirement.
TERMS OF BID AND BASIS OF AWARD
Proposals must be unconditional and for the purchase of all of the Series 2004 Bonds. The reoffering price for the
Series 2004 Bonds may not be less 99% of the principal amount of the Series 2004 Bonds for any single maturity thereof.
The aggregate purchase price, inclusive of original issue discount ("OID"), original issue premium and underwriter's
discount, may not be less than 100% of the principal amount of the Series 2004 Bonds.
The Series 2004 Bonds shall bear interest expressed in multiples of one-eighth (1/8) or one-twentieth (1/20) of one
(1) per centum. The use of split or supplemental interest coupons will not be considered and a zero rate or blank rate will
not be permitted. All Series 2004 Bonds maturing on the same date shall bear the same rate of interest.
3
The Series 2004 Bonds will be awarded to the bidder offering to purchase the Series 2004 Bonds at the lowest
annual interest cost computed on a true interest cost basis (the "TIC"). The annual TIC will be determined by doubling the
semi-annual interest rate necessary to discount the semi-annual debt service payments on the Series 2004 Bonds back to the
Net Bond Proceeds (defined as the par amount of the Series 2004 Bonds plus original issue premium, less any OID and
underwriter's discount on the Series 2004 Bonds calculated on a 360 day year to the Dated Date, as defined below). The
TlC must be calculated to four (4) decimal places.
THE CITY RESERVES THE RIGHT TO REJECT ALL BIDS OR ANY BID NOT CONFORMING TO THIS
OFFICIAL NOTICE OF BOND SALE OR NOT IN THE FORM OF THE OFFICIAL BID FORM. THE CITY ALSO
RESERVES THE RIGHT TO WAIVE, IF PERMITTED BY LAW, ANY IRREGULARITY OR INFORMALITY IN
ANY PROPOSAL. THE CITY SHALL NOT REJECT ANY CONFORMING BID, UNLESS ALL CONFORMING BIDS
ARE REJECTED.
SETTLEMENT OF BONDS
It is expected that closing for the Series 2004 Bonds will occur in Delray Beach, Florida on September 30, 2004, or
such other date as determined by the City (the "Closing Date"). On such date, the Series 2004 Bonds will be delivered to
DTC as securities depository registered in the name of CEDE & CO., as nominee of DTC through the DTC FAST system of
registration. The successful bidder shall advise the underwriting department of DTC, not less than 7 business days prior to
the closing date, the interest rates borne by the Series 2004 Bonds, the CUSIP identification numbers and the closing date.
The successful bidder shall also timely obtain CUSIP identification numbers and pay CUSIP Service Bureau charges for
assignment of the numbers. Any delay, error or omission with respect to the CUSIP numbers shall not constitute cause for
failure or refusal by the successful bidder to accept delivery of and pay for the Series 2004 Bonds in accordance with the
terms of this Official Notice of Bond Sale.
FULL PAYMENT OF THE PURCHASE PRICE (DEFINED AS THE BID PRICE, AS MAY BE ADJUSTED,
LESS THE GOOD FAITH DEPOSIT) MUST BE MADE TO THE CITY ON THE CLOSING-DATE BY THE
SUCCESSFUL BIDDER IN FEDERAL FUNDS OR IMMEDIATELY AVAILABLE FUNDS WITHOUT COST TO THE
CITY.
BLUE SKY LAWS
The successful bidder(s) will be responsible for the clearance or exemption with respect to the status of the Series
2004 Bonds for sale under the securities or "Blue Sky" laws of the several states and the preparation of any surveys or
memoranda in connection with such sale.
OFFICIAL STATEMENT
The City's Preliminary Official Statement ("POS"), Official Notice of Bond Sale and Official Bid Form are
available for viewing in electronic format at www.idealvrosoectus.com or by calling the City's financial advisor, Public
Financial Management (thc "Financial Advisor" or "PFM"), 300 South Orange Avenue, Suite 1170, Orlando, Florida
32801, (407) 648-2208.
The Preliminary Official Statement shall be deemed by the Issuer to be final as of its date, for purposes of SEC
Rule 15C2-12(b)(1) under the Securities Exchange Act of 1934, except for the omission of information concerning thc
offering price(s), interest rate(s), and any other terms or provisions to be determined from the successful bid or depending
on such matters, and thc identity of thc underwriter(s). The Preliminary Official Statement is, however, subject to such
further revisions, amendments and completion in a final Official Statement as may be necessary.
The City shall provide the successful bidder with 150 conformed copies of the final Official Statement within
seven (7) business days following the date of acceptance of the bid.
CHOICE OF LAW
Any litigation or claim arising out of any bid submitted (regardless of the means of submission) pursuant to this
Official Notice of Bond Sale shall be governed by and construed in accordance with the laws of the State of Florida. The
venue situs for any such action shall be the state courts of the Fifteenth Judicial Circuit in and for Palm Beach County,
Florida.
4
MANDATORY STATE FILING
Section 218.38(1)(b)1, Florida Statutes, as amended, requires that the City file, within 120 days after the delivery
of the Series 2004 Bonds, an information statement with the Division of Bond Finance of the Board of Administration of the
State containing the following information: (a) the name and address of the managing underwriter, if any, connected with
the bond issue; (b) the name and address of any attorney or financial consultant who advised the City with respect to the
bond issue; (c) any fee, bonus, or gratuity paid by any underwriter or financial consultant, in connection with the bond issue,
to any person not regularly employed or engaged by such underwriter or consultant; and (d) any other fee paid by the City
with respect to the bond issue, including any fee paid to attorneys or financial consultants. The successful bidder is
expected to provide to the City the information mentioned in (a) and (c) above when the Series 2004 Bonds are delivered,
but in no event later than ninety (90) days as required by Section 218.38(1)(b)2. Such information provided pursuant to the
cited statute shall be maintained by the Division of Bond Finance and by the City as a public record.
Additionally, Section 218.386, Florida Statutes, as amended, requires the Official Statement for the Series 2004
Bonds to include disclosure of any finder's fees paid in connection with the sale of the Series 2004 Bonds.
CITY OF DELRAY BEACH, FLORIDA
/s/JeffPeriman
JeffPerlman
Mayor
/s/David T. Harden
David T. Harden
City Manager
5
OFFICIAL BID FORM
$14,000,000'
CITY OF DELRAY BEACH, FLORIDA
GENERAL OBLIGATION BONDS, SERIES 2004
(Recreational and Cultural Projects)
City of Delray Beach ,2004
100 NW 1st Avenue
Detray Beach, Florida 33444
Ladies and Gentlemen:
On behalf of the undersigned and any underwriting syndicate which we have formed and lead, and in accordance
with the terms and conditions of the attached Official Notice of Bond Sale, dated ,2004, which is hereby made a
part of this proposal, we offer to purchase all of $14,000,000' City of Delray Beach, Florida, General Obligation Bonds,
Series 2004 (the "Series 2004 Bonds"). We will pay as the purchase price thereof, the aggregate sum of
Dollars ($ .) (~) in immediately available
Federal Funds. The Series 2004 Bonds will be dated as of ,2004, and shall bear interest from such date and shall
be payable semiannually commencing on February 1, 2005, and on each August 1 and February 1 thereafter until maturity
or prior redemption. The Series 2004 Bonds shall mature in the years and bear interest at the respective interest rates per
annum, all as stated in the following schedule:
Principal Interest Price or Principal Interest Price or
Year Amount* Rate Yield Year Amount* Rate Yield
2005 2015
2006 2016
2007 2017
2008 2018
2009 2019
2010 2020
2011 2021
2012 2022
2013 2023
2014 2024
Subject to your acceptance of our Official Bid, we agree to make a bona fide public offering of all the Series 2004
Bonds at yields not lower than those set forth in the above Schedule of Maturities, Principal Amounts, Interest Rates and
Prices or Yields. Our calculation, made as provided in the Official Notice of Bond Sale, of the true interest cost to the City
is %. This estimate is for information purposes only and is not binding on the City or the undersigned.
Preliminary, subject to change.
Subject to adjustment as provided in the Official Notice of Bond Sale.
In accordance with the Official Notice of Bond Sale (check one of the following):
We enclose herewith a Cashier's or Certified Check payable to the order of City of Delray Beach, Florida.
We are an authorized principal of a Financial Surety Bond with respect to this Bid as described in the
attached Notice of Bond Sale and, if this bid is accepted, we will submit our Good Faith Deposit in the form of a wire
transfer as instructed by the Issuer no later than 3:00 p.m. local Delray Beach time on the next business day following
said bid acceptance.
The Good Faith Deposit will be applied or returned in accordance with the provisions of the Official Notice of Bond
Sale.
It shall be a condition of our obligation as the successful bidder to accept delivery of, and pay for, the Series
2004 Bonds that, contemporaneously with, or before accepting, the Series 2004 Bonds and paying for them, we shall
receive the Closing Documents specified in the Official Notice of Bond Sale.
We hereby acknowledge receipt of the Preliminary Official Statement for the Series 2004 Bonds "deemed
final" (except for permitted omissions) by the City of Delray Beach, Florida.
We hereby request that 150 copies of the Official Statement (and any supplement thereto) be furnished to us in
accordance with the Official Notice of Bond Sale.
We agree to provide a list of all syndicate members by facsimile transmission upon notification of our
successful bid. Receipt of such list shall be a condition to award the Series 2004 Bonds.
It is understood and agreed that an award will be made for all or none of the Series 2004 Bonds and that the
principal amount of the Series 2004 Bonds and our purchase price as bid may be adjusted as provided in the Official
Notice of Bond Sale, the terms of which are incorporated herein by reference.
If the foregoing is acceptable to you, please signify by signing and returning a copy of this Official Bid Form to
the undersigned bidder whereupon it will become a binding agreement between us.
Respectfully submitted,
Accepted and agreed to Bidder
City of Delray Beach, Florida
By:
Title:
(No addition or alteration, except as provided above, is to be made to this Official Bid Form and it must not be detached
from the attached Official Notice of Bond Sale)
TRUTH-IN-BONDING STATEMENT
In compliance with Section 218.385, Florida Statutes, as amended, the bidder submits the following Truth-ln-
Bonding Statement with respect to the Series 2004 Bonds (NOTE: For state law purposes only and not a part of the
bid):
The City is proposing to issue $14,000,000' of debt or obligation for the purpose of financing a portion of the
costs of the Projects as more fully described in the Official Notice of Bond Sale. At a forecasted interest rate of
___%, total interest paid over the life of the debt or obligation will be $
The Series 2004 Bonds will be general obligations of the City, payable from unlimited ad valorem taxes levied on all
taxable property in the City and therefore since the Series 2004 Bonds are voter approved debt, the issuance thereof will
not result in any less ad valorem taxes the City will be able to levy and collect.
Preliminary, subject to change.
CERTIFICATE WITH RESPECT TO "ISSUE PRICE"
, acting on behalf of itself and the syndicate selling group, if any, created by it as
purchaser (the "Purchaser") of the $14,000,000' General Obligation Bonds, Series 2004 (the "Series 2004 Bonds") of
Delray Beach, Florida (the "City"), in order to establish the initial offering price(s) of the Series 2004 Bonds for the purpose
of determining the "issue price" of the Series 2004 Bonds within the meaning of Section 148 of the Internal Revenue Code
of 1986, as amended, DOES HEREBY CERTIFY, as follows:
1. The Purchaser, as of the date the Series 2004 Bonds were awarded to the Purchaser, (a) made a bona fide public
offering of the Series 2004 Bonds to the general public at a price equal to % of the principal amount thereof
(the "Public Offering Price"), and (b) sold a substantial amount of such Series 2004 Bonds for cash or to the extent
not so sold, reasonably expected, as of the date the Series 2004 Bonds were awarded to the Purchaser, to sell such
Series 2004 Bonds for cash to the general public at the Public Offering Price.
2. The Purchaser retained and did not reoffer $ principal amount of the Series 2004 Bonds.
3. The Public Offering Price (with respect to any principal amount of the Series 2004 Bonds that was not reoffered,
the price bid by the Purchaser to the City) does not exceed the fair market value of the Series 2004 Bonds as of the
date the Series 2004 Bonds were awarded to the Purchaser.
4. For the purpose of this certificate, "General Public" means the general public excluding bond houses, brokers or
similar persons or organizations acting in the capacity of underwriters or wholesalers.
Dated:
By:
Title:
* Preliminary, subject to change.
Preliminary Official Statement Dated August __, 2004
RATINGS: S&P: "AAA" Moodys: "Aaa"
NEW ISSUE: I~LL BOOK ENTRY RATINGS: (See "Ratings" herein)
In the opinion of Bond Counsel under existing law, and assuming compliance with the tax covenant described herein,
interest on the Series 2004 Bonds (as defined below) is excluded from gross income for federal income tax purposes, and is not
a specific preference item for purposes of the federal alternative minimum tax. See however, "TAX EXEMPTION" herein for a
description of certain other taxes imposed on corporations. Bond Counsel is also of the opinion that interest on the Series 2004
Bonds is exempt.[?om taxation under existing laws of the State of Florida, except as to estate taxes and taxes imposed by
Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, banks and savings
associations.
CITY OF DELRAY BEACH, FLORIDA
$ *
General Obligation Bonds, Series 2004
(Recreational and Cultural Projects)
Dated: _, 2004 Due: February 1, as shown on the Inside Cover
The City of Delray Beach, Florida General Obligation Bonds, Series 2004 (Recreational and Cultural Projects) (the
"Series 2004 Bonds") will be issued as fully registered bonds without coupons in the principal denomination of $5,000 or any
integral multiples thereof. The Series 2004 Bonds will be registered in the name of Cede & Co., as nominee for the Depository
Trust Company, New York, New York ("DTC"), and DTC will act as securities depository for the Series 2004 Bonds. So long
as Cede & Co. is the registered owner of the Series 2004 Bonds, principal of and interest on the Series 2004 Bonds will be paid
directly to Cede & Co., as nominee for DTC, by Wells Fargo Bank, National Association, having a designated corporate trust
office in Minneapolis, Minnesota, as Paying Agent for the Series 2004 Bonds (the "Paying Agent"). Interest on the Series
2004 Bonds is payable semi-annually, commencing February 1, 2005 and each August 1 and February 1 thereafter.
The Series 2004 Bonds are subject to redemption prior to maturity as described herein. See "Description of the Series
2004 Bonds - Redemption Provisions," herein.
The proceeds of the Series 2004 Bonds will be used by the City of Delray Beach, Florida (the "City") to (i) finance all
or a portion of the costs of acquisition and equipping of the Projects (as herein defined) and (ii) pay the cost of issuing the
Series 2004 Bonds, including the premium for the municipal bond insurance policy (the "Bond Insurance Policy").
The Series 2004 Bonds and the interest on such Series 2004 Bonds are general obligations of the City. In each
year while any of the Series 2004 Bonds are outstanding and unpaid, the City is irrevocably and unconditionally
obligated to levy and collect ad valorem taxes without limitation as to the rate or amount on all the taxable property
within the City, sufficient to pay the interest on the Series 2004 Bonds as it becomes due, and to provide for the payment
of the principal of the Series 2004 Bonds at maturity.
The scheduled payment of principal of and interest on the Series 2004 Bonds when due will be guaranteed under the
Bond Insurance Policy to be issued concurrently with the delivery of the Series 2004 Bonds by:
For a discussion of the terms and provisions of such the Bond Insurance Policy, including the limitations, see "BOND
INSURANCE," herein.
This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must
read the entire Official Statement to obtain information essential to the making of an informed investment decision.
The Series 2004 Bonds are offered subject to prior sale when, as and if issued by the City and accepted by the
Underwriter, and subject to approval as to legality by Greenburg Traurig, P.A., West Palm Beach, Florida, Bond Counsel to the
City, and certain other conditions. Certain legal matters will be passed on for the City by its City Attorney, Susan A. Ruby,
Esq. Public Financial Management, Inc. Orlando, Florida, served as financial advisor to the City in connection with the
issuance of the Series 2004 Bonds. It is expected that the Series 2004 Bonds in definitive form will be available for delivery
through the facilities of DTC in New York, New York, on or about _, 2004.
· Preliminary, subject to change.
Sealed bids for the Series 2004 Bonds will be received by the City of Delray Beach, Florida, via Parity as set forth in
the Official Notice of Sale until 11:00 A.M. Eastern Time, on , 2004 or such other date and time as will be
established by the Finance Director or his designee and communicated by Thomson Municipal Market Monitor not less than
20 hours prior to the time bids are to be received. This Preliminary Official Statement is "deemed final" by the City as of its
date for purposes of and except for certain omissions permitted by, SEC Rule 15-c-12(B)(2).
Dated: __, 2004
MATURITIES, AMOUNTS,* INTEREST RATES,
PRICES OR YIELDS AND INITIAL CUSIP NUMBERS
INITIAL
Principal Interest CUSIP
Maturity Amount* Rate Price or Yield NUMBERS**
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Preliminary, subject to change.
City is not responsible for the use of CUSIP numbers, nor is any representation made as to their
correctness. They are included solely for the convenience of the readers of this Official Statement.
CITY OF DELRAY BEACH, FLORIDA
CITY COMMISSION
Jeff Perlman, Mayor
Alberta Perry McCarthy, Vice Mayor
Jon R. Levinson, Deputy Vice Mayor
Patricia Archer, Commissioner
Bob Costin, Commissioner
CITY OFFICIALS
David T. Harden, City Manager
Joseph M. Safford, Finance Director
Rebecca S. O'Connor, Treasurer
Richard C. Hasko, Director of Environmental Services
Randall Krejcarek, City Engineer
Chevelle Nubin, Acting City Clerk
CITY ATTORNEY
Susan A. Ruby, Esquire
BOND COUNSEL
Greenberg Traurig, P.A.
West Palm Beach, Florida
FINANCIAL ADVISOR
Public Financial Management, Inc.
Orlando, Florida
No dealer, broker, salesperson or other person has been authorized by the City or the
Underwriter to give any information or to make any representations with respect to the Series
2004 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 is not to be construed as a contract or agreement between the
City or the Underwriter and the purchasers or owners, from time to time, of any of the Series
2004 Bonds. This Official Statement does not constitute an offer to sell or the solicitation of an
offer to buy, nor shall there be any sale of the Series 2004 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 public documents, records and
other soumes which are believed to be reliable but it is not guaranteed as to accuracy or
completeness. The City makes no representation as to any information from soumes other than
the information provided by the City. The information and expressions of opinion herein are
subject to change without notice, and, neither the delivery of this Official Statement nor any sale
of Series 2004 Bonds, under any cimumstances, create any implication that there has been no
change in any information set forth herein since the date hereof or the date as of which particular
information is given, if earlier.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE SERIFS 2004 BONDS AT LEVELS ABOVE THAT WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
The following Official Statement contains a general description of the Series 2004 Bonds
and sets forth certain information about the City. All summaries and descriptions herein of
documents, instruments and agreements, including the Series 2004 Bonds, are qualified in their
entirety by reference to the complete, definitive forms of the Series 2004 Bonds and such
documents, instruments and agreements, copies of which are on file at the office of the Paying
Agent.
THE SERIES 2004 BONDS HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACT. THE
REGISTRATION OR QUALIFICATION OF THE SERIES 2004 BONDS IN ACCORDANCE
WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF CERTAIN STATES,
IF ANY, IN WHICH THE SERIES 2004 BONDS HAVE BEEN REGISTERED OR
QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN
CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION
THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED
UPON THE MERITS OF THE SERIES 2004 BONDS OR THE ACCURACY OR
COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE
CONTRARY MAY BE A CRIMINAL OFFENSE.
Other than with respect to information concerning MBIA Insurance Corporation
contained under the caption "BOND INSURANCE" and Appendix D "Specimen Municipal
Bond Insurance Policy" herein, none of the information in this Official Statement has been
supplied or verified by MBIA Insurance Corporation and MBIA Insurance Corporation makes no
representation or warranty, express or implied, as to (i) the accuracy or completeness of such
information; (ii) the validity of the Series 2004 Bonds; or (iii) the tax-exempt status of the
interest on the Series 2004 Bonds.
TABLE OF CONTENTS
Page
INTRODUCTION .......................................................................................................................... 1
PURPOSE OF SERIES 2004 BONDS ......................................................................................... 1
SOURCES AND USES OF FUNDS ............................................................................................. 2
Sources of Funds ................................................................................................................ 2
Uses of Funds ...................................................................................................................... 2
DESCRIPTION OF THE SERIES 2004 BONDS ....................................................................... 3
General ................................................................................................................................ 3
Book-Entry Only System ................................................................................................... 3
Negotiability, Registration and Cancellation .................................................................. 6
Transfer and Exchange ..................................................................................................... 7
Redemption Provisions ...................................................................................................... 7
SECURITY FOR THE SERIES 2004 BONDS ........................................................................... 8
Pledge of Ad Valorem Taxes ............................................................................................. 8
Assessments ........................................................................................................................ 8
Collections ......................................... , ................................................................................. 9
Delinquent Taxes ................................................................................................................ 9
BOND INSURANCE ................................................................................................................... 13
Bond Insurance Policy ..................................................................................................... 13
The MBIA Insurance Corporation Insurance Policy ................................................... 13
MBIA ................................................................................................................................. 14
MBIA Information ........................................................................................................... 15
Financial Strength Ratings of MBIA ............................................................................. 15
THE CITY .................................................................................................................................... 16
Location and Size ............................................................................................................. 16
Brief Description .............................................................................................................. 16
Budgeting, Accounting and Auditing ............................................................................. 16
Operating Budget for Fiscal Year Ended September 30, 2003 .................................... 17
State Assessment Cap ...................................................................................................... 17
LEGAL DEBT LIMITATIONS ................................................................................................. 18
The Florida Constitution ................................................................................................. 18
DEBT SUMMARY ...................................................................................................................... 18
Selected Debt Data ........................................................................................................... 19
RATINGS ..................................................................................................................................... 21
LEGALITY .................................................................................................................................. 21
TAX EXEMPTION ..................................................................................................................... 21
UNDERWRITING ....................................................................................................................... 23
CONTINUING DISCLOSURE UNDERTAKING ................................................................... 23
ENFORCEABILITY OF REMEDIES ...................................................................................... 26
LITIGATION ............................................................................................................................... 26
GENERAL PURPOSE FINANCIAL STATEMENTS ............................................................ 27
FINANCIAL ADVISOR ............................................................................................................. 27
MISCELLANEOUS .................................................................................................................... 27
AUTHORIZATION OF AND CERTIFICATION CONCERNING OFFICIAL
STATEMENT .............................................................................................................................. 28
APPENDIX A GENERAL INFORMATION CONCERNING THE CITY OF DELRAY
BEACH, FLORIDA AND PALM BEACH COUNTY
APPENDIX B CITY OF DELRAY BEACH, FLORIDA GENERAL PURPOSE
FINANCIAL STATEMENTS AND OTHER INFORMATION FOR THE
FISCAL YEAR ENDED SEPTEMBER 30, 2003
APPENDIX C FORM OF APPROVING OPINION OF BOND COUNSEL
APPENDIX D SPECIMEN MUNICIPAL BOND INSURANCE POLICY
ii
OFFICIAL STATEMENT
$. *
The City of Delray Beach, Florida
General Obligation Bonds, Series 2004
(Recreational and Cultural Projects)
INTRODUCTION
The purpose of this Official Statement, which includes its cover page and certain
enclosed Appendices, is to furnish information with respect to the issuance by the City of Delray
Beach, Florida (the "City") of its General Obligation Bonds, Series 2004 (Recreational and
Cultural Projects) (the "Series 2004 Bonds") in the aggregate principal amount of $
The Series 2004 Bonds are being issued under the authority of and in full compliance
with the Constitution and laws of the State of Florida, including Chapter 166, Florida Statutes, as
amended and supplemented, the City Charter, as amended and supplemented, and other
applicable provisions of law. The Series 2004 Bonds are being issued more specifically pursuant
to Resolution No. 72-03 (the "Referendum Resolution"), adopted by the City Commission of the
City (the "Commission") on October 21, 2003 and Resolution No. 61-04, adopted by the
Commission on September 7, 2004 as supplemented by Resolution No. 62-04, adopted by the
Commission on September 7, 2004, which authorized the issuance by the City of up to
$24,000,000 in General Obligation Bonds in one or more series and sets forth the details of the
Series 2004 Bonds (the "Series 2004 Resolution" and together with the Referendum Resolution,
the "Resolution"). On January 20, 2004, a majority of the qualified electors of the City approved
the issuance of the Series 2004 Bonds by the City to finance the Projects (as defined below) in
the principal amounts prescribed in the Referendum Resolution.
Capitalized terms not otherwise defined in this Official Statement shall have the same
meanings assigned to such terms in the Series 2004 Resolution. The description of the Series
2004 Bonds, the Resolution, the description of certain statutory provisions and the information
from various reports and statements contained in this Official Statement are not comprehensive
or definitive. All references to such documents, reports and statements are qualified by the
actual content of such documents, reports and statements, copies of which may be obtained by
contacting the Director of Finance, City of Delray Beach, Florida, 100 NW First Avenue, Delray
Beach, FL 33444, (561) 243-7116 or during the offering period of the Series 2004 Bonds from
Public Financial Management, Inc., financial advisor to the City, (407) 648-2208.
PURPOSE OF SERIES 2004 BONDS
The Series 2004 Bonds will be issued by the City to (i) finance all or a portion of the
costs of acquisition and construction, reconstruction and equipping of new and certain existing
parks (in the principal amount not exceeding $9,000,000), new and existing recreation centers (in
the principal amount not exceeding $7,000,000), a parking garage and capital improvements as
part of the expansion of Old School Square (in the principal amount not exceeding $7,000,000)
and the furnishings and fixtures for the new library (in the principal amount not exceeding
Preliminary, subject to change.
$1,000,000) (collectively, the "Projects"); and (ii) pay the costs of issuance of the Series 2004
Bonds, including the premium fee for the Bond Insurance Policy.
SOURCES AND USES OF FUNDS
The proceeds to be received from the sale of the Series 2004 Bonds are expected to be
applied as follows:
Sources of Funds
Principal Amount of Series 2004 Bonds ................................................... $
[Original Issue Premium] .........................................................................
Total Sources of Funds .......................................... $
Uses of Funds
Deposit to Capital Projects Fund .............................................................. $
Underwriter' s Discount .............................................................................
Costs of Issuance (~) ...................................................................................
Total Uses of Funds ............................................... $
Includes the premium for the Bond Insurance Policy.
[Remainder of page intentionally left blank].
DESCRIPTION OF THE SERIES 2004 BONDS
General
The Series 2004 Bonds will be dated the date of delivery and will mature on February 1
of the years and in the principal amounts set forth on the inside cover page hereof. The Series
2004 Bonds will be initially issued only in the form of fully registered bonds in denominations of
$5,000 or any integral multiple thereof. Interest on the Series 2004 Bonds is payable
semiannually commencing February 1, 2005, and each August 1 and February 1 thereafter at the
rates per annum set forth on the inside cover page hereof. Wells Fargo Bank, National
Association, having a designated corporate trust office in Minneapolis, Minnesota, will serve as
bond registrar (thc "Bond Registrar") and paying agent (the "Paying Agent") for the Series 2004
Bonds. Thc Series 2004 Bonds will be issued as fully registered Bonds and, when issued, will be
registered in the name of Cede & Co., as nominee of the Depository Trust Company, New York,
New York ("DTC").
So long as the Series 2004 Bonds shall be in book-entry form, the principal of and
interest on such Series 2004 Bonds is payable by check or draft mailed or wire transfer to Cede
& Co., as nominee of DTC and registered owners thereof for redistribution by DTC to the DTC
Participants (as herein defined) and in turn to Beneficial Owners (as herein defined) as described
below under "Book-Entry Only System."
Book-Entry Only System
The Depository Trust Company ("DTC"), New York, New York, will act as securities
depository for the Series 2004 Bonds under a book-entry system with no physical distribution of
the Series 2004 Bonds made to the public. The Series 2004 Bonds will initially be issued as
fully-registered securities, registered in the name of Cede & Co. (DTC's partnership nominee),
or such other name as may be requested by an authorized representative of DTC. One fully-
registered Series 2004 Bond certificate will be issued for the aggregate principal amount of each
maturity of the Series 2004 Bonds and will be deposited with DTC.
DTC, the world's largest depository, is a limited-purpose trust company organized under
the New York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of thc New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S, equity
issues, corporate and municipal debt issues, and money market instruments from over 85
countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates
the post-trade settlement among Direct Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry changes in
Direct Participants' accounts, thereby eliminating the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S, securities brokers and dealers,
banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-
owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is
owned by a number of its Direct Participants and members of the National Securities Clearing
Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation and
3
Emerging Markets Clearing Corporation (NSCC, GSCC, MBSCC and EMCC, also subsidiaries
of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange,
LLC and the National Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as both U.S. and non-U.S, securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Direct and
Indirect Participants are on file with the Securities and Exchange Commission. More
information about DTC can be found at www.dtcc.com.
Purchases of the Series 2004 Bonds under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Series 2004 Bonds on DTC's records. The
ownership interest of each actual purchaser of each Series 2004 Bond ("Beneficial Owner") is in
turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as periodic statements
of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Series 2004 Bonds are to be
accomplished by entries made on the books of Direct and Indirect Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in the Bonds, except in the event that use of the book-entry system for the
Series 2004 Bonds is discontinued.
To facilitate subsequent transfers, all Series 2004 Bonds deposited by Direct Participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other
name as may be requested by an authorized representative of DTC. The deposit of Series 2004
Bonds with DTC and their registration in the name of Cede & Co., or such other DTC nominee,
does not effect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Series 2004 Bonds; DTC's records reflect only the identity of the
Direct Participants to whose accounts such Bonds are credited, which may or may not be the
Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2004
Bonds may wish to take certain steps to augment transmission to them of notices of significant
events with respect to the Series 2004 Bonds, such as redemptions, tenders, defaults and
proposed amendments to the Series 2004 Bond documents. For example, Beneficial Owners of
Series 2004 Bonds may wish to ascertain that the nominee holding the Series 2004 Bonds for
their benefit has agreed to obtain and transmit notices to Beneficial Owners, or in the alternative,
Beneficial Owners may wish to provide their names and addresses to the Paying Agent and
request that copies of the notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Series 2004 Bonds within
an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of
each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with
respect to the Series 2004 Bonds unless authorized by a Direct Participant in accordance with
DTC's procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Paying
Agent as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the Series 2004 Bonds
are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Series 2004 Bonds will be made to Cede & Co., or
such other nominee as may be requested by an authorized representative of DTC. DTC's
practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding
detail information from the City or Paying Agent, on the payable date in accordance with their
respective holdings shown on DTC's records. Payments by Direct and Indirect 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 Direct and Indirect Participants and not of DTC (or
its nominee), the City or the Paying Agent subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal, premium, if any, and interest to Cede
& Co. (or such other nominee as may be requested by an authorized representative of DTC) is
the responsibility of the Paying Agent, disbursement of such payments to Direct Participants
shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners
shall be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the
Series 2004 Bonds at any time by giving reasonable notice to the City or the Paying Agent.
Under such circumstances, in the event that a successor securities depository is not obtained,
Series 2004 Bond certificates are required to be prepared, executed and delivered.
Pursuant to the procedures of DTC, the City may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor securities depository). In that event, either
a successor securities depository will be selected by the City or Series 2004 Bond certificates
will be prepared, executed and delivered.
In the event of insolvency of DTC, if DTC has insufficient securities in its custody (e.g.,
due to theft or loss) to satisfy the claims of its Direct Participants with respect to deposited
securities and is unable by application of (i) cash deposits and securities pledged to DTC to
protect DTC against losses and liabilities, (ii) the proceeds of insurance maintained by DTC
and/or its Direct Participants or Indirect Participants or (iii) other resources, to obtain securities
necessary to eliminate the insufficiency, no assurances can be given that Direct Participants will
be able to obtain all of their deposited securities.
THE CITY, THE BOND REGISTRAR AND THE PAYING AGENT WILL NOT
HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS,
BENEFICIAL OWNERS OR OTHER NOMINEES OF SUCH BENEFICIAL OWNERS
FOR (A) SENDING TRANSACTION STATEMENTS; (B) MAINTAINING,
SUPERVISING OR REVIEWING THE ACCURACY OF ANY RECORDS
MAINTAINED BY DTC OR ANY DTC PARTICIPANT OR OTHER NOMINEES OF
SUCH BENEFICIAL OWNERS; (C) PAYMENT OR THE TIMELINESS OF PAYMENT
BY DTC TO ANY DTC PARTICIPANT, OR BY ANY DTC PARTICIPANT OR OTHER
NOMINEES OF BENEFICIAL OWNERS TO ANY BENEFICIAL OWNER, OF ANY
AMOUNT DUE IN RESPECT OF THE PRINCIPAL OF OR REDEMPTION PREMIUM,
IF ANY, OR INTEREST ON BOOK-ENTRY SERIES 2004 BONDS; (D) DELIVERY OR
TIMELY DELIVERY BY DTC TO ANY DTC PARTICIPANT, OR BY ANY DTC
PARTICIPANT OR OTHER NOMINEES OF BENEFICIAL OWNERS TO ANY
BENEFICIAL OWNERS, OF ANY NOTICE (INCLUDING NOTICE OF
REDEMPTION) OR OTHER COMMUNICATION WHICH IS REQUIRED OR
PERMITTED UNDER THE TERMS OF THE SERIES 2004 RESOLUTION TO BE
GIVEN TO HOLDERS OR OWNERS OF BOOK-ENTRY SERIES 2004 BONDS;
(E) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN
THE EVENT OF ANY PARTIAL REDEMPTION OF BOOK-ENTRY SERIES 2004
BONDS, OR (F)ANY ACTION TAKEN BY DTC OR ITS NOMINEE AS THE
REGISTERED OWNER OF THE BOOK-ENTRY SERIES 2004 BONDS.
The information in this section concerning DTC and DTC's book-entry system has been
obtained from DTC and other sources that the City believes to be reliable, but the City takes no
responsibility for the accuracy thereof.
Negotiability, Registration and Cancellation
Subject to the provisions of the Series 2004 Resolution, at the option of any registered
owner of the Series 2004 Bonds and upon surrender at the designated corporate trust office of the
Bond Registrar, with a written instrument of transfer satisfactory to the Bond Registrar duly
executed by the registered holder of a Series 2004 Bond or his duly authorized attorney, and
upon payment by such holder of any charges which the Bond Registrar or the City may make as
provided in this Section, the Series 2004 Bonds may be exchanged for Series 2004 Bonds of the
same series and maturity of any other authorized denominations.
The Bond Registrar shall keep books for the registration of Series 2004 Bonds and for the
registration of transfers of Series 2004 Bonds as provided in the Series 2004 Resolution. The
Series 2004 Bonds shall be transferable by the registered owner thereof in person or by his
attorney duly authorized in writing only upon the books of the City kept by the Bond Registrar
and only upon surrender thereof together with a written instrument of transfer satisfactory to the
Bond Registrar duly executed by the registered holder or his authorized attorney. Upon the
transfer of any such Series 2004 Bond, the City shall issue in the name of the transferee a new
Series 2004 Bond or Series 2004 Bonds.
The City, the Paying Agent and the Bond Registrar shall deem and treat the person in
whose name any Series 2004 Bond shall be registered upon the books kept by the Bond Registrar
as the absolute holder of such Series 2004 Bond, whether such Series 2004 Bond shall be
overdue or not, for the purpose of receiving payment of, or on account of, the principal of,
premium, if any, and interest on such Series 2004 Bond as the same become due and for all other
purposes. All such payments so made to any such holder or upon his order shall be valid and
effectual to satisfy and discharge the liability upon such Series 2004 Bond to the extent of the
sum or sums so paid, and neither the City, the Paying Agent, nor the Bond Registrar shall be
affected by any notice to the contrary.
[Remainder of page intentionally left blank].
6
Transfer and Exchange
Subject to the provisions of the Series 2004 Resolution, in all cases in which the privilege
of exchanging Series 2004 Bonds or transferring Series 2004 Bonds is exercised, the City shall
execute and the Bond Registrar shall authenticate and deliver Series 2004 Bonds in accordance
with the provisions of the Series 2004 Resolution. All Series 2004 Bonds surrendered in any
such exchanges or transfers shall forthwith be delivered to the Bond Registrar and cancelled by
the Bond Registrar in the manner provided by the Series 2004 Resolution. There shall be no
charge for any such exchange or transfer of Series 2004 Bonds, but the City or the Bond
Registrar may require payment of a sum sufficient to pay taxes, fees or other governmental
charges required to be paid with respect to such exchange or transfer. Neither the City nor the
Bond Registrar shall be required to (a) transfer or exchange Series 2004 Bonds for a period from
the Record Date to the next ensuing interest payment date on such Series 2004 Bonds, or fifteen
(15) days next preceding any selection of Series 2004 Bonds to be redeemed or thereafter until
the mailing of any notice of redemption; or (b) to transfer or exchange any Series 2004 Bonds
called for redemption.
Redemption Provisions
Optional Redemption. The Series 2004 Bonds maturing on February 1, 2015 and
thereafter are subject to redemption, at the option of the City prior to maturity on or after
February 1, 2014, in whole at any time or in part from time to time on the first day of any month
in such manner as shall be determined by the City, at a redemption price equal to the principal
amount of the Series 2004 Bonds to be redeemed together with accrued interest to the date fixed
for redemption.
If less than all of the Series 2004 Bonds are called for redemption, the Series 2004 Bonds
to be redeemed shall be selected in such manner as the City, in its discretion, shall determine,
and if less than all of a maturity shall be called for redemption, the Series 2004 Bonds to be
redeemed shall be selected by lot within such maturity.
Mandatory Redemption. The Series 2004 Bonds shall be subject to mandatory sinking
fund redemption, at the election of the successful bidder, on February 1 in the years 200_
through 20__.
Notice of Redemption. Notice of redemption of the Series 2004 Bonds shall be mailed,
postage prepaid, by the Bond Registrar at least thirty (30) and not more than sixty (60) days
before the date fixed for redemption to the registered owners of any of the Series 2004 Bonds or
portions of the Series 2004 Bonds which are to be redeemed, at their addresses as they appear
fifteen (15) days prior to the date such notice is mailed on the registration books of the City kept
by the Bond Registrar.
Such notice of redemption shall set forth (i) the date fixed for redemption, (ii) the
redemption price to be paid, (iii) the name and address of the Bond Registrar, (iv) if less than all
of the Series 2004 Bonds shall be called for redemption, the distinctive numbers, letters and
CUS1P identification numbers, if any, of such Series 2004 Bonds to be redeemed, (v) in the case
of Series 2004 Bonds to be redeemed in part only, the portion of the principal amount thereof to
be redeemed, and (vi) any other information the City or the Bond Registrar deems relevant.
Subject to the rules of the Securities Depository, in case any Series 2004 Bond is to be redeemed
7
in part only, the notice of redemption that relates to such Series 2004 Bond shall state also that
on or after the redemption date, upon surrender of the Series 2004 Bond, a new Series 2004
Bond or Series 2004 Bonds of the same maturity, bearing interest at the same rate and in
aggregate principal amount equal to the unredeemed portion of such Series 2004 Bond, will be
issued. Failure of the registered owner of any Series 2004 Bonds which are to be redeemed to
receive any such notice shall not affect the validity of the proceedings for the redemption of
Series 2004 Bonds for which proper notice has been given. Interest shall cease to accrue on any
of the Series 2004 Bonds duly called for prior redemption if payment of the redemption price has
been duly made or provided for.
SECURITY FOR THE SERIES 2004 BONDS
Pledge of Ad Valorem Taxes
The Series 2004 Bonds are general obligations of the City for which its full faith and
credit have been irrevocably pledged. The Series 2004 Bonds are payable from unlimited ad
valorem taxes levied on all taxable property located in the City (excluding homestead
exemptions) as required by applicable law. The taxes assessed, levied and collected for the
security and payment of the Series 2004 Bonds are required, pursuant to the terms of the Series
2004 Resolution, to be assessed, levied and collected and the proceeds of said taxes, except as
described above and in the Series 2004 Resolution, are to be applied solely to the payment of the
principal of and interest on the Series 2004 Bonds. All ad valorem taxes collected for the Series
2004 Bonds shall be deposited in a special fund known as the "Sinking Fund" which was created
and established by the Series 2004 Resolution. Moneys on deposit in the Sinking Fund will be
used solely for the payment of principal and redemption premium, if any, of and interest due on
the Series 2004 Bonds.
Assessments
Under Florida law, all taxable real property and personal property must be assessed at fair
market value, with some exceptions. Real and personal property valuations are determined each
year as of January 1 by the Palm Beach County Property Appraiser's office. The assessment roll
for real property is prepared between January and July 1, and each taxpayer is given notice by
mail of its proposed assessed property value.
The property owner has the right to file an appeal with the Value Adjustment Board,
which considers petitions relating to assessments and exemptions. A property owner who objects
to a determination by the Value Adjustment Board may file an appeal in Circuit Court. The
Value Adjustment Board certifies the assessment roll upon completion of the heating of all
appeals, other than those to the Circuit Court. Millage rates are then computed by the various
taxing authorities and certified to the Property Appraiser, who applies the millage rates to the
assessment roll to create the tax roll. The tax roll is then turned over to the Tax Collector for
collection.
The Florida Constitution entitles each real property owner who is a permanent resident of
the State as of January 1 to a $25,000 homestead exemption on his or her primary residential
property. In addition, the following uses of real property are generally exempt from ad valorem
taxation: religious, educational, charitable, scientific, literary and governmental. There are also
special exemptions for widows, aged persons and disabled veterans. The tax on personal
property covers only tangible personal property and exempts, among other things, household
goods and personal effects and inventory.
Collections
All real and personal property taxes are due and payable on November 1 of each year, or
as soon thereafter as the tax roll is certified and delivered to the Tax Collector. A notice is mailed
to each property owner on the tax roll for taxes levied by the County, school board and other
taxing authorities. Taxes may be paid upon receipt of such notice, with discounts at the rate of
4% if paid in the month of November; 3% if paid in the month of December, 2% if paid in the
month of January; and 1% if paid in the month of February. Taxes paid during the month of
March are without discount. All unpaid real and personal property taxes become delinquent on
April 1 of the year following the year in which the taxes are levied.
Delinquent Taxes
In the event of a delinquency in the payment of taxes on real property, the County Tax
Collector is required to sell tax certificates on such property to the person who pays the
delinquent taxes and interest and certain costs and charges relating thereto, and who accepts the
lowest interest rate per annum to be borne by the certificates (which shall in no event be more
than eighteen percent (18%) per annum). Delinquent taxes may be paid by a taxpayer prior to the
date of sale of a tax certificate by the payment of such taxes, together with interest and all costs
and charges relating thereto. Tax certificates are sold by public bid, and in case there are no
bidders, the certificate is issued to the County without payment of the delinquent taxes in which
the assessed lands are located. Proceeds from the sale of tax certificates are required to be used to
pay taxes, interest, costs and charges on the land described in the certificate.
County-held tax certificates may be purchased, and any tax certificate may be redeemed,
in whole or in part, by any person at any time before a tax deed is issued or the property is placed
on the list of lands available for sale, at a price equal to the face amount of the certificate or
portion thereof, together with all interest, costs, and charges due. The proceeds of such a
redemption are paid to the County Tax Collector who transmits to the holder of the certificate
such proceeds less service charges, and the certificate is cancelled. Any holder, other than the
County, of a tax certificate which has not been redeemed has seven (7) years from the date of
issuance of the tax certificate during which to act against the land that is the subject of the tax
certificate.
After an initial period ending two (2) years from April 1 of the year of issuance of a tax
certificate, during which period actions against the land are held in abeyance (except with respect
to County-held certificates) to allow for sales and redemptions of tax certi£~cates, the holder of a
certificate may apply for a tax deed to the subject land. The applicant, other than the County, is
required to pay to the County Tax Collector all amounts required to redeem or purchase all
outstanding tax certificates not held by the applicant covering the land, any omitted taxes or
delinquent taxes, current taxes, and interest if due, covering the land. If the County holds a tax
certificate and has not succeeded in selling it, the County must apply for a tax deed within two
(2) years after April 1 of the year of issuance. The County pays costs and fees to the County Tax
Collector but not any amount to redeem any other outstanding certificates covering the land.
Thereafter, the property is advertised for public sale.
In any such public sale, the private holder of the tax certificate who is seeking a tax deed
for non-homestead property is deemed to submit a minimum bid equal to the amount required to
redeem the tax certificate, charges for the cost of sale, redemption of other tax certificates on the
land, and the amount paid by such holder in applying for the tax deed, plus interest thereon. In
the case of homestead property, the bid is also deemed to include an amount equal to one-half
(1/2) of the latest assessed value of the homestead. If there are no higher bidders, the holder
receives title to the land and the amounts paid for the certificate and in applying for a tax deed
are credited towards the purchase price. If there are higher bidders, the holder may enter the
bidding. The highest bidder is awarded title to the land. The portion of the proceeds of such sale
needed to redeem the tax certificate (and all other amounts paid by such holder in applying for a
tax deed), plus interest, are forwarded to the holder thereof or credited to such holder if such
holder is the successful bidder. Excess proceeds are distributed first to satisfy governmental liens
against the land and then to the former title holder of the property (less service charges),
lienholders of record, mortgagees of record, vendees of recorded contracts for deeds, and other
lienholders and any other person to whom the land was assessed on the tax roll for the year in
which the land was assessed, all as their interests may appear.
If there are no bidders at the public sale, the County may at any time within ninety (90)
days from the date of offering for public sale purchase the land for a statutorily prescribed
minimum bid. After ninety (90) days have passed, any person, or governmental unit may
purchase the land by paying the amount of the minimum bid. Seven (7) years from the date of
offering for public sale, unsold lands escheat to the County.
For a discussion of the constitutional limitation on the annual increase in assessed
valuation of homestead (primary residence) property, see "THE CITY-State Assessment Cap"
herein.
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10
PRINCIPAL TAXPAYERS (UNAUDITED)
Percentage
2003 of Total
Taxpayer Taxes Levied Taxes Levied(1)
Linton Delray LLC $ 856,346 2.67%
Citation Club 825,074 2.57%
Office Depot, Inc. 728,366 2.27%
Delray Intracoastal 594,689 1.85%
Realty Associates Fund V 560,007 1.74%
Ocean Property LTD 523,327 1.63%
Depot Realty 479,365 1.49%
Summit Properties Partnership LP 461,226 1.44%
125 Via Deste Aprtmts Invstrs LLC 457,515 1.43%
Palm Beach County Health Facilities 419~714 1.31%
$5,905,629 18.39%
Source: Comprehensive Annual Financial Report of the City dated September 30, 2003.
(~) Total taxes levied for fiscal year 2003 are $32,069,034.
CITY OF DELRAY BEACH, FLORIDA
ASSESSED VALUE OF TAXABLE PROPERTY (UNAUDITED)
LAST TEN FISCAL YEARS
Personal
Fiscal Real Property Property Centrally Total
Year Ended Assessed Value Assessed Value Assessed Value Assessed Value
1994 $2,273,414,571 $161,191,710 $ 874,344 $2,435,480,625
1995 2,285,093,258 182,359,842 1,080,285 2,468,533,385
1996 2,345,831,009 194,562,246 1,190,016 2,541,583,271
1997 2,415,411,016 214,958,684 1,180,501 2,631,550,201
1998 2,526,205,305 231,12%006 1,602,085 2,758,936,396
1999 2,726,830,716 235,458,142 1,538,111 2,963,826,969
2000 2,908,069,980 260,128,321 1,625,553 3,169,823,854
2001 3,108,896,577 283,054,206 1,622,853 3,393,573,636
2002 3,468,430,111 289,581,133 1,589,665 3,759,600,909
2003 3,866,677,077 283,162,580 1,623,001 4,151,462,658
2004 4,438,122,578 265,666,772 2,013,779 4,705,803,129
Source: Palm Beach County Property Appraiser's Office.
11
CITY OF DELRAY BEACH, FLORIDA
PROPERTY TAX LEVIES AND COLLECTIONS (UNAUDITED)
Fiscal Total Total Outstanding
Year Current Percent Delinquent Property Collections Outstanding Delinquent
Ended Net Tax Tax Of Levy Tax Tax as a % of Delinquent Taxes of % of
9/30 LevyIn Collections Collected Collections Collections Current Levy Taxes Current Levy
1994 $18,888,080 $18,712,867 99.07% $ 61,001 $18,773,868 99.40% $708,344 3.75%
1995 18,994,194 18,837,457 99.17% 113,520 18,950,977 99.77% 727,734 3.83%
1996 19,422,203 19,297,375 99.36% 76,933 19,374,308 99.75% 770,330 3.97%
1997 20,004,670 19,910,114 99.53% 36,456 19,946,570 99.71% 824,842 4.12%
1998 20,821,315 20,731,763 99.57% 323,954 21,055,717 101.12% 590,440 2.83%
1999 22,099,064 21,996,762 99.54% 35,853 22,032,615 99.70% 652,726 2.95%
2000 23,465,518 23,345,095 99.49% 84,164 23,429,259 99.85% 678,916 2.89%
2001 26,105,220 25,968,855 99.48% 74,076 26,042,931 99.76% 729,262 2.79%
2002 29,084,111 28,938,206 99.50% 73,040 29,011,246 99.75% 792,294 2.72%
2003 32,099,240 31,953,508 99.55% 115,526 32,069,034 99.91% 822,259 2.56%
Source: Comprehensive Annual Financial Report of Delray Beach, September 30, 2003.
Note: All property taxes are assessed and collected by Palm Beach County without charge to
the City, and collections are distributed in full as collected.
(1) Tax Levy net of allowable discounts.
CITY OF DELRAY BEACH, FLORIDA
PROPERTY TAX RATES OF ALL OVERLAPPING GOVERNMENTS (UNAUDITED)
Last Ten Fiscal Years
(Per $1,000 of Assessed Value)
Palm
Fiscal Beach South Florida
Year Palm Health Water
Ended General Debt City School Beach Care Management
Sept. 30 Fund Service Total District County District District Total
1994 6.8600 1.1400 8.0000 10.0630 4.5499 1.4750 0.5970 24.6849
1995 6.8800 1.0700 7.9500 10.1850 4.5193 1.4500 0.5970 24.7013
1996 6.8700 1.0300 7.9000 9.8170 4.5191 1.4500 0.6470 24.3331
1997 6.9500 0.9000 7.8500 9.7880 4.5191 1.2000 0.6720 24.0291
1998 6.9500 0.8500 7.8000 9.5570 4.6000 1.1600 0.6970 23.8140
1999 6.9100 0.7900 7.7000 9.6820 4.6000 1.0500 0.6970 23.7290
2000 6.9100 0.7400 7.6500 9.0430 4.6000 0.9750 0.6970 22.9650
2001 7.2600 0.6900 7.9500 8.9180 4.6000 1.0250 0.6970 23.1900
2002 7.3700 0.6300 8.0000 8.9480 4.5500 1.1500 0.6970 23.3450
2003 7.4400 0.5600 8.0000 8.7790 4.5000 1.1300 0.6930 23.1020
Tax rate limits: Ten mills per Florida Statute 200.081 (one mill is $1 per
$1,000 assessed value).
Scope of tax rate limit No municipality shall levy ad valorem taxes for real and
tangible personal property in excess of ten mills of the assessed
value, except for special benefits and debt service on
obligations issued with the approval of those taxpayers subject
12
to ad valorem taxes.
Taxes due: March 31
Taxes delinquent: April 1
Discount Allowed: 4% November, 3% December, 2% January, 1% March
Penalties for delinquency: 3% plus advertising costs after April 1
Tax Collector: Palm Beach County
Tax Collector's Commission: None
Source: Comprehensive Annual Financial Report of Delray Beach, September 30, 2003, and
Finance Department of the City.
BOND INSURANCE
Bond Insurance Policy
Concurrently with the issuance of the Series 2004 Bonds, MBIA Insurance Corporation
("MBIA") will issue its Municipal Bond Insurance Policy for the Series 2004 Bonds (thc
"Policy"). The Policy guarantees thc scheduled payment of principal of and interest on the
Series 2004 Bonds when duc as set forth in the form of the Policy included as in Appendix D to
this Official Statement.
Thc Policy is not covered by any insurance security or guaranty fund established under
New York, California, Connecticut or Florida insurance law.
The MBIA Insurance Corporation Insurance Policy
Thc following information has been furnished by MBIA for use in this Official
Statement. Reference is made to Appendix D for a specimen of MBIA's policy.
MBIA's policy unconditionally and irrevocably guarantees the full and complete
payment required to be made by or on behalf of the City to the Paying Agent or its successor of
an amount equal to (i) the principal of (either at the stated maturity or by an advancement of
maturity pursuant to a mandatory sinking fund payment) and interest on, the Series 2004 Bonds
as such payments shall become due but shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of mandatory or optional redemption or
acceleration resulting from dcfanlt or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments guaranteed by MBIA's policy shall
be made in such amounts and at such times as such payments of principal would have been due
had there not been any such acceleration); and (ii) the reimbursement of any such payment which
is subsequently recovered from any owner of the Series 2004 Bonds pursuant to a final judgment
by a court of competent jurisdiction that such payment constitutes an avoidable preference to
such owner within the meaning of any applicable bankruptcy law (a "Preference").
MBIA's policy docs not insure against loss of any prepayment premium which may at
any time be payable with respect to any Series 2004 Bond. MBIA's policy docs not, under any
circumstance, insure against loss relating to: (i) optional or mandatory redemptions (other than
13
mandatory sinking fund redemptions); (ii) any payments to be made on an accelerated basis; (iii)
payments of the purchase price of Series 2004 Bonds upon tender by an owner thereof; or (iv)
any Preference relating to (i) through (iii) above. MBIA's policy also does not insure against
nonpayment of principal of or interest on the Series 2004 Bonds resulting from the insolvency,
negligence or any other act or omission of the Paying Agent or any other paying agent for the
Series 2004 Bonds.
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
writing by registered or certified mail, or upon receipt of written notice by registered or certified
mail, by MBIA from the Paying Agent or any owner of a Series 2004 Bond the payment of an
insured amount for which is then due, that such required payment has not been made, MBIA on
the due date of such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account with U.S. Bank
Trust National Association, in New York, New York, or its successor, sufficient for the payment
of any such insured amounts which are then due. Upon presentment and surrender of such Series
2004 Bonds or presentment of such other proof of ownership of the Series 2004 Bonds, together
with any appropriate instruments of assignment to evidence the assignment of the insured
amounts due on the Series 2004 Bonds as are paid by MBIA, and appropriate instruments to
effect the appointment of MBIA as agent for such owners of the Series 2004 Bonds in any legal
proceeding related to payment of insured amounts on the Series 2004 Bonds, such instruments
being in a form satisfactory to U.S. Bank Trust National Association, U.S. Bank Trust National
Association shall disburse to such owners or the Paying Agent payment of the insured amounts
due on such Series 2004 Bonds, less any amount held by the Paying Agent for the payment of
such insured amounts and legally available therefor.
MBIA
MBIA is the principal operating subsidiary of MBIA Inc., a New York Stock Exchange
listed company (the "Company"). The Company is not obligated to pay the debts of or claims
against MBIA. MBIA is domiciled in the State of New York and licensed to do business in and
subject to regulation under the laws of all 50 states, the District of Columbia, the Commonwealth
of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands of the
United States and the Territory of Guam. MBIA has three branches, one in the Republic of
France, one in the Republic of Singapore and one in the Kingdom of Spain. New York has laws
prescribing minimum capital requirements, limiting classes and concentrations of investments
and requiring the approval of policy rates and forms. State laws also regulate the amount of both
the aggregate and individual risks that may be insured, the payment of dividends by MBIA,
changes in control and transactions among affiliates. Additionally, MBIA is required to maintain
contingency reserves on its liabilities in certain amounts and for certain periods of time.
MBIA does not accept any responsibility for the accuracy or completeness of this Official
Statement or any information or disclosure contained herein, or omitted herefrom, other than
with respect to the accuracy of the information regarding the policy and MBIA set forth under
the heading "BOND INSURANCE." Additionally, MBIA makes no representation regarding the
Series 2004 Bonds or the advisability of investing in the Series 2004 Bonds.
14
MBIA Information
The following documents filed by the Company with the Securities and Exchange
Commission (the "SEC") arc incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended December 31,
2003; and
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2004.
Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act of 1934, as amended, after the date of this Official Statement and prior to the
termination of the offering of the Series 2004 Bonds offered hereby shall be deemed to be
incorporated by reference in this Official Statement and to be a part hereof. Any statement
contained in a document incorporated or deemed to be incorporated by reference herein, or
contained in this Official Statement, shall be deemed to be modified or superseded for purposes
of this Official Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this Official Statement.
The Company files annual, quarterly and special reports, information statements and
other information with the SEC under File No. 1-9583. Copies of the SEC filings (including (1)
the Company's Annual Report on Form 10-K for the year ended December 31, 2003, and (2) the
Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2004 and June 30,
2004) are available (i) over the Internet at the SEC's web site at http://www.sec.gov; (ii) at the
SEC's public reference room in Washington D.C.; (iii) over the Intemet at the Company's web
site at http://www.mbia.com; and (iv) at no cost, upon request to MBIA Insurance Corporation,
113 King Street, Armonk, New York 10504. The telephone number of MBIA is (914) 273-
4545.
As of December 31, 2003, MBIA had admitted assets of $9.9 billion (audited), total
liabilities of $6.2 billion (audited), and total capital and surplus of $3.7 billion (audited)
determined in accordance with statutory accounting practices prescribed or permitted by
insurance regulatory authorities. As of June 30, 2004 MBIA had admitted assets of $10.5 billion
(unaudited), total liabilities of $6.7 billion (unaudited), and total capital and surplus of $3.8
billion (unaudited) determined in accordance with statutory accounting practices prescribed or
permitted by insurance regulatory authorities.
Financial Strength Ratings of MBIA
Moody's Investors Service, Inc. rates the financial strength of MBIA "Aaa."
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. rates the financial
strength of MBIA "AAA."
Fitch Ratings rates the financial strength of MBIA "AAA."
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Each rating of MBIA should be evaluated independently. The ratings reflect the
respective rating agency's current assessment of the creditworthiness of MBIA and its ability to
pay claims on its policies of insurance. Any further explanation as to the significance of the
above ratings may be obtained only from the applicable rating agency.
The above ratings are not recommendations to buy, sell or hold the Series 2004 Bonds,
and such ratings may be subject to revision or withdrawal at any time by the rating agencies.
Any downward revision or withdrawal of any of the above ratings may have an adverse effect on
the market price of the Series 2004 Bonds. MBIA does not guaranty the market price of the
Series 2004 Bonds nor does it guaranty that the ratings on the Series 2004 Bonds will not be
revised or withdrawn.
The insurance provided by this policy is not covered by the Florida Insurance Guaranty
Association created under chapter 631, Florida Statutes.
TFIE CITY
Location and Size
The City, located on Florida's Gold Coast in Palm Beach County with an estimated
population of 62,578 (as of 2003) and sixteen square miles within its municipal boundaries.
Lying 18 miles south of West Palm Beach and 50 miles north of Miami along the Atlantic
Ocean, the City has been able to participate in the growth of South Florida and benefit from the
economic growth of this area in general.
Brief Description
The City is primarily a resort and residential community of well-kept homes and recent
developments of condominium apartments. The City has many recreational facilities including
tennis, golf, boating, fishing, water sports, and lawn bowling. During the winter months, the
hotels, motels, and restaurants fill to capacity with visiting tourists and winter residents. The
City's famous mile-long beach is an attraction for residents and tourists. The Intracoastal
Waterway provides boat dockage, and the Boynton Inlet gives access to the Atlantic Ocean for
salt water drift fishing. Lake Ida, adjacent to the City, also provides fishing and water skiing.
Further information on the City is contained in Appendix A - "General Information
Concerning the City of Delray Beach, Florida and Palm Beach County."
Budgeting, Accounting and Auditing
The City follows these procedures in establishing the budgetary data reflected in its
general purpose financial statements:
1. No later than the first regular Commission meeting in August, the City Manager
submits to the City Commission a proposed operating budget for the fiscal year commencing the
following October 1. The operating budget includes proposed expenditures and the means of
financing them.
2. Public hearings are conducted at City Hall to obtain taxpayer comments.
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3. The City advises the County Property Appraiser of the proposed millage rate and
the day, time and place of the public hearing for budget acceptance.
4. The public heating is held to obtain final taxpayer input and to adopt the final
budget.
5. The budget and related millage rates are legally enacted through passage of
separate resolutions.
6. Changes or amendments to the total budgeted expenditures of the City or a
department must be approved by the City Commission; however, changes within a department
which do not affect the total departmental expenditures may be approved at the administrative
level. Accordingly, the legal level of control is at the department level. All unencumbered
balances lapse at year end.
The City reports major governmental funds consisting of a General Fund and a Capital
Improvements Fund, a major Proprietary Fund consisting of a Water and Sewer Fund; as well as
Internal Service Funds and Pension Trust Funds.
Non-appropriated budgets, which are not legally adopted or legally required to be
adopted are prepared for the Law Enfomement Trust Fund, Community Development Fund,
Beautification Fund, Tennis Stadium Fund, Water and Sewer Fund, Delray Beach Municipal
Golf Course Fund, Lakeview Golf Course Fund, City Marina Fund, Sanitation Fund, Stormwater
Utility Fund, Central Garage Fund and the Insurance Fund. The Finance Department monitors
the expenditures of these funds through the use of budgets prepared by management.
Operating Budget for Fiscal Year Ended September 30, 2003
Total budgeted operating revenues and other financing sources for the General Fund for
fiscal year ending September 30, 2003 are $85,360,817. See Appendix B - "City of Delray
Beach, Florida General Purpose Financial Statements and other Information for the Fiscal Year
ended September 30, 2003."
Each month of the current fiscal year, actual revenues and expenditures of the General
Fund are compared with budgeted amounts by line item. Variations of actual revenues and
expenditures compared to budgeted amounts which are unfavorable are referred to the respective
department heads for explanations and possible amendment. A summary report of the status of
the budget is submitted to the City Manager for review and action. At the close of the 2003
fiscal year (September 30, 2003), total revenues were 110% of the annual budget amount and
total expenditures were 108% of the annual budget amount.
State Assessment Cap
On November 3, 1992, the voters of the State of Florida passed an amendment to Article
VII, Section 4 of the Florida constitution establishing a limitation of the lesser of 3% or the
increase in the Consumer Price Index during the relevant year, on the annual increase in assessed
valuation of homestead (primary residence) property, except in the event of a sale thereof during
such year, and except as to improvements thereto during such year. The amendment did not alter
any caps on millage rates otherwise set forth in the Florida Constitution.
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Suite 1170 407 648-2208
300 South Orange Avenue 407-646-1323 fax
Orlando, FL www.pfrn.com
32801-3470
ublic Financial Management
Financial and Investment ^d¥isors
September 7, 2004
The City Commission of
The City of Delray Beach, Florida
100 N.W. 1s~ Avenue
Delray Beach, Florida 33444
Dear Ladies and Gentleman:
In our capacity as financial advisor to the City of Delray Beach, Florida (the "City") on the City's
General Obligation Bonds, Series 2004 (the "Series 2004 Bonds''), Public Financial Management,
Inc., recommends that the principal and interest on the Series 2004 Bonds be insured by a municipal
bond insurance policy (the "Policy") to be issued by MBIA Insurance Corporation (the "Bond
Insurer") pursuant to the terms and provisions of the commitment of such Bond Insurer to provide
the Policy. This recommendation is based on the economic benefit that the City v/ri realize on the
Series 2004 Bonds as a result of procuring the Policy.
Sincerely,
James w. Glover
Public Financial Managements Inc.
Senior Managing Consultant