Boenning & Scattergood Inc.

Transcription

1 NEW ISSUE BOOK-ENTRY ONLY Rating: Standard & Poor s: AA (Stable Outlook) (See Rating herein) In the opinion of Gibbons P.C., Bond Counsel to the Authority, assuming continuing compliance by the Authority with certain tax covenants described herein, under existing law, interest on the Bonds (as defined herein) is excluded from the gross income of the owners of the Bonds for Federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the Code ) and interest on the Bonds is not an item of tax preference under Section 57 of the Code for purposes of computing alternative minimum tax. In the case of certain corporate holders of the Bonds, interest on the Bonds will be included in the calculation of the alternative minimum tax as a result of the inclusion of interest on the Bonds in adjusted current earnings of certain corporations. Under existing law, interest on the Bonds and net gains from the sale of the Bonds are exempt from the tax imposed by the New Jersey Gross Income Tax Act. See TAX MATTERS herein. $9,890,000 PARKING AUTHORITY OF THE TOWN OF MORRISTOWN In the County of Morris, New Jersey Guaranteed Parking Revenue Bonds - Series 2011 Dated: Date of Delivery Due: August 1, as shown on inside front cover Interest Payable: February 1 and August 1 First Interest Payment: February 1, 2012 The Guaranteed Parking Revenue Bonds - Series 2011, in the aggregate principal amount of $9,890,000 (the Bonds ), of the Parking Authority of the Town of Morristown (the Authority ), in the County of Morris, New Jersey are issuable as fully registered Bonds, without coupons, in denominations of $5,000 and any integral multiple thereof and when issued, will be registered in the name of CEDE & CO., as Bondholder and nominee for The Depository Trust Company, New York, New York ( DTC ), which will act as securities depository for the Bonds. Purchasers will not receive physical delivery of the Bonds, see Book-Entry Only System herein. Principal is payable on August 1, in the years set forth on the inside front cover, upon presentation and surrender to The Bank of New York Mellon, Woodland Park, New Jersey, in its capacity as Trustee and Paying Agent (the Trustee ). Semi-annual interest (payable February 1 and August 1, commencing February 1, 2012) on the Bonds will be paid by check mailed to the registered Owners of the Bonds as of the Record Date (hereinafter defined) by the Trustee. The Bonds are direct obligations of the Authority. The payment of the principal or redemption price of, and interest on the Bonds are payable from and are secured by the pledge of the funds and accounts held by the Trustee and by a pledge of the Net Revenues of the Authority, as such term is defined in the Resolution Authorizing Guaranteed Parking Revenue Bonds Series 1997 and other Obligations, adopted on May 16, 1997 (the Original Resolution ), as amended and supplemented on May 28, 1998, May 9, 2002, January 13, 2004, June 27, 2007 and August 16, 2011 (the Supplemental Resolutions ) (the Original Resolution and Supplemental Resolutions are hereinafter collectively referred to as the Resolution ). The pledge of and lien on the Net Revenues is subject to the prior right of the Authority to apply moneys to pay the expenses of operating and maintenance, as provided in the Resolution. The Bonds are authorized and issued pursuant to the Parking Authority Law, constituting Chapter 198 of the Pamphlet Laws of 1948, of the State of New Jersey, as amended and supplemented (the Act ). As additional security for the Bonds, the Town of Morristown, New Jersey (the Town ) has entered into a Replenishment Agreement, as amended and supplemented (the Replenishment Agreement ) for the benefit of the Holders of the Bonds and the full and prompt replenishment of the Debt Service Reserve Fund. Under such Replenishment Agreement, the Town is obligated to make up any deficiency in the Debt Service Reserve Fund for the Bonds. (See SECURITY FOR THE BONDS The Replenishment Agreement herein.) Bonds, together with other available funds, are being used for: (1) currently refunding the Authority s outstanding Guaranteed Parking Revenue Bonds - Series 2002; (2) currently refunding the Authority s outstanding Guaranteed Parking Revenue Bonds - Series 2004; (3) funding a Debt Service Reserve Fund; and (4) paying the costs and expenses incurred in connection with the issuance and delivery of the Bonds. The Bonds are subject to redemption prior to their stated maturity dates, as set forth herein. THE AUTHORITY HAS NO POWER TO LEVY OR COLLECT TAXES, AND THE BONDS ARE NOT AND SHALL NOT BE DEEMED TO CREATE A DEBT OR LIABILITY OF THE STATE OF NEW JERSEY OR OF ANY POLITICAL SUBDIVISION OTHER THAN THE AUTHORITY (PAYABLE FROM THE AUTHORITY S NET REVENUES), AND THE TOWN (TO THE EXTENT PROVIDED IN THE REPLENISHMENT AGREEMENT) AND DO NOT AND SHALL NOT CREATE OR CONSTITUTE ANY INDEBTEDNESS, LIABILITY OR OBLIGATION OF THE STATE OF NEW JERSEY, OR OF ANY POLITICAL SUBDIVISION, OTHER THAN THE AUTHORITY (PAYABLE FROM THE AUTHORITY S NET REVENUES), AND THE TOWN (TO THE EXTENT PROVIDED IN THE REPLENISHMENT AGREEMENT) EITHER LEGAL, MORAL OR OTHERWISE. This cover page contains certain information for quick reference only. Investors must read the entire Official Statement, including all Appendices, to obtain information essential to the making of an informed investment decision. The Bonds are offered when, as and if issued by the Authority and delivered to the Underwriters, subject to prior sale, to withdrawal or modification of the offer without notice and to approval of legality by the law firm of Gibbons P.C., Newark, New Jersey and certain other conditions described herein. Certain legal matters will be passed upon for the Authority by its general counsel, Greenbaum, Rowe, Smith & Davis, LLP, Woodbridge, New Jersey. It is expected that the Bonds will be available for delivery through the facilities of DTC in New York, New York on or about September 15, Dated: August 16, 2011 MATURITIES, AMOUNTS, RATES, PRICES/YIELDS AND CUSIP NUMBERS As Shown on Inside Cover Boenning & Scattergood Inc. NW Capital Markets, Inc. PNC Capital Markets LLC

2 $9,890,000 PARKING AUTHORITY OF THE TOWN OF MORRISTOWN Guaranteed Parking Revenue Bonds - Series 2011 MATURITY SCHEDULE Year Principal Amount Interest Rate Yield Price Cusip* 2012 $315, % 1.00% EY , EZ , FA , FB , FC , FD , FE , FF , FG , FH , FJ , FK , FL , FM8 *The above CUSIP (Committee on Uniform Securities Identification Procedures) numbers have been assigned by an organization not affiliated with the Authority and the Authority is not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience of bondholders and no representation is made as to the correctness of such CUSIP numbers. CUSIP numbers assigned to securities may be changed during the term of such securities based on a number of factors including, but not limited to, the refunding or defeasance of such issue or the use of secondary market financial products. The Authority has not agreed to, and there is no duty or obligation to, update this Official Statement to reflect any change or correction in the CUSIP numbers set forth above.

3 PARKING AUTHORITY OF THE TOWN OF MORRISTOWN In the County of Morris, New Jersey MEMBERS OF THE AUTHORITY BOARD Name Office Term Expires Margret Brady Chairperson December 31, 2011 Christopher Leon Garibian Vice Chairperson December 31, 2012 Anthony Lucia Treasurer December 31, 2013 Michael R. Elms Secretary December 31, 2014 James Gervasio Assistant Secretary/Treasurer December 31, 2015 EXECUTIVE DIRECTOR George Fiore COUNSEL TO THE AUTHORITY Greenbaum, Rowe, Smith & Davis, LLP Woodbridge, New Jersey AUTHORITY AUDITOR VM Associates, Inc. Mt. Arlington, New Jersey BOND COUNSEL Gibbons P.C. Newark, New Jersey TRUSTEE The Bank of New York Mellon Woodland Park, New Jersey UNDERWRITERS Boenning & Scattergood Inc. West Conshohocken, Pennsylvania NW Capital Markets, Inc. Jersey City, New Jersey PNC Capital Markets LLC Philadelphia, Pennsylvania FINANCIAL CONSULTANT VALCO Capital, Ltd. Ligonier, Pennsylvania

4 The information which is set forth herein has been provided by the Authority and by other sources which are believed by the Authority to be reliable, but the information provided by such sources is not guaranteed as to accuracy or completeness by the Authority. The Authority has not confirmed the accuracy or completeness of information relating to the Town (except in those limited instances in which the Authority has provided information to the Town which the Town has included in Appendix A) and disclaims any responsibility for the accuracy or completeness thereof. No dealer, broker, salesman or other person has been authorized by the Authority, the Town or the Underwriters to give any information or to make any representations, with respect to the Bonds other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the Authority, the Town and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriters or, as to information from other sources, by the Authority, or the Town. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in any of the information set forth herein since the date hereof or the dates of the information contained herein. Upon issuance, the Bonds will not be registered under the Securities Act of 1933, as amended, will not be listed on any stock or other securities exchange and neither the Securities Exchange Commission, nor any other federal, state, municipal or other governmental entity, other than the Authority (subject to the limitations set forth above), will have passed upon the accuracy or adequacy of this Official Statement. This Official Statement includes the cover page and the Appendices attached hereto. The Underwriters have been authorized by the Authority to imprint the Bond offering prices and their names on the cover page and inside front cover page, together with the interest rates per annum adopted for the various maturities of the Bonds. In connection with this offering, the Underwriters may over allot or effect transactions, which stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT Certain statements included or incorporated by reference in this Official Statement, at the very minimum, constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended (the Exchange Act ), and Section 27A of the United States Securities Act of 1933, as amended (the Securities Act ). Such statements are generally identifiable by the terminology used such as plan, expect, estimate, budget or other similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THOSE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS OFFICIAL STATEMENT. THE AUTHORITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN THEIR EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED, OCCUR.

5 TABLE OF CONTENTS INTRODUCTION...1 AUTHORIZATION FOR THE BONDS...2 PURPOSE OF THE ISSUE...2 PLAN OF FINANCE...2 THE BONDS...3 BOOK ENTRY ONLY SYSTEM...4 REDEMPTION PROVISIONS...6 SECURITY FOR THE BONDS...6 SOURCES AND USES OF FUNDS...9 DEBT SERVICE SCHEDULE...10 TOTAL COMBINED LONG-TERM DEBT SERVICE...11 ADDITIONAL BONDS...11 THE AUTHORITY...12 AUTHORITY FINANCIAL HISTORY...16 PLEDGE OF THE STATE NOT TO LIMIT POWERS OF AUTHORITY OR RIGHTS OF BONDHOLDERS...16 MUNICIPAL BANKRUPTCY...16 LITIGATION...17 BONDHOLDERS RISKS...17 LEGALITY FOR INVESTMENT...18 TAX MATTERS...18 LEGAL MATTERS...19 RATING...19 FINANCIAL CONSULTANT...19 UNDERWRITING...20 CONTINUING DISCLOSURE...20 FINANCIAL STATEMENTS OF THE AUTHORITY...21 FINANCIAL STATEMENTS OF THE TOWN...21 PREPARATION OF OFFICIAL STATEMENT...21 MISCELLANEOUS...21 APPENDIX A DESCRIPTION OF THE TOWN OF MORRISTOWN... A-1 APPENDIX B REPORT ON EXAMINATION OF FINANCIAL STATEMENTS FOR THE AUTHORITY FOR THE YEAR ENDED DECEMBER 31, B-1 APPENDIX C REPORT OF AUDIT FOR THE TOWN OF MORRISTOWN FOR THE YEAR ENDED DECEMBER 31, C-1 APPENDIX D FORM OF APPROVING LEGAL OPINION... D-1 APPENDIX E SUMMARY OF LEGAL DOCUMENTS...E-1 The Table of Contents does not list all of the subjects in this Official Statement and in all instances references should be made to the complete Official Statement to determine the subjects set forth herein.

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7 OFFICIAL STATEMENT $9,890,000 PARKING AUTHORITY OF THE TOWN OF MORRISTOWN In the County of Morris, New Jersey Guaranteed Parking Revenue Bonds - Series 2011 INTRODUCTION This Official Statement, including the cover page hereof and the Appendices attached hereto, is furnished by the Parking Authority of the Town of Morristown (the Authority ), a public body corporate and politic of the State of New Jersey (the State ), to provide certain information relating to the Authority, its parking facilities (as more fully described herein), the Town of Morristown (the Town ), in the County of Morris (the County ), and the $9,890,000 principal amount of Guaranteed Parking Revenue Bonds - Series 2011 (the Bonds ) to be issued by the Authority. The Bonds will be issued on a parity with the Authority s $27,180,000 principal amount of Guaranteed Parking Revenue Bonds Series 2007, dated July 1, 2007, of which $26,380,000 are outstanding (the 2007 Bonds ). The Bank of New York Mellon, Woodland Park, New Jersey (the Trustee, Paying Agent and Registrar ) has been appointed to serve as trustee, paying agent and registrar for the Bonds. Copies of the Resolution (as hereinafter defined) and the Replenishment Agreement (as hereinafter defined), are on file at the offices of the Authority in Morristown, New Jersey, and at the principal corporate trust offices of the Trustee in Woodland Park, New Jersey and reference is made to such documents for the provisions relating, among other things, to the terms and security of the Bonds, the custody and application of the proceeds of the Bonds, the rights and remedies of the Holders of the Bonds, and the rights, duties and obligations of the Authority, the Trustee and the Town under the terms of the Town s Replenishment Agreement, as such term is hereinafter defined, of the timely payment of the principal of and interest on the Bonds, all as more fully described herein. Brief descriptions of the Bonds, the Authority, the Town and the provisions of the Resolution appear in this Official Statement. The summaries of and references to all documents, statutes, reports, and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by reference to each document, statute, report or instrument. A brief description of the Town is attached to this Official Statement as Appendix A. Said description of the Town has been furnished by the Town, and neither the Authority nor any Underwriter has confirmed the accuracy or completeness of information relating to the Town and the Authority and the Underwriters disclaim any responsibility for the accuracy or completeness thereof. Words and terms used herein which are not otherwise defined herein shall have the meanings assigned to such terms in the Resolution. THE AUTHORITY HAS NO POWER TO LEVY OR COLLECT TAXES, AND THE BONDS ARE NOT AND SHALL NOT BE DEEMED TO CREATE A DEBT OR LIABILITY OF THE STATE OF NEW JERSEY OR OF ANY POLITICAL SUBDIVISION OTHER THAN THE AUTHORITY (PAYABLE FROM THE AUTHORITY S NET REVENUES), AND THE TOWN (TO THE EXTENT PROVIDED IN THE REPLENISHMENT AGREEMENT) AND DO NOT AND SHALL NOT CREATE OR CONSTITUTE ANY INDEBTEDNESS, LIABILITY OR OBLIGATION OF THE STATE OF NEW JERSEY, OR OF ANY POLITICAL SUBDIVISION OTHER THAN THE AUTHORITY (PAYABLE FROM THE AUTHORITY S NET REVENUES), AND THE TOWN (TO THE EXTENT PROVIDED IN THE REPLENISHMENT AGREEMENT), EITHER LEGAL, MORAL OR OTHERWISE. THE ACT PROVIDES THAT NEITHER THE MEMBERS OF THE AUTHORITY NOR ANY PERSON EXECUTING BONDS OF THE AUTHORITY SHALL BE LIABLE PERSONALLY ON SUCH BONDS BY REASON OF THE ISSUANCE THEREOF. -1-

8 AUTHORIZATION FOR THE BONDS The Bonds are authorized pursuant to the Parking Authority Law, constituting Chapter 198 of the Pamphlet Laws of 1948, of the State of New Jersey, as amended and supplemented (the Act ) and a resolution of the Authority entitled Resolution Authorizing Guaranteed Parking Revenue Bonds Series 1997 and other Obligations, adopted on May 16, 1997 (the Original Resolution ) as amended and supplemented on May 28, 1998, May 9, 2002, January 13, 2004, June 27, 2007, and August 16, 2011 (the Supplemental Resolutions ) (the Original Resolution and Supplemental Resolutions are hereinafter collectively referred to as the Resolution ). In accordance with the Local Authorities Fiscal Control Law, constituting Chapter 313 of the Pamphlet Laws of 1983 of the State of New Jersey, the Local Finance Board, Division of Local Government Services of the Department of Community Affairs of the State of New Jersey (the Local Finance Board ), has reviewed the issuance of the Bonds, and the refinancing of the Series 2002 and Series 2004 Bonds as described herein, and, by resolution dated October 13, 2010, made favorable findings and recommendations with regard thereto. PURPOSE OF THE ISSUE The Bonds, together with other available funds, are being used for: (1) currently refunding the Authority s outstanding Guaranteed Parking Revenue Bonds - Series 2002 (the 2002 Bonds ) (see PLAN OF FINANCE The 2002 Refunding ); (2) currently refunding the Authority s outstanding Guaranteed Parking Revenue Bonds - Series 2004 (the 2004 Bonds ) (see PLAN OF FINANCE The 2004 Refunding ); (3) funding a Debt Service Reserve Fund; and (4) paying the costs and expenses incurred in connection with the issuance and delivery of the Bonds. The 2002 Refunding PLAN OF FINANCE The 2002 Refunding consists of the current refunding of the entire $1,360,000 outstanding aggregate principal amount of the Authority s 2002 Bonds, maturing on February 1, 2012 through and including February 1, 2015 (the 2002 Refunded Bonds ). Upon issuance of the Bonds, a portion of the proceeds of the Bonds will be irrevocably deposited with the Trustee, acting as escrow agent for the Authority s 2002 Bonds under an Escrow Agreement (the Escrow Agreement ). The amount deposited will be held in trust for the holders of the Refunded 2002 Bonds who will thereafter have an express and irrevocable lien thereon, such monies sufficient to pay the principal and interest on the 2002 Refunded Bonds to and including September 19, 2011, and to redeem by optional redemption on September 19, 2011, at a redemption price of 100%, all of the 2002 Refunded Bonds then outstanding. Upon such deposit, the 2002 Refunded Bonds shall no longer be outstanding and shall no longer be secured by the pledge of the Resolution. The 2004 Refunding The 2004 Refunding consists of the current refunding of the entire $9,250,000 outstanding aggregate principal amount of the Authority s 2004 Bonds, maturing on August 1, 2012 through and including August 1, 2025 (the 2004 Refunded Bonds ). Upon issuance of the Bonds, a portion of the proceeds of the Bonds will be irrevocably deposited with the Trustee, acting as escrow agent for the Authority s 2004 Bonds under the Escrow Agreement. The amount deposited will be held in trust for the holders of the Refunded 2004 Bonds who will thereafter have an express and irrevocable lien thereon, such monies sufficient to pay the principal and interest on the 2004 Refunded Bonds to and including September 19, 2011, and to redeem by optional redemption on September 19, 2011, at a redemption price of 100%, all of the 2004 Refunded Bonds then outstanding. Upon such deposit, the 2004 Refunded Bonds shall no longer be outstanding and shall no longer be secured by the pledge of the Resolution. -2-

9 THE BONDS Description of the Bonds The Bonds shall be dated and bear interest from the date of delivery and shall mature on August 1, in the years and amounts and bear interest at the rates set forth on the inside cover page of this Official Statement. The Bonds shall be issued in fully registered form. The Bonds, when issued, will be registered in the name of CEDE & CO., as nominee of DTC. Purchases of beneficial interest in the Bonds will be made in book-entry form in the denomination of $5,000 each or any integral multiple thereof. Purchasers will not receive physical delivery of the Bonds, See Book-Entry Only System below. Payment of Principal and Interest The principal of the Bonds shall be paid on the respective maturity dates upon presentation and surrender of the Bonds at the principal corporate trust office of The Bank of New York Mellon, Woodland Park, New Jersey (the Bond Registrar and Paying Agent ) except as set forth under Book-Entry Only System herein. Interest on the Bonds shall be payable by check or draft mailed or delivered initially on February 1, 2012 and semiannually thereafter on August 1 and February 1 in each year until maturity or earlier redemption to the registered Owners of the Bonds as of each next preceding January 15 and July 15 (the Record Dates ) at their addresses as shown on the registration books of the Authority kept for that purpose at the principal corporate office of the Bond Registrar. The Bonds are subject to redemption prior to maturity as described herein. Interest on any Bond that is payable, but is not punctually paid or provided for, on any Interest Payment Date (hereafter, Defaulted Interest ) will immediately cease to be payable to the registered Owner as of the Record Date, and such Defaulted Interest shall be paid to the Owner in whose name the Bond is registered at the close of business on a special record date (a Special Record Date ) for the payment of such Defaulted Interest. Such Special Record Date shall be established by notice mailed by the Paying Agent not less than fifteen (15) days preceding the Special Payment Date to the persons in whose names such Bonds are registered as of the close of business on the Special Record Date preceding the Special Payment Date. Transfer, Exchange and Registration of Bonds Bonds are transferable upon the registration books maintained by the Bond Registrar, by the registered Owner thereof in person or by his duly authorized attorney, upon surrender thereof together with a written instrument of transfer duly executed by the registered Owner thereof or his duly authorized attorney, and upon such surrender, the Authority shall issue in the name of transferee or transferees a new fully registered Bond of the same aggregate principal amount and series, designation, maturity date and interest rate as the surrendered Bond, as provided in the Resolution. The Authority and the Bond Registrar may treat and consider the person in whose name a Bond is registered as the absolute Owner thereof for the purpose of receiving payment of the principal or redemption price thereof and interest due thereon and for all other purposes whatsoever. The Authority and the Bond Registrar shall not be required (i) to exchange or transfer any Bonds during a period beginning on the fifteenth day next preceding any date of mailing of notice of Bonds to be redeemed and ending on the date of such mailing; or (ii) exchange or transfer any Bonds which have been selected or called for redemption in whole or part. Bonds, at the option of the registered Owner thereof, may be exchanged for an aggregate principal amount of a Bond of the same series, designation, maturity and interest rate of any authorized -3-

10 denomination, as provided in the Resolution. When any Bond is mutilated, destroyed, lost or stolen, the Authority, in its discretion, may issue and the Paying Agent shall authenticate a new Bond of like date, tenor, amount, maturity, and series in accordance with provisions therefor in the Resolution. BOOK-ENTRY ONLY SYSTEM The Depository Trust Company ( DTC ) will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond will be issued for each maturity of the Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE BONDHOLDERS, BONDOWNERS OR REGISTERED OWNERS OF THE BONDS SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS. 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 the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates 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, is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has Standard & Poor s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, 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 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 Bonds is discontinued. To facilitate subsequent transfers, all 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 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the -4-

11 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 Bonds may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to the security documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners, in the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar 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 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 any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds and principal and interest payments on the 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 Issuer or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as if the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Paying Agent, or Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Authority or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility for the accuracy thereof. Disclaimer of Liability for Failures of DTC The Authority, Financial Consultant, and the Underwriters cannot and do not give any assurances that DTC, the Direct and Indirect Participants or others will distribute payments of principal, interest or premium with respect to the Bonds paid to DTC or its nominee as the owner of Bonds, or will distribute -5-

12 any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. The Authority and the Underwriters are not responsible or liable for the failure of DTC or any Participant to make any payment or give any notice to a Beneficial Owner with respect to the Bonds, or any error or delay relating thereto. So long as Cede & Co. is the registered owner of the bonds, as nominee of DTC, references herein to the bondholders or registered owners of the bonds (other than under the caption Tax Matters ) shall mean Cede & Co. and shall not mean the beneficial owners of the bonds. Payments made by the paying agent to DTC or its nominee shall satisfy the Authority s obligations with respect to the Bonds to the extent of such payments. Optional Redemption REDEMPTION PROVISIONS Bonds maturing on August 1, 2022 and thereafter, are subject to redemption prior to maturity, at the option of the Authority, as a whole or in part, at any time, in any order of maturity as the Authority shall direct and within a maturity by lot, as selected by the Trustee, on August 1, 2021 or on any date thereafter. Any such redemption shall be at a redemption price equal to 100% of the principal amount thereof, together with accrued interest to the date fixed for redemption. In the event any Bonds are in a denomination greater than $5,000, a portion of such Bonds may be redeemed, but portions of Bonds shall be redeemed only in the principal amount of $5,000 or any whole multiple thereof. Manner of Redemption If a Bond is of a denomination larger than $5,000, a portion of such Bond may be redeemed. For the purposes of redemption, a Bond shall be treated as representing that number of Bonds which is obtained by dividing the principal amount thereof by $5,000, each $5,000 portion of such Bond being subject to redemption. In the case of partial redemption of a Bond, payment of the redemption price shall be only upon surrender of such Bond in exchange for Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion of the principal amount thereof. Notice of Redemption In the event that the Trustee is required or authorized, or has received notice from the Authority of its election to redeem Bonds, the Trustee will, in accordance with the terms of the Resolution, give notice, in the name of the Authority, of the redemption of such Bonds. Such notice shall set forth the information required by the terms of the Resolution and shall be given by mailing a copy of such notice, postage prepaid, not more than sixty (60) and not less than thirty (30) days prior to the date fixed for redemption, to the Registered Owner of any of the Bonds to be redeemed, at his last address appearing upon the registration books of the Authority which are kept and maintained by the Registrar but 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 (See APPENDIX E SUMMARY OF LEGAL DOCUMENTS herein). General SECURITY FOR THE BONDS The Bonds are direct obligations of the Authority and the payment of the principal of, and interest on the Bonds are payable from and secured by the pledge of and lien on Net Revenues as defined in the Resolution. Under the Resolution, the Authority has pledged the Net Revenues, and all moneys, investment income, securities and funds established and created by the Resolution, and held by the -6-

13 Trustee, to secure the payment of the principal of, and interest on the Bonds, issued under and pursuant to the Resolution. Such pledge is, however, in accordance with the provisions of the Resolution, subject to the right of the Authority to withdraw amounts from the Revenue Fund for the payment of Operating and Maintenance Expenses and from the General Reserve and Replacement Fund for other lawful purposes of the Authority. (See APPENDIX E SUMMARY OF LEGAL DOCUMENTS herein.) The Authority has no power to levy or collect taxes, and the Bonds are not and shall not be deemed to create a debt or liability of the State of New Jersey or of any political subdivision other than the Authority (payable from the Authority s Net Revenues), and the Town (to the extent provided in the Replenishment Agreement as defined herein) and do not and shall not create or constitute any indebtedness, liability or obligation of the State of New Jersey, or of any political subdivision (other than the Authority (payable from the Authority s Net Revenues), and the Town (to the extent provided in the Replenishment Agreement), either legal, moral or otherwise. The Act provides that neither the members of the Authority nor any person executing bonds of the Authority shall be liable personally on such bonds by reason of the issuance thereof. The provisions of the Bonds and the Resolution are deemed to be and do constitute contracts by and among the Authority, the Trustee and the Holders, from time to time, of the Bonds, and the pledge made in the Resolution and the covenants and agreements set forth in the Resolution to be performed on behalf of the Authority shall be for the equal benefit, protection and security of the Holders of any and all Bonds, all of which, regardless of the time or times of their issue or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or pursuant to the Resolution. Rate Covenant Under the Resolution, the Authority has covenanted to fix, impose, charge and collect tolls, fares, fees and other charges in accordance with the Act. The Authority must estimate, compute, make, charge and collect such rents, rates, fees and other charges pursuant to the Act, so the Net Revenues for each Fiscal Year are at least equal to 110% of the annual Debt Service Requirements. Debt Service Requirements with reference to a specified period shall equal the sum of: (i) (ii) With respect to any Bonds (a) interests accruing on such Bonds during the period, (b) the principal amount of Bonds or sinking fund installment or other principal portion next maturing or becoming due by virtue of mandatory redemption and (c) any sum required to be deposited into the Debt Service Reserve Fund; and With respect of any other long-term obligation of the Authority (a) interest accruing on such obligations during the period, (b) amounts required to be paid during the period with respect to the principal or sinking fund requirements on such obligations (c) all lease rental payments on obligations which evidence the acquisition of capital assets, and (d) any sum required to be paid pursuant to the Replenishment Agreement (as defined below) or any other guaranty agreement. Under terms of the Replenishment Agreement (as defined below), the Town has agreed to take whatever actions it may take under law to assist the Authority with rate increases as necessary to meet the rate covenant as described in the Resolution. Debt Service Reserve Fund The Debt Service Reserve Fund is established under the Resolution with the Trustee, and upon issuance of the Bonds an amount equal to the maximum annual Debt Service Reserve Requirements (as defined in the Resolution) on the 2007 Bonds and 2011 Bonds, and any Additional Bonds will be deposited therein. Moneys in the Debt Service Reserve Fund shall be used to make up certain deficiencies, -7-

14 if any, in the Debt Service Fund (including the sinking fund account) established under the Resolution for payment of principal and interest on the Bonds. The Replenishment Agreement The Town, the Trustee and the Authority entered into a Replenishment Agreement as of June 1, 1997 which was supplemented by a supplement to the Replenishment Agreement dated June 1, 1998, May 28, 2002, February 26, 2004, July 1, 2007 and September 15, 2011 (as supplemented, the Replenishment Agreement ). Pursuant to the Replenishment Agreement, the Town, covenants for the equal protection and benefit of all Holders of the Bonds, for so long as any principal or interest is due to be paid pursuant to the Resolution with respect to the Bonds that following an application by the Trustee of the monies in the Debt Service Reserve Fund to make up a deficiency in the Debt Service Fund pursuant to the Resolution, the Town will, upon demand, make full and prompt payment to the Trustee of all funds necessary to fully fund the Debt Service Reserve Fund up to the Debt Service Reserve Fund Requirement as such term is defined in the Resolution. Under the Replenishment Agreement the Town is required to take such actions as necessary to assure that the amounts required to meet the Debt Service Reserve Fund Requirement will be available on the Bond Payment Date. Such actions may include, but not be limited to, the adoption of an emergency appropriation, the levy of ad valorem taxes upon all taxable real property located within the Town, without limitation as to rate or amount, or any other actions that are legally permitted to be taken to meet the requirement of the Replenishment Agreement. The Town s obligations under the Replenishment Agreement are absolute and unconditional, payable, unless otherwise paid, from the unlimited ad valorem taxing power of the Town. Parity Obligation with the 2007 Bonds The Authority issued its 2007 Bonds for the purpose of designing and constructing a 781 space parking facility and attached 33,815 square foot office building (the Office Building, and together with this parking facility and the Authority s other parking facilities, the Authority Parking Facilities ) funding a Debt Service Reserve Fund, capitalizing interest and paying the costs and expenses incurred in connection with the issuance and delivery of such Bonds. There are currently $26,380,000 principal amount of 2007 Bonds outstanding. The Bonds are secured on a parity with the 2007 Bonds with the Net Revenues of the Authority and in all funds on deposit with the Trustee. The 2007 Bonds were insured by a policy of insurance issued by MBIA Insurance Corporation. -8-

15 SOURCES AND USES OF FUNDS The following sets forth the sources and uses of funds: Sources of Funds: Par Amount of Bonds... $ 9,890, Original Issue Premium , Transfers from Prior Issue Debt Service Funds , Transfers from 2002 and 2004 Bonds Debt Service Reserve Fund... 1,003, Excess Debt Service Reserve Fund to Escrow Fund , Total Sources of Funds... $ 11,919, Uses of Funds: Deposit to Escrow Fund... $ 10,666, Original Issue Discount... 55, Deposit to Debt Service Reserve Fund... 1,003, Costs of Issuance (1) , Total Uses of Funds... $ 11,919, (1) Includes rating fees, legal fees, underwriters discount, trustee fees, redemption fees, escrow agent fees, auditors fees, financial consultant fees, verification fee, preparation and printing of preliminary and official statements, miscellaneous expenses and rounding. [Intentionally Left Blank] -9-

16 DEBT SERVICE SCHEDULE $9,890,000 PARKING AUTHORITY OF THE TOWN OF MORRISTOWN In the County of Morris, New Jersey Guaranteed Parking Revenue Bonds - Series 2011 Date Principal Interest Rate Interest Total Principal and Interest Fiscal Year Debt Service (Year Ending 12/31) 2/1/2012 $128, $128, /1/2012 $315, % 169, , $612, /1/ , , /1/ , , , , /1/ , , /1/ , , , , /1/ , , /1/ , , , , /1/ , , /1/ , , , ,001, /1/ , , /1/ , , , ,005, /1/ , , /1/ , , , ,003, /1/ , , /1/ , , , ,003, /1/ , , /1/ , , , ,001, /1/ , , /1/ , , , ,004, /1/ , , /1/ , , , ,003, /1/ , , /1/ , , , ,000, /1/ , , /1/ , , , ,004, /1/ , , /1/ , , , ,000, Totals $9,890,000 $2,964, $12,854, $12,854,

17 TOTAL COMBINED LONG-TERM DEBT SERVICE PARKING AUTHORITY OF THE TOWN OF MORRISTOWN In the County of Morris, New Jersey Guaranteed Parking Revenue Bonds Fiscal Year Ending 12/ Bonds 2011 Bonds Total Debt Service 2012 $ 1,467, $ 612, $ 2,079, ,468, , ,082, ,473, , ,084, ,467, , ,454, ,454, ,001, ,456, ,446, ,005, ,452, ,448, ,003, ,452, ,449, ,003, ,452, ,452, ,001, ,454, ,449, ,004, ,453, ,450, ,003, ,454, ,455, ,000, ,456, ,450, ,004, ,454, ,454, ,000, ,455, ,467, ,467, ,463, ,463, ,467, ,467, ,465, ,465, ,464, ,464, ,464, ,464, ,465, ,465, ,466, ,466, ,462, ,462, ,464, ,464, ,462, ,462, ,466, ,466, Total $ 49,969, $ 12,854, $ 62,824, ADDITIONAL BONDS The Authority may issue, from time to time, Additional Bonds, on parity with the Bonds, for the purpose of paying costs of acquisition, construction or completion of new or existing parking facilities, including, in each case, reimbursement of expenditures made by it or paying any indebtedness incurred by it for such purpose; and the Trustee shall authenticate and shall deliver such Additional Bonds, but only upon receipt, as applicable under the circumstances, of certain items as set forth in the Resolution. Unless the Town has so approved, such Additional Bonds will not have a parity interest in the Debt Service Reserve Fund, nor will the Holders of any such Additional Bonds benefit from the agreement of the Town under the Replenishment Agreement. -11-

18 THE AUTHORITY The Authority was created by ordinance of the Town, finally adopted by the Mayor and Board of Alderman thereof on February 14, 1956, pursuant to Chapter 198, P.L. 1948, (Revised Statutes 40:11A-1 et seq.). The Authority exists as a public body corporate and politic constituting a political subdivision of the State of New Jersey. Purpose of the Authority Under the Act, the Authority is authorized and empowered, among other things: to construct, maintain, repair and operate parking projects; to issue its revenue bonds; to fix, alter, charge and collect rents, rates and fees for use of parking projects; to sue and be sued; to borrow money; to invest its funds; and to sell, transfer and dispose of any of its property. The Authority also has the right to acquire real property by the exercise of the power of eminent domain, subject to the consent of the governing body of the Town. The Authority may include in any parking project, and provide and lease as lessor, structures, buildings, space or accommodations for any business, commercial or other use, if in the opinion of the Authority, such inclusion is economically beneficial. Management The Authority is restricted to function within the geographical limits of the Town. The Authority is governed by a board consisting of five (5) members, each of whom is appointed by the governing body of the Town for a term of five (5) years. Upon the expiration of a member s term, such member continues to serve until a successor has been appointed by the Town and has been qualified. The current members of the Authority and the respective dates of expiration of their terms are set forth below: Margret Brady Chairperson December 31, 2011 Christopher Leon Garibian Vice Chairperson December 31, 2012 Anthony Lucia Treasurer December 31, 2013 Michael R. Elms Secretary December 31, 2014 James Gervasio Assistant Secretary/Treasurer December 31, 2015 The day-to-day activities of the Authority are managed by George Fiore, the Executive Director of the Authority. Personnel Presently, seventeen (17) full-time and four (4) part-time employees carry out the daily operations of the Authority. The Authority s Fiscal Year is for the twelve-month period ending December 31 in each year or for such other twelve-month period as may be determined by a Resolution of the Authority. The Authority s administrative office is located at 14 Maple Avenue, Morristown, New Jersey. For pension obligations, funded and unfunded. See APPENDIX B - REPORT ON EXAMINA- TION OF FINANCIAL STATEMENTS FOR THE AUTHORITY FOR THE YEAR ENDED DECEMBER 31,

19 Facilities and Enforcement Total Parking Spaces As of June, 2011 the total parking supply administered by the Authority amounted to 3,579 parking spaces, broken down as follows: Curb Parking Meters 831 Spaces located in 10 regular parking lots 707 Spaces (metered) located on-street 495 Spaces in the Ann-Bank garage 696 Spaces in the John L. Dalton garage 59 Vail Mansion Deck 791 Spaces in De Hart Street Garage 3,579 TOTAL PARKING SPACES The current total of 707 on-street meters includes: (10) 30 minute limit meters; (3) 60 minute limit meters; (405) 90 minute limit meters; (275) 2 hour limit meters; (7) 3 hour limit meters; and (7) 12 hour limit meters. Curb parking meter fees, effective May 12, 1998 and currently effective are as follows: - basic fee: $0.10 per 12 minutes (dimes); $0.25 per 30 minutes (quarters) The on-street meters are typically in force from 8:00 am to 8:00 pm Monday through Saturday. There is no charge for parking on Sundays, New Years Day, Memorial Day, Independence Day, Thanksgiving Day and Christmas Day. Parking Lots The Authority administers 10 parking lots ranging in size from 8 spaces to 270 spaces. The operation of each lot is determined by the type of parking demand in the vicinity of each lot. A breakdown of the operation of the 10 Authority lots is as follows: Type of Operation #Lots #Spaces % of Total Monthly Parking Only % Pay Station/Meters/Monthly Mix Pay Station/Monthly Parking Mix Parking Meters/Monthly Parking Mix Parking Meters Only Pay Station (Pay by Space) Only TOTALS % While the Authority does own most of its parking lots, some lots are leased, or partially leased from other owners these lots include 13M and a small portion of the Mall Lot. -13-

20 Parking Lot Fees The basic fees in the eight lots controlled by parking meters or pay stations are $0.50 per hour at the 1-hour to 3-hour limit spaces, $0.25 per two hours in the 10-hour and 12-hour limit spaces, and $10.00 to $85.00 per month (where monthly parking is permitted). Daily parking, controlled by pay station and slot box operation, is available in train station lot 3R for $5.00 per day. Monthly parking is also available. The parking fees in the monthly parking only lots are $65.00 per month in the Mall lot, and $40.00 per month ($20.00 student) at Lot 6R. Parking Garages As of June 2011, there are four parking garages, containing a total of 2,041 spaces in the parking system: The Ann-Bank Garage (formerly Lot 12L) contains 621 spaces and was built by the Authority in In 1993, the Authority sold a 126-space portion of the Ann-Bank Garage to Morris County, reducing the Authority administered capacity of that facility to 495 spaces. In 2004, the Authority sold a 40% interest in the 495 space supply (the equivalent of 198 spaces) to Morris County. The 40% interest is conveyed to the County in the form of 198 permanently owned scan cards. However, the Authority still administers the full 495 space parking supply. The Authority continues to derive revenues from this facility on a shared parking basis when spaces are not otherwise occupied by County parkers; The John L. Dalton Garage (formerly Lot 2B) contains 696 spaces and was opened in June, With the opening of the John L. Dalton Garage, the parking system became primarily composed of parking garage spaces 42.6% of the parking supply was located in one of the three parking structures. The DeHart Street Garage (formerly Deck 1A) contains 791 parking spaces and was opened in October This garage is completely automated and no cash is accepted in exiting lanes. Transactions are handled either: 1) at pay on foot stations that accept cash and credit cards, or 2) in the exit lane using a credit card. Because it is Morristown s first unmanned garage, the Authority has stationed an attendant in a cashier booth located near the exit lanes to assist customers who are unfamiliar with the new revenue control systems. The one level Vail Mansion Deck (formerly Lot 9I) is accessed from South Street and contains 59 spaces. It was opened in 2008 and accepts monthly parking, hourly parking and event parking (the deck is adjacent to the Community Theatre). The deck is controlled with hang tags for monthly permit parking and with two electronic pay-on-foot stations for hourly and event parking transactions. The following is a schedule of the operations of Parking Garages: -14-

21 Facility Vail Mansion Deck De Hart Street Garage Dalton Garage Ann Bank Garage Capacity Handicap Spaces Year Opened 59 spaces spaces Spaces Spaces Type of Operation Permits & Pay Stations Permits & Pay Stations Cashier; Pay Stations & Permits Cashier & Permits Fees/Usage (59) permit spaces; $5 flat fee on event nights; $0.50 per hour on non-event nights 0 to 30 min = $1.00; 30 min to 1 hr - $l.50; each additional ½ hr up to 3 hrs - $.75; 3 to 4 hours =$6.50; each add l hr up to 9 hrs. =$2; 9 to 10 hrs =$19; each add l hr up to 24 hr =$2.50; $5 flat fee on event nights; $2 flat fee on Thurs, Fri & Sat after 7 PM 0 to 30 min = $1.00; 30 min to 1 hr = $1.50; each additional ½ hr up to 3 hrs = $0.75; 3 to 4 hrs = $6.50; each add l hr up to 9 hrs = $2; 9 to 10 hrs = $19; each add l hr up to 24 hrs = $ to 30 min = $1.00; 30 min to 1 hr = $1.50; each additional ½ hr up to 3 hrs = $.75; 3 to 4 hrs = $6.50; each add l hr up to 9 hrs = $2; 9 to 10 hrs = $19; each add l hr up to 24 hrs = $2.50 Monthly (permit fees) $75.00 $70.00 $ $75.00 Authority Office Building The Authority moved its offices from 10 Pine Street to a new LEED certified, four story office building (14 Maple Avenue) located adjacent to the De Hart Street garage in December The new office building was developed and is owned by the Authority. Other occupants of the building include notfor-profit entities such as the Geraldine R. Dodge Foundation and The Seeing Eye. As part of a three way agreement between the Authority and two other entities, the Authority sold the 10 Pine Street office building but will remain its property manager. Parking Fines and Enforcement The fine for Overtime Parking was increased from $22.00 to $25.00 on October 15, 2004 by the governing body of the Town. The fines for other parking violations are listed below. Violation Fine Over Extension $37.00 Prohibited Parking $47.00 Unlawful use of a Handicap Space $ (State mandated minimum fine) The Authority receives none of the revenue from parking fines this income is routed to the Town accounts with certain payments also made to the State. At the request of the Town, the Authority assumed responsibility for the enforcement of the Residential Parking Program in Town effective November 1, To date, the program has been -15-

22 successful and is intended to enhance the ambiance of residential neighborhoods. The Authority receives none of the revenue from parking fines. This income is routed to the Town accounts. The Authority meter enforcement officers patrol the Authority s on-street parking meters and the Authority off-street facilities equipped with meters or regulated by monthly parking permits. The summary below presents Authority enforcement and on-street meter revenue levels over the past five years: Total No. of On-Street Year Tickets Issued Meter Revenue ,964 $516, , , , , , , , ,192 AUTHORITY FINANCIAL HISTORY The Authority has never defaulted on the payment of interest or principal of any debt obligation or, at any time issued any refunding obligations in order to avoid a default on an existing obligation. The Authority has never borrowed money for the purpose of paying its operating expenses. PLEDGE OF THE STATE NOT TO LIMIT POWERS OF AUTHORITY OR RIGHTS OF BONDHOLDERS The Act sets forth the pledge and agreement that the State will not limit or alter the rights vested by the Act in the Authority or in the holders of obligations of the Authority until such obligations are fully met and discharged. MUNICIPAL BANKRUPTCY The undertakings of the Authority and the Town should be considered with reference to Chapter 9 of the Bankruptcy Act, 11 United States Code Section 901, et seq., as amended by Public Law , approved April 8, 1976, and as further amended on November 6, 1978 by the Bankruptcy Reform Act of 1978, effective October 1, 1979, and as further amended effective October 17, 2005 by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, and as further amended from time to time, and other bankruptcy laws affecting creditor s rights and municipalities in general. The amendments of P.L replace former Chapter 9 and permit a State political subdivision, public agency, or instrumentality that is insolvent or unable to meet its debts to file a petition in a court of bankruptcy for the purpose of effecting a plan to adjust its debts; directs such a petitioner to file with the court a list of petitioner s creditors; provides that a petition filed under this chapter shall operate as a stay of the commencement or continuation of the judicial or other proceeding against the petitioner; grants priority to debts owed for services of materials actually provided within three months of the filing of the petition; directs a petitioner to file a plan for the adjustment of its debts; and provides that the plan must be accepted in writing by or on behalf of creditors holding at least two-thirds in amount and more than one-half in number of the listed creditors. The 1976 Amendments were incorporated into the Bankruptcy Reform Act of 1978 with only minor changes. Reference should also be made to N.J.S.A. 52:27-40 et seq., which provides that a political subdivision has the power to file a petition in bankruptcy provided the approval of the Municipal Finance Commission has been obtained. The powers of the Municipal Finance Commission have been vested in -16-

23 the Local Finance Board. The Bankruptcy Act specifically provides that Chapter 9 does not limit or impair the power of a state to control, by legislation or otherwise, the procedures that a political subdivision must follow in order to take advantage of the provisions of the Bankruptcy Act. LITIGATION No litigation of any nature is now pending in any court restraining or enjoining the authorization, issuance or delivery of the Bonds or in any manner questioning the Authority or proceedings for the authorization or issuance of the Bonds or the Replenishment Agreement, or in any way their validity, or questioning, contesting, or in any way affecting the creation, organization, corporate existence or powers of the Authority, or the title of any of the present officers thereof to their respective titles. There is no litigation presently pending or to the knowledge of the Authority threatened against the Authority, including the litigation referred to above, that would materially adversely affect the financial condition of the Authority. BONDHOLDERS' RISKS Certain risks are inherent in the successful operation of facilities such as the Authority Parking Facilities. Such risks should be considered in evaluating the Authority's ability to generate sufficient revenues to pay principal of, premium, if any, and interest on the Bonds when due. This section discusses some of risks but is not intended to be a comprehensive listing of all risks associated with the operation of the Parking Authority Facility or the payment of the Bonds. Limited Resources of the Authority The Authority is entirely dependent upon the successful operation of the Authority Parking Facilities to meet its debt service obligations with respect to the Bonds and its other obligations under the Resolution. The Authority does not have any sources of funds other than the Net Revenues that may be provided by the operation of its parking facilities (as provided under the Resolution). The Authority has no taxing power. Continuing Legal Requirements Regarding the Bonds In the event that the Authority fails to comply with the requirements of the Code, interest on the Bonds may become subject to federal income taxation retroactively to the date of issuance of the Bonds. See TAX MATTERS herein. Other General Real Estate Risks There are many diverse risks involved in any investment in real estate, many of which are not within the Authority s control, which may have a substantial effect on the ability of the Authority to generate revenues from the operation of the Authority Parking Facilities sufficient to pay debt service on the Bonds. Such risks include possible adverse use of adjoining land, fires or other casualty, condemnation, increased taxes, changes in demand for such facilities, decline in the neighborhood in which the Authority Parking Facilities or the Authority s other parking facilities are located and general economic conditions. Other Possible Risk Factors The occurrence of any of the following events, or other unanticipated events, could adversely affect the operations of the Authority Parking Facilities: -17-

24 (i) Inability to control increases in operating costs, including salaries, wages and fringe benefits, supplies and other expenses, without being able to obtain corresponding increase in revenues; (ii) Unionization, employee strikes and other adverse labor actions which could result in a substantial increase in expenditures without a corresponding increase in revenues; or (iii) Adoption of federal, state or local legislation or regulations having an adverse effect on the future operating or financial performance of the Authority Parking Facilities. LEGALITY FOR INVESTMENT The Act provides that the State and all public officers, municipal corporations, political subdivisions, and public bodies, all banks, bankers, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations and other persons carrying on an insurance business and all executors, administrators, guardians, trustees, and other fiduciaries may legally invest any sinking funds, moneys or other funds belonging to them or within their control in any bonds or other obligations issued by the Authority, including the Bonds, and such bonds are authorized security for all public deposits. TAX MATTERS Exclusion of Interest on the Bonds from Gross Income for Federal Income Tax Purposes The Code imposes certain requirements which must be met on a continuing basis subsequent to the issuance of the Bonds in order to assure that interest on the Bonds will be excluded from gross income for purposes of Federal income taxation under Section 103 of the Code. Failure of the Authority to comply with such requirements may cause interest on the Bonds to be included in gross income for Federal income tax purposes, retroactive to the date of the issuance of the Bonds. The Authority has covenanted to comply with the provisions of the Code applicable to the Bonds and has covenanted not to take any action or permit any action that would cause the interest on the Bonds to be included in gross income under Section 103 of the Code or cause interest on the Bonds to be treated as an item of tax preference under Section 57 of the Code. Assuming the Authority observes its covenants with respect to continuing compliance with the Code, Gibbons P.C., Bond Counsel to the Authority, is of the opinion that, under existing law, interest on the Bonds is excluded from the gross income of the owners of the Bonds for Federal income tax purposes pursuant to Section 103 of the Code and interest on the Bonds is not an item of tax preference under Section 57 of the Code for purposes of computing the alternative minimum tax. Additional Federal Income Tax Consequences In the case of certain corporate holders of the Bonds, interest on the Bonds will be included in the calculation of the alternative minimum tax as a result of the inclusion of interest on the Bonds in adjusted current earnings of certain corporations. Prospective purchasers of the Bonds should be aware that ownership of, accrual of, receipt of, interest on, or disposition of, tax-exempt obligations, such as the Bonds, may have additional Federal income tax consequences for certain taxpayers, including without limitation, taxpayers eligible for the earned income credit, recipients of certain Social Security and certain Railroad Retirement benefits, taxpayers that may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, financial institutions, property and casualty companies, foreign corporations and certain S corporations. -18-

25 Bond Counsel expresses no opinion regarding any Federal tax consequences other than its opinion with regard to the exclusion of interest on the Bonds from gross income pursuant to Section 103 of the Code and interest on the Bonds not constituting an item of tax preference under Section 57 of the Code. Prospective purchasers of the Bonds should consult their tax advisors with respect to all other tax consequences (including, but not limited to, those listed above) of holding the Bonds. State Taxation Bond Counsel is of the opinion that, under existing law, interest on the Bonds and net gains from the sale of the Bonds are exempt from the tax imposed by the New Jersey Gross Income Tax Act. Miscellaneous Amendments to federal and state tax laws are proposed from time to time and could be enacted, and court decisions and administrative interpretations may be rendered, in the future. There can be no assurance that any such future amendments or actions will not adversely affect the value of the Bonds, the exclusion of interest on the Bonds from gross income, alternative minimum taxable income, state taxable income, or any combination from the date of issuance of the Bonds or any other date, or that such changes will not result in other adverse federal or state tax consequences. THE ABOVE SUMMARY OF POSSIBLE TAX CONSEQUENCES IS NOT EXHAUSTIVE OR COMPLETE. ALL PURCHASERS OF THE BONDS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE POSSIBLE FEDERAL, STATE AND LOCAL INCOME TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS. LEGAL MATTERS All legal matters incident to the authorization, issuance, sale and delivery of the Bonds will be subject to the final approving opinion of Gibbons, P.C., Newark, New Jersey, Bond Counsel to the Authority, whose approving legal opinion will be delivered with the Bonds substantially in the form set forth as Appendix D. Certain legal matters will be passed on for the Authority by its General Counsel, Greenbaum, Rowe, Smith & Davis, LLP, Woodbridge, New Jersey. RATING Standard & Poor s Ratings Services ( S&P ) has assigned its municipal bond rating of AA (stable outlook), to the Bonds Such rating reflects only the views of such organization and any desired explanation of the significance of any such rating should be obtained from the Rating Agency furnishing the same. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance any such rating will continue for any given period of time or that any such rating will not be revised downward or withdrawn entirely by the Rating Agency, if in the judgment of such Rating Agency, circumstances so warrant. Any such downward revision or withdrawal of any such rating may have an adverse effect on the market price of the Bonds. FINANCIAL CONSULTANT The Authority has retained VALCO Capital, Ltd., Ligonier, Pennsylvania as financial consultant (the Financial Consultant ) in connection with the financial terms of the Bonds. The Financial Consultant is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness, or fairness, of the information contained in the Official Statement. The Financial Consultant is an independent consulting firm and is not engaged in the business of underwriting, trading, or distributing municipal securities or other public securities. -19-

26 UNDERWRITING The Bonds are being purchased for reoffering by Boenning & Scattergood Inc., NW Capital Markets, Inc. and PNC Capital Markets LLC, (the Underwriters ). The Underwriters have agreed to purchase the Bonds at an aggregate purchase price of $10,121, (said aggregate purchase price reflecting the par amount of the Bonds plus a net original issue premium of $288,725.45, and less an Underwriting discount of $56,867.50). The purchase contract for the Bonds provides that the Underwriters will purchase all the Bonds, if any are purchased, and that the obligation to make such purchase is subject to certain terms and conditions set forth in the Purchase Contract. The Underwriters may offer and sell certain Bonds to certain dealers and others (including sales for deposit into investment trusts) at prices lower than the public offering price stated on the inside front cover page hereof. The Underwriters may over-allot or effect transactions which stabilize or maintain the market price of the Bonds at levels above those which might otherwise prevail in the open market; such stabilizing, if commenced, may be discontinued at any time without prior notice. CONTINUING DISCLOSURE The Securities and Exchange Commission (the SEC ), pursuant to the Securities Exchange Act of 1934, as amended and supplemented (the Securities Exchange Act ) has adopted amendments to its Rule 15c2-12 ( Rule 15c2-12 ) effective July 3, 1995 which generally prohibits a broker, dealer, or municipal securities dealer ( Participating Underwriter ) from purchasing or selling municipal securities, such as the Bonds, unless the Participating Underwriter has reasonably determined that an issuer of municipal securities or an obligated person has undertaken in a written agreement or contract for the benefit of holders of such securities to provide certain annual financial information and event notices to various information repositories. On August 16, 2011, the Authority adopted a Resolution authorizing and approving the adoption and execution of a Continuing Disclosure Agreement, which was subsequently executed as of September 15, 2011 (the Continuing Disclosure Agreement ), for the benefit of the holders of the Authority s outstanding obligations which are subject to the requirements of Rule 15c2-12, including the Bonds, pursuant to which the Authority has agreed to comply with the disclosure requirements of Rule 15c2-12. On May 9, 1996, the Town entered into a continuing Disclosure Agreement which has been extended to include disclosure on a continuing basis by virtue of its being an obligated person on the Bonds as a result of entering into the Replenishment Agreement. Specifically, the Authority and the Town have each covenanted in their respective Continuing Disclosure Agreements to provide annual financial statements and certain financial information and operating data relating to the Authority or the Town, respectively, by not later than one hundred and eighty (180) days after the end of its fiscal year (which fiscal year currently ends on December 31 of each year) commencing with the fiscal year of the Town ending December 31, 2011 and the fiscal year of the Authority ending December 31, 2011 (the Financial Report ), and to provide notices of the occurrence of certain enumerated events, as set forth in Rule 15c2-12. The financial statements to be provided will be prepared in a manner consistent with the procedures used in connection with the audited financial statements set forth in Appendices B and C hereto. The other financial and operating data for the Authority to be provided in each Financial Report will be consistent with the type of information set forth in this Official Statement under the heading The Authority as contained in the Facilities and Enforcement subheading. The other financial and operating data for the Town to be provided in each Financial Report will be consistent with the type of information set forth in Appendix A under the headings Summary of the Town of Morristown Budgets, Current Fund Balances and Amounts Utilized In Succeeding Year s Budget, Current Tax Collections, Delinquent Taxes and Tax Title Liens, Assessed Valuations of Property Owned by the Town of Morristown Acquired for Taxes, Ten Largest Taxpayers, Assessed Valuations Land Improvements by Class, Assessed Valuations Net Valuation Taxable, Components of -20-

27 Real Estate Tax Rate, Apportionment of Tax Levy, Debt Information on the Town, and Statement of Indebtedness. Holders of the Bonds may bring an action only for specific performance in the event that the Authority or the Town or both fail to meet their obligations under their respective Continuing Disclosure Agreements. Amendments to such Continuing Disclosure Agreements may only be made (i) with the consent of all of the holders of the Bonds, (ii) to comply with any changes to Rule 15c2-12 or (iii) to cure ambiguities or inconsistent provisions, or (iv) to add additional obligations to which the Continuing Disclosure Agreement will apply. Each Financial Report will be filed by the Authority or Town, as applicable, with the Municipal Securities Rulemaking Board (the MSRB ) which The MSRB was designated by the SEC to be the central repository for ongoing disclosures by municipal issuers effective July 1, Disclosure filings and notices are made available to investors through the MSRB s Electronic Municipal Market Access (EMMA) system which is accessible on the internet at emma.msrb.org. Current Compliance The Authority and the Town have each complied with all prior written undertakings under Rule 15c2-12 to provide timely ongoing disclosure of annual financial information and notice of material events affecting its securities. FINANCIAL STATEMENTS OF THE AUTHORITY The financial statements of the Authority of and for the year ended December 31, 2010 included in this official statement have been audited by VM Associates, Inc., Mt. Arlington, New Jersey, independent auditors, as stated in their report appearing in Appendix B. FINANCIAL STATEMENTS OF THE TOWN The financial statements of the Town of Morristown for the year ended December 31, 2010 included in Appendix C have been prepared by McEnerney, Brady & Company, LLC, Livingston, New Jersey, Certified Public Accountants. PREPARATION OF OFFICIAL STATEMENT This Official Statement has been prepared by the Authority from Authority documents and from other sources, including publicly available sources, considered reliable, but the Authority does not make any warranty, guaranty or other representation with respect to the accuracy and completeness of such information. MISCELLANEOUS All of the summaries of the provisions of the Bonds, the Resolution and the Replenishment Agreement, hereinabove set forth are made subject to all of the detailed provisions thereof, to which reference is hereby made for further information, and do not purport to be complete statements of any or all such provisions of such documents. -21-

28 All estimates and assumptions herein have been made on the best information available and are believed to be reliable, but no representations whatsoever are made that such estimates or assumptions are correct or will be realized. So far as any statements herein involve matters of opinion, whether or not expressly so stated, they are intended merely as such and not representations of fact. PARKING AUTHORITY OF THE TOWN OF MORRISTOWN By: /s/ Margret Brady Margret Brady, Chairman Dated: August 16,

29 APPENDIX A DESCRIPTION OF THE TOWN OF MORRISTOWN

30 [ THIS PAGE INTENTIONALLY LEFT BLANK ]

31 GENERAL INFORMATION Size and Geographical Location The Town of Morristown, the County seat of Morris County, encompasses approximately three square miles in the southeastern part of the County. It is located approximately 35 miles west of New York City. Transportation Major transportation arteries of the northeast corridor traverse the Town. These include Interstate Route 287, U.S. Route 202, and New Jersey Route 24, which provide an east/west link from Morristown to the New Jersey Turnpike and the Garden State Parkway. These transportation facilities are connected by a well maintained network of local and county roads. Commuter rail service is available near the Town s central business district. Service is provided to Newark, Hoboken and New York City. In addition to traditional municipal services, the Town operates a municipal airport. A 99 year lease agreement was executed with a private airport operator/developer in FORM OF GOVERNMENT The Town is operated as a Mayor-Council Plan F form of government under the provisions of the Faulkner Act, Chapter 210 of the 1971 laws of New Jersey, as amended. Under this form of government, the governing body consists of an elected mayor, four council members elected by wards and three council members elected at-large. The legislative powers are vested in the Town Council, and the executive power is vested with the Mayor. The Mayor appoints a professionally qualified Business Administrator with the advice and consent of the Council. The day-to-day operations of the Town are the responsibility of the full-time professional staff, coordinated by the Business Administrator. MUNICIPAL SERVICES Police and Fire Protection: The Police Department consists of 50 full time professional officers, including detectives as well as additional employees who serve as auxiliary officers, school crossing guards, and administrative and clerical support. The department operates marked patrol cars, marked specialty vehicles and unmarked vehicles. The Uniform Fire Bureau includes 30 full-time paid professional firefighters which includes the Chief and Captains, 60 volunteer firefighters (40 of which are active) as well as administrative and clerical support staff. The department operates four (4) pumpers, two (2) ladder trucks, two (2) support vehicles, one (1) rescue truck, one (1) ambulance and two (2) fire official vehicles. Water Services: Residents and businesses of the Town obtain their water supply from the Southeast Morris County Municipal Utilities Authority, a regional water authority. The Town has representation on the Authority s Board, which has the responsibility for setting rates. Sanitary Sewer System: The Town operates its own wastewater treatment facility. The facility services Morristown as well as certain portions of several surrounding communities. The Town currently charges sewer users on the basis of water consumption and classification (i.e., residential, commercial, industrial, etc.). The sewer rates are set by ordinance. A-1

32 Solid Waste Disposal: In 2011, the Town entered into a five (5) year contract with Blue Diamond Disposal to provide solid waste and recycling collection services for residential property owners. All of the non-recyclable waste is brought to the Morris County Recycling Transfer Station for final disposition. The Town has implemented an aggressive recycling program, which encourages its residents to reduce the amount of solid waste brought to the transfer station. PENSIONS For pension obligations, funded and unfunded, see APPENDIX C - INDEPENDENT AUDITORS REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 FOR THE TOWN OF MORRISTOWN. EDUCATION The District is a comprehensive (Pre-Kindergarten through Grade 12) regional public school system for students residing in the Township of Morris and the Town. The school district operates one prekindergarten school, six elementary schools for grades kindergarten through five, (this includes one multiage magnet school), one middle school for grades six through eight, and a high school for grades nine through twelve. The school district also operates the Lafayette Learning Center, a separate facility that provides special education services both to residents and students from other school districts. The number of students enrolled in the Morris School District for the past five school years is as follows: School District Enrollment Year Total District , , , , , ,769 Source: New Jersey Department of Education; Morris School District Officials. ECONOMIC AND DEMOGRAPHIC INFORMATION Building Permits Number of Estimated Cost Year Permits of Construction $ 30,807, ,113 27,653, , ,820, , ,955, ,537, ,165 54,136,567 Source: Town of Morristown, Building and Construction Department. A-2

33 Labor Force, Employment and Unemployment For the years 2005 to March 2011, the New Jersey Department of Labor reported the following annual average employment information for the Town of Morristown, the County of Morris and the State of New Jersey: Total Labor Employed Total Force Labor Force Unemployed Town of Morristown 2011 (1) N/A N/A N/A ,448 10, ,626 10, ,673 11, ,547 11, ,539 11, ,341 10, County of Morris 2011 (1) 270, ,600 19, , ,100 21, , ,700 19, , ,200 11, , ,450 8, , ,902 9, , ,239 8,608 State of New Jersey 2011 (1) 4,491,600 4,062, , ,587,050 4,122, , ,536,650 4,118, , ,502,750 4,256, , ,457,650 4,267, , ,518,000 4,309, , ,430,400 4,235, ,500 Source: New Jersey Department of Labor & Workforce Development, Division of Labor Market Demographic Research; Municipal Estimates. (1) As of March, 2011 Population Population trends for the Town, County and the State of New Jersey since 1980 are shown below: Area Town of Morristown 16,614 16,189 18,544 18,411 County of Morris 407, , , ,276 State of New Jersey 7,365,011 7,730,188 8,414,350 8,791,894 Source: U.S. Census Bureau. A-3

34 MUNICIPAL BUDGET Pursuant to the Local Budget Law (N.J.S.A. 40A:4-1 et seq.) the Town is required to have a balanced budget in which debt service is included in full for each fiscal year. The Local Budget Law (N.J.S.A. 40A:4-1 et seq.) The foundation of the New Jersey local finance system is the annual cash basis budget. The Town must adopt an operating budget in the form required by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (the Division ). Items of revenue and appropriation are regulated by law and must be certified by the Director of the Division (the Director ) prior to final adoption of the budget. The Local Budget Law requires each local unit to appropriate sufficient funds for payment of current debt service and the Director is required to review the adequacy of such appropriations, among others, for certification. The Director has no authority over individual operating appropriations, unless a specific amount is required by law, but the review functions focusing on anticipated revenues serve to protect the solvency of all local units. Local budgets, by law and regulation, must be in balance on a cash basis. No budget or amendment thereof shall be adopted unless the director shall have previously certified his approval thereof (N.J.S.A. 40A:4-10). The principal sources of Town revenues are real estate taxes and miscellaneous revenues, including State Aid. In any year, the municipality may authorize, by resolution, the issuance of tax anticipation notes which may be issued in anticipation of the collection of taxes for such year. Tax anticipation notes, are limited in amount by law and must be paid off in full by a municipality within one hundred and twenty (120) days after the close of the fiscal year. Real Estate Taxes The general principle that revenue cannot be anticipated in a budget in excess of that realized in the preceding year applies to delinquent property taxes. N.J.S.A. 40A:4-29 delineates anticipation of delinquent tax collections: The maximum which may be anticipated is the sum produced by the multiplication of the amount of delinquent taxes unpaid and owing to the local unit on the first day of the current fiscal year by the percentage of collection of delinquent taxes for the year immediately preceding the current fiscal year. Section 41 of the Local Budget Law provides with regard to current taxes that: "Receipts from the collection of taxes levied or to be levied in the municipality, or in the case of a county for general county purposes and payable in the fiscal year, shall be anticipated in an amount which is not in excess of the percentage of taxes levied and payable during the next preceding fiscal year which was received in cash by the last day of the preceding fiscal year." The provision requires that an additional amount (the reserve for uncollected taxes ) be added to the tax levy required to balance the budget so that when the percentage of the prior year's tax collection is applied to the combined total, the product will at least be equal to the tax levy required to balance the budget. The reserve requirement is calculated as follows: Levy required to Balance Budget Prior Year's Percentage of Current = Total Taxes to be Levied Tax Collections (or lesser %) Chapter 28 of the Pamphlet Laws of 1997 of New Jersey amended Section 41 of the Local Budget Law to allow municipalities to reduce the reserve for uncollected taxes by taking into account prior year A-4

35 tax reductions resulting from tax appeal judgments awarded to property owners. Another statute, Chapter 99 of the Pamphlet Laws of 1997 of New Jersey, allows a municipality to (1) reduce the reserve for uncollected taxes by deducting receipts anticipated during the fiscal year from the sale of unpaid taxes or municipal liens when such sale is concluded in the final month of the fiscal year or (2) not budget for the reserve for uncollected taxes if it sells its total property tax levy pursuant to such statute. See TAX INFORMATION OF THE TOWN Tax Collection Procedures herein for a brief discussion of Chapter 99. Miscellaneous Revenues Section 26 of the Local Budget Law provides: no miscellaneous revenues from any source shall be included as an anticipated revenue in the budget in an amount in excess of the amount actually realized in cash from the same source during the next preceding fiscal year, unless the Director shall determine upon application by the governing body that the facts clearly warrant the expectation that such excess amount will actually be realized in cash during the fiscal year and shall certify such determination, in writing, to the local unit. No budget or amendment thereof shall be adopted unless the Director shall have previously certified his approval thereof. (N.J.S.A. 40A:4-10). The exception to this is the inclusion of categorical grants-in-aid contracts for their face amount with an offsetting appropriation. The fiscal years for such grants rarely coincide with the municipality's calendar fiscal year. Limitations on Municipal Appropriations and Tax Levy A statute passed in 1976, as amended and supplemented (N.J.S.A. 40A: et seq.), commonly known as the "Cap Law", imposed limitations on increases in municipal appropriations subject to various exceptions. While the Cap Law restricts the ability of a municipality to increase its overall appropriations, the payment of debt service is an exception from this limitation. The Cap formula is somewhat complex, but basically, it permits a municipality to increase its overall appropriations by the lesser of 2.5% or the Cost-of-Living Adjustment ("COLA"). Increases up to 3.5% are allowed by adoption of an ordinance whenever the COLA is less than 2.5%. If the COLA is greater than 2.5%, an increase in any amount above 2.5% will be permitted by adoption of an ordinance to 3.5% and beyond 3.5% upon passage of a referendum. The COLA is the rate of annual percentage increase in the Implicit Price Deflator for State and Local Government purchases of goods and services computed by the U.S. Department of Commerce. Exceptions to the limitations imposed by the Cap Law also exist for other items including capital expenditures; extraordinary expenses approved by the Local Finance Board for implementation of an interlocal services agreement; expenditures mandated as a result of certain emergencies; and certain expenditures for services mandated by law. The Cap Law does not limit the obligation of the Town to levy ad valorem taxes upon all taxable real property within the Town to pay debt service. Additionally, the Legislature of the State of New Jersey has previously enacted P.L. 2007, c.62 (the Property Tax Act ) effective April 3, 2007, which imposed a 4% cap on the tax levy of a municipality, county, fire district or solid waste collection district, with certain exceptions and subject to a number of adjustments. The Property Tax Act has now been amended by the provisions of P.L. 2010, c.44 effective June 13, 2010 (the Amendment ) and applicable to the next budget year following enactment. The Amendment reduces the tax levy cap to 2% from 4%, limits exclusions only to capital expenditures, including debt service, certain increases in pension contributions and accrued liability for pension contributions in excess of 2%, certain healthcare cost increases in excess of 2% and extraordinary costs directly related to a declared emergency. Waivers from the Division of Local Government Services or the Local Finance Board are no longer available under the Amendment. For municipalities, the levy cap is in addition to the existing appropriation cap; both cap laws must be met. Neither cap law limits the obligation of the Town to levy ad valorem taxes upon all taxable real property within the Town to pay debt service. A-5

36 Deferral of Current Expense Emergency appropriations, i.e., those made after the adoption of the budget and determination of the tax rate, may be authorized by the governing body of the municipality. With minor exceptions, however, such appropriations must be included in full in the following year's budget. When such appropriations exceed 3% of the adopted operating budget, consent of the Director must be obtained. The exceptions are certain enumerated quasi-capital projects such as ice, snow and flood damage to streets, roads and bridges, which may be amortized over three years; and tax map preparation, revaluation of real property, codification of ordinances and master plan preparations, which may be amortized over five years. Budget Transfers Budget transfers provide a degree of flexibility and afford a control mechanism. Transfers between major appropriation accounts are prohibited until the last two months of the year and, although sub-accounts within an appropriation are not subject to the same year-end transfer restriction, they are subject to internal review. Fiscal Year The Town's fiscal year is the calendar year. Chapter 75 of the Pamphlet Laws of 1991 of the State (codified as N.J.S.A. 40A:4-3.1) required municipalities with populations in excess of 35,000 or that received Municipal Revitalization Aid from the State in 1990 or 1991 to change their fiscal year from the calendar year to the State fiscal year (July 1 to June 30), unless an exemption was granted. Municipalities not meeting the criteria for a mandatory change had the option to choose to change to the State fiscal year. N.J.S.A. 40A:4-3.1 amended by P.L. 2000, c. 126, to eliminate the criteria for mandatory change of the fiscal year, but to continue to grant all municipalities the option to change to the State fiscal year. The Town did not meet the criteria to change to the State fiscal year and does not presently intend to optionally make such a change in the future. Budget Process Primary responsibility for the Town's budget process lies with the Town Council. As prescribed by the Local Budget Law, adoption should occur by the end of March, however, extensions may be granted by the Division to any local governmental unit. In the first quarter in which the budget formulation is taking place, the Town operates under a temporary budget which may not exceed 26.25% of the previous fiscal year's adopted budget. In addition to the temporary budget, the Town may approve emergency temporary appropriations for any purpose for which appropriations may lawfully be made. A-6

37 SUMMARY OF THE TOWN OF MORRISTOWN BUDGETS CURRENT FUND (As Adopted) Anticipated Revenues Fund Balance $1,923,000 $1,700,000 $ 381,000 $ 1,497,433 $1,500,000 Miscellaneous Revenues 11,699,699 11,574,760 12,663,898 13,601,768 12,666,750 Receipts from Delinquent Taxes 305, ,000 1,100,000 1,400, ,700 Amount to be Raised by Taxes for Support of Municipal Budget 23,595,878 23,373,806 22,622,865 21,621,608 20,670,127 $37,523,577 $37,198,566 $36,767,763 $38,120,809 $35,237,577 Appropriations Salaries and Wages $13,897,380 $14,471,300 $15,814,390 $15,754,328 $15,611,035 Other Expenses 12,875,553 13,449,766 10,889,924 13,087,482 11,569,543 Deferred Charges and Statutory Expenditures 3,729,990 1,872,299 2,707, , ,590 Judgments Capital Improvement Fund 45,000 25,000 5, , ,700 Municipal Debt Service 6,025,000 6,153,000 5,992,000 5,927,000 5,445,100 Transferred to Board of Education 207, , , , ,609 Reserve for Uncollected Taxes 743,000 1,020,000 1,128,000 1,905,000 1,350,000 Source: Town of Morristown Budgets. $37,523,577 $37,198,566 $36,767,763 $38,120,809 $35,237,577 SEWER UTILITY FUND (As Adopted) Anticipated Revenues Fund Balance $ 325,000 $ 300,000 $ 285,000 $ 150,000 $ 100,000 Sewer User Fees 8,077,000 8,182,000 8,242,000 8,258,473 8,262,026 Miscellaneous Revenues 650, , , , ,162 Deficit (General Budget) $9,052,443 $9,139,000 $9,063,800 $8,814,273 $8,627,188 Appropriations Salaries and Wages $ 713,993 $ 718,250 $ 672,980 $ 643,323 $ 623,768 Other Expenses 1,058,650 1,103,750 1,052,420 1,153,150 1,078,120 Deferred Charges and Statutory Expenditures 54,700 55,000 51,000 49,500 48,000 Capital Improvement Fund ,600 78,600 Municipal Debt Service 4,625,100 4,662,000 4,767,400 4,555,700 4,561,700 Surplus (General Budget) 2,600,000 2,600,000 2,520,000 2,387,000 2,237,000 Source: Town of Morristown Budgets. $9,052,443 $9,139,000 $9,063,800 $8,814,273 $8,627,188 A-7

38 CAPITAL BUDGET In accordance with the Local Budget Law, each local unit should adopt and annually revise a multiyear capital program budget. The capital budget, when adopted, does not constitute the approval or appropriation of funds, but sets forth a plan of the possible capital expenditures which the local unit may contemplate over the next six years. The following is a summary of the adopted capital budget for the years 2011 through 2016: Year Amount 2011 $1,577, ,825, ,501, ,065, ,960, ,060,000 $12,988,000 Source: 2011 Municipal Budget of the Town of Morristown. Proposed Sources of Funding Budget Appropriations (Current Year) $20,000 Budget Appropriations (Future Years) 550,000 Capital Improvement Fund 39,000 Bonds and Notes (General) 10,192,000 Bonds and Notes (Self Liquidating) 2,187,000 Source: 2011 Municipal Budget of the Town of Morristown. $12,988,000 A-8

39 CURRENT FUND BALANCES AND AMOUNTS UTILIZED IN SUCCEEDING YEAR S BUDGET Fund Balance Utilized in Budget of Year December 31 Succeeding Year 2010 $2,533,008 $1,923, ,984,055 1,700, ,212, , ,709,810 1,497, ,025,060 1,425, ,924,713 1,437,000 Tax Collection Procedures TAX INFORMATION ON THE TOWN Real property taxes are assessed locally, based upon assessed value. The tax bill includes a levy for Town, County and School purposes. Tax bills are normally mailed annually in June. Taxes are payable in four quarterly installments on February 1, May 1, August 1, and November 1. If unpaid on these dates, the amount due becomes delinquent and subject to interest at 8% per annum, or 18% on any delinquency amount in excess of $1,500. The school levy is turned over to the Board of Education as expenditures are incurred, and the balance, if any, transferred as of June 30, of each fiscal year. County taxes are paid quarterly on February 15, May 15, August 15 and November 15 to the County by the Town. Annually, the properties with unpaid taxes for the previous year are placed in a tax sale in accordance with the New Jersey Statutes. Annual in rem tax foreclosure proceedings are instituted to enforce the tax collection or acquisition of title to the property by the Town. Chapter 99 of the Pamphlet Laws of 1997 of New Jersey allows a municipality to sell its total property tax levy to the highest bidder either by public sale with sealed bids or by public auction. The purchaser shall pay the total property tax levy bid amount in quarterly installments or in one annual installment. Property taxes will continue to be collected by the municipal tax collector and the purchaser will receive as a credit against his payment obligation, the amount of taxes paid to the tax collector. The purchaser is required to secure his payment obligation to the municipality by an irrevocable letter of credit or a surety bond. The purchaser is entitled to receive delinquent taxes and other municipal charges collected by the tax collector. The statute sets forth bidding procedures and minimum bidding terms and requires the review and approval of the sale by the Division of Local Government Services. Tax Appeals The New Jersey Statutes provide a taxpayer with remedial procedures for appealing an assessment deemed excessive. The taxpayer has a right to petition the Morris County Tax Board on or before the first day of April of the current tax year for review. The County Board of Taxation has the authority after a hearing to decrease or reject the appeal petition. These adjustments are usually concluded within the current tax year and reductions are shown as cancelled or remitted taxes for that year. If the taxpayer feels his petition was unsatisfactorily reviewed by the County Board of Taxation, appeal may be made to the State Department of Taxation, Division of Tax Appeal, for a further hearing. State tax appeals tend to take several years prior to settlement and any losses in tax collections from prior years are charged directly to operations or with the permission of the Local Finance Board may be financed, generally, over a three to five year period. A-9

40 CURRENT TAX COLLECTIONS Collection During Year of Levy Year Total Levy Amount Percent 2010 $ 58,425,833 $ 58,107, % ,519,873 55,844, ,143,200 51,572, ,405,388 49,495, ,631,054 48,767, ,670,080 46,776, Source: Town of Morristown, Annual Audit Reports. DELINQUENT TAXES AND TAX TITLE LIENS Tax Title Delinquent Total Percentage of Year Liens Taxes Delinquent Levy 2010 $ 18,146 $ 2,888,850 $ 2,906, % ,189 3,153,965 3,166, ,496,918 3,496, ,624,596 2,624, , , , , , Source: Town of Morristown, Annual Audit Reports. ASSESSED VALUATIONS OF PROPERTY OWNED BY THE TOWN OF MORRISTOWN ACQUIRED FOR TAXES Year Amount 2010 $1,551, ,551, ,551, ,551, ,551, ,700 Source: Town of Morristown, Annual Audit Reports. A-10

41 TEN LARGEST TAXPAYERS The ten largest taxpayers in the Town and their 2010 assessed valuations are listed below: Taxpayer Assessment 2nd Roc Jersey Associates (1) $ 34,216,200 Rosewood Lafayette Commons LLC (1) 31,372,300 Parsons Village 27,300,000 5th Roc Jersey Associates (1) 24,500,000 Kadima Medical Properties LLC 23,900,000 AML-TTG on the Plaza LLC 20,160,800 Memorial Inv. Corp. 19,574,400 RAF2 the Green at Park Place East 18,100, Madison Avenue LLC (1) 17,000,000 Morristown Medical Inv. Ltd. 16,950,000 Total $233,073,700 (1) Assessment appeals pending in New Jersey Tax Court. The ten largest taxpayers represent 10.4% of the total assessed valuation of the Town for Source: Tax Assessor. ASSESSED VALUATIONS LAND IMPROVEMENTS BY CLASS Year Vacant Land Residential Commercial Apartment Industrial Total 2010 $34,308,800 $1,275,219,742 $718,372,300 $211,285,200 $11,445,300 $2,250,641, ,271,200 1,238,444, ,433, ,421,700 11,665,100 2,211,236, ,435,100 1,195,501, ,460, ,921,700 11,665,100 2,257,983, ,989,100 1,194,136, ,006, ,599,100 11,665,100 2,197,397, ,973,400 1,186,237, ,147, ,248,100 11,665,100 2,197,272,042 Source: Tax Duplicate. ASSESSED VALUATIONS NET VALUATION TAXABLE Ratio of Business Net Assessed Value Total True Value Personal Valuation To True Value Of Of Assessed Year Real Property Property Taxable Real Property Property 2010 $2,244,388,942 $13,238,487 $2,257,627, % $3,278,201, ,211,236,142 14,288,651 2,225,524, ,125,968, ,257,983,942 14,717,922 2,272,701, ,001,932, ,197,397,142 16,222,421 2,213,619, ,621,726, ,197,622,042 16,351,394 2,213,973, ,438,048, ,225,308,082 20,247,993 2,245,556, ,221,448,114 Source: Tax Duplicate and Abstract of Ratables of Morris County A-11

42 COMPONENTS OF REAL ESTATE TAX RATE (Per $100 of Assessment) County Regional Year Total Municipal County Open Space School Source: Tax Collector APPORTIONMENT OF TAX LEVY (Including School and County Purposes) Regional Year Total Municipal School County ,357,272 23,373,808 27,507,087 7,476, ,243,879 22,622,865 26,575,792 7,045, ,352,508 21,621,608 24,953,163 6,777, ,441,024 20,670,127 23,599,652 6,171, ,631,054 20,710,138 22,914,326 6,006,590 Source: Tax Collector STATEMENT OF LITIGATION There is at present no single action against the Town which would impose an undue financial burden on the Town. In New Jersey's courts of general jurisdiction, unliquidated money damages are pleaded generally without specifying a dollar amount. The Town is party-defendant in certain law suits, none of a kind unusual for a municipality of its size, and none of which, in the opinion of the Town Attorney, would impair the Town's ability to pay its Bondholders or to make payments under the Replenishment Agreement. All of the Town s tort actions are being defended by municipal joint insurance funds (which provide pooled private insurance coverage and self-insurance coverage to its members). Pending municipal real estate tax appeals are limited in number and, based upon the Town's prior experience in tax appeals, and assuming that such tax appeals are resolved adversely to the interest of the Town, such resolution would not impair the Town's ability to pay its Bondholders or to make payments under the Replenishment Agreement. A-12

43 CERTAIN STATUTORY PROVISIONS FOR THE PROTECTION OF GENERAL OBLIGATION DEBT Local Bond Law (N.J.S.A. 40A:2-1 et seq.) The Local Bond Law governs the issuance of bonds and notes to finance certain municipal capital expenditures. Among its provisions are requirements that bonds must mature within the statutory period of usefulness of the projects bonded and that bonds be retired in serial installments. A 5% cash down payment is generally required to be appropriated for the financing of expenditures for municipal purposes for which bonds are authorized. The Local Fiscal Affairs Law (N.J.S.A. 40A:5-1 et seq.) This law regulates the non-budgetary financial activities of local governments. An annual, independent audit of the local unit's accounts for the previous year must be performed by a licensed Registered Municipal Accountant. The audit, conforming to the Division of Local Government Services "Requirements of Audit," includes recommendations for improvement of the local unit's financial procedures and must be filed with the Director within six months after the close of the fiscal year. A synopsis of the audit report, together with all recommendations made, must be published in a local newspaper within 30 days of its completion. The annual audit report is filed with the Town Clerk and is available for review during business hours. The chief financial officer of every local unit must file annually with the Director a verified statement of financial condition of the local unit and all constituent boards, agencies or commissions. Debt Limits The authorized bonded indebtedness of a municipality in the State of New Jersey is limited by statute, subject to the exceptions noted below, to an amount equal to 3-1/2% of its equalized valuation basis. The equalized valuation basis of the municipality is set by statute as the average for the last three years of the equalized value of all taxable real property and improvements and certain class II railroad property within its boundaries as annually determined by the State Board of Taxation. Certain categories of debt are permitted by statute to be deducted for purposes of computing the statutory debt limit. On December 31, 2010, the Town's percentage of statutory net debt was 1.44% and was comprised of the following: Gross Debt Deductions Net Debt General Debt $35,331,432 $506 $35,330,926 School Debt 2,388,339 2,388,339 - Utility Debt 26,493,164 17,012,699 9,480,465 Parking Authority Debt 37,770,000 37,770,000 - Exceptions to Debt Limits-Extensions of Credit $101,982,935 $57,171,544 $44,811,391 The debt limit of the Town may be exceeded with the approval of the Local Finance Board, in the Division of Local Government Services, Department of Community Affairs, State of New Jersey, a State regulatory agency (the Local Finance Board ). If all or any part of a proposed debt authorization would exceed its debt limit, the Town must apply to the Local Finance Board for an extension of credit. If the Local A-13

44 Finance Board determines that a proposed debt authorization would not materially impair the ability of the Town to meet its obligations or to provide essential services, or makes other statutory determinations, approval is granted. In addition, debt in excess of the statutory debt limit may be issued without the approval of the Local Finance Board to fund certain notes, for self-liquidating purposes and, in each fiscal year, in an amount not exceeding two-thirds of the amount budgeted in such fiscal year for the retirement of outstanding obligations (exclusive of obligations issued for utility or assessment purposes). Short-Term Financing The Town may issue bond anticipation notes to temporarily finance capital improvements. Bond anticipation notes, which are general obligations of the Town, may be issued for a period not exceeding one year and may be renewed annually for one-year periods. Generally, bond anticipation notes may not be outstanding longer than 10 years. Additionally, beginning in the third year and continuing in each year that the notes are outstanding, the amount of notes that may be issued is decreased by the minimum amount required for the first year principal payment of bonds in anticipation of which such notes are issued. School Debt Subject to Voter Approval State Law permits the school district, upon approval of the voters, to authorize school district debt, including debt in excess of its independent debt limit of 4% of the equalized valuation basis, by using the available borrowing capacity of the Town. If such debt is in excess of the school district debt limit, the State Commissioner of Education and the Local Finance Board must approve the proposed debt authorization before it is submitted to the voters. The Municipal Finance Commission (N.J.S.A. 52:27-1 et seq.) The Municipal Finance Commission was created in 1931 to assist in the financial rehabilitation of municipalities which had defaulted in their obligations. The powers of such Commission are exercised today by the Local Finance Board. The local finance system is intended to prevent default on obligations or occurrence of severe fiscal difficulties in any local unit. Should extreme economic conditions adversely affect any local unit, the Municipal Finance Commission Statutes are available to assist in restoring the stability of the local unit. Any holder of bonds or notes which are in default for over sixty (60) days (for payment of principal or interest) may bring action against such municipality in the Superior Court of New Jersey. Any municipality may declare itself unable to meet its obligations and bring action in such court. In either case, the court's determination that the municipality is in default or unable to meet its obligations causes the Municipal Finance Commission to become operative in that community. The Municipal Finance Commission exercises direct supervision over the finances and accounts of any local unit under its jurisdiction. Such commission is authorized to appoint an auditor to examine and approve all claims against the municipality and to serve as comptroller for that community. The commission is also directed to supervise tax collections and assessments, to approve the funding of municipal school district indebtedness, the adjustment or composition of the claims of creditors, and the readjustment of debts under the Federal Municipal Bankruptcy Act. Such Act has been substantially revised in 1976 so as to permit municipalities to have access to bankruptcy court for protection against suits by Bondholders and without prior warranty for creditors' approvals in cases of impending default. The Local Finance Board also serves as the funding commission to exercise supervision over the funding or refunding of local government debt. Any county or municipality seeking to adjust its debt service must apply to and receive the approval of such funding commission for the proposed reorganization of its debt. A-14

45 DEBT INFORMATION ON THE TOWN Debt Statements The Town must report all new authorizations of debt or changes in previously authorized debt to the Division of Local Government Services, Department of Community Affairs of the State of New Jersey (the Division ). The Supplemental Debt Statement, as this report is known, must be submitted to the Division before final passage of any debt authorization. Before January 31 of each year the Town must file an Annual Debt Statement with the Division. This report is made under oath and states the authorized, issued and unissued debt of the Town as of the previous December 31. Through the Annual and Supplemental Debt Statements, the Division monitors all local borrowing. Debt Incurring Capacity As of December 31, 2010 Municipal: Equalized Valuation Basis (last 3 years average) $3,096,558, /2% Borrowing Margin 108,379,541 Net Debt Issued, Outstanding and Authorized 44,811,391 Remaining Municipal Borrowing Capacity $ 63,568,150 Regional School: 4% Borrowing Margin $ 123,862,333 Debt Issued, Outstanding and Authorized 2,388,339 Remaining School Borrowing Capacity $ 121,473,994 Gross and Statutory Net Debt as of December 31, 2010 Source: Town of Morristown. Gross Debt Statutory Net Debt Year Amount Amount Percentage 2010 $101,982,935 $44,811, % ,937,370 49,339, ,938,119 55,775, ,080,310 59,462, ,793,360 61,474, ,859,269 63,733, ,635,028 65,087, ,139,066 67,532, ,172,144 69,317, A-15

46 STATEMENT OF INDEBTEDNESS As of December 31, 2010 GENERAL PURPOSES Bonds Issued and Outstanding $31,323,533 Bond Anticipation Notes Outstanding 2,817,900 Bonds and Notes Authorized But Not Issued 1,190,000 $35,331,433 REGIONAL SCHOOL Bonds Issued and Outstanding 2,388,339 AIRPORT UTILITY Bonds and Loans Authorized But Not Issued -0- SANITARY SEWER SYSTEM Bonds Issued and Outstanding $18,552,467 Bond Anticipation Notes 3,275,000 Bonds and Notes Authorized But Not Issued 4,665,697 26,493,164 PARKING AUTHORITY Bon ds Issued and Outstanding 37,770,000 TOTAL GROSS DEBT $101,982,935 STATUTORY DEDUCTIONS Municipal Purpose 506 Regional School 2,388,339 Sanitary Sewer System 26,493,164 Parking Authority 37,770,000 (57,171,544) TOTAL NET DEBT $44,811,391 OVERLAPPING DEBT County of Morris (Note 1) $7,352,406 TOTAL OVERLAPPING DEBT $7,352,406 GROSS DEBT Per Capita (2010 Census 18,411) $5,539 Percent of Net Valuation Taxable (2010-$2,244,388,942) 4.54% Percent of Estimated True Value of Real Property (2010-$3,236,788,205) 3.15% NET MUNICIPAL DEBT Per Capita (2010 Census 18,411) $2,434 Percent of Net Valuation Taxable (2010-$2,244,388,942) 2.00% Percent of Estimated True Value of Real Property (2010-$3,236,788,205) 1.38% OVERALL DEBT (Gross and Overlapping Debt) Per Capita (2010 Census 18,411) $5,938 Percent of Net Valuation Taxable (2010-$2,244,388,942) 4.87% Percent of Estimated True Value of Real Property (2010-$3,236,788,205) 3.38% Note (1) Overlapping debt as of December 31, 2010, was computed based upon the real property ratio of equalized valuations of the municipality to all municipalities within the County as provided in the 2010 Morris County Abstract of Ratables published by the Morris County Board of Taxation. Source: Town of Morristown. A-16

47 APPENDIX B REPORT ON EXAMINATION OF FINANCIAL STATEMENTS FOR THE PARKING AUTHORITY OF THE TOWN OF MORRISTOWN FOR THE YEAR ENDED DECEMBER 31, 2010

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121 APPENDIX C REPORT OF AUDIT FOR THE TOWN OF MORRISTOWN FOR THE YEAR ENDED DECEMBER 31, 2010

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