NEW ISSUE FULL BOOK ENTRY

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1 NEW ISSUE FULL BOOK ENTRY RATINGS: Moody's: "Aa3" Fitch: "AA" (See "Ratings" herein) The Bonds are being issued as Federally Taxable Build America Bonds. Therefore interest on the Bonds will not be excluded from gross income for federal income tax purposes. See "TAX MATTERS" herein for a more complete discussion. $8,260,000 City of Sarasota, Florida Sales Tax Payments Revenue Bonds, Series 2010 (Federally Taxable Build America Bonds Recovery Zone Economic Development Bonds Direct Subsidy) Dated: Date of Delivery Due: February 1, as shown on inside cover page The City of Sarasota, Florida (the "City") is issuing its $8,260,000 Sales Tax Payments Revenue Bonds, Series 2010 (Federally Taxable Build America Bonds Recovery Zone Economic Development Bonds Direct Subsidy) (the "Bonds") in fully registered form, without coupons, in denominations of $5,000 or any integral multiple thereof. Interest on the Bonds will be payable on August 1, 2011, and semiannually thereafter on each February 1 and August 1. When initially issued, the Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository for the Bonds. Purchasers will not receive certificates representing their beneficial interest in the Bonds. Accordingly, principal of and interest on the Bonds will be paid by U.S. Bank National Association, Miami, Florida, as paying agent (the "Bond Registrar" and "Paying Agent"), directly to DTC, as the registered owner thereof. Principal of and premium, if any, on the Bonds will be payable upon presentation when due at the designated corporate office of the Paying Agent. DTC will in turn be responsible for remitting all payments to its Direct Participants (as defined herein) for subsequent distribution to the Beneficial Owners (as defined herein) of the Bonds. See "DESCRIPTION OF THE BONDS Book-Entry Only System" herein. The Bonds are being issued as "Build America Bonds" and further designated as "Recovery Zone Economic Development Bonds" under Section 1400U-2 of the Internal Revenue Code of 1986, as amended (the "Code"). Pursuant to Section 54AA(g) of the Code, the City will elect to receive a cash subsidy from the United States Treasury equal to 45% of the interest payable on the Bonds as provided in Section 6431 of the Code. See "TAX MATTERS" herein. The Bonds are subject to optional, extraordinary optional and mandatory redemption prior to their stated maturity as set forth herein. Together with other legally available funds of the City, the Bonds are being issued for the purpose of (i) financing a portion of the cost of the construction, reconstruction and renovation of a Facility for a Retained Spring Training Franchise to be used for major league baseball operations including without limitation expansion of the Ed Smith Stadium Complex (the "Project") and (ii) paying certain costs and expenses related to the issuance of the Bonds. Sarasota County is responsible for the completion of the Project. The City is only obligated to contribute proceeds from the Bonds and certain other legally available funds to the Project. See "PURPOSE OF THE BONDS." The Bonds are payable solely from and secured by a lien upon and a pledge of (1) the Sales Tax Payments (as defined below), (2) any Direct Subsidy Payments (as defined herein), and (3) until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in certain of the funds and accounts established by the Resolution, all in the manner and to the extent described in the Resolution (collectively, the "Pledged Funds"). In the event Pledged Funds are insufficient to pay principal or interest on the Bonds, the Bonds are further secured by a covenant to budget and appropriate Non-Ad Valorem Revenues (as described herein) of the City, in the manner and to the extent provided for in the Resolution. The City received certification for the major league baseball spring training facility as a "Facility for a Retained Spring Training Facility." Accordingly, pursuant to Section (6)(d)7.b, Florida Statutes, the City receives monthly distributions from the State of $41, (the "Sales Tax Payments") which payments began in March 2007 and will end in February See "SECURITY FOR THE BONDS Certifications of Spring Training Facility and Use of Distributions." The Bonds shall not constitute general obligations or indebtedness of the City as "bonds" within the meaning of any constitutional or statutory provision, but shall be special obligations of the City, payable solely from and secured by a lien upon and pledge of the Pledged Funds and other sources described in the Resolution. No owner of any Bond shall ever have the right to compel the exercise of any ad valorem taxing power to pay such Bond, or be entitled to payment of such Bond from any moneys of the City except from the Pledged Funds and other sources described in the Resolution. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Bonds are offered for delivery when, as and if issued and received by the Underwriter, subject to prior sale and to the approval of legality by Bryant Miller Olive P.A., Tampa, Florida, Bond Counsel. Certain legal matters will be passed upon for the City by Fournier and Connolly, P.A., Sarasota, Florida and for the Underwriter by GrayRobinson, P.A., Tampa, Florida, Counsel to the Underwriter. RBC Capital Markets, LLC, St. Petersburg, Florida, is serving as Financial Advisor to the City. It is expected that settlement for the Bonds will occur through the facilities of DTC in New York, New York on or about December 16, This Official Statement is dated November 30, 2010.

2 CITY OF SARASOTA, FLORIDA AMOUNTS, MATURITIES, INTEREST RATES, PRICES AND INITIAL CUSIP NUMBERS $8,260,000 Sales Tax Payments Revenue Bonds, Series 2010 (Federally Taxable Build America Bonds Recovery Zone Economic Development Bonds Direct Subsidy) $890,000 Serial Bonds Amount Maturity (February 1) Interest Rate Price Initial CUSIP Number* $225, % 100% BD0 220, BE8 220, BF5 225, BG3 $1,210, % Term Bonds due February 1, 2020, Price 100%; Initial CUSIP Number BH1* $3,130, % Term Bonds due February 1, 2030, Price 100%; Initial CUSIP Number BJ7* $3,030, % Term Bonds due February 1, 2037, Price 100%; Initial CUSIP Number BK4* * The City is not responsible for the use of CUSIP numbers, nor is a representation made as to their correctness. The CUSIP numbers are included solely for the convenience of the readers of this Official Statement.

3 CITY OF SARASOTA, FLORIDA MAYOR Kelly M. Kirschner COMMISSIONERS Fredd "Glossie" Atkins, Vice Mayor Suzanne Atwell Richard Clapp Terry Turner CITY MANAGER Robert J. Bartolotta CITY AUDITOR AND CLERK Pamela M. Nadalini FINANCE DIRECTOR Christopher H. Lyons, CPA, CGFO, CPFO CITY ATTORNEY Robert M. Fournier, Esq. BOND COUNSEL Bryant Miller Olive P.A. Tampa, Florida FINANCIAL ADVISOR RBC Capital Markets, LLC St. Petersburg, Florida INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Purvis Gray & Company Sarasota, Florida

4 No dealer, broker, account executive, financial consultant or other person has been authorized to give any information or to make any representations, other than those contained in this Official Statement, in connection with the offering of the Bonds described herein, and if given or made, such information or representations must not be relied upon as having been authorized by the City or the Underwriter. This Official Statement does not constitute an offer to sell the Bonds or a 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. Except where otherwise indicated, the information set forth herein has been furnished by the City and by other sources which are believed to be reliable. The Underwriter has reviewed the information in this Official Statement in accordance with and as a part of its responsibilities to investors under federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. Any statements in this Official Statement involving estimates, assumptions and matters of opinion, whether or not expressly so stated, are intended as such and are not representations of fact, and the City expressly makes no representation that such estimates, assumptions or opinions will be realized or fulfilled. The information and expressions of opinion herein are subject to change without notice and neither the delivery of the Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH BONDS AT THE LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE RESOLUTION BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES, IF ANY, IN WHICH THE BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

5 TABLE OF CONTENTS Page INTRODUCTORY STATEMENT... 1 AUTHORITY FOR ISSUANCE... 1 PURPOSE OF THE BONDS... 1 ESTIMATED SOURCES AND USES OF FUNDS... 2 DESCRIPTION OF THE BONDS... 2 Terms and Form... 2 Book-Entry Only System... 3 Interchangeability, Negotiability and Transfer... 5 Designation of Bonds as "Build America Bonds Recovery Zone Economic Development Bonds"... 6 Mandatory Redemption... 7 Optional Redemption... 9 Extraordinary Optional Redemption Change in Recovery Act... 9 Selection of Bonds to be Redeemed Notice of Redemption Redemption of Portions of Bonds Payment of Redeemed Bonds SECURITY FOR THE BONDS General Certification of Spring Training Facility and Use of Distributions Derivation of the Sales Tax Payments Historical State Sales Tax Collections and Distributions Backup Covenant to Budget and Appropriate Special Investment Considerations No Debt Service Reserve Fund Pledge of Non-Ad Valorem Revenues Additional Bonds Description of Non-Ad Valorem Revenues NET DEBT SERVICE REQUIREMENTS FOR THE BONDS FLOW OF FUNDS VALIDATION LEGALITY TAX MATTERS General Original Issue Discount Market Discount Bond Premium i

6 TABLE OF CONTENTS (Continued) Page Sale, Exchange or Redemption Information Reporting and Backup Withholding Nonresidents Circular 230 Disclosure FINANCIAL ADVISOR LITIGATION ENFORCEABILITY OF REMEDIES CONTINUING DISCLOSURE DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS RATINGS UNDERWRITING FINANCIAL STATEMENTS MISCELLANEOUS AUTHORIZATION OF OFFICIAL STATEMENT APPENDIX A - City of Sarasota, Florida, General Information APPENDIX B - Composite Form of the Resolution APPENDIX C - General Purpose Financial Statements for the Fiscal Year Ended September 30, 2009 APPENDIX D - Form of Bond Counsel Opinion APPENDIX E - Form of Continuing Disclosure Agreement ii

7 OFFICIAL STATEMENT relating to CITY OF SARASOTA, FLORIDA $8,260,000 Sales Tax Payments Revenue Bonds, Series 2010 (Federally Taxable Build America Bonds Recovery Zone Economic Development Bonds Direct Subsidy) INTRODUCTORY STATEMENT The purpose of this Official Statement, which includes the cover page and the Appendices, is to present information for the offering by the City of Sarasota, Florida (the "City") of its $8,260,000 Sales Tax Payments Revenue Bonds, Series 2010 (Federally Taxable Build America Bonds Recovery Zone Economic Development Bonds Direct Subsidy) (the "Bonds"). Definitions of certain words and terms having initial capitals used herein and in the Resolution (as defined below) are contained in the composite form of the Resolution attached as APPENDIX B hereto. The Bonds will be payable solely from and secured by a lien upon and a pledge of (1) the Sales Tax Payments (as defined herein), (2) any Direct Subsidy Payments (as defined herein), and (3) until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in certain of the funds and accounts established by the Resolution, all in the manner and to the extent described in the Resolution (collectively, the "Pledged Funds"). In the event Pledged Funds are insufficient to pay principal or interest on the Bonds, the Bonds are further secured by a covenant to budget and appropriate Non-Ad Valorem Revenues (as described herein) of the City, in the manner and to the extent provided for in the Resolution. AUTHORITY FOR ISSUANCE The Bonds will be issued pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida, particularly Chapter 166, Part II, Florida Statutes, Chapter 159, Part VII, Florida Statutes, Section (5)(c)(2), Florida Statutes, Section (6)(d)6.b., Florida Statutes, the municipal charter of the City, and other applicable provisions of law (collectively, the "Act"), and Resolution No. 10R-2135 duly adopted by the City Council of the City (the "City Council") on November 2, 2009, as amended and supplemented by Resolution No. 10R-2139 duly adopted by the City Council on December 7, 2009 (collectively, the "Resolution"). PURPOSE OF THE BONDS Together with other legally available funds of the City, the Bonds are being issued for the purpose of (i) financing a portion of the cost of the construction, reconstruction and renovation of a Facility for a Retained Spring Training Franchise to be used for major league baseball operations including without limitation expansion of the Ed Smith Stadium Complex (the "Project") and (ii) paying certain costs and expenses related to the issuance of the Bonds. Sarasota County is responsible for the completion of the Project. The City is only obligated to contribute the net proceeds of the Bonds and certain other legally available funds to the Project. 1

8 The City received certification for the Project as a "Facility for a Retained Spring Training Facility." Accordingly, pursuant to Section (6)(d)7.b, Florida Statutes, the City receives monthly distributions from the State of $41, (the "Sales Tax Payments") which payments began in March 2007 and will end in February See "SECURITY FOR THE BONDS Certifications of Spring Training Facility and Use of Distributions." The Major League Baseball spring training facility located in the City (the "Sports Complex") has been used for Major League Baseball spring training activities since The Sports Complex was leased by the City to the Cincinnati Reds under a lease that expired on October 31, The Sports Complex requires substantial renovation in order to host a Major League Baseball team. Sarasota County has entered into a Memorandum of Understanding with the Baltimore Orioles to utilize the Sports Complex for spring training. The City has entered into an interlocal agreement with Sarasota County whereby the City has transferred ownership of the Sports Complex to Sarasota County. Pursuant to that agreement and a second interlocal agreement, the City has agreed to issue the Bonds to be repaid from the Sales Tax Payments and to transfer net proceeds of the Bonds and accumulated Sales Tax Payments to assist in the financing of the Project. Sarasota County is simultaneously issuing with the City's issuance of the Bonds, $9,380,000 of its Capital Improvement Revenue Bonds, Series 2010A (Federally Taxable Build America Bonds Direct Subsidy) and $10,270,000 of its Capital Improvement Revenue Bonds, Series 2010B (Federally Taxable Build America Bonds Recovery Zone Economic Development Bonds Direct Subsidy) (collectively, the "Sarasota County Bonds") for the Project. The City reasonably expects Sarasota County to issue the Sarasota County Bonds and complete the Project; however, such events are the sole responsibility of Sarasota County and beyond the City's control. ESTIMATED SOURCES AND USES OF FUNDS The proceeds from the sale of the Bonds, together with other legally available funds of the City, are to be applied as follows: SOURCES OF FUNDS Principal Amount of Bonds $8,260, Accumulated Sales Tax Payments (1) 379, Total Sources of Funds $8,639, USES OF FUNDS Deposit to Project Fund $8,094, Costs of Issuance (2) 545, Total Uses of Funds $8,639, (1) See "PURPOSE OF THE BONDS" above. (2) Cost of issuance includes the fees and out-of-pocket expenses for Bond Counsel, the Financial Advisor, Underwriter's Discount, printing, rating and other associated costs. Also includes legal and legislative costs associated with the bond validation trial, including the appeal to the Florida Supreme Court. See "VALIDATION" herein. Terms and Form DESCRIPTION OF THE BONDS The Bonds shall be dated as of their date of delivery, will bear interest at the rates per annum set forth on the inside cover page hereof, payable on August 1, 2011 and semiannually thereafter on February 1 and August 1 of each year (each, a "Interest Date") to maturity by wire transfer or check of 2

9 U.S. Bank National Association, with an office in Miami, Florida, as "Bond Registrar and Paying Agent," payable to the registered owners thereof, as shown on the registration books of the City on the 15th day of the calendar month (whether or not a business day) next preceding each Interest Date. The Bonds will mature on February 1 in the years and in the principal amounts set forth on the inside cover page hereof. The Bonds will be issued in fully registered form in the denominations of $5,000 each and integral multiples thereof. Principal of the Bonds and premium, if any, will be payable to the registered owners thereof upon presentation and surrender of such Bonds at the designated corporate trust office of the Bond Registrar and Paying Agent. The Bonds will be issued initially as book-entry obligations and held by The Depository Trust Company ("DTC") as securities depository. The ownership of one fully registered Bond for each maturity as set forth on the inside cover page hereof, in the appropriate aggregate principal amount of such maturity, will be registered in the name of Cede & Co., as nominee for DTC. For more information regarding DTC and DTC's Book-Entry System, see the subheading "Book-Entry Only System" which immediately follows. Book-Entry Only System The information in this caption concerning The Depository Trust Company, New York, New York ("DTC") and DTC's book entry system has been obtained from DTC and neither the City nor the Underwriter make any representation or warranty or take any responsibility for the accuracy or completeness of such information. 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 certificate will be issued for each maturity of the Bonds, in the aggregate amount of such maturity, and deposited with DTC. DTC, the world's largest securities 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 (the "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 3

10 Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for such Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (the "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 the 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 of the 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 the 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 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 the Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of the 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 Bond 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 a maturity of the Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such Bonds 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 City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, premium, if any, 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 the City or the Paying Agent on the 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 is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in 4

11 effect from time to time. Payment of principal, premium, if any, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City 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 City or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, the Bonds are required to be printed and delivered. The City may, pursuant to the procedures of DTC, decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, the Bonds will be printed and delivered to DTC. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE HOLDER OF THE BONDS OR REGISTERED OWNERS OF THE BONDS SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS. The City can make no assurances that DTC will distribute payments of principal of, redemption premium, if any, or interest on the Bonds to the Direct Participants, or that Direct and Indirect Participants will distribute payments of principal of, redemption price, if any, or interest on the Bonds or redemption notices to the Beneficial Owners of such Bonds or that they will do so on a timely basis, or that DTC or any of its Participants will act in a manner described in this Official Statement. The City is not responsible or liable for the failure of DTC to make any payment to any Direct Participant or failure of any Direct or Indirect Participant to give any notice or make any payment to a Beneficial Owner in respect to the Bonds or any error or delay relating thereto. The rights of holders of beneficial interests in the Bonds and the manner of transferring or pledging those interests is subject to applicable state law. Holders of beneficial interests in the Bonds may want to discuss the manner of transferring or pledging their interest in the Bonds with their legal advisors. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, the Bond certificates will be printed and delivered. Thereafter, the Bond certificates may be transferred and exchanged as described in the Resolution. Interchangeability, Negotiability and Transfer So long as the Bonds are registered in the name of DTC or its nominee, the following paragraphs relating to transfer and exchange of beneficial ownership interests in the Bonds will not apply to the Bonds and the transfer and registration of beneficial ownership interests in the Bonds will be governed by the rules and procedures of DTC as generally described under "DESCRIPTION OF THE BONDS Book-Entry Only System," above. Bonds, upon surrender thereof at the office of the Bond Registrar with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the Holder thereof or such Holder's attorney duly authorized in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same maturity of any other authorized denominations. 5

12 The Bonds issued under the Resolution shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform Commercial Code of the State of Florida, subject to the provisions for registration and transfer contained in the Resolution and in the Bonds. So long as any of the Bonds shall remain Outstanding, the City shall maintain and keep, at the office of the Bond Registrar, books for the registration and transfer of the Bonds. Each Bond shall be transferable only upon the books of the City, at the office of the Bond Registrar, under such reasonable regulations as the City may prescribe, by the Holder thereof in person or by such Holder's attorney duly authorized in writing upon surrender thereof together with a written instrument of transfer satisfactory to the Bond Registrar duly executed and guaranteed by the Holder or such Holder's duly authorized attorney. Upon the transfer of any such Bond, the City shall issue, and cause to be authenticated, in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and maturity as the surrendered Bond. The City, the Bond Registrar and any Paying Agent or fiduciary of the City may deem and treat the Person in whose name any Outstanding Bond shall be registered upon the books of the City as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price, if applicable, and interest on such Bond and for all other purposes, and all such payments so made to any such Holder or upon such Holder's order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid and neither the City nor the Bond Registrar nor any Paying Agent or other fiduciary of the City shall be affected by any notice to the contrary. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the City shall execute and the Bond Registrar shall authenticate and deliver such Bonds in accordance with the provisions of the Resolution. Execution of Bonds for purposes of exchanging, replacing or transferring Bonds may occur at the time of the original delivery of the Bonds. All Bonds surrendered in any such exchanges or transfers shall be held by the Bond Registrar in safekeeping until directed by the City to be cancelled by the Bond Registrar. For every such exchange or transfer of Bonds, the City or the Bond Registrar may make a charge sufficient to reimburse it for any tax, fee, expense or other governmental charge required to be paid with respect to such exchange or transfer. The City and the Bond Registrar shall not be obligated to make any such exchange or transfer of any Bonds during the 15 days next preceding an Interest Date on the Bonds, or, in the case of any proposed redemption of Bonds, then, for the Bonds subject to redemption, during the 15 days next preceding the date of the first mailing of notice of such redemption and continuing until such redemption date. Designation of Bonds as "Build America Bonds Recovery Zone Economic Development Bonds" The City currently intends to elect to treat the Bonds as "Build America Bonds" for purposes of the American Recovery and Reinvestment Act of 2009 (the "Recovery Act"), and, pursuant to the Resolution, the Recovery Zone Ordinance No enacted by the Board of County Commissioners of Sarasota County (the "Board") on July 21, 2009, and a vote by the Board to transfer to the City an amount of its allocation equal to the principal amount of the Bonds, and to further treat the Bonds as "Recovery Zone Economic Development Bonds" for purposes of the Recovery Act. As such, subject to certain conditions described herein, the City expects to receive Direct Subsidy Payments from the United States Treasury Secretary in an amount equal to 45% of interest payable on the Bonds. These conditions generally involve the use of the proceeds and certain filing requirements with the Internal Revenue Service. Such Direct Subsidy Payments are pledged to the payment of debt service on the Bonds, and do constitute a component of the Pledged Funds. However, payment of debt service on the Bonds is not contingent upon receipt by the City of the Direct Subsidy Payments. Direct Subsidy Payments do not constitute a full faith and credit guarantee of the United States, but are required by the Recovery Act to be paid by the United States Treasury Secretary. For more information, see "TAX MATTERS" herein. 6

13 Direct Subsidy Payments actually received are taken into account as a deduction from interest coming due on the Bonds, for purposes of calculating Annual Debt Service. Furthermore, Direct Subsidy Payments received during the City's prior Fiscal Year are taken into account for purposes of the issuance of Additional Bonds under the Resolution. Failure of the City to receive Direct Subsidy Payments with respect to the Bonds or any Additional Bonds, whether due to failure of the City to timely file payment request forms or satisfy other eligibility requirements or for any other reason, could result in the calculated debt service coverage requirement for the issuance of Additional Bonds being calculated by taking into account a deduction against interest coming due for an amount of anticipated Direct Subsidy Payments that are, in fact, not received by the City. This could result in debt service coverage being lower than would otherwise be permitted under the Resolution if such Direct Subsidy Payments were not taken into consideration. For more information, see "SECURITY FOR THE BONDS Additional Bonds" herein. No assurances can be provided that the City will receive the Direct Subsidy Payments. The amount of any Direct Subsidy Payment is subject to legislative changes by Congress. No assurance can be given that any future legislation, clarification, amendments to the Internal Revenue Code of 1986, as amended (the "Code"), if enacted into law, or judicial decisions or failure by the City to satisfy eligibility requirements will not potentially reduce or eliminate Direct Subsidy Payments expected to be received by the City with respect to the Bonds. If Direct Subsidy Payments from the Department of Treasury are reduced or eliminated under certain conditions, or significant new conditions are imposed upon the City in connection with the receipt thereof, the City has retained the right to redeem the Bonds. See "Extraordinary Optional Redemption Change in Recovery Act" below. Direct Subsidy Payments will only be paid to the City if the Bonds are "qualified bonds" under Section 54AA(g) of the Code (hereafter "Qualified Build America Bonds"). For the Bonds to be and remain Qualified Build America Bonds, the City must comply with certain requirements of the Code and establish certain facts and expectations with respect to the Bonds, including the use and investment of proceeds thereof and the use of property financed thereby. The City has not made any covenants in the Resolution to comply with the requirements of the Code necessary for the Bonds to remain Qualified Build America Bonds which entitles the City to receive Direct Subsidy Payments. In addition, the City must timely file a Form 8038-CP with respect to each interest payment date requesting the associated Direct Subsidy Payments. If the City fails to file the necessary Form 8038-CP in a timely manner, it is possible that the City's receipt of such Direct Subsidy Payments would be delayed. In certain circumstances, the Direct Subsidy Payments may be offset by the federal government for amounts determined to be owed to it by the City (or agencies of the federal government). Amounts owing and offset by the federal government may be unrelated to the Bonds. The amount of any such offset is not predictable, and the City does not currently expect that any such offsets will apply to the payment of the Direct Subsidy Payments the City expects to receive. Any such offset does not alter the City's obligation to pay principal, premium, if any, and interest due on the Bonds. Payment of debt service on the Bonds is not contingent upon receipt by the City of the Direct Subsidy Payments. The City is obligated to make all payments of principal and interest on the Bonds whether or not it receives the Direct Subsidy Payments. Mandatory Redemption The Bonds maturing on February 1, 2020, are subject to mandatory sinking fund redemption on a pro rata basis prior to maturity in part, on February 1, 2016 and on each February 1 thereafter at a redemption price equal to the principal amount of such Bonds or portions thereof to be redeemed, plus interest accrued thereon to the date of redemption, on February 1 in the following years and in the following Amortization Installments: 7

14 * Maturity. Year (February 1) Amount 2016 $230, , , , * 255,000 The Bonds maturing on February 1, 2030, are subject to mandatory sinking fund redemption on a pro rata basis prior to maturity in part, on February 1, 2021 and on each February 1 thereafter at a redemption price equal to the principal amount of such Bonds or portions thereof to be redeemed, plus interest accrued thereon to the date of redemption, on February 1 in the following years and in the following Amortization Installments: * Maturity. Year (February 1) Amount 2021 $265, , , , , , , , , * 365,000 The Bonds maturing on February 1, 2037, are subject to mandatory sinking fund redemption on a pro rata basis prior to maturity in part, on February 1, 2031 and on each February 1 thereafter at a redemption price equal to the principal amount of such Bonds or portions thereof to be redeemed, plus interest accrued thereon to the date of redemption, on February 1 in the following years and in the following Amortization Installments: * Maturity. Year (February 1) Amount 2031 $380, , , , , , * 520,000 8

15 Optional Redemption The Bonds maturing prior to February 1, 2021 will not be subject to optional redemption prior to maturity. The Bonds maturing on or after February 1, 2022 shall be subject to redemption prior to their respective maturities, at the option of the City, on or after February 1, 2021, as a whole or in part at any time, and if in part, by maturities to be selected by the City and by lot within a maturity if less than a full maturity, at a redemption price (plus accrued interest to the date fixed for redemption) equal to the principal amount thereof, without premium. Extraordinary Optional Redemption Change in Recovery Act Prior to February 1, 2021, the Bonds are subject to extraordinary optional redemption on any date prior to their maturity at the option of the City, in whole or in part upon the occurrence of an Extraordinary Event, at a redemption price equal to the greater of: (1) 100% of the principal amount of the Bonds to be redeemed; or (2) the sum of the present value of the remaining scheduled payments of principal and interest to the maturity date of the Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date on which the Bonds are to be redeemed, discounted to the date on which the Bonds are to be redeemed on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate, plus 100 basis points; plus, in each case, accrued interest on the Bonds to be redeemed to the redemption date. An "Extraordinary Event" will have occurred if a change has occurred to Section 1400U-2 or 6431 of the Code (as such Sections were added by Section 1401 and Section 1531, respectively, of the Recovery Act, pertaining to Recovery Zone Economic Development Bonds) or there is any guidance published by the Internal Revenue Service or Treasury with respect to such Section or Sections or any other legislation is enacted which impacts the receipt of the 45% Direct Subsidy Payments, or any determination by the Internal Revenue Service, the Treasury or any court of competent jurisdiction, which determination is not the result of any act or omission by the City to satisfy its requirements to receive the 45% Direct Subsidy Payments from the Treasury pursuant to which the City's 45% Direct Subsidy Payment from the Treasury is reduced or eliminated. "Treasury Rate" means, with respect to any redemption date for a particular Bond, the rate per annum, expressed as a percentage of the principal amount, equal to the semiannual equivalent yield to maturity or interpolated maturity of the Comparable Treasury Issue (defined below), assuming that the Comparable Treasury Issue is purchased on the redemption date for a price equal to the Comparable Treasury Price (defined below), as calculated by the Designated Investment Banker (defined below). "Comparable Treasury Issue" means, with respect to any redemption date for a particular Bond, the United States Treasury security or securities selected by the Designated Investment Banker that has an actual or interpolated maturity comparable to the remaining average life of the Bond to be redeemed, and that would be utilized in accordance with customary financial practice in pricing new issues of debt securities of comparable maturity to the remaining average life of the Bonds to be redeemed. "Comparable Treasury Price" means, with respect to any redemption date for a particular Bond, (i) if the Designated Investment Banker receives at least four Reference Treasury Dealer Quotations (defined below), the average of such quotations for such redemption date, after excluding the highest and 9

16 lowest Reference Treasury Dealer Quotations, or (ii) if the Designated Investment Banker obtains fewer than four Reference Treasury Dealer Quotations, the average of all such quotations. City. "Designated Investment Banker" means one of the Reference Treasury Dealers appointed by the "Reference Treasury Dealer" means a firm, specified by the City from time to time, that is a primary United States government securities dealer in the City of New York (the "Primary Treasury Dealer"). "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date for a particular Bond, the average, as determined by the Designated Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Designated Investment Banker by such Reference Treasury Dealer at 3:30 P.M., New York City time, on the third Business Day preceding such redemption date. Selection of Bonds to be Redeemed The Bonds shall be redeemed only in the principal amount of $5,000 each and integral multiples thereof. The City shall, at least sixty days prior to the redemption date (unless a shorter time period shall be satisfactory to the Registrar) notify the Registrar of such redemption date and of the principal amount of Bonds to be redeemed. For purposes of any redemption of less than all of the Outstanding Bonds of a single maturity, the particular Bonds or portions of Bonds to be redeemed shall be selected not more than forty five days prior to the redemption date by the Registrar from the Outstanding Bonds of the maturity or maturities designated by the City by such method as the Registrar shall deem fair and appropriate and which may provide for the selection for redemption of Bonds or portions of Bonds in principal amounts of $5,000 and integral multiples thereof. If less than all of the Outstanding Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the City and the Paying Agent (if the Registrar is not the Paying Agent for such Bonds) in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed. Notice of Redemption Unless waived by any Holder of Bonds to be redeemed, notice of any redemption made under the Resolution shall be given by the Registrar on behalf of the City by mailing a copy of an official redemption notice by registered or certified mail at least thirty days and not more than sixty days prior to the date fixed for redemption to each Holder of Bonds to be redeemed at the address of such Holder shown on the registration books maintained by the Registrar or at such other address as shall be furnished in writing by such Holder to the Registrar; provided, however, that no defect in any notice given pursuant to the Resolution to any Holder of Bonds to be redeemed nor failure to give such notice shall in any manner defeat the effectiveness of a call for redemption as to all other Holders of Bonds to be redeemed. Every official notice of redemption shall be dated and shall state: (1) the redemption date, (2) the Redemption Price, 10

17 (3) if less than all Outstanding Bonds are to be redeemed, the number (and, in the case of a partial redemption of any Bond, the principal amount) of each Bond to be redeemed, (4) that, on the redemption date, the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (5) that such Bonds to be redeemed, whether as a whole or in part, are to be surrendered for payment of the Redemption Price at the designated office of the Registrar. Prior to any redemption date, the City shall deposit with the Registrar an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds which are to be redeemed on that date. Official notice of redemption having been given as set forth above, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the City shall default in the payment of the Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar at the Redemption Price. Installments of interest due on or prior to the redemption date shall be payable as provided in the Resolution for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Holder a new Bond or Bonds of the same maturity in the amount of the unpaid principal of such partially redeemed Bond. All Bonds which have been redeemed shall be canceled and destroyed by the Bond Registrar and shall not be reissued. Notwithstanding the foregoing or any other provision of the Resolution, notice of optional redemption pursuant to the Resolution may be conditioned upon the occurrence or non-occurrence of such event or events as shall be specified in such notice of optional redemption and may also be subject to rescission by the City if expressly set forth in such notice. Redemption of Portions of Bonds Any Bond which is to be redeemed only in part shall be surrendered at any place of payment specified in the notice of redemption (with due endorsement by, or written instrument of transfer in form satisfactory to, the Bond Registrar duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the City shall execute and the Bond Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds, of the same interest rate and maturity, and of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bonds so surrendered. Payment of Redeemed Bonds Notice of redemption having been given substantially as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the City shall default in the payment of the Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar and/or Paying Agent at the appropriate Redemption Price, plus accrued interest. All Bonds which have been redeemed shall be canceled by the Bond Registrar and shall not be reissued. 11

18 SECURITY FOR THE BONDS General The Bonds are payable, solely from and secured by a lien upon and a pledge of (1) the Sales Tax Payments (as defined herein), (2) any Direct Subsidy Payments (as defined herein), and (3) until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in funds and accounts established by the Resolution, with the exception of the Rebate Fund and the Unrestricted Revenue Account; provided, however, the proceeds deposited in the Construction Fund in connection with the issuance of a particular Series of Bonds shall only secure such Series (collectively, the "Pledged Funds"). In the event Pledged Funds are insufficient to pay principal or interest on the Bonds, the Bonds are further secured by a covenant to budget and appropriate Non-Ad Valorem Revenues (as described herein) of the City, in the manner and to the extent provided for in the Resolution. "Sales Tax Payments" means the sales tax revenues distributable to the City pursuant to the Act and the 2006 Certification. The "2006 Certification" means the certification of the Office of Tourism, Trade and Economic Development of the State of Florida (the "OTTED") dated December 31, 2006 designating the Project as a Facility for a Retained Spring Training Franchise pursuant to Section (5)(c)2, Florida Statutes, as such certification was continued and approved in a letter of the OTTED dated September 30, Accordingly, the City receives monthly distributions from the State of Sales Tax Payments in the amount of $41,666.67, which payments began in March 2007 and will end in February "Non-Ad Valorem Revenues" means all revenues of the City not derived from ad valorem taxation, and which are lawfully available to be used to pay debt service on the Bonds. THE BONDS SHALL NOT CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE CITY AS "BONDS" WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE CITY, PAYABLE SOLELY FROM AND SECURED BY A LIEN UPON AND PLEDGE OF THE PLEDGED FUNDS AND OTHER SOURCES DESCRIBED IN THE RESOLUTION. NO HOLDER OF ANY BOND SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER TO PAY SUCH BOND, OR BE ENTITLED TO PAYMENT OF SUCH BOND FROM ANY MONEYS OF THE CITY EXCEPT FROM THE PLEDGED FUNDS AND OTHER SOURCES DESCRIBED IN THE RESOLUTION. Certification of Spring Training Facility and Use of Distributions The City received certification from the OTTED for the Project as a "facility for a retained spring training franchise" on December 31, 2006, and further received a letter from OTTED dated September 30, 2009 which continued and approved such certification when the Baltimore Orioles replaced the Cincinnati Reds as the Project's tenant. In addition, the City sought advice from the Office of the General Counsel for the Florida Department of Revenue (the "FDOR") as to whether distributions from the State pursuant to Section (6)(d)6.b., Florida Statutes, would be subject to termination once the Bonds have been issued and whether the monies previously distributed to the City pursuant to Section (6)(d)6.b., Florida Statutes, which are currently held in escrow by the City, may also be used in accordance with the terms of the Resolution. Section (6), Florida Statutes, as amended, provides that the funds received pursuant to Section , Florida Statutes, as amended, may be used "only for the public purpose of paying for the acquisition, construction, reconstruction or renovation of... a facility for a retained professional sports 12

19 franchise... or to pay or pledge for the payment of debt service on, or to fund debt service reserve funds, arbitrage rebate obligations, or other amounts payable with respect to, bonds issued for the acquisition, construction, reconstruction or renovation of such facility or for the reimbursement of such costs or the refinancing of bonds issued for such purposes." The FDOR is given the authority by Section , Florida Statutes, as amended, to audit an applicant to verify and enforce the legislative requirements for the expenditure of its distributions. If FDOR determines that the monthly distributions of $41, have not been expended as required by State law, FDOR may pursue recovery of such funds pursuant to the laws and rules governing the assessment of taxes. If an audit determines that distributions were not expended for intended purposes, assessments could be made and offset against future distributions. The City received an opinion dated November 2, 2009 from the General Counsel of the FDOR to the effect that after the issuance of the Bonds, the distributions will not be subject to termination and further that the monies currently held in escrow by the City must be used in accordance with the terms of the Resolution. Accordingly, pursuant to Section (6)(d)6.b, Florida Statutes, the City received its first monthly distribution of $41, in March 2007, and shall continue to receive such distributions monthly until February Such receipts are referred to in the Resolution as "Sales Tax Payments" which are pledged to the Bonds. All such receipts have been held in escrow by the City and will be transferred to Sarasota County along with net proceeds of the Bonds. The City has covenanted in the Resolution that it will do all things required on its part to continue the receipt of the Sales Tax Payments in compliance with the Act and any successor provision of law governing the same, and it will proceed diligently to perform legally and effectively all steps required on its part to receive the Sales Tax Payments and shall exercise all legally available remedies to enforce such collections now or hereafter available under State law. Derivation of the Sales Tax Payments Section , Florida Statutes, as amended, imposes a 6% tax on the sales price of tangible personal property sold at retail in the State subject to certain exemptions therefrom. A similar tax is imposed on the price of tangible personal property when the property is not sold, but is used, consumed, distributed or stored for use or consumption within the State. The largest single source of tax receipts in the State is the sales and use tax. The only Sales Tax Payments to be received by the City in connection with its pledge thereof to the Bonds is the $41, monthly distribution as set forth above under " Certification of Spring Training Facility and Use of Distributions." Unless a transaction is specifically exempt, the State sales and use tax is applicable to sales of tangible personal property at retail in the State including the business of making mail order sales, the rental or furnishing of things or services taxable under Chapter 212, Florida Statutes, as amended, the storage for use or consumption within the State of any item or article of tangible personal property, and the lease or rental of such property within the State. The FDOR shall pay over to the Chief Financial Officer of the State all funds received and collected by and under Chapter 212, Florida Statutes, as amended, and Sections (1)(b) and (2)(b), Florida Statutes, as amended, to be credited to the account of the State General Revenue Fund. Set forth below is the distribution by the State of such proceeds (after reallocation of convention development taxes and discretionary sales surtaxes to their respective clearing trust funds) pursuant to Section (6)(d), Florida Statutes, as amended: 1. State General Revenue Fund: In any Fiscal Year, the greater of $500 million, minus an amount equal to 4.6% of the proceeds of the taxes collected pursuant to Chapter 201, Florida Statutes, as amended (documentary taxes), or 5% of all other taxes and fees imposed pursuant to Chapter 212, Florida 13

20 Statutes, as amended, or remitted pursuant to Sections (l)(b) and (2)(b), Florida Statutes, as amended, shall be deposited in monthly installments into the State General Revenue Fund. 2. Ecosystem Management and Restoration Trust Fund: Two-tenths of one percent (0.2%) shall be transferred to the Ecosystem Management and Restoration Trust Fund to be used for water quality improvements and water restoration projects. 3. State Local Government Half-Cent Sales Tax Clearing Trust Fund: After the distributions in (1) and (2) above, 8.814% of the amount remitted by a sales tax dealer located within a participating county pursuant to Section , Florida Statutes, as amended, shall be transferred into the State Local Government Half-Cent Sales Tax Clearing Trust Fund. Between July 1, 2003 and July 1, 2004, 9.553% was transferred and prior to July 1, 2003, 9.653% was transferred pursuant to Section , Florida Statutes. Beginning July 1, 2003, the amount to be transferred pursuant to this paragraph is reduced by 0.1 percent and such amount is to be transferred to the Public Employees Relations Commission Trust Fund. 4. State Local Government Half-Cent Sales Tax Clearing Trust Fund: After the distributions in (1), (2) and (3) above, 0.095% shall be transferred to the State Local Government Half- Cent Sales Tax Clearing Trust Fund and distributed pursuant to Section , Florida Statutes, as amended. 5. Revenue Sharing Trust Fund for Counties. After the distribution in (1), (2), (3) and (4) above, 2.044% of the available proceeds shall be transferred monthly to the Revenue Sharing Trust Fund for Counties as set forth in Section , Florida Statutes, as amended. 6. Revenue Sharing Trust Fund for Municipalities. After the distribution in (1), (2), (3), (4) and (5) above, % of the available proceeds shall be transferred monthly to the Revenue Sharing Trust Fund for Municipalities as set forth in Section , Florida Statutes, as amended, provided however, if the total proceeds to be transferred hereunder are less than the amounts transferred in state Fiscal Year , each municipality shall receive an amount proportional to the amount it was due in state Fiscal Year Distribution in Lieu of Funds Previously Distributed Pursuant to the Pari-mutuel Wagering Trust Fund. Of the remaining proceeds, $29,915,500 shall be divided among the counties, provided however, payments may be made directly to the school boards, special districts or a municipality as provided by an existing local or special law. This distribution is in lieu of funds previously distributed pursuant to the Pari-mutuel Wagering Trust Fund. 8. Professional Sports: Of the remaining proceeds: (a) $166,667 shall be distributed monthly for 30 years to each applicant that has been certified as a "facility for a new professional sports franchise" or a "facility for a retained professional sports franchise" pursuant to Section , Florida Statutes, as amended; and (b) up to $41,667 shall be distributed monthly for 30 years to each applicant certified as a "retained spring training franchise facility" pursuant to Section , Florida Statutes, as amended, however, not more than $416,670 maybe distributed monthly to all such certified facilities. As described above, the Project has been certified as a "facility for a retained spring training franchise." 9. Golf Hall of Fame: Of the remaining proceeds $166,667 shall be distributed monthly for up to 300 months to an applicant which is certified as the "professional golf hall of fame" pursuant to Section , Florida Statutes, as amended, and is open to the public. 14

21 10. International Game Fish Association: Of the remaining proceeds, $83,333 distributed monthly for up to 168 months to an applicant which is both certified as the International Game Fish Association World Center facility pursuant to Section , Florida Statutes, as amended, and is open to the public. This distribution is subject to reduction pursuant to Section , Florida Statutes, as amended. 11. State General Revenue Fund: All other proceeds shall remain with the State General Revenue Fund. Historical State Sales Tax Collections and Distributions The following table sets forth historical sales tax collections and historical distributions of the general sales and use taxes: State of Florida Collection and Distributions of the General Sales and Use Tax State Fiscal Years Ended June 30, 2006 through June 30, 2011 Collections (1) Distributions (1) State Fiscal Year Ended June 30 Ecosystem and Restoration Management Trust Fund Local Governments (2) Sports Facilities Transfer Other Distribution After Sports Facilities Transfer 2011 (3) $18,830,400,000 (4) $0 $2,030,600,000 $22,730,500 $16,759,000, ,835,200,000 (4) 0 1,924,300,000 22,730,500 15,871,100, ,609,519,245 (4) 36,957,571 2,016,038,153 23,730,558 16,531,424, ,721,299,764 (4) 41,191,617 2,226,946,776 22,730,556 18,428,916, ,877,149,948 43,539,314 2,376,370,844 20,409,979 19,435,200, ,812,428,112 43,453,669 2,380,483,067 19,466,712 19,367,389,624 (1) Amounts collected for distribution are first deposited into the General Revenue Fund before deposits are transferred to the other funds and expenses provided for therein. See "DESCRIPTION OF SALES TAX REVENUES General" above for the order of distribution of all funds received and collected by and under Chapter 212, Florida Statutes. (2) Local Governments' distributions include the half-cent, county and municipal revenue sharing, and the shift of $29,915,500 to counties that used to be funded from pari-mutual tax revenues. (3) All collections and distributions for the Fiscal Year ended June 30, 2011 are projected by the Office of Economic and Demographic Research, The Florida Legislature. (4) State-wide sales tax collections are estimated to increase 5.58% for Fiscal Year 2011 according to the Office of Economic and Demographic Research, The Florida Legislature compared to Fiscal Year State-wide sales collections declined 4.16% in Fiscal Year 2010 compared to Fiscal Year 2009, declined 10.19% in Fiscal Year 2009 compared to Fiscal Year 2008, and declined 5.28% in Fiscal Year 2008 compared to Fiscal Year 2007, all attributable to declining economic activity. SOURCE: Office of Economic and Demographic Research, The Florida Legislature. Backup Covenant to Budget and Appropriate Subject to the next paragraph, in the event Pledged Funds are insufficient to pay principal or interest on the Bonds, the City has covenanted and agreed and has a positive and affirmative duty to appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Revenues, amounts sufficient to pay principal of and interest on the Bonds not being paid from other amounts as the same 15

22 shall become due. Such covenant and agreement on the part of the City to budget and appropriate such amounts of Non-Ad Valorem Revenues is cumulative to the extent not paid, and shall continue until such Non-Ad Valorem Revenues or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. No lien upon or pledge of such budgeted Non-Ad Valorem Revenues shall be in effect until such monies are budgeted and appropriated as provided in the Resolution. The City has acknowledged and agreed that the obligations of the City to include the amount of such amendments in each of its annual budgets and to pay such amounts from Non-Ad Valorem Revenues may be enforced in a court of competent jurisdiction in accordance with the remedies set forth in the Resolution. Until such monies are budgeted and appropriated as provided in the Resolution, such covenant to budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Revenues, nor does it preclude the City from pledging in the future its Non-Ad Valorem Revenues heretofore in the Resolution or hereafter, nor does it require the City to levy and collect any particular Non-Ad Valorem Revenues, nor does it give the Holders of the Bonds a prior claim on the Non-Ad Valorem Revenues as opposed to claims of general creditors of the City. Such covenant to budget and appropriate Non-Ad Valorem Revenues is subject in all respects to the prior payment of obligations secured by a pledge of such Non-Ad Valorem Revenues or in the future entered into (including the payment of debt service on bonds and other debt instruments). Anything in the Resolution to the contrary notwithstanding, it is understood and agreed that all obligations of the City under the Resolution shall be payable from the portion of Non-Ad Valorem Revenues budgeted and appropriated as therein provided. Nothing in the Resolution shall be deemed to pledge ad valorem tax power or ad valorem tax revenues or to permit or constitute a mortgage or lien upon any assets owned by the City and no Holder of the Bonds nor any other person, may compel the levy of ad valorem taxes on real or personal property within the boundaries of the City or the use or application of ad valorem tax revenues in order to satisfy any payment obligations under the Resolution or to maintain or continue any of the activities of the City which generate user service charges, regulatory fees, or any other Non-Ad Valorem Revenues. Notwithstanding any provisions of the Resolution or the Bonds to the contrary, the City shall never be obligated to maintain or continue any of the activities of the City which generate user service charges, regulatory fees or any Non- Ad Valorem Revenues. Until such monies are budgeted and appropriated as provided in the Resolution, neither the Resolution nor the obligations of the City thereunder shall be construed as a pledge of or a lien on all or any legally available Non-Ad Valorem Revenues of the City, but shall be payable solely as provided in the Resolution and, notwithstanding anything therein to the contrary, is subject to the funding obligations for essential governmental services of the City, and is further subject to the provisions of the Act. Special Investment Considerations As described above, the City's backup covenant to budget and appropriate Non-Ad Valorem Revenues does not constitute a lien, either legal or equitable, on any of the City's revenues. The amount of such revenues available to make backup payments on the Bonds may be effectively limited by (i) the requirement for a balanced budget, (ii) funding requirements for essential governmental services of the City, (iii) a decrease in one or more of the sources of Non-Ad Valorem Revenues, for example, a fluctuation in the Half-Cent Sales Tax collections due to changes in economic activity and a decrease in the dollar volume of purchases in Sarasota County (see " Historical State Sales Tax Collections and Distributions"), and (iv) the inability of the City to expend revenues not appropriated or in excess of funds actually available after the use of such funds to satisfy obligations having an express lien or pledge on such funds. Furthermore, the City is not restricted in its ability (i) to pledge such revenues for other purposes or to issue additional debt specifically secured by such revenues or by a covenant similar to that securing the Bonds or (ii) to reduce or discontinue services that generate Non-Ad Valorem Revenues. 16

23 All of these factors may limit the availability of Non-Ad Valorem Revenues to pay a portion of the debt service on the Bonds in the event the Pledged Funds are insufficient to pay principal or interest on the Bonds. In addition, there can be no certainty as to the outcome of any judicial proceedings to enforce the City's obligation to appropriate such funds. No Debt Service Reserve Fund There is no debt service reserve fund for the Bonds. Pledge of Non-Ad Valorem Revenues Other than Pledged Funds, no specific source of Non-Ad Valorem Revenues are pledged as a backup in the event the Pledged Funds are insufficient to pay principal or interest on the Bonds. Certain sources of Non-Ad Valorem Revenues are already pledged for the payment of other indebtedness of the City. Future issues of other indebtedness of the City may be secured by a pledge of Non-Ad Valorem Revenues as described above. Additional Bonds No Additional Bonds, payable on a parity with the Bonds then Outstanding pursuant to the Resolution, shall be issued except upon the conditions and in the manner set forth below. The City may issue one or more Series of Additional Bonds for any one or more of the following purposes: financing the Cost of an Additional Project, or the completion thereof or of the Project, or refunding any or all Outstanding Bonds or of any Subordinated Indebtedness of the City. No such Additional Bonds shall be issued unless there shall have been obtained and filed with the City a statement of the Director of Finance demonstrating that the Sales Tax Payments, together with any Direct Subsidy Payments received during the City's prior Fiscal Year, is sufficient to pay Maximum Annual Debt Service (for this purpose only, Maximum Annual Debt Service shall not include Direct Subsidy Payments to avoid double counting) of all Bonds then Outstanding including such Additional Bonds with respect to which such statement is made. Description of Non-Ad Valorem Revenues Franchise Fees The following describes the sources of the City's Non-Ad Valorem Revenues: Franchise fees are levied annually on utility companies by the City in return for granting a privilege sanctioning a monopoly or permitting the use of public property. Such fees are currently levied against Florida Power and Light Co. and Tampa Electric Company (formerly Peoples Gas Company). Utility Service Fees Public Service Tax The Public Service Tax is imposed, levied and collected by the City pursuant to Section , Florida Statutes, and other applicable provisions of law, on the purchase of electricity, fuel oil, metered or bottled gas (natural liquefied petroleum gas or manufactured), water service, and other services on which a tax may be imposed by law. Florida law authorizes any municipality in the State to levy a Public Service Tax on the purchase within such municipality of electricity, metered natural gas, liquefied petroleum gas either metered or 17

24 bottled, manufactured gas either metered or bottled, water service and fuel oil as well as any services competitive with those specifically enumerated. This tax may not exceed 10% of the payments received by the sellers of such services from purchasers (except in the case of fuel oil, for which the maximum tax is four cents per gallon). The purchase of natural gas or fuel oil by a public or private utility either for resale or for use as fuel in the generation of electricity, or the purchase of fuel oil or kerosene for use as an aircraft engine fuel or propellant or for use in internal combustion engines, is exempt from the levy of such tax. Pursuant to the Constitution of the State, Florida Statutes and a resolution of the City, the City levies a Public Service Tax, within the incorporated area of the City at the rate of 10% on sales of all services for which it is allowed to tax, and with the restriction that the tax on fuel oil cannot exceed 4 cents per gallon. Florida law provides that a municipality may exempt from the Public Service Tax the first 500 kilowatts of electricity per month purchased for residential use. The City has not adopted such an exemption but it does exempt purchases by the United States Government, the State, Sarasota County, the City and its agencies, boards, commissions and authorities from the levy of such tax. In addition, the City exempts purchases used exclusively for church purposes by any State recognized church. The Public Service Tax must be collected by the seller from purchasers at the time of sale and remitted to the City. Such tax will appear on a periodic bill rendered to consumers for electricity, metered and bottled gas, water service and fuel oil. A failure by a consumer to pay that portion of the bill attributable to the Public Service Tax may result in a suspension of the service involved in the same fashion as the failure to pay that portion of the bill attributable to the particular utility service. Licenses and Permits These are revenues derived from the issuance of local licenses and permits, including professional and occupational licenses required for the privilege of engaging in certain trades, occupations and other activities. Intergovernmental This category includes federal, state and other local units grants, and revenues shared by the state and other local units. Local Communications Services Tax. The Communications Services Tax Simplification Act, enacted by Chapter , Laws of Florida, as amended by Chapter , Laws of Florida, and now codified in part as Chapter 202, Florida Statutes (the "Communications Services Tax Act") established, effective October 1, 2001, a communications services tax on the sale of communications services as defined in Section , Florida Statutes, and as of the same date repealed Section (9), Florida Statutes, which previously granted municipalities the authority to levy a utility services tax on the purchase of telecommunication services. Florida Statutes, Section , as amended, provides that counties and municipalities may levy, by ordinance, a discretionary communications services tax (the "Local Communications Services Tax") on communications services, the revenues from which may be pledged for the repayment of current or future bonded indebtedness. The City set the rates for its Local Communications Services Tax pursuant to Ordinance No enacted on June 14,

25 Communication services are defined as the transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals, including cable services, to a point, or between or among points, by or through any electronic, radio, satellite, cable, optical, microwave, or other medium or method now in existence or hereafter devised, regardless of the protocol used for such transmission or conveyance. The term does not include: (a) (b) (c) (d) (e) (f) (g) Information services; Installation or maintenance of wiring or equipment on a customer's premises; The sale or rental of tangible personal property; The sale of advertising, including, but not limited to, directory advertising; Bad check charges; Late payment charges; Billing and collection services; or (h) Internet access service, electronic mail service, electronic bulletin board service, or similar on-line services. Any sale of communications services charged to a service address in the City is subject to the City's local communications services tax at a rate of 5.62%. The Communications Services Tax Act further provides that, to the extent that a provider of communications services is required to pay to a local taxing jurisdiction a tax, charge, or other fee under any franchise agreement or ordinance with respect to the services or revenues that are also subject to the tax, such provider is entitled to a credit against the amount of such tax payable to the State in the amount of such tax, charge, or fee with respect to such service or revenues. The amount of such credit shall be deducted from the amount that the local taxing jurisdiction is entitled to receive. The Local Communications Services Tax must be collected by the provider from purchasers and remitted to the FDOR. The proceeds of said Local Communications Services Tax less the FDOR's cost of administration is deposited in the Local Communications Services Tax clearing trust fund and distributed monthly to the appropriate jurisdictions. Half Cent Sales Tax. The State levies and collects a sales tax on, among other things, the sales price of each item or article of tangible personal property sold at retail in the State, subject to certain exceptions and dealer allowances. In 1982, the Florida legislature created the Local Government Half- Cent Sales Tax Program (the "Local Government Half-Cent Sales Tax Program") which distributes a portion of the sales tax revenue and money from the State's General Revenue Fund to counties and municipalities that meet strict eligibility requirements. In 1982, when the Local Government Half-Cent Sales Tax Program was created, the general rate of sales tax in the State was increased from 4 % to 5%, and one--half of the fifth cent was devoted to the Local Government Half-Cent Sales Tax Program, thus giving rise to the name "Half-Cent Sales Tax." Although the amount of sales tax revenue deposited into the Local Government Half-Cent Sales Tax Program is no longer one--half of the fifth cent of every dollar of the sales price of an item subject to sales tax, the name "Half-Cent Sales Tax" has continued to be utilized. 19

26 Section , Florida Statutes, provides for the distribution of sales tax revenues collected by the State and further provides for the distribution of a portion of sales tax revenues to the Local Government Half-Cent Sales Tax Clearing Trust Fund (the "Trust Fund"), after providing for transfers to the General Fund and the Ecosystem Management and Restoration Trust Fund. The entire sales tax remitted to the State by each sales tax dealer located within a particular county (the "Local Government Half-Cent Sales Tax Revenues") is deposited in the Trust Fund and earmarked for distribution to the governing body of such county and each participating municipality within that county pursuant to a distribution formula. The percentage of Local Government Half--Cent Sales Tax Revenues deposited in the Trust Fund is %. The general rate of sales tax in the State is currently 6.00%. After taking into account the distributions to the General Fund (historically 5% of taxes collected) and the Ecosystem Management and Restoration Trust Fund (.2% of the taxes collected), for every dollar of taxable sales price of an item, approximately cents is deposited into the Trust Fund. As of October 1, 2001, the Trust Fund began receiving a portion of certain taxes imposed by the State on the sales of communication services (the "CST Revenues") pursuant to Chapter 202, Florida Statutes. Monies received by the City pursuant to Chapter 202, Florida Statutes, that are not deposited in the Trust Fund do not constitute Half-Cent Sales Tax revenues. Accordingly, moneys distributed from the Trust Fund now consist of funds derived from both general sales tax proceeds and CST Revenues required to be deposited into the Trust Fund. The Half-Cent Sales Tax collected within a county and distributed to local government units is distributed among the county and the municipalities therein in accordance with the following formula: County Share (percentage of total Half-Cent = Sales Tax receipts) unincorporated area population + 2/3 incorporated area population Municipality Share (percentage of total Half-Cent = Sales Tax receipts) total county population total county population + 2/3 incorporated area population municipality population + 2/3 incorporated area population For purposes of the foregoing formula, "population" is based upon the latest official State estimate of population certified prior to the beginning of the local government Fiscal Year. Should any unincorporated area of Sarasota County become incorporated as a municipality, the share of the Half-Cent Sales Tax received by Sarasota County and the City would be reduced. The Half-Cent Sales Tax is distributed from the Trust Fund on a monthly basis to participating units of local government in accordance with Part VI, Chapter 218, Florida Statutes (the "Sales Tax Act"). The Sales Tax Act permits the City to pledge its share of the Half-Cent Sales Tax for the payment of principal of and interest on any capital project. To be eligible to participate in the Half-Cent Sales Tax, the counties and municipalities must comply with certain requirements set forth in the Sales Tax Act. These requirements include those concerning the reporting and auditing of its finances, the levying of ad valorem taxes or receipt of other revenue sources, and certifying certain requirements pertaining to the employment and compensation of 20

27 law enforcement officers, the employment of fire fighters, the auditing of certain dependent special districts, and the method of fixing millage rates for the levying of ad valorem taxes. Although the Sales Tax Act does not impose any limitation upon the number of years during which the City can receive distribution of the Half-Cent Sales Tax from the Trust Fund, there may be future amendments to the Sales Tax Act. To be eligible to participate in the Trust Fund in future years, the City must comply with certain eligibility and reporting requirements of Chapter 218, Part VI, Florida Statutes, otherwise, the City will not be entitled to any Trust Fund distributions for twelve (12) months following a "determination of noncompliance" by the FDOR. State Revenue Sharing. A portion of the taxes levied and collected by the State is shared with local governments under the provisions of Chapter 218, Part II, Florida Statutes. The amount deposited by FDOR into the State Revenue Sharing Trust Fund for Municipalities is % of available sales and use tax collections after certain required distributions, 12.5% of the Florida alternative fuel user decal fee collections, and the net collections from the one-cent municipal fuel tax. To be eligible for State Revenue Sharing funds, a local government must be audited, with certain exceptions; must have filed its annual financial report with the Florida Department of Financial Services; must certify certain requirements pertaining to the employment and compensation of law enforcement officers and the employment of firefighters; must levy an ad valorem tax of at least 3 mills or collected equivalent alternative revenues from a combination of the following sources available to municipalities: a remittance from the county pursuant to Section (6)(a), Florida Statutes, occupational license taxes, utility taxes, and ad valorem taxes. Eligibility is retained if the local government has met eligibility requirements for the previous three years, even if the local government reduces its millage or utility taxes because of the receipt of the Half-Cent Sales Tax. The amount of the State Revenue Sharing Trust Fund for Municipalities distributed to anyone municipality is the average of three factors: an adjusted population factor; a sales tax collection factor, which is the proportion of the local municipality's ordinary sales tax collected within the municipality to the total sales tax collected within all eligible municipalities in the State; and a relative revenue-raising ability factor, which measures the municipality's ability to raise revenue relative to other qualifying municipalities in the State. Each municipality is entitled to receive a minimum amount of State Revenue Sharing funds known as the "guaranteed entitlement" as defined in Section (6), Florida Statutes. To be eligible to participate in State Revenue Sharing in future years, the City must comply with certain eligibility and reporting requirements, otherwise, the City will not be entitled to distributions for a period of time. Charges for Services Charges for various services provided by the City to residents, property owners, and grants received from other governments, including the following: (a) General Government: all money resulting from charges for current services; i.e., photographs, zoning review fees, certification fees for reports and ordinances; fees; (b) Public Safety: fees for police services, extra-duty administration fees, towing and storage 21

28 (c) Physical Environment: pre-annexation fees for utility connections to property outside the City boundaries; (d) Building and Zoning Inspections: fees for sidewalk café and valet permits, right-of-way permits, Alcoholic license review fees, burglar alarm permits; (e) Recreational and Special Events: fees for parks and recreation activities and events; and (f) Other: fees for services not specifically mentioned above, i.e., engineering services, public hearing fees. [Balance of page intentionally left blank.] 22

29 Other Revenue and Financing Sources This category includes a variety of revenues and transfers from other funds, including the interest earnings on invested funds, revenues from cell tower leases, and rental of City properties to private businesses. THE CITY OF SARASOTA, FLORIDA NON-AD VALOREM REVENUES YEAR ENDED SEPTEMBER 30 th (Est.) FY FY FY FY FY Franchise Tax $4,892,424 (1) $ 5,319,627 $ 5,208,466 $ 5,578,299 $ 5,451,451 Utility Service Fees 9,750,249 9,641,138 9,814,032 9,750,102 9,899,607 Licenses and Permits 1,022,214 1,005,317 1,142, , ,345 Intergovernmental (2) 26,366,130 (1) 27,729,065 30,979,306 29,731,945 28,012,447 Charges for Services 1,406,998 1,659,280 1,271,086 1,506,734 1,537,401 Other Revenue and Financing Sources 6,755,840 7,122,910 7,125,208 8,952,054 9,633,200 Total Non-Ad Valorem Revenues $50,193,855 $52,477,337 $55,540,124 $56,504,794 $55,495,451 Less: Essential City Services 27,627,698 27,432,079 26,784,957 24,770,781 23,250,346 Available Non-Ad Valorem Revenues 22,566,157 25,045,258 28,755,167 31,734,013 32,245,105 Non-Ad Valorem Maximum Annual Debt Service (3) 6,028,892 6,452,298 4,975,981 4,975,981 5,118,370 Net Funds Available for Additional Debt Service $16,537,265 $18,592,960 $23,779,186 $26,758,032 $27,126,735 (1) The reduction in Fiscal Year in Franchise Tax and Intergovernmental revenues are attributable to a decline in the local and State-wide economy. (2) Included are Half-Cent Sales Tax revenues collected by the State and distributed to counties and municipalities. State sales tax collections declined 2.4% during the state Fiscal Year 2010 compared to the state Fiscal Year See " Historical State Sales Tax Collections and Distributions." Also included is the City's share of One Percent Local Governmental Infrastructure Sales Tax, Gas Tax Revenues and Tax Incremental Revenues from the City's community redevelopment agency, all of which also declined. The One Percent Local Governmental Infrastructure Sales Tax would only be available as a backup to the Pledged Funds for the payment of the Bonds if the City Commission approves such expenditure for the Project. The Gas Tax Revenues and Tax Incremental Revenues are not legally available as a backup to the Pledged Funds for purposes of paying debt service on the Bonds. (3) Includes First Florida Governmental Financing Commission's ("FFGFC") Improvement and Refunding Revenue Bonds, Series 2001, of which the City's current outstanding loan amount is $585,000; FFGFC's Improvement and Refunding Revenue Bonds, Series 2003, of which the City's current outstanding loan amount is $2,565,000; and FFGFC's Revenue Bonds, Series 2005, of which the City's current outstanding loan amount is $2,985,000. Also includes the City's Special Obligation Revenue Refunding Bonds, Series 1992, currently outstanding in the principal amount of $3,313,556 and the City's Capital Improvement Revenue Bond, Series 2009 (Federally Taxable Build America Bonds Direct Subsidy), of which the City's current outstanding loan amount is $20,513,896. SOURCE: City of Sarasota Finance Department 23

30 NET DEBT SERVICE REQUIREMENTS FOR THE BONDS Period Ending February 1 Principal Interest Anticipated Direct Subsidy Payments (1) Total Debt Service Net Debt Service 2012 $225,000 $573, $798, $-258, $540, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,000 99, , , , ,000 68, , , , ,000 36, , , , Totals $8,260,000 $8,654, $16,914, $-3,894, $13,019, (1) Direct Subsidy Payments are a component of Pledged Funds. FLOW OF FUNDS Beginning on the date the Bonds are issued, the City shall deposit the Sales Tax Payments, as received and any Direct Subsidy Payments into the Restricted Revenue Account promptly upon receipt thereof. The moneys in the Restricted Revenue Account shall be deposited or credited on or before the 21st day of each month, commencing with the month in which delivery of the Bonds shall be made to the Initial Purchaser, in the following manner and in the following order of priority: Interest Account. The City shall deposit into or credit to the Interest Account the sum which, together with the balance in such Account and any anticipate Direct Subsidy Payments, shall equal the interest on all Outstanding Bonds accrued and unpaid and to accrue to the end of the then current calendar month. Moneys in the Interest Account shall be used to pay interest on the Bonds as and when the same become due, whether by redemption or otherwise, and for no other purpose. The City shall adjust the amount of the deposit into the Interest Account not later than the month immediately preceding any 24

31 Interest Date so as to provide sufficient moneys in the Interest Account to pay the interest on the Bonds coming due on such Interest Date. Principal Account. Next, the City shall deposit into or credit to the Principal Account the sum which, together with the balance in said Account, shall equal the principal amounts on all Outstanding Bonds due and unpaid and that portion of the principal next due within one year which would have accrued on such Bonds during the then current calendar month if such principal amounts were deemed to accrue monthly (assuming that a year consists of twelve equivalent calendar months of thirty days each) in equal amounts from the next preceding principal payment due date, or, if there is no such preceding principal payment due date, from a date one year preceding the due date of such principal amount. Moneys in the Principal Account shall be used to pay the principal of the Bonds as and when the same shall mature, and for no other purpose. The City shall adjust the amount of deposit to the Principal Account not later than the 21st day of the month immediately preceding any principal payment date so as to provide sufficient moneys in the Principal Account to pay the principal on the Bonds becoming due on such principal payment date. Bond Amortization Account. Commencing in the month which is one year prior to any Amortization Installment due date, the City shall deposit into or credit to the Bond Amortization Account the sum which, together with the balance in said Account, shall equal the Amortization Installments on all Outstanding Bonds due and unpaid and that portion of the Amortization Installments of all Outstanding Bonds next due which would have accrued on such Bonds during the then current calendar month if such Amortization Installments were deemed to accrue monthly (assuming that a year consists of twelve equivalent calendar months having thirty days each) in equal amounts from the next preceding Amortization Installment due date, or, if there is no such preceding Amortization Installment due date, from a date one year preceding the due date of such Amortization Installment. Moneys in the Bond Amortization Account shall be used to purchase or redeem Term Bonds in the manner provided in the Resolution, and for no other purpose. The City shall adjust the amount of the deposit into the Bond Amortization Account not later than the 21st day of the month immediately preceding any date for payment of an Amortization Installment so as to provide sufficient moneys in the Bond Amortization Account to pay the Amortization Installments on the Bonds coming due on such date. Payments to the Bond Amortization Account shall be on a parity with payments to the Principal Account. Unrestricted Revenue Account. The balance of any moneys after the deposits required by the Resolution may be transferred, at the discretion of the City, to the Unrestricted Revenue Account or to any other appropriate fund or account of the City and may be used to redeem or defease Bonds and/or to be used to make improvements to the Project. The moneys required to be accounted for in each of the funds and accounts referenced above and established in the Resolution may be deposited in a single bank account, and funds allocated to such funds and accounts may be invested in a common investment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the moneys on deposit therein. VALIDATION On July 8, 2010, the Circuit Court of the Twelfth Judicial Circuit in and for Sarasota County, Florida entered a final judgment validating the Bonds. On October 28, 2010, the Supreme Court of Florida affirmed said judgment, and ordered that no motion for rehearing would be allowed. 25

32 LEGALITY Certain legal matters in connection with the issuance of the Bonds are subject to the approval of Bryant Miller Olive P.A., Tampa, Florida, Bond Counsel, whose approving opinion will be available at the time of delivery of the Bonds and will be printed on the Bonds. The form of Bond Counsel's opinion is attached hereto as APPENDIX D and reference is made to such form of opinion for the complete text thereof. Certain legal matters will be passed upon by the City Attorney, Fournier and Connolly, P.A., Sarasota, Florida and by GrayRobinson, P.A., Tampa, Florida, Counsel to the Underwriter. The proposed text of the opinion of Bond Counsel is set forth as "APPENDIX D FORM OF BOND COUNSEL OPINION" attached hereto. The actual legal opinion to be delivered may vary from that text if necessary to reflect facts and law on the date of delivery. Each opinion will speak only as of its date, and subsequent distribution of it by recirculation of the Official Statement or otherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any of the matters referenced in such opinion subsequent to its date. Bond Counsel has not been engaged to, nor has it undertaken to, review (1) the accuracy, completeness or sufficiency of this Official Statement or any other offering material relating to the Bonds; provided, however, that Bond Counsel will render an opinion to the Underwriter of the Bonds relating to the accuracy of certain statements contained herein and under the heading "TAX MATTERS" and certain statements which summarize provisions of the Resolution and the Bonds, or (2) the compliance with any federal or state securities law with regard to the sale or distribution of the Bonds. General TAX MATTERS The City, pursuant to the Recovery Act is issuing the Bonds as Build America Bonds and further designated the Bonds as Recovery Zone Economic Development Bonds. The City has elected to receive Direct Subsidy Payments from the United States Treasury equal to 45% of the interest payable on the Bonds. The availability of such Direct Subsidy Payments is subject to the City's continued compliance with certain covenants and establishment of certain facts and expectations with respect to the Bonds, the use and investment proceeds thereof and the use of property financed thereby. No assurances can be provided that the City will receive the Direct Subsidy Payments. No assurance can be given that any future legislation, clarification, amendments to the Code, if enacted into law, judicial decisions or failure by the City to timely file payment request forms or otherwise satisfy other eligibility requirements will not potentially reduce or eliminate Direct Subsidy Payments expected to be received by the City with respect to the Bonds. The amount of any Direct Subsidy Payment is subject to legislative changes by Congress. Direct Subsidy Payments will only be paid if the Bonds are "qualified bonds" under Section 54AA(g) of the Code (hereafter "Qualified Build America Bonds"). For the Bonds to be and remain Qualified Build America Bonds, the City must comply with certain requirements of the Code and establish certain facts and expectations with respect to the Bonds, including the use and investment of proceeds thereof and the use of property financed thereby. The City has not covenanted to and is not obligated to comply with the requirements of the Code in order for the Bonds to remain Qualified Build America Bonds. In addition, the City must timely file a Form 8038-CP with respect to each interest payment date requesting the associated Direct Subsidy Payment. Therefore, if the City fails to file the necessary Form 8038-CP in a timely manner, it is possible that the City's receipt of such Direct Subsidy Payment will be delayed. Direct Subsidy Payments are subject to offset against certain amounts that may, for any reason, 26

33 related or unrelated to the Bonds or the Direct Subsidy Payment, be owed by the City to an agency of the United States. As such, the Direct Subsidy Payments to be received by the City with respect to the Bonds could be reduced or eliminated due to amounts owed to the federal government by the City. The City is obligated to make all payments of principal and interest on the Bonds whether or not it receives the Direct Subsidy Payments. Interest on the Bonds is not excluded from gross income for federal income tax purposes. Except as described herein, Bond Counsel will express no opinion as to any other tax consequences regarding the Bonds. Holders of the Bonds should consult their tax advisors with respect to the inclusion of interest on Bonds in gross income for federal income tax purposes. The following is a summary of certain anticipated United States federal income tax consequences of the purchase, ownership and disposition of the Bonds by certain persons. The summary is based upon provisions of the Code, the regulations promulgated thereunder and rulings and court decisions now in effect, all of which are subject to change. This summary is intended as a general explanatory discussion of the consequences of holding the Bonds, limited to those persons who hold the Bonds as "capital assets" within the meaning of Section 1221 of the Code. This summary does not purport to address all aspects of federal income taxation that may affect particular investors in light of their individual circumstances or certain types of investors subject to special treatment under the federal income tax laws, including but not limited to financial institutions, insurance companies, dealers in securities or currencies, persons holding the Bonds as a hedge against currency risks or as a position in a straddle for tax purposes, foreign investors or persons whose functional currency is not the U.S. dollar. This summary does not address alternative minimum tax issues or the indirect consequences to a holder of an equity interest in a holder of the Bonds. Potential purchasers of the Bonds should consult their own tax advisors in determining the federal, state or local tax consequences to them of the purchase, ownership and disposition of the Bonds. As stated above, interest on the Bonds is not excluded from gross income for federal income tax purposes. Purchasers other than those who purchase the Bonds in the initial offering at their principal amounts will be subject to federal income tax accounting rules affecting the timing and/or characterization of payments received with respect to such Bonds. Generally, interest paid on the Bonds and recovery of accrued original issue and market discount, if any, will be treated as ordinary income to the Bondholder, and, after adjustment for the foregoing, principal payments will be treated as a return of capital. Original Issue Discount The following summary is a general discussion of certain federal income tax consequences of the purchase, ownership and disposition of the Bonds issued with original issue discount ("Discount Bonds"). A Bond will be treated as having been issued at an original issue discount if the excess of its "stated redemption price at maturity" (defined below) over its issue price (defined as the initial offering price to the public at which a substantial amount of the Bonds of the same maturity have first been sold to the public, excluding bond houses and brokers) equals or exceeds one quarter of one percent of such Bond's stated redemption price at maturity multiplied by the number of complete years to its maturity. Generally, a Discount Bond's "stated redemption price at maturity" is the total of all payments provided by the Bonds that are not payments of "qualified stated interest." Generally, "qualified stated interest" includes stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually at a single fixed rate. In general, the amount of original issue discount includible in income by the initial holder of a Discount Bond is the sum of the "daily portions" of original issue discount with respect to such Bond for 27

34 each day during the taxable year in which such holder held such Discount Bond. The daily portion of original issue discount is determined by allocating to each day in any accrual period a ratable portion of the original issue discount allocable to that accrual period. An accrual period may be of any length, and may vary in length over the term of a Discount Bond, provided that each accrual period is not longer than one year and each scheduled payment of principal or interest occurs at the end of an accrual period. The amount of original issue discount allocable to each accrual period is equal to the difference between (i) the product of the Discount Bond's adjusted issue price at the beginning of such accrual period and its yield to maturity (determined on the basis of compounding at the close of each accrual period and appropriately adjusted to take into account the length of the particular accrual period) and (ii) the amount of any qualified stated interest payments allocable to such accrual period. The "adjusted issue price" of a Discount Bond at the beginning of any accrual period is the sum of the issue price of the Discount Bond plus the amount of original issue discount allocable to all prior accrual periods minus the amount of any prior payments on the Discount Bond that were not qualified stated interest payments. Under these rules, holders will have to include in income increasingly greater amounts of original issue discount in successive accrual periods. Holders of Discount Bonds should consult their own tax advisors as to the determination for federal income tax purposes of the amount of original issue discount properly accruable in any period and as to other federal tax consequences and the treatment of original issue discount for purposes of state and local taxes on, or based on, income. Market Discount If a holder purchases the Bonds for an amount that is less than the adjusted issue price of the Bonds, and such difference is not considered to be de minimis, then such discount will represent market discount. Absent an election to accrue market discount currently, upon a sale, exchange or other disposition of the Bonds, a portion of any gain will be ordinary income to the extent it represents the amount of any such market discount that was accrued through the date of sale. In addition, absent an election to accrue market discount currently, the portion of any interest expense incurred to carry a market discount bond is limited. Such holders should consult their own tax advisors with respect to whether or not they should elect to accrue market discount currently, the determination and treatment of market discount for federal income tax purposes and the state and local tax consequences of owning such Bonds. Bond Premium If a holder purchases a Bond at a cost greater than its principal amount, such holder may elect to treat such excess as amortizable bond premium. As the tax accounting treatment of bond premium is complex, such holders should consult their own tax advisors with respect to whether or not they should elect to amortize such premium under Section 171 of the Code. Sale, Exchange or Redemption Upon a sale, exchange or redemption of the Bonds, holders will generally realize a capital gain or loss on the Bonds equal to the difference between the amount realized on the sale, exchange or retirement (less any accrued qualified stated interest which will be taxable as such) and the holder's adjusted tax basis on the Bonds. The holder's adjusted tax basis for the Bonds is the price such owner pays for the Bonds plus the amount of any original issue discount and market discount previously included in income, reduced on account of any payments received (other than qualified periodic interest payments) and any amortized bond premium. The legal defeasance of the Bonds may result in a deemed sale or exchange of such Bonds under certain circumstances, in which event an owner of the Bonds will also recognize 28

35 taxable gain or loss as described above. Owners of such Bonds should consult their tax advisors as to the federal income tax consequences of any such an event. Information Reporting and Backup Withholding Interest paid on bonds such as the Bonds is subject to information reporting to the Internal Revenue Service. In conjunction with the information reporting requirement, the Code subjects certain non-corporate owners of Bonds, under certain circumstances, to "backup withholding" at (i) the fourth lowest rate of tax applicable under Section 1(c) of the Code (i.e., a rate applicable to unmarried individuals) for taxable years beginning on or before December 31, 2010; and (ii) the rate of 31% for taxable years beginning after December 31, 2010, with respect to payments on the Bonds and proceeds from the sale of the Bonds. This withholding generally applies if the owner of Bonds (i) fails to furnish the payor such owner's social security number or other taxpayer identification number ("TIN"), (ii) furnished the payor an incorrect TIN, (iii) fails to properly report interest, dividends, or other "reportable payments" as defined in the Code, or (iv) under certain circumstances, fails to provide the payor or such owner's securities broker with a certified statement, signed under penalty of perjury, that the TIN provided is correct and that such owner is not subject to backup withholding. Backup withholding will not apply, however, with respect to certain payments made to holders, including payments to certain exempt recipients and to certain Nonresidents (defined below). Prospective purchasers of the Bonds may also wish to consult with their tax advisors as to their qualification for an exemption from backup withholding and the procedure for obtaining the exemption. Nonresidents Under the Code, interest and original issue discount income with respect to Bonds held by nonresident alien individuals, foreign corporations and other non-united States persons ("Nonresidents") may not be subject to withholding. Payments on the Bonds to a Nonresident that has no connection with the United States other than holding the Bonds will generally be made free of withholding tax, as long as such holder has complied with certain tax identification and certification requirements. Nonresidents should consult their own tax advisors in determining the federal, state or local tax consequences to them of the purchase, ownership and disposition of the Bonds. Circular 230 Disclosure The above discussion was written to support the promotion and marketing of the Bonds and was not intended or written to be used, and cannot be used, by a taxpayer for purposes of avoiding United States federal income tax penalties that may be imposed. Each taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor. FINANCIAL ADVISOR RBC Capital Markets, LLC ("RBC"), St. Petersburg, Florida, is serving as Financial Advisor to the City with respect to the sale of the Bonds. RBC assisted in the preparation of this Official Statement and in other matters relating to the planning, structuring and issuance of the Bonds. RBC did not engage in any underwriting activities with regard to the issuance and sale of the Bonds. RBC is employed as Financial Advisor to the City in connection with the issuance of the Bonds. RBC's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. RBC is not obligated to undertake, and has not undertaken to make, an independent verification of to assume responsibility for the accuracy, completeness, or fairness of the information in this Official Statement. 29

36 LITIGATION There is no pending or, to the knowledge of the City, any threatened litigation against the City which in any way questions or affects the validity of the Bonds, or any proceedings or transactions relating to their issuance, sale or delivery, or the adoption of the Resolution, or, which may materially adversely affect the imposition, collection and pledge of the Pledged Funds. ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Bonds upon an Event of Default under the Resolution are in many respects dependent upon judicial actions, which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code, the remedies specified by the Federal Bankruptcy Code, the Resolution and the Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving opinion) will be qualified, as to the enforceability of the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. CONTINUING DISCLOSURE The City has covenanted for the benefit of Bondholders to provide certain financial information and operating data relating to the City and the Bonds in each year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated material events. Such covenant shall only apply so long as the Bonds remain outstanding under the Resolution. The covenant shall also cease upon the termination of the continuing disclosure requirements of Securities and Exchange Commission Rule 15c2-12(b)(5) (the "Rule") by legislative, judicial or administration action. The Annual Report and any notices of material events will be filed by the City with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System ("EMMA") described in the Form of the Continuing Disclosure Agreement attached hereto as APPENDIX E. The specific nature of the information to be contained in the Annual Report and the notices of material events are described in APPENDIX E FORM OF CONTINUING DISCLOSURE AGREEMENT, which shall be executed by the City at the time of issuance of the Bonds. With respect to the Bonds, no party other than the City is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the aforementioned Rule. The City has not failed to comply with the requirements of any undertaking of the City entered into in compliance with the Rule. DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Section , Florida Statutes, and the regulations promulgated thereunder, require that the City make full and fair disclosure of any bonds or other debt obligations of such entities that have been in default as to payment of principal or interest at any time after December 31, The City is not and has not, since December 31, 1975, been in default as to payment of principal and interest on its bonds or other debt obligations. Although the City is not aware of any defaults with respect to bonds or other debt obligations as to which it has served only as a conduit issuer, it has not undertaken an independent review or investigation of such bonds or other obligations. The City does not believe that any information about any default would be considered material by a reasonable investor in the Bonds because the City was not 30

37 liable to pay the principal of or interest on any such bonds except from payments made to it by the private companies on whose behalf such bonds were issued and no funds of the City were pledged to pay such bonds or the interest thereon. RATINGS Moody's Investors Service ("Moody's") and Fitch Ratings ("Fitch") have assigned ratings of "Aa3" and "AA," respectively, to the Bonds. There is no assurance that any rating will continue for any given period of time or that it will not be lowered or withdrawn entirely by such rating agency, if in its judgment, circumstances so warrant. A downward change in or withdrawal of such rating may have an adverse effect on the market price of the Bonds. An explanation of the significance of the rating can be received from the applicable rating agency. UNDERWRITING The Bonds are being purchased by Raymond James & Associates, Inc. (the "Underwriter") at a purchase price equal to $8,197, (taking into account an Underwriter's discount of $62,069.68) subject to certain terms and conditions set forth in a Bond Purchase Contract between the City and the Underwriter, including the approval of certain legal matters by Bond Counsel and the existence of no material adverse change in the condition of the City from that set forth in this Official Statement. The Bonds may be offered and sold to certain dealers at prices lower than such offering prices, and such public offering prices may be changed, from time to time, by the Underwriter. FINANCIAL STATEMENTS The general purpose financial statements of the City, for the Fiscal Year ended September 30, 2009, included in this Official Statement as APPENDIX C, have been audited by Purvis Gray & Company, Sarasota, Florida, independent certified public accountants, auditors for the City. The audited financial statements of the City have been included herein as a publicly available document without the consent of Purvis Gray & Company. MISCELLANEOUS All information included herein has been provided by the City, except where attributed to other sources. 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 reference or summary is qualified in its entirety by reference to each such document, statute, report or other instrument. The information herein has been compiled from official and other sources and, while not guaranteed by the City, is believed to be correct. So far as any statements made in this Official Statement and the appendices attached hereto involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representation of fact, and no representation is made that any of the estimates will be realized. [Balance of page intentionally left blank.] 31

38 AUTHORIZATION OF OFFICIAL STATEMENT The delivery of this Official Statement has been duly authorized by the Commission. At the time of delivery of the Bonds, the City Manager and Finance Director will furnish a certificate to the effect that neither the City Manager nor the Finance Director have any knowledge or reason to believe that this Official Statement, as of its date and as of the date of delivery of the Bonds, contains any untrue statement of a material fact and does not omit to state a material fact which should be included therein for the purpose for which the Official Statement is to be used, or which is necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading. CITY OF SARASOTA, FLORIDA By: /s/ Robert J. Bartolotta Robert J. Bartolotta City Manager By: /s/ Christopher H. Lyons Christopher H. Lyons Finance Director 32

39 APPENDIX A City of Sarasota, Florida, General Information

40 [THIS PAGE INTENTIONALLY LEFT BLANK]

41 Location CITY OF SARASOTA, FLORIDA GENERAL INFORMATION The City is located by the Gulf of Mexico on the southwest coast of Florida and covers an area of 24 square miles with an estimated population of 53,160. The City, once the winter home of the Ringling Bros. and Barnum & Bailey Circus, is a mecca for those seeking a high quality of life. The City is a major resort area with an average year round temperature of 71 F and miles of pristine white sand beaches that beckon to the hundreds of thousands of tourists that visit year round. The City is the new winter home of the Baltimore Orioles major league baseball team. The City owns and operates the Van Wezel Performing Arts Hall, the premier showcase for the performing arts on the Florida southwest coast. In 2007, the City completed phase I of the 29 acre Payne Park which converted the former trailer park to a beautiful neighborhood landscaped park on the fringe of downtown, with lighted walking and jogging trails, tennis courts, wide open rolling green spaces, a fountain, parking area, restrooms, and a skateboard park. The City's functional (seasonal plus tourist) population swells to almost 100,000 during the winter months. The provision for tourist accommodations, restaurants, entertainment, financial institutions, and health services constitutes a major source of employment, and contributes significantly to the stability of the local economy. Employment figures for the area have eroded from the last fiscal year, as the effect of the economic slowdown continues to impact many areas of the local economy. Sarasota County had an unemployment rate of 12.3% in September 2009 as compared to the statewide rate of 11.1% and the national rate of 9.8%. In major publications, Sarasota continues to earn high ratings as a City that is economically vibrant while successfully managing its growth and providing a high quality of life. This includes excellent schools, low crime, and excellent neighborhoods. The City of Sarasota has avoided urban sprawl and overcrowding because the City fathers have put a premium on green space, culture, and an accessible downtown. Population The most recent estimate of the City's population is 53,160 for the fiscal year ended September 30, This is 4.26% greater than the 1990 Census figure. Population Growth and % Change Year Population Change % , , % , , , , , , , , Source: United States Bureau of the Census; University of Florida, Bureau Economic and Business Research. A-1

42 Demographic and Economic Statistics City of Sarasota, Florida Last Ten Fiscal Years Fiscal year Ended Per Capita September 30, Population (1) Personal Income (2) Unemployment Rate (4) Personal Income (3) ,160 $2,953,516,440 $55, % ,644 3,114,981,034 55, % ,364 3,038,535,768 54, % ,848 2,446,604,736 44, % ,639 2,366,305,812 43, % ,434 2,299,890,934 42, % ,939 2,245,318,753 41, % ,657 2,232,560,456 41, % ,715 2,157,730,380 40, % ,659 2,048,485,986 39, % (1) Source: Bureau of Economic and Business Research (BEBR) of the University of Florida (2) Source: Calculated (Population x Per Capita Personal Income) (3) Source: U.S. Dept. of Commerce, Bureau of Economic Analysis for Sarasota County (4) Source: U.S. Dept. of Labor, Bureau of Labor Statistics for Sarasota County As of April 2010 estimates of work force and employment data for Sarasota County are as follows: Civilian Labor Force 167,676 Employed 147,766 Unemployed 19,910 Unemployment Rate 11.9% Source: State of Florida Department of Labor and Employment Security. Ten Largest Employers in the Sarasota County as of September 30, 2009 School Board of Sarasota County 5,297 Sarasota Memorial Hospital 3,092 Sarasota County 2,033 Publix Supermarkets 1,602 PGT Industries 913 Venice Regional Medical Center 830 Sun Trust Bank 819 City of Sarasota 651 Sun Hydraulics Corporation 640 Comcast Cablevision 595 Source: Economic Development Corporation of Sarasota County. A-2

43 Transportation The City is served by varied transportation facilities: rail freight service, interstate bus transportation, six major airlines and four commuter lines serving through the Sarasota-Bradenton International Airport, and other major airlines through the Tampa International Airport. Two United States highways also serve the City - U.S. Highway 41 and 301. State Highways 72 and 780 provide access to the east, Interstate I-75 connects State Highway 780 three miles to the east of the City, with four interchanges serving the area and the City. Health Facilities The City has one major hospital, which is the third largest in the State. There are specialized facilities for cardiac intensive care and for conditions such as substance abuse, emotional disorders and head injuries. Convalescent hospitals, nursing homes and assisted living facilities provide continuing medical and nursing care. Educational Facilities Sarasota County provides a public school system for 41,057 students offering a wide range of programs, which include emphasis on the basics, gifted and handicapped programs. Sarasota County students consistently score above national averages in the American College Testing Program and on the Scholastic Aptitude Tests. The University of South Florida ("USF") in the City provides undergraduate and graduate level programs. New College is the honors college of the state university system and ranks eighth in the nation for the percentage of graduates earning doctoral degrees. The Ringling School of Art and Design is fully accredited and offers Bachelor of Fine Arts degrees. Four small Colleges which include Eckerd College, University of Sarasota, Goshen College and the International College operate mini-campuses or satellite branches within the City. Florida State University College of Medicine has opened a building downtown for medical students training at Sarasota Memorial Hospital. Additionally, Manatee Community College and Sarasota County Technical Institute offer additional educational opportunities for local citizens. Cultural Facilities The Sarasota area is culturally sophisticated, offering a wide variety of entertainment. There are six professional theatres, an opera company, a ballet company, a symphony orchestra and more than 50 art galleries. The Ringling Museum of Art displays one of the world's finest Baroque art collections. The Van Wezel Hall for the Performing Arts, owned and managed by the City, hosts internationally known theatre, ballet and musical groups. Recreation The City's recreational setting appeals to persons of all ages. The area has 32 miles of Gulf beaches which provide water activities such as swimming, scuba diving, sailing, skiing, fishing and boating. The annual Suncoast Offshore Grand Prix features motor boat races and attracts the top drivers in the world. There are 22 municipal parks and 78 golf courses in the area. Other recreational activities include tennis, racquetball, jogging and hiking. The Audubon Society and local garden clubs provide a continuing forum for nature and conservation interests. The City has a skateboard park in the Payne Park A-3

44 complex. Payne Park is a 40-acre area that is being developed as a "signature" park for the downtown area through a phased in master plan. Tourism Sarasota County is a major resort area, which hosts over one million tourists each year county-wide. Tourism revenue is estimated at $550 million annually and contributes significantly to the stability of the local economy. The provision of tourist accommodations, including restaurants, entertainment and other services, constitutes a major source of employment in the county. Communications Sarasota County is served by ABC-affiliate WWSB, (which has its state of the art broadcasting facilities in downtown Sarasota), Comcast Cable Television and local channel SNN, and two local government channels. There are seventeen local radio stations and seven locally published newspapers. The Sarasota Herald Tribune is The New York Times chain's second largest daily. Sarasota also publishes several special and general interest magazines. City Commission The City of Sarasota has operated under the Commission-City Manager form of government since On September 3, 1996, the electors of the City approved by referendum a new City Charter. The City Commission consists of five elected citizens who are qualified voters in the City. The Commission acts as the governing body of the City with powers to pass ordinances, adopt resolutions and appoint a chief administrative officer, the City Manager. The City Auditor and Clerk and the City Attorney are also appointed by the Commission. City elections are held in March on a nonpartisan basis. Three Commissioners, elected by districts, and two Commissioners, elected at large, all serve four-year terms. The Commission elects, from among its members, a Mayor and Vice Mayor who serve one-year terms. Administration of the City The City Manager, as the administrative head of the City, is charged with the responsibility of the proper administration of all affairs of the City. The City Manager submits an annual budget to the City Commission in which detailed estimates of the revenues and the expenses for conducting all departments, divisions and proprietary functions of the City. The City Auditor and Clerk is head of the department of records and custodian of all official records of the City and is responsible to the City Commission for the proper administration of all the affairs concerning the records of the City. The City Auditor and Clerk is also the election official for the City. The City Attorney serves as legal advisor to the City Commission and all of the governmental and proprietary functions of the City and its departments, divisions, officers, boards and committees. The City Finance Director is head of the department of finance and custodian of all funds of the City and is responsible to the City Manager for the proper administration of all financial affairs of the City placed under his authority. A-4

45 Scope of Services The City provides a range of municipal services. The public safety operation includes police protection, as well as building, code enforcement and zoning. Recreational services include tennis courts, golf courses, neighborhood parks and facilities. Public Works provides essential street and highway maintenance, signalization, landscape maintenance, as well as solid waste management. Public Utilities provides water and sewer service and reuse water for irrigation. In addition, the City operates two municipal auditoriums and the Van Wezel Performing Arts Hall. Other services provided include planning and redevelopment, engineering, community development, as well as general administrative services. Community Redevelopment Agency The City Commission recognized that there were land areas within the City of Sarasota where redevelopment was critical to proper growth of the City. Accordingly, the Commission formed the Community Redevelopment Agency (CRA). The creation of the CRA allows tax increment financing to implement the provisions of the Downtown Master Plan, updated in 2001, to rehabilitate the redevelopment area. The Community Redevelopment Trust Fund was established on December 15, 1986, and the City began receiving tax increment revenues during fiscal year The CRA cooperates with the private sector to attract good, long-term, financially sound projects that will generate new employment opportunities while protecting Sarasota's unique character and charm. The CRA has produced a watershed of upscale high-end projects such as, the 100 Central Avenue mixed use retail condominium complex which includes a "Whole Foods Market," 95 Condominium units and a public parking garage; the Plaza at Five points is a 17 story mixed use retail and condominium project in the heart of downtown; the Courthouse Centre is an office/retail complex with penthouse condominiums on the 9 th and 10 th floors; a new Sarasota County Area Transit bus transfer station; the new home of the Sarasota Herald Tribune; all of which are now completed and being occupied. Last year the City Commission approved the extension of the Community Redevelopment Agency to include the Newtown area in order to provide funds for the Newtown Redevelopment Plan. Funding was approved in the fiscal year The CRA will allocate approximately 1/2 of the available un-appropriated funds for the Newtown redevelopment projects, and the other 1/2 for future projects within the Downtown CRA area. This change provides a funding source for these two important initiatives over the next seven years. Other City Initiatives The City is nearing the completion of a nearly 100,000 square foot six story Police headquarters building, which was approved by the City taxpayers. The new Police headquarters will replace the current facility which was built in the 1950's. This new facility will be hurricane hardened to withstand a category 5 storm, and will consolidate the current off-site police operations under one roof. The new building will include parking for 200 vehicles, and will serve as the City's emergency operations center, including a community meeting room for public use. As the construction industry and the general economy have softened in Sarasota, the City is fast tracking some of the projects approved in the Phase III Penny Sales Tax referendum which became effective October The $10 million Robert L. Taylor Community Recreation Center began construction in the spring of 2010, with a currently expected completion date in the spring of The community redevelopment and economic development of the Newtown area is one of the top five priorities for the City. The Robert L. Taylor Complex when completed will include basketball courts, community meeting and activity rooms, a fitness center, children and teen activity center, and a new A-5

46 community swimming pool. The new Robert L. Taylor Community Complex will be a major focal point for the area to generate strong neighborhood programs and community outreach for people of all ages. St. Armands Special Business Neighborhood Improvement District The St. Armands Special Business Neighborhood Improvement District (BID) was created by City Ordinance on July 16, 2002 as a dependent taxing authority with the power to levy up to two mills in property taxes, with City Commission approval, for the purpose of purchasing supplemental service such as maintenance, security, sanitation, promotions, infrastructure and capital improvements. The boundaries of the BID are made up of all parcels of real property located within the CT Zone District in the vicinity of St. Armands Circle. Golden Gate Point Streetscape Special District The Golden Gate Point Streetscape Special District completed the reconstruction of the Golden Gate Point street with brick pavers, plus sidewalks, old fashion street lighting, enhanced landscaping, trees, and other amenities in the Golden Gate Point district. The Golden Gate residents taxed themselves to pay the debt service on the $5.8 million bonds, plus the additional maintenance for these improvements. Independent Auditors The City's Charter requires that an annual audit of the financial statements of the City be performed by a firm of independent certified public accountants. Purvis Gray & Company, CPA, Sarasota, Florida have audited the financial statements of the City for the fiscal year ended September 30, Certificate of Achievement for Excellence in Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) has awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its comprehensive annual financial reports for the past twenty-eight consecutive years. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. Distinguished Budget Presentation Award The Government Finance Officers Association of the United States and Canada (GFOA) has presented the award for Distinguished Budget Presentation Award to the City of Sarasota, Florida, for its past twenty annual budgets. In order to qualify for this award, the City's budget document was judged to have met program criteria as a policy document, financial plan, an operations guide and communication medium. [Remainder of this page intentionally left blank.] A-6

47 City of Sarasota, Florida Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) Fiscal Year Real Property Less: Taxable Total Ended September 30, Residential Property Commercial Property Industrial Property Personal Property Tax-Exempt Property Assessed Value Direct Rate 2009 $8,778,639 $2,111,301 $2,179,937 $592,967 $4,445,580 $9,217, ,998,951 2,462,680 2,272, ,266 5,014,413 10,335, ,085,057 2,224,421 2,151, ,933 5,299,090 9,716, ,344,535 1,853,708 1,816, ,491 3,956,378 7,595, ,251,452 1,504,981 1,511, ,563 3,335,225 6,467, ,300,332 1,367,501 1,177, ,962 2,846,720 5,589, ,289,562 1,227, , ,499 2,243,189 4,880, ,468,361 1,074, , ,959 1,824,048 4,213, ,973, , , ,393 1,605,427 3,776, ,661, , , ,933 1,486,710 3,514, Source: Note: Sarasota County Property Appraiser Property is assessed at market value. The Save Our Homes Amendment caps homesteaded property at a maximum increase in the taxable value to 3% per year. Tax rates are per $1,000 of assessed value. City of Sarasota, Florida Principal Property Taxpayers Fiscal Year Taxable Assessed Value Percentage of Total City Taxable Assessed Value Taxpayer Rank Slab/Ritz Carlton Hotel Co. $80,462, % Verizon Florida Inc. 60,256, Westfield Southgate Shoppingtown 51,863, Florida Power & Light 51,619, Irish American Mgt Services LP. 51,274, Logan Acquisitions Corl/Lido Beach LLC 46,520, Hotel Associates of Sarasota LLC 38,388, Plymouth Harbor Inc. 36,489, New York Times / Sarasota Herald 33,902, Sarasota Main Real Estate LLC 33,289, Source: Sarasota County Property Appraiser A-7

48 Selected Financial Information The following tables contain certain financial data pertaining to the City: PRO FORMA & OVERLAPPING DEBT STATEMENT SEPTEMBER 30, 2009 CITY OF SARASOTA DIRECT DEBT General Obligation Bonds Non-Self Supporting Revenue Bonds Pro-Forma Self Supporting Revenue Debt 2007 General Obligation Bonds $44,765, General Obligation Bonds 5,627, Special Obligation Revenue Refunding Bonds - Capital Appreciation Bonds $11,861, Special Obligation Revenue Bonds 21,066, First Florida Governmental Financing Commission 2,135, A First Florida Governmental Financing Commission 1,145,000 State Revolving Fund Loan 859, B First Florida Governmental Financing Commission $ 790, First Florida Governmental Financing Commission 2,965, First Florida Governmental Financing Commission 3,525, Water and Sewer System Revenue Refunding Bonds, Series 1993-C 5,380, Water and Sewer System Revenue Refunding Bonds 2,835, A Water and Sewer Revenue Refunding Bonds 7,285, B Water and Sewer Revenue Refunding Bonds 4,825, Water and Sewer Revenue Refunding Bonds 5,510, Water and Sewer Revenue Bonds 7,025, Water and Sewer Revenue Bonds 22,500,000 Total Direct Debt $50,392,352 $37,067,519 $62,640,000 OVERLAPPING DEBT Total Overlapping Debt City's Share 17.57% Sarasota County Board of County Commissioners $ -- $ -- City Direct Debt 49,816,456 Total Direct and Overlapping Debt $49,816,456 Source: City of Sarasota, Finance Department. A-8

49 Debt Ratios and Related Statistical Information (as of September 30, 2009) Population Estimate and January 1, 2009 Assessed Valuation Ratios 2009 Population Estimate... 53, Census Population 51, Census Population... 50, Census Population... 48, Census Population... 40, Census Population... 34,083 County Total Assessment Valuation... $63,005,449,000 County Net Taxable Assessed Valuation... $46,539,503,000 City of Sarasota Total Assessed Valuation... $12,005,106,000 City of Sarasota Net Taxable Assessed Valuation... $8,178,722,000 Ratio of City to County - Net Taxable Assessed Valuation % Direct General Obligation Debt as a percentage of: Total Assessed Valuation % Net Taxable Assessed Valuation % Direct and Overlapping General Obligation Debt as a percentage of: Total Assessed Valuation % Net Taxable Assessed Valuation % Direct General Obligation Debt per Capita... $ Direct and Overlapping General Obligation Debt per Capita... $ Assessed Valuation per Capita... $225, Net Taxable Assessed Valuation per Capita... $153, Source: City of Sarasota, Finance Department. A-9

50 General Fund Revenues, Transfers, Expenditures and Fund Balances Fiscal Years Ending September 30, Revenues and Transfers Ad Valorem Taxes $19,680,996 $22,255,938 $22,225,365 $17,223,438 $14,009,628 Franchise Tax 5,319,627 5,208,466 5,578,299 5,451,451 4,415,624 Utilities Excise 9,641,138 9,814,032 9,750,102 9,899,607 9,722,636 Prof. & Occ. License 769, , , , ,952 Building Permits 126, , , , ,495 Other Licenses & Permits 109, ,450 79,221 79,155 79,570 State Revenue Sharing 1,751,959 1,810,801 1,868,955 2,176,497 1,846,453 Half-Cent Sales Tax 3,449,557 4,035,952 4,537,513 5,139,592 5,101,986 Other Shared Revenues 2,208,991 2,424, ,836 1,018, ,620 Charges for Services 1,659,280 1,271,086 1,506,734 1,537,401 1,316,621 Fines & Forfeitures 467, , , , ,381 Investment Earnings 941,300 1,121,767 1,605,944 1,840,128 1,264,762 Rents 975, , , , ,351 Other Revenues/Transfers In 9,022,605 8,339,169 10,079,250 8,490,036 7,457,075 Total Revenues $56,123,677 $58,862,280 $59,926,732 $55,258,448 $48,070,154 Expenditures General Government $14,402,925 $16,722,593 $16,709,113 $12,612,876 $11,763,463 Public Safety 32,709,099 32,305,353 30,270,969 27,818,274 25,332,880 Physical Environment 2,750,739 3,189,047 3,392,760 2,701,673 2,373,361 Transportation 3,877,006 4,328,384 4,537,783 4,214,134 4,091,346 Economic Environment 16, ,596 20,000 Culture & Recreation 275, , , , ,376 Total Expenditures $54,032,007 $56,871,604 $55,442,806 $47,776,532 $44,016,426 Other Financing Uses Enterprise/Internal Service Funds $780,000 $1,685,059 $2,100,232 $1,455,410 $1,829,083 Capital Projects , Debt Service 2,833, , , , ,494 Special Revenue Funds 42,331 45, , , ,165 Total Other Financing Uses $3,655,641 $2,288,596 $2,819,478 $3,073,818 $2,551,742 Total Expenditures & Financing Uses $57,687,648 $59,160,200 $58,262,284 $50,850,350 $46,568,168 Excess (Deficiency) (1,563,971) (297,920) 1,664,448 $4,408,098 $1,501,986 Fund Balance Beginning $22,069,634 $22,367,554 $20,703,106 $16,295,008 $14,793,022 Ending Fund Balance $20,505,663 $22,069,634 $22,367,554 $20,703,106 $16,295,008 Source: Audited Comprehensive Annual Financial Reports for the City for Fiscal Years Ended September 30, A-10

51 CITY OF SARASOTA, FLORIDA General Governmental Revenues by Source (1) Last Ten Fiscal Years Year Taxes Special Assessments Licenses and Permits Intergovernmental Revenues Charges for Services Charges to Other Funds Fines and Forfeits Interest Earnings Miscellaneous Revenues Total $53,422,221 $95,000 $1,752,050 $25,139,466 $2,102,245 $4,419,805 $893,217 $4,487,271 $1,708,684 $94,019, ,203,621 95,000 3,543,118 21,062,863 2,109,925 4,349, ,839 4,920,722 2,466,442 94,663, ,391,501 80,000 2,771,644 21,683,562 2,432,373 5,452,096 1,320,276 5,176,574 2,432,516 93,740, ,526, ,852 2,991,586 28,843,941 2,560,540 5,123,752 1,121,965 3,569,826 2,129,211 91,978, ,746, ,768 4,332,541 26,436,856 2,052,188 4,721,887 1,366,904 2,042,116 1,979,334 82,783, ,186,709 97,980 4,468,586 26,342,081 1,858,325 4,011,422 1,274,760 1,572,768 4,437,324 80,249, ,605,498 96,047 2,630,373 23,084,167 1,643,903 3,905,496 1,102,277 1,408,070 1,587,155 70,062,986 A ,411,570 89,343 2,598,206 22,658,794 1,104,884 3,741,118 1,341,157 2,071,894 1,652,044 66,669, ,897,919 90,171 2,646,326 21,177,791 1,075,984 3,606,722 1,112,503 4,295,178 3,562,044 67,464, ,076,877 83,507 2,815,236 25,298, ,714 3,414,794 1,110,246 3,501,340 2,553,453 63,696,025 (1) Includes General, Special Revenue, Debt Service and Capital Projects Funds. Source: City of Sarasota, Finance Department.

52 CITY OF SARASOTA, FLORIDA General Governmental Expenditures by Function (1) Last Ten Fiscal Years Fiscal Year General Government Public Safety Physical Environment Transportation Culture & Recreation Economic Environment Debt Service Capital Projects Total $14,549,145 $35,232,364 $8,174,910 $4,831,724 $301,778 $7,042,409 $8,433,785 $30,625,828 $109,191, ,398,101 36,501,295 3,528,637 5,569, ,595 6,890,211 8,925,762 7,318,614 84,597, ,283,464 33,432,710 3,792,915 5,885, ,461 8,883,313 7,012,213 15,852,224 92,729, ,482,866 30,796,766 3,895,159 5,473, ,289 13,701,861 6,394,429 8,346,688 82,451, ,337,813 27,738,867 3,134,105 5,004, ,292 10,950,714 7,029,166 12,298,006 78,981, ,607,461 26,063,776 4,746,781 5,644, ,721 9,572,416 6,888,776 12,472,340 77,596,938 A ,827,183 23,005,750 3,514,685 5,071, ,837 6,229,537 7,315,569 12,813,633 70,518, ,936,701 21,321,258 3,428,423 4,989, ,584 6,433,547 12,957,092 6,956,999 67,362, ,711,424 20,918,501 7,023,341 3,633,013 38,582 4,289,610 6,965,612 11,293,265 64,873, ,273,152 21,605,709 3,226,692 3,457,424 9,919 7,034,713 5,677,905 22,984,452 73,269,966 (1) Includes General, Special Revenue, Debt Service and Capital Projects Funds. Source: City of Sarasota, Finance Department.

53 CITY OF SARASOTA, FLORIDA Special Tax Collections Last Ten Fiscal Years Fiscal Year Utilities Service Tax Franchise Fees Cigarette Tax Occupational Licenses Half Cent Sales Tax Local Option Gas Tax $9,641,138 $5,319, $769,373 $3,449,557 $2,479, ,814,032 5,208, ,295 4,035,952 2,574, ,750,102 5,578, ,191 4,537,513 2,928, ,899,607 5,451, ,551 5,139,592 3,022, ,722,636 4,415, ,952 5,101,986 2,973, ,371,751 4,114, ,971 4,792,383 2,941, ,156,178 3,840, ,042 4,405,787 2,861, ,109,163 3,593, ,571 4,382,544 2,924, ,592,697 4,448, ,002 4,109,702 2,614, ,415,496 3,843, , ,592 3,939,947 1,753,569 Source: Comprehensive Annual Financial Report of the City for the Fiscal Years Ended September 30, A-13

54 CITY OF SARASOTA, FLORIDA Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years Fiscal Year Population (1) Net Assessed Value Gross General Bonded Debt Debt Service Monies Available Net General Bonded Debt Ratio of Net Bonded Debt to Assessed Value (Percent) Net Bonded Debt Per Capita ,160 $9,217,262,974 $50,392,352 $575,896 $49,816, % $ ,644 10,335,524,802 51,360, ,364 50,772, ,364 9,716,115,668 47,365, ,336 47,014, ,848 7,595,323,664 2,235, ,708 1,550, ,639 6,467,330,208 3,425, ,178 2,650, ,434 5,589,481,929 5,835,000 1,405,283 4,429, ,939 4,880,271,971 8,160,000 1,627,413 6,532, ,657 4,213,509,172 10,360,000 1,714,043 8,645, ,715 3,776,718,779 12,640,000 1,751,459 10,888, ,659 3,514,156,220 14,785,000 1,612,722 13,172, (1) Source: University of Florida, Bureau of Economic and Business Research. Source: Comprehensive Annual Financial Report of the City for the Fiscal Year Ended September 30, A-14

55 CITY OF SARASOTA, FLORIDA Property Value and Construction Last Ten Fiscal Years (in thousands of dollars) Construction (1) Property Value (2) Fiscal Year Residential Commercial Commercial & Residential Exempt N/A N/A $10,889,940 $4,445, N/A N/A 12,461,631 5,014, N/A N/A 12,309,478 5,299, N/A N/A 9,198,243 3,956, N/A N/A 7,756,433 3,335, N/A N/A 6,667,833 2,846, ,340 65,180 5,517,283 2,243, ,665 64,597 4,542,421 1,824, , ,322 3,967,193 1,605, , ,918 3,594,738 1,486,710 (1) City of Sarasota Building & Zoning Department. (2) Sarasota County Property Appraiser. A-15

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57 APPENDIX B Composite Form of the Resolution

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59 APPENDIX B COMPOSITE FORM OF THE BOND RESOLUTION Resolution No. 10R-2135 adopted by the City Commission on November 2, 2009, as amended and supplemented by Resolution No. 10R-2139 adopted by the City Commission on December 7, This is not an official record of the City. RESOLUTION NO. 10R-2135 A RESOLUTION OF THE CITY OF SARASOTA, FLORIDA AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $9,500,000 IN AGGREGATE PRINCIPAL AMOUNT OF SALES TAX PAYMENTS REVENUE BONDS, SERIES 2009 (FEDERALLY TAXABLE-BUILD AMERICA BONDS-RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS- DIRECT SUBSIDY) FOR THE CITY OF SARASOTA, FLORIDA FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF CONSTRUCTION, RECONSTRUCTION AND RENOVATION OF A FACILITY FOR A RETAINED SPRING TRAINING FRANCHISE; PLEDGING THE SALES TAX PAYMENTS DISTRIBUTED TO THE CITY PURSUANT TO SECTIONS (6)(d)6.b. AND (5)(c)2., FLORIDA STATUTES AND CERTAIN DIRECT SUBSIDY PAYMENTS RECEIVED FROM THE UNITED STATES TREASURY SECRETARY TO SECURE PAYMENT THEREOF; PROVIDING A BACKUP COVENANT TO BUDGET AND APPROPRIATE NON-AD VALOREM REVENUES OF THE CITY; MAKING CERTAIN COVENANTS AND AGREEMENTS FOR THE BENEFIT OF THE HOLDERS OF SUCH BONDS; AUTHORIZING CERTAIN OFFICIALS AND EMPLOYEES OF THE CITY TO TAKE ALL ACTIONS REQUIRED IN CONNECTION WITH THE SALE, ISSUANCE AND DELIVERY OF SUCH BONDS; TAKING CERTAIN OTHER ACTIONS WITH RESPECT TO SUCH BONDS; PROVIDING FOR READING BY TITLE ONLY; AND PROVIDING AN EFFECTIVE DATE. TABLE OF CONTENTS Page No. ARTICLE I - GENERAL... 4 SECTION Definitions... 4 SECTION Authority for Resolution SECTION Resolution to Constitute Contract SECTION Findings SECTION Initial Project ARTICLE II - AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS SECTION Authorization of Bonds SECTION Authorization and Description of Series 2009 Bonds SECTION Application of Series 2009 Bond Proceeds SECTION Execution of Bonds SECTION Authentication SECTION Temporary Bonds SECTION Bonds Mutilated, Destroyed, Stolen or Lost SECTION Transfer SECTION Coupon Bonds; Capital Appreciation Bonds; Variable Rate Bonds SECTION Form of Bonds ARTICLE III - REDEMPTION OF BONDS SECTION Optional, Mandatory and/or Extraordinary Mandatory Redemption SECTION Selection of Bonds to be Redeemed SECTION Notice of Redemption SECTION Redemption of Portions of Bonds SECTION Payment of Redeemed Bonds ARTICLE IV - SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION Bonds not to be Indebtedness of Issuer SECTION Security for Bonds SECTION Backup Covenant to Budget and Appropriate SECTION Construction Fund SECTION Funds and Accounts SECTION Flow of Funds SECTION Investments SECTION Separate Accounts ARTICLE V - SUBORDINATED INDEBTEDNESS, ADDITIONAL BONDS, AND COVENANTS OF ISSUER {25394/004/ DOCv4} B-1 {25394/004/ DOCv4} B-2 SECTION Subordinated Indebtedness SECTION Issuance of Additional Bonds SECTION Bond Anticipation Notes SECTION Books and Records SECTION Annual Audit SECTION No Impairment SECTION Collection of Sales Tax Payments SECTION Federal Income Tax Covenants; Taxable Bonds ARTICLE VI - DEFAULTS AND REMEDIES SECTION Events of Default SECTION Remedies SECTION Directions to Trustee as to Remedial Proceedings SECTION Remedies Cumulative SECTION Waiver of Default SECTION Application of Moneys After Default ARTICLE VII - SUPPLEMENTAL RESOLUTIONS SECTION Supplemental Resolutions without Bondholders' Consent SECTION Supplemental Resolutions with Bondholders' Consent SECTION Supplemental Resolutions with Insurer's Consent in lieu of Bondholders' Consent ARTICLE VIII - MISCELLANEOUS SECTION Defeasance SECTION Sale of Bonds SECTION Validation SECTION Capital Appreciation Bonds SECTION General Authority SECTION No Third Party Beneficiaries SECTION No Personal Liability SECTION Severability of Invalid Provisions SECTION Repeal of Inconsistent Instruments SECTION Effective Date BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF SARASOTA, FLORIDA: ARTICLE I GENERAL SECTION Definitions. When used in this Resolution, the following terms shall have the following meanings, unless the context clearly otherwise requires: "Act" shall mean the Constitution and laws of the State of Florida, Chapter 166, Part II, Florida Statutes, Chapter 159, Part VII, Florida Statutes (with respect to any Direct Subsidy Bonds), Section (5)(c)2., Florida Statutes, Section (6)(d)6.b., Florida Statutes, the municipal charter of the Issuer and other applicable provisions of law. "Additional Bonds" shall mean the obligations issued at any time under the provisions of Section 5.02 and 5.03 hereof on a parity with the Series 2009 Bonds. "Additional Project" shall mean the construction, reconstruction, or renovation of the Initial Project. "Amortization Installment" shall mean an amount designated as such by Supplemental Resolution of the Issuer and established with respect to any Term Bonds. "Annual Debt Service" shall mean, with respect to any Bond Year, the aggregate amount of (1) all interest required to be paid on the Outstanding Bonds during such Bond Year, except to the extent that such interest is to be paid from (a) deposits in the Interest Account made from Bond proceeds or (b) Direct Subsidy Payments actually received, (2) all principal of Outstanding Serial Bonds maturing in such Bond Year, and (3) all Amortization Installments herein designated with respect to such Bond Year. "Bond Amortization Account" shall mean the separate account in the Debt Service Fund established pursuant to Section 4.05 hereof. "Bond Counsel" shall mean Bryant Miller Olive P.A., or any attorney at law or firm of attorneys, of nationally recognized standing in matters pertaining to obligations issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States of America. "Bond Year" shall mean the period commencing on February 2 of each year and continuing through the next succeeding February 1. {25394/004/ DOCv4} B-3 B-1 {25394/004/ DOCv4} B-4

60 "Bondholder" or "Holder" or "holder" or any similar term, when used with reference to a Bond or Bonds, shall mean any person who shall be the registered owner of any Outstanding Bond or Bonds as provided in the registration books of the Issuer. "Bonds" shall mean the Series 2009 Bonds, together with any Additional Bonds issued pursuant to this Resolution. "Build America Bonds" shall mean Taxable Bonds of that name as described in the Recovery Act which are issued by the Issuer pursuant to Section 54AA of the Code for which the Issuer elects to receive Direct Subsidy Payments in an amount equal to a percentage of the interest paid on such Bonds. "Capital Appreciation Bonds" shall mean the aggregate principal amount of the Bonds that bear interest payable solely at maturity or upon redemption prior to maturity in the amounts determined by reference to the Compounded Amounts, all as shall be determined by Supplemental Resolution of the Issuer. In the case of Capital Appreciation Bonds that are convertible to Bonds with interest payable prior to maturity or redemption of such Bonds, such Bonds shall be considered Capital Appreciation Bonds only during the period of time prior to such conversion. "2006 Certification" shall mean the certification of the Office of Tourism, Trade and Economic Development of the State of Florida dated December 31, 2006 designating the Initial Project as a Facility for a Retained Spring Training Franchise pursuant to Section (5)(c)2, Florida Statutes, as such certification was continued and approved in a letter of the Office of Tourism, Trade and Economic Development of the State of Florida dated September 30, "City Attorney" shall mean the City Attorney of the Issuer, or any assistant or interim City Attorney. time. "City Charter" shall mean the municipal charter of the Issuer, as amended from time to "City Clerk" or "Clerk" shall mean the City Auditor and Clerk of the Issuer, or any assistant or deputy City Auditor and Clerk. "City Commission" shall mean the City Commission of the Issuer. "City Manager" shall mean the City Manager or any deputy, assistant, acting or interim City Manager of the Issuer, or such other person as may be duly authorized by the Issuer to act on his or her behalf. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations and rules thereunder in effect or proposed. "Compounded Amounts" shall mean, as of any date of computation with respect to any Capital Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation Bond (the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation Bond from the date of delivery to the original purchasers thereof to the interest date next preceding the date of computation or the date of computation if an interest date, such interest to accrue at the applicable rate which shall not exceed the legal rate, compounded semiannually, plus, with respect to matters related to the payment upon redemption or acceleration of the Capital Appreciation Bonds, if such date of computation shall not be an interest date, a portion of the difference between the Compounded Amount as of the immediately preceding interest date and the Compounded Amount as of the immediately succeeding interest date, calculated based on the assumption that Compounded Amount accrues during any semi-annual period in equal daily amounts on the basis of a 360-day year of twelve 30-day months. "Construction Fund" shall mean the City of Sarasota, Florida, Sales Tax Payments Revenue Bonds, Construction Fund established pursuant to Section 4.04 hereof. "Cost" when used in connection with a Project, shall mean (1) the cost of physical construction; (2) costs of acquisition of such Project; (3) costs of land and interests therein and the cost incidental to such acquisition; (4) the cost of any indemnity and surety bonds and premiums for insurance during construction; (5) all interest due to be paid on the Bonds and other obligations relating to the Project during, and if deemed advisable by the Issuer for up to one year after the end of, the construction period of such Project and for a reasonable period thereafter; (6) engineering, legal and other consultant fees and expenses; (7) costs and expenses incidental to the issuance of the Bonds for up to one year, including the fees and expenses of any attorneys, financial advisors, auditors, engineers, Paying Agent, Registrar or depository; (8) payments, when due (whether at the maturity of principal or the due date of interest or upon redemption) on any indebtedness of the Issuer (other than the Bonds) incurred for such Project; (9) costs of machinery or equipment required by the Issuer for the commencement of operation of such Project; or (10) any other costs properly attributable to such construction or acquisition, as determined by generally accepted accounting principles and shall include reimbursement to the Issuer for any such items of Cost heretofore paid by the Issuer. Any Supplemental Resolution may provide for additional items to be included in the aforesaid Costs. "County" shall mean Sarasota County, Florida, a political subdivision of the State of Florida. "Debt Service Fund" shall mean the City of Sarasota, Florida, Sales Tax Payments Revenue Bonds Debt Service Fund established pursuant to Section 4.05 hereof. {25394/004/ DOCv4} B-5 {25394/004/ DOCv4} B-6 "Direct Subsidy Bonds" shall mean Build America Bonds and/or Recovery Zone Economic Development Bonds issued pursuant to this Resolution. "Direct Subsidy Payment" shall mean, with respect to Direct Subsidy Bonds issued pursuant to this Resolution, payments in an amount equal to a percentage of interest paid on such Bonds provided directly to the Issuer from the United States Treasury Secretary, or other party designated by the federal government to issue such payments. "Federal Securities" shall mean: 1. Cash 2. U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series "SLGs") 3. Direct obligations of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities. 4. Resolution Funding Corp. (REFCORP). Only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable. 5. Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S&P. If, however, the issue is only rated by S&P (i.e., there is no Moody's rating), then the pre-refunded bonds must have been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded municipals to satisfy this condition. 6. Obligations issued by the following agencies which are backed by the full faith and credit of the U.S.: a. U.S. Export-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership b. Farmers Home Administration (FmHA) Certificates of beneficial ownership c. Federal Financing Bank d. General Services Administration Participation certificates e. U.S. Maritime Administration Guaranteed Title XI financing f. U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures U.S. government guaranteed debentures and U.S. Public Housing Notes and Bonds U.S. government guaranteed public housing notes and bonds "Finance Director" shall mean the Finance Director or any deputy, assistant, acting or interim Finance Director of the Issuer, or such other person as may be duly authorized by the Issuer to act on his or her behalf. "Financial Advisor" shall mean RBC Capital Markets Corporation or such other financial advisor as may be duly appointed by the Issuer. "Fiscal Year" shall mean the period commencing on October 1 of each year and continuing through the next succeeding September 30, or such other period as may be prescribed by law. "Initial Project" shall mean the construction, reconstruction and renovation of a Facility for a Retained Spring Training Franchise including without limitation renovation and expansion of the Ed Smith Stadium Complex expected to be used for major league baseball operations in accordance with the Interlocal Agreement and the Act. "Insurance Policy" or "Insurance Policies" shall mean any policy of bond insurance, letter of credit, guarantee, or other similar form of credit enhancement issued by an Insurer and insuring or guaranteeing the payment when due of all or any portion of the principal of and interest on any Series of Bonds. All references in this Resolution to the Insurance Policy or Insurance Policies shall be of no force and effect (i) if there is a default in the performance of any obligations thereunder by the applicable Insurer, or (ii) at such time as there are no Bonds Outstanding with respect to which an Insurer has issued an Insurance Policy or Insurance Policies. "Insurer" shall mean the issuer or issuers of any Insurance Policy or any successor corporation that assumes the obligations of the issuer of such Insurance Policy. All references in this Resolution to the Insurer and/or an Insurance Policy shall be of no force and effect to a {25394/004/ DOCv4} B-7 B-2 {25394/004/ DOCv4} B-8

61 particular Series of Bonds if such Bonds are not insured, and/or at such time as there are no Bonds Outstanding with respect to which an Insurer has issued an Insurance Policy. "Interest Account" shall mean the separate account in the Debt Service Fund established pursuant to Section 4.05 hereof. "Interest Date" shall be February 1 and August 1 of each year. "Interlocal Agreement" shall mean that certain Interlocal Agreement dated as of July 24, 2009 between the County and the Issuer relating to the Initial Project. Issuer" shall mean the City of Sarasota, Florida, a municipal corporation of the State of Florida. "Maximum Annual Debt Service" shall mean the largest amount of Annual Debt Service for any Bond Year in which Bonds shall be Outstanding, excluding all Bond Years which shall have ended prior to the Bond Year in which Maximum Annual Debt Service shall be computed. "Maximum Interest Rate" shall mean, with respect to any particular Variable Rate Bonds, a numerical rate of interest, which shall be set forth in the Supplemental Resolution of the Issuer delineating the details of such Bonds, that shall be the maximum rate of interest such Bonds may at any time bear in the future in accordance with the terms of such Supplemental Resolution. "Mayor" means the Mayor or Vice Mayor of the Issuer. "Non-Ad Valorem Revenues" shall mean all revenues of the Issuer not derived from ad valorem taxation, and which are lawfully available to be used to pay debt service on the Bonds. "Outstanding" when used with reference to Bonds and as of any particular date, shall describe all Bonds theretofore and thereupon being authenticated and delivered except, (1) any Bond in lieu of which another Bond or other Bonds have been issued under an agreement to replace lost, mutilated or destroyed Bonds, (2) any Bond surrendered by the Holder thereof in exchange for another Bond or other Bonds under Sections 2.06 and 2.08 hereof, and (3) Bonds canceled after purchase in the open market or because of payment at or redemption prior to maturity. "Paying Agent" shall mean any paying agent for Bonds appointed by or pursuant to a Supplemental Resolution and its successors or assigns, and any other Person which may at any time be substituted in its place pursuant to this Resolution. "Permitted Investments" shall mean to the extent such investments comply with the Issuer's written investment policy: 1. (a) cash (fully insured by the Federal Deposit Insurance Corporation), (b) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America ("U.S. Treasury Obligations"), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated. 2. Federal Housing Administration debentures. 3. The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America: (a) Federal Home Loan Mortgage Corporation (FHLMC) senior debt obligations and participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) (b) Farm Credit System (formerly Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives) consolidated system-wide bonds and notes (c) Federal Home Loan Banks (FHL Banks) consolidated debt obligations (d) Federal National Mortgage Association (FNMA) senior debt obligations and mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) 4. Unsecured certificates of deposit, time deposits, and bankers' acceptances (having maturities of not more than 365 days) of any bank the short-term obligations of which are rated "A-1+" or better by S&P and "Prime-1" by Moody s. 5. Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation, in banks which have capital and surplus of at least $15 million. 6. Commercial paper (having original maturities of not more than 270 days) rated "A-1+" by S&P and "Prime-1" by Moody's. {25394/004/ DOCv4} B-9 {25394/004/ DOCv4} B Money market funds rated "Aam" or "AAm-G" by S&P, or better and if rated by Moody s rated "Aa2" or better. 8. "State Obligations", which means: (a) Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated at least "A3" by Moody's and at least "A-" by S&P, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated. (b) Direct general short-term obligations of any state agency or subdivision or agency thereof described in (a) above and rated "A-1+" by S&P and "MIG-1" by Moody's. (c) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state or state agency described in (b) above and rated "AA-" or better by S&P and "Aa3" or better by Moody's. 9. Pre-refunded municipal obligations rated "AAA" by S&P and "Aaa" by Moody's meeting the following requirements: (a) the municipal obligations are (1) not subject to redemption prior to maturity or (2) the Paying Agent for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; (b) the municipal obligations are secured by cash or U.S. Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations; (c) the principal of and interest on the U.S. Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations ("Verification Report"); (d) the cash or U.S. Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or Paying Agent in trust for owners of the municipal obligations; (e) no substitution of a U.S. Treasury Obligation shall be permitted except with another U.S. Treasury Obligation and upon delivery of a new Verification Report; and (f) the cash or U.S. Treasury Obligations are not available to satisfy any other claims, including those by or against the Paying Agent or escrow agent. 10. Repurchase agreements: with (1) any domestic bank, or domestic branch of a foreign bank, the long term debt of which is rated at least "A-" by S&P and "A3" Moody's; or (2) any broker-dealer with "retail customers" or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least "A-" by S&P and "A3" by Moody's, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (3) any other entity rated at least "A-" by S&P and "A3" Moody's and acceptable to Assured Guaranty Corp. (each an "Eligible Provider"), provided that: (a) (i) permitted collateral shall include U.S. Treasury Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers), and (ii) collateral levels must be at least 102% of the total principal when the collateral type is U.S. Treasury Obligations, 103% of the total principal when the collateral type is GNMA s and 104% of the total principal when the collateral type is FNMA and FHLMC ("Eligible Collateral"); (b) the Paying Agent or a third party acting solely as agent therefore or for the Issuer (the "Custodian") has possession of the collateral or the collateral has been transferred to the Custodian in accordance with applicable state and federal laws (other than by means of entries on the transferor's books) and such collateral shall be marked to market; (c) the collateral shall be marked to market on a daily basis and the provider or Custodian shall send monthly reports to the Paying Agent, the Issuer and Assured Guaranty Corp. setting forth the type of collateral, the collateral percentage required for that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the collateral; (d) the repurchase agreement (or guaranty, if applicable) may not be assigned or amended without the prior written consent of Assured Guaranty Corp.; (e) the repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Custodian has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof; (f) the repurchase agreement shall provide that if during its term the provider's rating by either Moody's or S&P is withdrawn or suspended or falls below "A-" by S&P or "A3" by Moody's, as appropriate, the provider must, notify the Issuer, the Paying Agent and Assured Guaranty Corp. within five (5) days of receipt of such notice. Within ten (10) days of receipt of such notice, the provider shall either: (i) provide a written guarantee acceptable to Assured Guaranty Corp., (ii) post Eligible Collateral, or (iii) assign the agreement to an Eligible Provider. {25394/004/ DOCv4} B-11 B-3 {25394/004/ DOCv4} B-12

62 If the provider does not perform a remedy within ten (10) business days, the provider shall, at the direction of the Paying Agent (who shall give such direction if so directed by Assured Guaranty Corp.) repurchase all collateral and terminate the repurchase agreement, with no penalty or premium to the Issuer or the Paying Agent. 11. Investment agreements: with a domestic or foreign bank or corporation the longterm debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least "AA-" by S&P and "Aa3" by Moody's, and acceptable to Assured Guaranty Corp. (each an "Eligible Provider"); provided that: (a) interest payments are to be made to the Paying Agent at times and in amounts as necessary to pay debt service (or, if the investment agreement is for the construction fund, construction draws) on the Series 2009 Bonds; (b) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven (7) days' prior notice; the Issuer and the Paying Agent hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; (c) the provider shall send monthly reports to the Paying Agent, the Issuer and Assured Guaranty Corp. setting forth the balance the Issuer or Paying Agent has invested with the provider and the amounts and dates of interest accrued and paid by the provider; (d) the investment agreement shall state that is an unconditional and general obligation of the provider, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors; (e) the investment agreement (or guaranty, if applicable) may not be assigned or amended without the prior written consent of Assured Guaranty Corp.; (f) the Issuer, the Paying Agent and Assured Guaranty Corp. shall receive an opinion of domestic counsel to the provider that such investment agreement is legal, valid, binding and enforceable against the provider in accordance with its terms; (g) the Issuer, the Paying Agent and Assured Guaranty Corp. shall receive an opinion of foreign counsel to the provider (if applicable) that (i) the investment agreement has been duly authorized, executed and delivered by the provider and constitutes the legal, valid and binding obligation of the provider, enforceable against the provider in accordance with its terms, (b) the choice of law of the state set forth in the investment agreement is valid under that country s laws and a court in such country would uphold such choice of law, and (c) any judgment rendered by a court in the United States would be recognized and enforceable in such country; (h) the investment agreement shall provide that if during its term: (i) the provider's rating by either S&P or Moody's falls below "AA-" or "Aa3", the provider shall, at its option, within ten (10) days of receipt of publication of such downgrade, either (i) provide a written guarantee acceptable to Assured Guaranty Corp., (ii) post Eligible Collateral with the Issuer, the Paying Agent or a third party acting solely as agent therefore (the "Custodian") free and clear of any third party liens or claims, or (iii) assign the agreement to an Eligible Provider, or (iv) repay the principal of and accrued but unpaid interest on the investment; (ii) the provider's rating by either S&P or Moody's is withdrawn or suspended or falls below "A-" or "A3", the provider must, at the direction of the Issuer or the Paying Agent (who shall give such direction if so directed by Assured Guaranty Corp.), within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Issuer or Paying Agent. (i) in the event the provider is required to collateralize, permitted collateral shall include U.S. Treasury Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers) and collateral levels must be 102% of the total principal when the collateral type is U.S. Treasury Obligations, 103% of the total principal when the collateral type is GNMA s and 104% of the total principal when the collateral type is FNMA and FHLMC ("Eligible Collateral"). In addition, the collateral shall be marked to market on a daily basis and the provider or Custodian shall send monthly reports to the Paying Agent, the Issuer and Assured Guaranty Corp. setting forth the type of collateral, the collateral percentage required for that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the collateral; (j) the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Custodian has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof; (k) the investment agreement must provide that if during its term: (i) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the Issuer or the Paying Agent (who shall give such direction if so directed by the Assured Guaranty Corp.), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Issuer or Paying Agent, as appropriate, and (ii) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. ("event of insolvency"), the provider's {25394/004/ DOCv4} B-13 {25394/004/ DOCv4} B-14 obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Issuer or Paying Agent, as appropriate. "Person" shall mean an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or governmental entity. "Pledged Funds" shall mean (1) the Sales Tax Payments, (2) any Direct Subsidy Payments, and (3) until applied in accordance with the provisions of this Resolution, all moneys, including investments thereof, in the funds and accounts established hereunder, with the exception of the Rebate Fund and the Unrestricted Revenue Account; provided, however, that proceeds deposited in the Construction Fund in connection with the issuance of a particular Series of Bonds shall only secure such Series. "Principal Account" shall mean the separate account in the Debt Service Fund established pursuant to Section 4.05 hereof. "Project" shall mean the Initial Project and any Additional Project. "Rebate Amount" means the excess of the future value, as of a computation date, of all receipts on nonpurpose investments (as defined in Section (b) of the Income Tax Regulations) over the future value, as of that date, of all payments on nonpurpose investments, all as provided by regulations under the Code implementing Section 148 thereof. "Rebate Fund" shall mean the City of Sarasota, Florida Sales Tax Payments Revenue Bonds Rebate Fund established pursuant to Section 5.08 hereof. "Rebate Year" shall mean, with respect to a particular Series of Bonds issued hereunder, a one-year period (or shorter period from the date of issue) that ends at the close of business on the day in the calendar year selected by the Issuer as the last day of a Rebate Year. The final Rebate Year with respect to a particular Series of Bonds issued hereunder, however, shall end on the date of final maturity of that Series of Bonds. "Recovery Act" shall mean the American Recovery and Reinvestment Act of "Recovery Zone Economic Development Bonds" shall mean Taxable Bonds of that name as described in the Recovery Act which are issued by the Issuer pursuant to Section 1400U-2 of the Code for which the Issuer elects to receive Direct Subsidy Payments in an amount equal to a percentage of the interest paid on such Bonds. "Redemption Price" shall mean, with respect to any Bond or portion thereof, the principal amount or portion thereof, plus the applicable premium, if any, payable upon redemption thereof pursuant to such Bond or this Resolution. "Registrar" shall mean any registrar for the Bonds appointed by or pursuant to a Supplemental Resolution and its successors and assigns, and any other Person which may at any time be substituted in its place pursuant to Supplemental Resolution. "Resolution" shall mean this Resolution, as the same may from time to time be amended, modified or supplemented by Supplemental Resolution. "Restricted Revenue Account" shall mean the separate account in the Revenue Fund established pursuant to Section 4.05 hereof. "Revenue Fund" shall mean the City of Sarasota, Florida Sales Tax Payments Revenue Bonds Revenue Fund established pursuant to Section 4.05 hereof. "Sales Tax Payments" shall mean the sales tax revenues distributable to the Issuer pursuant to the Act and the 2006 Certification. "Sarasota County Recovery Zone Allocation and Official Action" shall mean Sarasota County Ordinance No enacted by the Board of County Commissioners of the County on July 21, 2009 designating the entire geographic area of the County as a recovery zone, and the determination by the Board of County Commissioners of the County on October 13, 2009 to delegate from its allocation not to exceed $9,500,000 of Recovery Zone Economic Development Bonds to the Issuer. "Serial Bonds" shall mean all of the Bonds other than the Capital Appreciation Bonds, Term Bonds and Variable Rate Bonds. "Series" shall mean all the Bonds delivered on original issuance in a simultaneous transaction and identified pursuant to Sections 2.01 and 2.02 hereof or a Supplemental Resolution authorizing the issuance by the Issuer of such Bonds as a separate Series, regardless of variations in maturity, interest rate, Amortization Installments or other provisions. "Series 2009 Bonds" shall mean the Issuer's Sales Tax Payments Revenue Bonds, Series 2009 (Federally Taxable Build America Bonds Recovery Zone Economic Development Bonds- Direct Subsidy) authorized pursuant to Section 2.02 hereof. "State" shall mean the State of Florida. "Subordinated Indebtedness" shall mean that indebtedness of the Issuer, subordinate and junior to the Bonds, issued in accordance with the provisions of Section 5.01 hereof. "Supplemental Resolution" shall mean any resolution of the Issuer amending or supplementing this Resolution adopted and becoming effective in accordance with the terms of Sections 7.01, 7.02 and 7.03 hereof. {25394/004/ DOCv4} B-15 B-4 {25394/004/ DOCv4} B-16

63 "Taxable Bond" shall mean any Bond where the interest income thereon is includable in the gross income of the Holder thereof for federal income tax purposes or that such interest is subject to federal income taxation. "Term Bonds" shall mean those Bonds which shall be designated as Term Bonds hereby or by Supplemental Resolution of the Issuer and which are subject to mandatory redemption by Amortization Installments. "Unrestricted Revenue Account" shall mean the separate account in the Revenue Fund established pursuant to Section 4.05 hereof. "Variable Rate Bonds" shall mean Bonds or other obligations issued with a variable, adjustable, convertible or other similar rate which is not fixed in percentage for the entire term thereof at the date of issue. The terms "herein," "hereunder," "hereby," "hereto," "hereof" and any similar terms, shall refer to this Resolution; the term heretofore shall mean before the date of adoption of this Resolution; and the term "hereafter" shall mean after the date of adoption of this Resolution. Words importing the masculine gender include every other gender. Words importing the singular number include the plural number, and vice versa. SECTION Authority for Resolution. This Resolution is adopted pursuant to the provisions of the Act. SECTION Resolution to Constitute Contract. In consideration of the purchase and acceptance of any or all of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Issuer with the Holders of the Bonds and shall be deemed to be and shall constitute a contract between the Issuer and the Holders from time to time of the Bonds. The pledge made in this Resolution and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Holders of any and all of said Bonds and the Insurer. All of the Bonds, regardless of the time or times of their issuance 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 this Resolution. SECTION Findings. It is hereby ascertained, determined and declared: (A) That the Issuer deems it necessary, desirable and in the best interests of the Issuer and its citizens and to serve a paramount public purpose that the Initial Project be constructed, reconstructed and renovated in accordance with the Interlocal Agreement. (B) That a portion of the Initial Project shall be financed with the proceeds of the Series 2009 Bonds in accordance with the Interlocal Agreement. (C) That in order to preserve and promote gainful employment and tourism and to enhance the economic prosperity and public welfare of the inhabitants of the Issuer, it is necessary and desirable to construct, reconstruct and renovate the Initial Project in accordance with the Interlocal Agreement. (D) That Office of Trade, Tourism and Economic Development of the State of Florida has certified the Initial Project as a "Facility For a Retained Professional Sports Franchise" as defined in Section (5)(c)2., Florida Statutes, and therefor, the Issuer is entitled to receive from the State sales tax revenues, pursuant to Section (6)(d)6.b., Florida Statutes, and other applicable provisions of law, in the amount of $41, per month for 30 years from the date of first payment, which first payment occurred on March 1, (E) That the Issuer is obligated, pursuant to the Interlocal Agreement, to issue the Series 2009 Bonds in the manner and to the extent described herein, and to grant the proceeds of the Series 2009 Bonds to the County be used to finance a portion of the Costs of the Initial Project. (F) manner. That the Sales Tax Payments are not heretofore pledged or encumbered in any (G) That the estimated Pledged Funds will be sufficient to pay the principal of and interest on the Series 2009 Bonds, as the same become due, and all other payments provided for in this Resolution. (H) That the principal of and interest on the Series 2009 Bonds and all other payments provided for in this Resolution will be payable in the manner and to the extent described herein or in a Supplemental Resolution; and the ad valorem taxing power of the Issuer will never be necessary or authorized to pay the principal of and interest on the Bonds and, except as otherwise provided herein, the Bonds shall not constitute a lien upon any property of the Issuer. SECTION Initial Project. The Issuer does hereby authorize the construction, reconstruction and renovation of the capital improvements which comprise the Initial Project in accordance with the Interlocal Agreement and the Act. [End of Article I] {25394/004/ DOCv4} B-17 {25394/004/ DOCv4} B-18 ARTICLE II AUTHORIZATION, TERMS, EXECUTION AND REGISTRATION OF BONDS SECTION Authorization of Bonds. This Resolution creates an issue of Bonds of the Issuer to be designated as "City of Sarasota, Florida, Sales Tax Payments Revenue Bonds" which may be issued in one or more Series as hereinafter provided. The aggregate principal amount of the Bonds which may be executed and delivered under this Resolution is not limited except as is or may hereafter be provided in this Resolution or as limited by the Act or by law. The Bonds may, if and when authorized by the Issuer pursuant to this Resolution, be issued in one or more Series, with such further appropriate particular designations added to or incorporated in such title for the Bonds of any particular Series as the Issuer may determine and as may be necessary to distinguish such Bonds from the Bonds of any other Series. Each Bond shall bear upon its face the designation so determined for the Series to which it belongs. The Bonds shall be issued for such purpose or purposes; shall bear interest at such rate or rates not exceeding the maximum rate permitted by law; and shall be payable in lawful money of the United States of America on such dates; all as determined by Supplemental Resolution of the Issuer. The Bonds shall be issued in denominations of $5,000 or integral multiples thereof, in such form, whether coupon or registered; shall be dated such date; shall bear such numbers; shall be payable at such place or places; shall contain such redemption provisions; shall have such Paying Agents and Registrars; shall mature in such years and amounts; shall provide that the proceeds thereof be used in such manner; may be Direct Subsidy Bonds, Capital Appreciation Bonds, Serial Bonds, Term Bonds or Variable Rate Bonds (provided, however, that the issuance of Variable Rate Bonds which are Additional Bonds is subject to the provisions of Section 5.02(D) hereof); all as determined by Supplemental Resolution of the Issuer. SECTION Authorization and Description of Series 2009 Bonds. A Series of Bonds entitled to the benefit, protection and security of this Resolution is hereby authorized in an aggregate principal amount of not to exceed $9,500,000 for the principal purposes of financing the Initial Project in accordance with the Interlocal Agreement and paying certain costs of issuance incurred with respect to such Series. Such Series shall be issued as Recovery Zone Economic Development Bonds pursuant to the Recovery Act and the Sarasota County Recovery Zone Designation and Official Action, and may be designated as, and shall be distinguished from the Bonds of all other Series by the title "City of Sarasota, Florida, Sales Tax Payments Revenue Bonds, Series 2009 (Federally Taxable Build America Bonds Recovery Zone Economic Development Bonds-Direct Subsidy)," provided the Issuer may change such designation in the event that the total authorized amount of Series 2009 Bonds are not issued in a simultaneous transaction or the Series 2009 Bonds are not issued in calendar year Notwithstanding anything herein to the contrary, based upon a recommendation of the Financial Advisor that it is in the best economic interests of the Issuer, the Issuer may elect to issue all or a portion of the Series 2009 Bonds as traditional tax-exempt Bonds, Recovery Zone Economic Development Bonds and/or Build America Bonds, and may separate the Bonds into separate subseries and/or may modify the name of the issue accordingly. To the extent that any of the Series 2009 Bonds are issued as tax-exempt Bonds, the Issuer hereby delegates to the Finance Director the authority to designate such Bonds as "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Code, if facts and circumstances support such designation. In the event the Issuer determines to issue any of the Series 2009 Bonds as Build America Bonds pursuant to the Recovery Act, this Resolution shall be conclusive evidence that the Issuer has made an irrevocable election to have Section 54AA of the Code apply to such Build America Bonds and to receive the subsidy payment directly from the United States Treasury Secretary. Further, in the event the Issuer determines to issue any of the Series 2009 Bonds as Recovery Zone Economic Development Bonds pursuant to the Recovery Act and the Sarasota County Recovery Zone Allocation and Official Action, this Resolution shall be conclusive evidence that the Issuer has made an irrevocable election to have Section 1400U-2 of the Code apply to such Recovery Zone Economic Development Bonds and to receive the subsidy payment directly from the United States Treasury Secretary. The Series 2009 Bonds shall be dated as of the first day of the month in which occurs the delivery of the Series 2009 Bonds to the purchaser or purchasers thereof or such other date as may be set forth by Supplemental Resolution of the Issuer; shall be issued as fully registered Bonds; shall be numbered consecutively from one upward in order of maturity preceded by the letter "R"; shall be issued in denominations of $5,000 or integral multiples thereof and shall bear interest at a rate or rates not exceeding the maximum rate permitted by law, payable in such manner and on such dates; shall consist of such amounts of Serial Bonds and Term Bonds; maturing in such amounts or Amortization Installments and in such years; shall be payable in such place or places; shall have such Paying Agent and Registrar; and shall contain such redemption provisions; all as the Issuer shall provide hereafter by Supplemental Resolution. The principal of or Redemption Price, if applicable, on the Series 2009 Bonds are payable upon presentation and surrender of the Series 2009 Bonds at the designated office of the Paying Agent. Interest payable on any Series 2009 Bond on any Interest Date will be paid by check or draft of the Paying Agent to the Holder in whose name such Bond shall be registered at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding such Interest Date, or, unless otherwise provided by Supplemental Resolution, at the option of the Paying Agent, and at the request and expense of such Holder, by bank wire transfer for the account of such Holder. In the event the interest {25394/004/ DOCv4} B-19 B-5 {25394/004/ DOCv4} B-20

64 payable on any Series 2009 Bond is not punctually paid or duly provided for by the Issuer on such Interest Date, such defaulted interest will be paid to the Holder in whose name such Bond shall be registered at the close of business on a special record date for the payment of such defaulted interest as established by notice to such Holder, not less than ten days preceding such special record date. All payments of principal of or Redemption Price, if applicable, and interest on the Series 2009 Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION Application of Series 2009 Bond Proceeds. Except as otherwise provided by Supplemental Resolution, the proceeds derived from the sale of the Series 2009 Bonds, including accrued interest and premium, if any, shall, simultaneously with the delivery of the Series 2009 Bonds to the purchaser or purchasers thereof, be applied by the Issuer as follows: (A) Accrued interest, if any, shall be deposited in the Interest Account and shall be used only for the purpose of paying the interest which shall thereafter become due on the Series 2009 Bonds. (B) A sufficient amount shall be applied to the payment of costs and expenses relating to the issuance of the Series 2009 Bonds which must be paid upon delivery of the Series 2009 Bonds. Such amount may, at the option of the Issuer, be deposited in and disbursed from the Construction Fund. (C) The balance shall be deposited in the Construction Fund and then shall be transferred to the County pursuant to the Interlocal Agreement to be used to pay the Costs of the Initial Project. SECTION Execution of Bonds. The Bonds shall be executed in the name of the Issuer and signed by, or bear the facsimile signature of the Mayor, shall be attested by or bear the facsimile signature of the City Clerk and shall be approved as to form and correctness by the City Attorney. The official seal of the Issuer shall be imprinted on each Bond. In case any one or more of the officers who shall have signed or sealed any of the Bonds or whose facsimile signature shall appear thereon shall cease to be such officer of the Issuer before the Bonds so signed and sealed have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Any Bond may be signed and sealed on behalf of the Issuer by such person who at the actual time of the execution of such Bond shall hold the proper office of the Issuer, although, at the date of such Bond, such person may not have held such office or may not have been so authorized. The Issuer may adopt and use for such purposes the facsimile signatures of any such persons who shall have held such offices at any time after the date of the adoption of this Resolution, notwithstanding that either or both shall have ceased to hold such office at the time the Bonds shall be actually sold and delivered. SECTION Authentication. No Bond of any Series shall be secured hereunder or be entitled to the benefit hereof or shall be valid or obligatory for any purpose unless there shall be manually endorsed on such Bond a certificate of authentication by the Registrar or such other entity as may be approved by the Issuer for such purpose. Such certificate on any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The form of such certificate shall be substantially in the form provided in Section 2.10 hereof. SECTION Temporary Bonds. Until the definitive Bonds of any Series are prepared, the Issuer may execute, in the same manner as is provided in Section 2.04 hereof, and deliver, upon authentication by the Registrar pursuant to Section 2.05 hereof, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof, one or more temporary Bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued, in denominations authorized by the Issuer by Supplemental Resolution, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Issuer, at its own expense, shall prepare and execute definitive Bonds, which shall be authenticated by the Registrar. Upon the surrender of such temporary Bonds for exchange, the Registrar, without charge to the Holder thereof, shall deliver in exchange therefor definitive Bonds, of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds issued pursuant to this Resolution. All temporary Bonds surrendered in exchange for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith canceled by the Registrar. SECTION Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may, in its discretion, issue and deliver, and the Registrar shall authenticate, a new Bond of like tenor as the Bond so mutilated, destroyed, stolen or lost (e.g., Serial Bonds will be exchanged for Serial Bonds and Capital Appreciation Bonds will be exchanged for Capital Appreciation Bonds), in exchange and substitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of such Holder's ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer or the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Bonds so surrendered or otherwise substituted shall be canceled by the Registrar. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the same or cause the Bond to be paid, upon being indemnified as aforesaid, and if such Bonds be lost, stolen or destroyed, without surrender thereof. {25394/004/ DOCv4} B-21 {25394/004/ DOCv4} B-22 Any such duplicate Bonds issued pursuant to this Section 2.07 shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bond be at any time found by anyone, and such duplicate Bond shall be entitled to equal and proportionate benefits and rights as to lien on the Pledged Funds to the same extent as all other Bonds issued hereunder. SECTION Transfer. Bonds, upon surrender thereof at the office of the Registrar with a written instrument of transfer satisfactory to the Registrar, duly executed by the Holder thereof or such Holder's attorney duly authorized in writing, may, at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same Series, maturity of any other authorized denominations and type (e.g., Serial Bonds will be exchanged for Serial Bonds and Capital Appreciation Bonds will be exchanged for Capital Appreciation Bonds). The Bonds issued under this Resolution shall be and have all the qualities and incidents of negotiable instruments under the law merchant and the Uniform Commercial Code of the State, subject to the provisions for registration and transfer contained in this Resolution and in the Bonds. So long as any of the Bonds shall remain Outstanding, the Issuer shall maintain and keep, at the office of the Registrar, books for the registration and transfer of the Bonds. Each Bond shall be transferable only upon the books of the Issuer, at the office of the Registrar, under such reasonable regulations as the Issuer may prescribe, by the Holder thereof in person or by such Holder's attorney duly authorized in writing upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed and guaranteed by the Holder or such Holder's duly authorized attorney. Upon the transfer of any such Bond, the Issuer shall issue, and cause to be authenticated, in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and Series and maturity as the surrendered Bond. The Issuer, the Registrar and any Paying Agent or fiduciary of the Issuer may deem and treat the Person in whose name any Outstanding Bond shall be registered upon the books of the Issuer as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price, if applicable, and interest on such Bond and for all other purposes, and all such payments so made to any such Holder or upon such Holder's order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid and neither the Issuer nor the Registrar nor any Paying Agent or other fiduciary of the Issuer shall be affected by any notice to the contrary. The Registrar, in any case where it is not also the Paying Agent in respect to any Series of Bonds, forthwith (A) following the fifteenth day prior to an Interest Date for such Series; (B) following the fifteenth day next preceding the date of first mailing of notice of redemption of any Bonds of such Series; and (C) at any other time as reasonably requested by the Paying Agent of such Series, shall certify and furnish to such Paying Agent the names, addresses and holdings of Bondholders and any other relevant information reflected in the registration books. Any Paying Agent of any fully registered Bond shall effect payment of interest on such Bonds by mailing a check or draft to the Holder entitled thereto or may, in lieu thereof, upon the request and at the expense of such Holder, transmit such payment by bank wire transfer for the account of such Holder. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Issuer shall execute and the Registrar shall authenticate and deliver such Bonds in accordance with the provisions of this Resolution. Execution of Bonds pursuant to Section 2.04 hereof for purposes of exchanging, replacing or transferring Bonds may occur at the time of the original delivery of the Series of which such Bonds are a part. All Bonds surrendered in any such exchanges or transfers shall be held by the Registrar in safekeeping until directed by the Issuer to be canceled by the Registrar. For every such exchange or transfer of Bonds, the Issuer or the Registrar may make a charge sufficient to reimburse it for any tax, fee, expense or other governmental charge required to be paid with respect to such exchange or transfer. The Issuer and the Registrar shall not be obligated to make any such exchange or transfer of Bonds of any Series during the fifteen days next preceding an Interest Date on the Bonds of such Series (other than Variable Rate Bonds), or, in the case of any proposed redemption of Bonds of such Series, then during the fifteen days next preceding the date of the first mailing of notice of such redemption and continuing until such redemption date. SECTION Coupon Bonds; Capital Appreciation Bonds; Variable Rate Bonds. The Issuer, at its discretion, may by Supplemental Resolution authorize the issuance of coupon Bonds, registrable as to principal only or as to both principal and interest, Capital Appreciation Bonds or Variable Rate Bonds. Such Supplemental Resolution shall provide for the negotiability, transfer, interchangeability, denominations and form of such Bonds and, if applicable, coupons appertaining thereto. Coupon Bonds (other than Taxable Bonds) shall only be issued if an opinion of Bond Counsel is received to the effect that issuance of such coupon Bonds will not adversely affect the exclusion from gross income of interest earned on such Bonds for federal income tax purposes. SECTION Form of Bonds. The text of the Bonds, except as otherwise provided pursuant to Section 2.09 hereof, the form of which shall be provided by Supplemental Resolution of the Issuer, shall be in substantially the following form with such non-material omissions, insertions and variations as may be necessary and/or desirable and approved by the Mayor prior to the issuance thereof (which necessity and/or desirability and approval shall be presumed by the Issuer's delivery of the Bonds to the purchaser or purchasers thereof): [Remainder of page intentionally left blank] {25394/004/ DOCv4} B-23 B-6 {25394/004/ DOCv4} B-24

65 No. R- UNITED STATES OF AMERICA STATE OF FLORIDA SARASOTA COUNTY, FLORIDA CITY OF SARASOTA, FLORIDA SALES TAX PAYMENTS REVENUE BONDS, SERIES $ of such Paying Agent mailed to such Registered Holder at the address appearing on such registration books or, at the option of such Paying Agent, and at the request and expense of such Registered Holder, by bank wire transfer for the account of such Holder. In the event interest payable on this Bond is not punctually paid or duly provided for by the Issuer on such interest payment date, payment of each installment of such defaulted interest shall be made to the person in whose name this Bond shall be registered at the close of business on a special record date for the payment of such defaulted interest as established by notice to such Registered Holder, not less than ten days preceding such special record date. Interest Maturity Date of Rate Date Original Issue CUSIP %,, Registered Holder: Principal Amount: KNOW ALL MEN BY THESE PRESENTS, that the City of Sarasota, Florida, a municipality created and existing under and by virtue of the laws of the State of Florida (the "Issuer"), for value received, hereby promises to pay, solely from the Pledged Funds hereinafter described, to the Registered Holder identified above, or registered assigns as hereinafter provided, on the Maturity Date identified above, the Principal Amount identified above and interest on such Principal Amount from the Date of Original Issue identified above or from the most recent interest payment date to which interest has been paid at the Interest Rate per annum identified above on 1 and 1 of each year commencing 1,, until such Principal Amount shall have been paid, except as the provisions hereinafter set forth with respect to redemption prior to maturity may be or become applicable hereto. Interest on this Bond will be computed on the basis of a 360-day year consisting of twelve 30- day months. Such Principal Amount and interest and the redemption premium, if any, on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Such Principal Amount and the redemption premium, if any, on this Bond, are payable, upon presentation and surrender hereof, at the designated corporate trust office of,,, as Paying Agent. Payment of each installment of interest shall be made to the person in whose name this Bond shall be registered on the registration books of the Issuer maintained by,,, as Registrar, at the close of business on the date which shall be the fifteenth day (whether or not a business day) of the calendar month next preceding each interest payment date and shall be paid by a check or draft This Bond is one of an authorized issue of Bonds in the aggregate principal amount of $ (the "Bonds") of like date, tenor and effect, except as to maturity date, interest rate, denomination and number, issued for the purpose of, under the authority of and in full compliance with the Constitution and laws of the State of Florida, Chapter 166, Part II, Florida Statutes, [Chapter 159, Part VII, Florida Statutes], Section (5)(c)2., Florida Statutes, Section (6)(d)6.b., Florida Statutes, the municipal charter of the Issuer, and other applicable provisions of law (collectively, the "Act"), and Resolution No. 09R- adopted by the City Commission of the Issuer on, _2009, as amended and supplemented from time to time, and as particularly supplemented by Resolution No. R-, adopted by the City Commission on, (collectively, the "Resolution"), and is subject to the terms and conditions of the Resolution. The Bonds and the interest thereon are payable solely from and secured by a lien upon and a pledge of (1) the Sales Tax Payments, (2) any Direct Subsidy Payments, and (3) until applied in accordance with the provisions of the Resolution, all moneys, including investments thereof, in certain of the funds and accounts established by the Resolution, all in the manner and to the extent described in the Resolution (collectively, the "Pledged Funds"). In addition, the Bonds are secured by a covenant to budget and appropriate Non-Ad Valorem Revenues of the Issuer, in the manner and to the extent provided for in the Resolution. IT IS EXPRESSLY AGREED BY THE REGISTERED HOLDER OF THIS BOND THAT THE FULL FAITH AND CREDIT OF THE ISSUER, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF, ARE NOT PLEDGED TO THE PAYMENT OF THE PRINCIPAL, PREMIUM, IF ANY, AND INTEREST ON THIS BOND AND THAT SUCH HOLDER SHALL NEVER HAVE THE RIGHT TO REQUIRE OR COMPEL THE EXERCISE OF ANY TAXING POWER OF THE ISSUER, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF, TO THE PAYMENT OF SUCH PRINCIPAL, PREMIUM, IF ANY, OR INTEREST. THIS BOND AND THE OBLIGATION EVIDENCED HEREBY SHALL NOT CONSTITUTE A LIEN UPON ANY PROPERTY OF THE ISSUER, BUT SHALL CONSTITUTE A LIEN ONLY ON, AND SHALL BE PAYABLE SOLELY FROM, THE PLEDGED FUNDS AND OTHER SOURCES DESCRIBED IN THE RESOLUTION. {25394/004/ DOCv4} B-25 {25394/004/ DOCv4} B-26 Neither the members of the City Commission of the Issuer nor any person executing this Bond shall be liable personally hereon or be subject to any personal liability or accountability by reason of the issuance hereof. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN THIS PLACE. This Bond shall not be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by the Registrar. IN WITNESS WHEREOF, the City of Sarasota, Florida has issued this Bond and has caused the same to be executed by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of its City Auditor and Clerk, approved as to form and correctness by the manual or facsimile signature of its City Attorney, and its official seal or a facsimile thereof to be affixed or reproduced hereon, all as of the day of,. (SEAL) ATTEST: City Auditor and Clerk CITY OF SARASOTA, FLORIDA By: Mayor APPROVED AS TO FORM AND CORRECTNESS: City Attorney [Provisions on Reverse Side of Bond] This Bond is transferable in accordance with the terms of the Resolution only upon the books of the Issuer kept for that purpose at the designated corporate trust office of the Registrar by the Registered Holder hereof in person or by such Holder's attorney duly authorized in writing, upon the surrender of this Bond together with a written instrument of transfer satisfactory to the Registrar duly executed by the Registered Holder or such Holder's attorney duly authorized in writing, and thereupon a new Bond or Bonds in the same aggregate principal amount shall be issued to the transferee in exchange therefor, and upon the payment of the charges, if any, therein prescribed. The Bonds are issuable in the form of fully registered Bonds in the denominations of $5,000 and integral multiples thereof, not exceeding the aggregate principal amount of the Bonds maturing on the same date. The Issuer, the Registrar and any Paying Agent may treat the Registered Holder of this Bond as the absolute owner hereof for all purposes, whether or not this Bond shall be overdue, and shall not be affected by any notice to the contrary. The Issuer and the Registrar shall not be obligated to make any exchange or transfer of the Bonds during the fifteen days next preceding an interest payment date, or in the case of any proposed redemption of the Bonds, then, during the fifteen days next preceding the date of the first mailing of notice of such redemption. [INSERT REDEMPTION PROVISIONS] Notice of redemption shall be given in the manner described in the Resolution. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond, exist, have happened and have been performed, in regular and due form and time as required by the laws and Constitution of the State of Florida applicable thereto, and that the issuance of the Bonds does not violate any constitutional or statutory limitations or provisions. ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto [Insert Name, Address, Social Security or Other Identifying Number of Assignee] the within Bond and does hereby irrevocably constitute and appoint as attorneys to register the transfer of the said Bond on the books kept for registration thereof with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. NOTICE: The signature to this assignment must correspond with the name of the Registered Holder as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever and the Social Security or other identifying number of such assignee must be supplied. {25394/004/ DOCv4} B-27 B-7 {25394/004/ DOCv4} B-28

66 The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF TRANS MIN ACT -- (Cust.) Custodian for under Uniform Transfer to Minors Act of (State) Additional abbreviations may also be used though not in the list above. CERTIFICATE OF VALIDATION, IF APPLICABLE This Bond was validated by judgment of the Circuit Court of the Twelfth Judicial Circuit of the State of Florida, in and for Sarasota County, Florida rendered on,. CITY OF SARASOTA, FLORIDA By: Mayor STATEMENT OF INSURANCE [IF APPLICABLE, INSERT INSURER LANGUAGE] [End of Article II] CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the issue described in the within-mentioned Resolution. DATE OF AUTHENTICATION: Registrar By: Authorized Officer {25394/004/ DOCv4} B-29 {25394/004/ DOCv4} B-30 ARTICLE III REDEMPTION OF BONDS SECTION Optional, Mandatory and/or Extraordinary Optional Redemption. The Bonds may be subject to optional, mandatory and/or extraordinary optional redemption as may be provided by Supplemental Resolution. SECTION Selection of Bonds to be Redeemed. The Bonds shall be redeemed only in the principal amount of $5,000 each and integral multiples thereof. The Issuer shall, at least sixty days prior to the redemption date (unless a shorter time period shall be satisfactory to the Registrar) notify the Registrar of such redemption date and of the principal amount of Bonds to be redeemed. For purposes of any redemption of less than all of the Outstanding Bonds of a single maturity, the particular Bonds or portions of Bonds to be redeemed shall be selected not more than forty-five days prior to the redemption date by the Registrar from the Outstanding Bonds of the maturity or maturities designated by the Issuer by such method as the Registrar shall deem fair and appropriate and which may provide for the selection for redemption of Bonds or portions of Bonds in principal amounts of $5,000 and integral multiples thereof. If less than all of the Outstanding Bonds of a single maturity are to be redeemed, the Registrar shall promptly notify the Issuer and Paying Agent (if the Registrar is not the Paying Agent for such Bonds) in writing of the Bonds or portions of Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed. SECTION Notice of Redemption. Unless waived by any Holder of Bonds to be redeemed, notice of any redemption made pursuant to this section shall be given by the Registrar on behalf of the Issuer by mailing a copy of an official redemption notice by registered or certified mail at least thirty days and not more than sixty days prior to the date fixed for redemption to each Holder of Bonds to be redeemed at the address of such Holder shown on the registration books maintained by the Registrar or at such other address as shall be furnished in writing by such Holder to the Registrar; provided, however, that no defect in any notice given pursuant to this Section to any Holder of Bonds to be redeemed nor failure to give such notice shall in any manner defeat the effectiveness of a call for redemption as to all other Holders of Bonds to be redeemed. Every official notice of redemption shall be dated and shall state: (1) the redemption date, (2) the Redemption Price, (3) if less than all Outstanding Bonds are to be redeemed, the number (and, in the case of a partial redemption of any Bond, the principal amount) of each Bond to be redeemed, (4) that, on the redemption date, the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (5) that such Bonds to be redeemed, whether as a whole or in part, are to be surrendered for payment of the Redemption Price at the designated office of the Registrar. Prior to any redemption date, the Issuer shall deposit with the Registrar an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds which are to be redeemed on that date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Issuer shall default in the payment of the Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar at the Redemption Price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Holder a new Bond or Bonds of the same maturity in the amount of the unpaid principal of such partially redeemed Bond. All Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued. Notwithstanding the foregoing or any other provision hereof, notice of optional redemption pursuant to this Section 3.03 may be conditioned upon the occurrence or nonoccurrence of such event or events as shall be specified in such notice of optional redemption and may also be subject to rescission by the Issuer if expressly set forth in such notice. SECTION Redemption of Portions of Bonds. Any Bond which is to be redeemed only in part shall be surrendered at any place of payment specified in the notice of redemption (with due endorsement by, or written instrument of transfer in form satisfactory to, the Registrar duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Issuer shall execute and the Registrar shall authenticate and deliver to the Holder of such Bond, without service charge, a new Bond or Bonds, of the same interest rate and maturity, and of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bonds so surrendered. SECTION Payment of Redeemed Bonds. Notice of redemption having been given substantially as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the {25394/004/ DOCv4} B-31 B-8 {25394/004/ DOCv4} B-32

67 redemption date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Issuer shall default in the payment of the Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar and/or Paying Agent at the appropriate Redemption Price, plus accrued interest. All Bonds which have been redeemed shall be canceled by the Registrar and shall not be reissued. [End of Article III] ARTICLE IV SECURITY, SPECIAL FUNDS AND APPLICATION THEREOF SECTION Bonds not to be Indebtedness of Issuer. THE BONDS SHALL NOT BE OR CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE ISSUER AS "BONDS" WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE SPECIAL OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM AND SECURED BY A LIEN UPON AND PLEDGE OF THE PLEDGED FUNDS. NO HOLDER OF ANY BOND SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER TO PAY SUCH BOND, OR BE ENTITLED TO PAYMENT OF SUCH BOND FROM ANY MONEYS OF THE ISSUER EXCEPT FROM THE PLEDGED FUNDS AND OTHER SOURCES DESCRIBED HEREIN. The Pledged Funds shall immediately be subject to the lien of this pledge without any physical delivery thereof or further act, and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer. SECTION Security for Bonds. The payment of the principal of or Redemption Price, if applicable, and interest on the Bonds shall be secured forthwith equally and ratably by a pledge of and lien upon the Pledged Funds. The Issuer does hereby irrevocably pledge the Pledged Funds to the payment of the principal of or Redemption Price, if applicable, and interest on the Bonds in accordance with the provisions hereof. SECTION Backup Covenant to Budget and Appropriate. Subject to the next paragraph, in the event Pledged Funds are insufficient to pay principal or interest on the Bonds, the Issuer covenants and agrees and has a positive and affirmative duty to appropriate in its annual budget, by amendment, if necessary, from Non-Ad Valorem Revenues, amounts sufficient to pay principal of and interest on the Bonds not being paid from other amounts as the same shall become due. Such covenant and agreement on the part of the Issuer to budget and appropriate such amounts of Non-Ad Valorem Revenues shall be cumulative to the extent not paid, and shall continue until such Non-Ad Valorem Revenues or other legally available funds in amounts sufficient to make all such required payments shall have been budgeted, appropriated and actually paid. No lien upon or pledge of such budgeted Non-Ad Valorem Revenues shall be in effect until such monies are budgeted and appropriated as provided herein. The Issuer further acknowledges and agrees that the obligations of the Issuer to include the amount of such amendments in each of its annual budgets and to pay such amounts from Non-Ad Valorem Revenues may be enforced in a court of competent jurisdiction in accordance with the remedies set forth herein. {25394/004/ DOCv4} B-33 {25394/004/ DOCv4} B-34 Until such monies are budgeted and appropriated as provided herein, such covenant to budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Revenues, nor does it preclude the Issuer from pledging in the future its Non-Ad Valorem Revenues, nor does it require the Issuer to levy and collect any particular Non-Ad Valorem Revenues, nor does it give the Holders of the Bonds a prior claim on the Non-Ad Valorem Revenues as opposed to claims of general creditors of the Issuer. Such covenant to budget and appropriate Non-Ad Valorem Revenues is subject in all respects to the prior payment of obligations secured by a pledge of such Non-Ad Valorem Revenues heretofore, herein or hereafter entered into (including the payment of debt service on bonds and other debt instruments). Anything in this Resolution to the contrary notwithstanding, it is understood and agreed that all obligations of the Issuer hereunder shall be payable from the portion of Non-Ad Valorem Revenues budgeted and appropriated as herein provided, and nothing herein shall be deemed to pledge ad valorem tax power or ad valorem tax revenues or to permit or constitute a mortgage or lien upon any assets owned by the Issuer and no Holder of the Bonds nor any other person, may compel the levy of ad valorem taxes on real or personal property within the boundaries of the Issuer or the use or application of ad valorem tax revenues in order to satisfy any payment obligations hereunder or to maintain or continue any of the activities of the Issuer which generate user service charges, regulatory fees, or any other Non-Ad Valorem Revenues. Notwithstanding any provisions of this Resolution or the Bonds to the contrary, the Issuer shall never be obligated to maintain or continue any of the activities of the Issuer which generate user service charges, regulatory fees or any Non-Ad Valorem Revenues. Until such monies are budgeted and appropriated as herein provided, neither this Resolution nor the obligations of the Issuer hereunder shall be construed as a pledge of or a lien on all or any legally available Non-Ad Valorem Revenues of the Issuer, but shall be payable solely as provided herein and, notwithstanding anything herein to the contrary, is subject to the funding obligations for essential governmental services of the Issuer, and is further subject to the provisions of Section , Florida Statutes. SECTION Construction Fund. The Issuer covenants and agrees to establish a separate fund in a bank or trust company in the State, which is eligible under the laws of such State to receive funds of the Issuer, to be known as the "City of Sarasota, Florida Sales Tax Payments Revenue Bonds, Construction Fund" (the "Construction Fund"), which shall be used only for payment of the Cost of the Initial Project in accordance with the Interlocal Agreement. Moneys in the Construction Fund which derive from a particular Series of Bonds, until applied in payment of any item of the Cost of a Project in accordance with the Interlocal Agreement, in the manner hereinafter provided, shall be held in trust by the Issuer and shall be subject to a lien and charge in favor of the Holders of such Series of Bonds and for the further security of such Holders. SECTION Funds and Accounts. The Issuer covenants and agrees to establish with a bank or trust company in the State of Florida, which is eligible under the laws of such State to receive funds of the Issuer, separate funds to be known as the "City of Sarasota, Florida Sales Tax Payments Revenue Bonds Revenue Fund" (the "Revenue Fund") and the "City of Sarasota, Florida Sales Tax Payments Revenue Bonds Debt Service Fund" (the "Debt Service Fund"). The Issuer shall maintain in the Revenue Fund two accounts: the "Restricted Revenue Account" and the "Unrestricted Revenue Account." The Issuer shall maintain in the Debt Service Fund three accounts: the "Interest Account," the "Principal Account," and the "Bond Amortization Account." Moneys in the aforementioned funds and accounts, other than the Unrestricted Revenue Account, until applied in accordance with the provisions hereof, shall be subject to a lien and charge in favor of the Holders and for the further security of the Holders. The Issuer shall at any time and from time to time appoint one or more depositories to hold, for the benefit of the Bondholders, any one or more of the funds and accounts established hereby. Such depository or depositories shall perform at the direction of the Issuer the duties of the Issuer in depositing, transferring and disbursing moneys to and from each of such funds and accounts as herein set forth, and all records of such depositary in performing such duties shall be open at all reasonable times to inspection by the Issuer and its agents and employees. Any such depositary shall be a bank or trust company duly authorized to exercise corporate trust powers and subject to examination by federal or state authority, of good standing, and having a combined capital, surplus and undivided profits aggregating not less than ten million dollars ($10,000,000). SECTION Flow of Funds. (A) Beginning on the date the Series 2009 Bonds are issued, the Issuer shall deposit the Sales Tax Payments, as received, and any Direct Subsidy Payments into the Restricted Revenue Account promptly upon receipt thereof. The moneys in the Restricted Revenue Account shall be deposited or credited on or before the 21st day of each month, commencing with the month in which delivery of the Series 2009 Bonds shall be made to the purchaser or purchasers thereof, or such later date as hereinafter provided, in the following manner and in the following order of priority: (1) Interest Account. The Issuer shall deposit into or credit to the Interest Account the sum which, together with the balance in said Account and any anticipated Direct Subsidy Payments, shall equal the interest on all Outstanding Bonds accrued and unpaid and to accrue to the end of the then current calendar month. Moneys in the Interest Account shall be used to pay interest on the Bonds as and when the same become due, whether by redemption or otherwise, and for no other purpose. The Issuer shall adjust the amount of the deposit into the Interest Account not later than the month immediately preceding any Interest Date so as to provide sufficient moneys in the Interest Account to pay the interest on the Bonds coming due on such Interest Date. (2) Principal Account. Next, the Issuer shall deposit into or credit to the Principal Account the sum which, together with the balance in said Account, shall equal the principal amounts on all Outstanding Bonds due and unpaid and that portion of the principal next due within one year which would have accrued on said Bonds during the then current calendar {25394/004/ DOCv4} B-35 B-9 {25394/004/ DOCv4} B-36

68 month if such principal amounts were deemed to accrue monthly (assuming that a year consists of twelve equivalent calendar months of thirty days each) in equal amounts from the next preceding principal payment due date, or, if there is no such preceding principal payment due date, from a date one year preceding the due date of such principal amount. Moneys in the Principal Account shall be used to pay the principal of the Bonds as and when the same shall mature, and for no other purpose. The Issuer shall adjust the amount of deposit to the Principal Account not later than the month immediately preceding any principal payment date so as to provide sufficient moneys in the Principal Account to pay the principal on Bonds becoming due on such principal payment date. (3) Bond Amortization Account. Commencing in the month which is one year prior to any Amortization Installment due date, the Issuer shall deposit into or credit to the Bond Amortization Account the sum which, together with the balance in said Account, shall equal the Amortization Installments on all Bonds Outstanding due and unpaid and that portion of the Amortization Installments of all Bonds Outstanding next due which would have accrued on such Bonds during the then current calendar month if such Amortization Installments were deemed to accrue monthly (assuming that a year consists of twelve equivalent calendar months having thirty days each) in equal amounts from the next preceding Amortization Installment due date, or, if there is no such preceding Amortization Installment due date, from a date one year preceding the due date of such Amortization Installment. Moneys in the Bond Amortization Account shall be used to purchase or redeem Term Bonds in the manner herein provided, and for no other purpose. The Issuer shall adjust the amount of the deposit into the Bond Amortization Account not later than the 21 st day of the month immediately preceding any date for payment of an Amortization Installment so as to provide sufficient moneys in the Bond Amortization Account to pay the Amortization Installments on the Bonds coming due on such date. Payments to the Bond Amortization Account shall be on a parity with payments to the Principal Account. Amounts accumulated in the Bond Amortization Account with respect to any Amortization Installment (together with amounts accumulated in the Interest Account with respect to interest, if any, on the Term Bonds for which such Amortization Installment was established) may be applied by the Issuer, on or prior to the sixtieth day preceding the due date of such Amortization Installment (a) to the purchase of Term Bonds of the Series and maturity for which such Amortization Installment was established, at a price not greater than the Redemption Price at which such Term Bonds may be redeemed on the first date thereafter on which such Term Bonds shall be subject to redemption, or (b) to the redemption at the applicable Redemption Price of such Term Bonds, if then redeemable by their terms. The applicable Redemption Price (or principal amount of maturing Term Bonds) of any Term Bonds so purchased or redeemed shall be deemed to constitute part of the Bond Amortization Account until such Amortization Installment date, for the purposes of calculating the amount of such Account. As soon as practicable after the sixtieth day preceding the due date of any such Amortization Installment, the Issuer shall proceed to call for redemption on such due date, by causing notice to be given as provided in Section 3.03 hereof, Term Bonds of the Series and maturity for which such Amortization Installment was established (except in the case of Term Bonds maturing on an Amortization Installment date) in such amount as shall be necessary to complete the retirement of the unsatisfied balance of such Amortization Installment. The Issuer shall pay out of the Bond Amortization Account and the Interest Account to the appropriate Paying Agents, on or before the day preceding such redemption date (or maturity date), the amount required for the redemption (or for the payment of such Term Bonds then maturing), and such amount shall be applied by such Paying Agents to such redemption (or payment). All expenses in connection with the purchase or redemption of Term Bonds shall be paid by the Issuer from the Revenue Fund. (4) Insured Payments. Next, the Issuer shall pay any amount due and owing an Insurer. (5) Unrestricted Revenue Account. The balance of any moneys after the deposits required by Sections 4.06(A)(1) through 4.05(A)(4) hereof may be transferred, at the discretion of the Issuer, to the Unrestricted Revenue Account or to any other appropriate fund or account of the Issuer and may be used to redeem or defease Bonds and/or to be used to make improvements to the Project. (B) The Issuer, in its discretion, may use moneys in the Principal Account and the Interest Account to purchase or redeem Bonds coming due on the next principal payment date, provided such purchase or redemption does not adversely affect the Issuer's ability to pay the principal or interest coming due on such principal payment date on the Bonds not so purchased or redeemed. (C) At least one business day prior to the date established for payment of any principal of or Redemption Price, if applicable, or interest on the Bonds, the Issuer shall withdraw from the appropriate account of the Debt Service Fund sufficient moneys to pay such principal or Redemption Price, if applicable, or interest and deposit such moneys with the Paying Agent for the Bonds to be paid. SECTION Investments. The Construction Fund, the Restricted Revenue Account and the Debt Service Fund shall be continuously secured in the manner by which the deposit of public funds are authorized to be secured by the laws of the State and the investment policy of the Issuer. Moneys on deposit in the Construction Fund, the Restricted Revenue Account and the Debt Service Fund may be invested and reinvested in Permitted Investments maturing no later than the date on which the moneys therein will be needed. Any and all income received by the Issuer from the investment of moneys in each account of the Construction Fund, the Interest Account, the Principal Account, the Bond Amortization Account and the Restricted Revenue Account shall be retained in such respective Fund or Account unless otherwise required by applicable law. {25394/004/ DOCv4} B-37 {25394/004/ DOCv4} B-38 Nothing contained in this Resolution shall prevent any Permitted Investments acquired as investments of or security for funds held under this Resolution from being issued or held in book-entry form on the books of the Department of the Treasury of the United States. SECTION Separate Accounts. The moneys required to be accounted for in each of the foregoing funds and accounts established herein may be deposited in a single bank account, and funds allocated to the various funds and accounts established herein may be invested in a common investment pool, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the moneys on deposit therein and such investments for the various purposes of such funds and accounts as herein provided. The designation and establishment of the various funds and accounts in and by this Resolution shall not be construed to require the establishment of any completely independent, self-balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues for certain purposes and to establish certain priorities for application of such revenues as herein provided. [End of Article IV] ARTICLE V SUBORDINATED INDEBTEDNESS, ADDITIONAL BONDS, AND COVENANTS OF ISSUER SECTION Subordinated Indebtedness. The Issuer will not issue any other obligations, except under the conditions and in the manner provided herein, payable from the Pledged Funds or voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien thereon in favor of the Bonds and the interest thereon. The Issuer may at any time or from time to time issue evidences of indebtedness payable in whole or in part out of the Pledged Funds and which may be secured by a pledge of the Pledged Funds; provided, however, that such pledge shall be, and shall be expressed to be, subordinated in all respects to the pledge of the Pledged Funds created by this Resolution. The Issuer shall have the right to covenant with the holders from time to time of any Subordinated Indebtedness to add to the conditions, limitations and restrictions under which any Additional Bonds may be issued pursuant to Section 5.02 hereof. The Issuer agrees to pay promptly any Subordinated Indebtedness as the same shall become due. SECTION Issuance of Additional Bonds. No Additional Bonds, payable on a parity with the Bonds then Outstanding pursuant to this Resolution, shall be issued except upon the conditions and in the manner herein provided. The Issuer may issue one or more Series of Additional Bonds for any one or more of the following purposes: financing the Cost of an Additional Project, or the completion thereof or of the Initial Project, or refunding any or all Outstanding Bonds or of any Subordinated Indebtedness of the Issuer. with: No such Additional Bonds shall be issued unless the following conditions are complied (A) There shall have been obtained and filed with the Issuer a statement of the Director of Finance demonstrating that the Sales Tax Payments, together with any Direct Subsidy Payments received during the Issuer's prior Fiscal Year, is sufficient to pay Maximum Annual Debt Service (for this purpose only, Maximum Annual Debt Service shall not include Direct Subsidy Payments to avoid double counting) of all Bonds then Outstanding including such Additional Bonds with respect to which such statement is made. (B) Additional Bonds shall be deemed to have been issued pursuant to this Resolution the same as the Outstanding Bonds, and all of the other covenants and other provisions of this Resolution (except as to details of such Additional Bonds inconsistent therewith) shall be for the equal benefit, protection and security of the Holders of all Bonds issued pursuant to this Resolution. All Bonds, regardless of the time or times of their issuance, {25394/004/ DOCv4} B-39 B-10 {25394/004/ DOCv4} B-40

69 shall rank equally with respect to their lien on the Pledged Funds and their sources and security for payment therefrom without preference of any Bond over any other. (C) The Issuer shall receive the prior written consent of the Insurer or Insurers prior to the issuance of any Variable Rate Bonds secured by the Pledged Funds; provided, however, that such written consent may be in the form of a covenant made for the benefit of the Insurer or Insurers in a Supplemental Resolution. SECTION Bond Anticipation Notes. Subject to Sections 5.01 and 5.02 hereof, the Issuer may issue notes in anticipation of the issuance of Bonds which shall have such terms and details and be secured in such manner, not inconsistent with this Resolution, as shall be provided by Resolution of the Issuer. SECTION Books and Records. The Issuer will keep books and records of the receipt of the Sales Tax Payments and Direct Subsidy Payments in accordance with generally accepted accounting principles, and any Holder or Holders of Bonds shall have the right at all reasonable times to inspect the records, accounts and data of the Issuer relating thereto. SECTION Annual Audit. The Issuer shall, within a reasonable amount of time after the close of each Fiscal Year, cause the financial statements of the Issuer to be properly audited by a recognized independent certified public accountant or recognized independent firm of certified public accountants, and shall require such accountants to complete their report on the annual financial statements in accordance with applicable law. Such annual financial statements shall contain, but not be limited to, a balance sheet, a statement of revenues, expenditures and changes in fund balance, and any other statements as required by law or accounting convention. The annual financial statements shall be prepared in conformity with generally accepted accounting principles. A copy of the audited financial statements for each Fiscal Year shall be furnished to any Holder of a Bond who shall have furnished such Holder's address to the City Clerk and requested in writing that the same be furnished to such Holder. The Issuer shall be permitted to make a reasonable charge for furnishing such audited financial statements. SECTION No Impairment. As long as there are Bonds Outstanding hereunder, the pledging of the Pledged Funds in the manner provided herein shall not be subject to repeal, modification or impairment by any subsequent ordinance, resolution or other proceedings of the City Commission. SECTION Collection of Sales Tax Payments. The Issuer covenants to do all things necessary on its part to continue the receipt of the Sales Tax Payments in compliance with the Act and any successor provision of law governing the same. The Issuer will proceed diligently to perform legally and effectively all steps required on its part to receive the Sales Tax Payments and shall exercise all legally available remedies to enforce such collections now or hereafter available under State law. SECTION Federal Income Tax Covenants; Taxable Bonds. (A) The Issuer covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that it shall not use the proceeds of such Series of Bonds in any manner which would cause the interest on such Series of Bonds to be or become includable in the gross income of the Holder thereof for federal income tax purposes. (B) The Issuer covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that neither the Issuer nor any Person under its control or direction will make any use of the proceeds of such Series of Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause such Series of Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and neither the Issuer nor any other Person shall do any act or fail to do any act which would cause the interest on such Series of Bonds to become includable in the gross income of the Holder thereof for federal income tax purposes. (C) The Issuer hereby covenants with the Holders of each Series of Bonds (other than Taxable Bonds) that it will comply with all provisions of the Code necessary to maintain the exclusion of interest on the Bonds from the gross income of the Holder thereof for federal income tax purposes, including, in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code. (D) The Issuer may, if it so elects, issue one or more Series of Taxable Bonds the interest on which is (or may be) includable in the gross income of the Holder thereof for federal income tax purposes, so long as each Bond of such Series states in the body thereof that interest payable thereon is (or may be) subject to federal income taxation and provided that the issuance thereof will not cause the interest on any other Bonds theretofore issued hereunder to be or become includable in the gross income of the Holder thereof for federal income tax purposes. The covenants set forth in paragraphs (A), (B) and (C) above shall not apply to any Taxable Bonds. (E) There is hereby created and established a fund to be known as the "City of Sarasota Sales Tax Payments Revenue Bonds Rebate Fund" (the "Rebate Fund"), and a separate account therein for each Series of Bonds. The Issuer shall deposit into the appropriate account in the Rebate Fund, from investment earnings on moneys deposited in the other funds and accounts created hereunder, or from any other legally available funds of the Issuer, an amount equal to the Rebate Amount for such Rebate Year. The Issuer shall use such moneys deposited in the appropriate account in the Rebate Fund only for the payment of the Rebate Amount to the United States as required by this Section In complying with the foregoing, the Issuer may rely upon any instructions or opinions from Bond Counsel. If any amount shall remain in the Rebate Fund after payment in full of all Bonds issued hereunder that are not Taxable Bonds and after payment in full of the Rebate Amount to the {25394/004/ DOCv4} B-41 {25394/004/ DOCv4} B-42 United States in accordance with the terms hereof, such amounts shall be available to the Issuer for any lawful purpose. The Rebate Fund shall be held separate and apart from all other funds and accounts of the Issuer, shall not be impressed with a lien in favor of the Bondholders and the moneys therein shall be available for use only as herein provided. [End of Article V] ARTICLE VI DEFAULTS AND REMEDIES SECTION Events of Default. The following events shall each constitute an "Event of Default:" (A) The Issuer shall fail to make a payment of the principal of, Amortization Installment, redemption premium or interest on any Bond when due. (B) There shall occur the dissolution or liquidation of the Issuer, or the filing by the Issuer of a voluntary petition in bankruptcy, or the commission by the Issuer of any act of bankruptcy, or adjudication of the Issuer as a bankrupt, or assignment by the Issuer for the benefit of its creditors, or appointment of a receiver for the Issuer, or the entry by the Issuer into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Issuer in any proceeding for its reorganization instituted under the provisions of the Federal Bankruptcy Act, as amended, or under any similar act in any jurisdiction which may now be in effect or hereafter enacted. (C) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Resolution on the part of the Issuer to be performed, and such default shall continue for a period of thirty days after written notice of such default shall have been received from the Holders of not less than twenty-five percent (25%) of the aggregate principal amount of Bonds Outstanding or the Insurer of such amount of Bonds. Notwithstanding the foregoing, subject to receiving prior written consent from the Insurer, the Issuer shall not be deemed in default hereunder if such default can be cured within a reasonable period of time and if the Issuer in good faith institutes curative action and diligently pursues such action until the default has been corrected. SECTION Remedies. Any Holder of Bonds issued under the provisions of this Resolution or any trustee or receiver acting for such Bondholders may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights under the laws of the State, or granted and contained in this Resolution, and may enforce and compel the performance of all duties required by this Resolution or by any applicable statutes to be performed by the Issuer or by any officer thereof. The Holder or Holders of Bonds in an aggregate principal amount of not less than twenty-five percent (25%) of the Bonds then Outstanding may by a duly executed certificate in writing appoint a trustee for Holders of Bonds issued pursuant to this Resolution with authority to represent such Bondholders in any legal proceedings for the enforcement and protection of the rights of such Bondholders and such certificate shall be executed by such Bondholders or their duly authorized attorneys or representatives, and shall be filed in the office of the City {25394/004/ DOCv4} B-43 B-11 {25394/004/ DOCv4} B-44

70 Clerk. Notice of such appointment, together with evidence of the requisite signatures of the Holders of not less than twenty-five percent (25%) in aggregate principal amount of Bonds Outstanding and the trust instrument under which the trustee shall have agreed to serve shall be filed with the Issuer and the trustee and notice of appointment shall be given to all Holders of Bonds in the same manner as notices of redemption are given hereunder. After the appointment of the first trust hereunder, no further trustees may be appointed; however, the Holders of a majority in aggregate principal amount of all the Bonds then Outstanding may remove the trustee initially appointed and appoint a successor and subsequent successors at any time. SECTION Directions to Trustee as to Remedial Proceedings. The Holders of a majority in principal amount of the Bonds then Outstanding (or any Insurer insuring any then Outstanding Bonds who is not in default in the performance of any of its obligations under its Insurance Policy) have the right, by an instrument or concurrent instruments in writing executed and delivered to the trustee, to direct the method and place of conducting all remedial proceedings to be taken by the trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions hereof, and that the trustee shall have the right to decline to follow any such direction which in the opinion of the trustee would be unjustly prejudicial to Holders of Bonds not parties to such direction. SECTION Remedies Cumulative. No remedy herein conferred upon or reserved to the Bondholders is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. SECTION Waiver of Default. No delay or omission of any Bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default, or an acquiescence therein; and every power and remedy given by Section 6.02 of this Resolution to the Bondholders may be exercised from time to time, and as often as may be deemed expedient. available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Persons entitled thereto, without any discrimination or preference; SECOND: to the payment to the Persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due at maturity or as Amortization Installments upon mandatory redemption prior to maturity (other than Bonds called for redemption for the payment of which moneys are held pursuant to the provisions of Section 8.01 of this Resolution), in the order of their due dates, with interest upon such Bonds from the respective dates upon which they became due, and, if the amount available shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment first of such interest, ratably according to the amount of such interest due on such date, and then to the payment of such principal, ratably according to the amount of such principal due on such date, to the Persons entitled thereto without any discrimination or preference; THIRD: to the payment of the Redemption Price of any Bonds called for optional redemption pursuant to the provisions of this Resolution; and FOURTH: to the payment of amounts due and owing the Insurer. [End of Article VI] SECTION Application of Moneys After Default. If an Event of Default shall happen and shall not have been remedied, the Issuer or a trustee or receiver appointed for the purpose shall apply all Pledged Funds as follows and in the following order: (A) To the payment of the reasonable and proper charges, expenses and liabilities of the trustee or receiver, Registrar and Paying Agent hereunder; and (B) To the payment of the interest and principal or Redemption Price, if applicable, then due on the Bonds, as follows: FIRST: to the payment to the Persons entitled thereto of all installments of interest then due, in the order of the maturity of such installments, and, if the amount {25394/004/ DOCv4} B-45 {25394/004/ DOCv4} B-46 ARTICLE VII SUPPLEMENTAL RESOLUTIONS SECTION Supplemental Resolutions without Bondholders' Consent. The Issuer, from time to time and at any time, may adopt such Supplemental Resolutions without the consent of the Bondholders (which Supplemental Resolutions shall thereafter form a part hereof) for any of the following purposes: (A) To cure any ambiguity or formal defect or omission or to correct any inconsistent provisions in this Resolution or to clarify any matters or questions arising hereunder. (B) To grant to or confer upon the Bondholders any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders. (C) To add to the conditions, limitations and restrictions on the issuance of Bonds under the provisions of this Resolution other conditions, limitations and restrictions thereafter to be observed. (D) To add to the covenants and agreements of the Issuer in this Resolution other covenants and agreements thereafter to be observed by the Issuer or to surrender any right or power herein reserved to or conferred upon the Issuer. (E) To specify and determine the matters and things referred to in Sections 2.01, 2.02 or 2.09 hereof, and also any other matters and things relative to such Bonds which are not contrary to or inconsistent with this Resolution as theretofore in effect, or to amend, modify or rescind any such authorization, specification or determination at any time prior to the first delivery of such Bonds. (F) To authorize Additional Bonds or Additional Projects or to change or modify the description of the Initial Project or any Additional Project in accordance with the Interlocal Agreement. (G) To specify and determine matters necessary or desirable for the issuance of Variable Rate Bonds or Direct Subsidy Bonds. (H) To comply with any future rules or regulations with respect to tax-exempt Bonds or Direct Subsidy Bonds. (I) To make any other change that, in the opinion of the Issuer, would not materially adversely affect the security for the Bonds. SECTION Supplemental Resolutions with Bondholders' Consent. Subject to the terms and provisions contained in this Section 7.02 and Sections 7.01 and 7.03 hereof, the Holder or Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time, anything contained in this Resolution to the contrary notwithstanding, to consent to and approve the adoption of such Supplemental Resolutions hereto as shall be deemed necessary or desirable by the Issuer for the purpose of supplementing, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Resolution; provided, however, that if such modification or amendment will, by its terms, not take effect so long as any Bonds of any specified Series or maturity remain Outstanding, the consent of the Holders of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Outstanding Bonds under this Section Any Supplemental Resolution which is adopted in accordance with the provisions of this Section 7.02 shall also require the written consent of the Insurer of any Bonds which are Outstanding at the time such Supplemental Resolution shall take effect. No Supplemental Resolution may be approved or adopted which shall permit or require (A) an extension of the maturity of the principal of or the payment of the interest on any Bond issued hereunder, (B) reduction in the principal amount of any Bond or the Redemption Price or the rate of interest thereon, (C) the creation of a lien upon or a pledge of other than the lien and pledge created by this Resolution which adversely affects any Bondholders, (D) a preference or priority of any Bond or Bonds over any other Bond or Bonds, or (E) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Resolution. Nothing herein contained, however, shall be construed as making necessary the approval by Bondholders of the adoption of any Supplemental Resolution as authorized in Section 7.01 hereof. If, at any time the Issuer shall determine that it is necessary or desirable to adopt any Supplemental Resolution pursuant to this Section 7.02, the City Clerk shall cause the Registrar to give notice of the proposed adoption of such Supplemental Resolution and the form of consent to such adoption to be mailed, postage prepaid, to all Bondholders at their addresses as they appear on the registration books. Such notice shall briefly set forth the nature of the proposed Supplemental Resolution and shall state that copies thereof are on file at the offices of the City Clerk and the Registrar for inspection by all Bondholders. The Issuer shall not, however, be subject to any liability to any Bondholder by reason of its failure to cause the notice required by this Section 7.02 to be mailed and any such failure shall not affect the validity of such Supplemental Resolution when consented to and approved as provided in this Section Whenever the Issuer shall deliver to the City Clerk an instrument or instruments in writing purporting to be executed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed Supplemental Resolution described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in {25394/004/ DOCv4} B-47 B-12 {25394/004/ DOCv4} B-48

71 such notice, thereupon, but not otherwise, the Issuer may adopt such Supplemental Resolution in substantially such form, without liability or responsibility to any Holder of any Bond, whether or not such Holder shall have consented thereto. If the Holders of not less than a majority in aggregate principal amount of the Bonds Outstanding at the time of the adoption of such Supplemental Resolution shall have consented to and approved the adoption thereof as herein provided, no Holder of any Bond shall have any right to object to the adoption of such Supplemental Resolution, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same or from taking any action pursuant to the provisions thereof. Upon the adoption of any Supplemental Resolution pursuant to the provisions of this Section 7.02, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Resolution of the Issuer and all Holders of Bonds then Outstanding shall thereafter be determined, exercised and enforced in all respects under the provisions of this Resolution as so modified and amended. SECTION Supplemental Resolutions with Insurer's Consent in lieu of Bondholders' Consent. Notwithstanding any provisions of Section 7.02 above to the contrary, if the Insurer of a particular Series of Bonds is not then in default in the performance of any of its obligations under its Insurance Policy, the approvals, consents and notifications required by Section 7.02 above to be given by or to the Holders of the Bonds, as the case may be, subject to such Insurance Policy shall be given solely by or to the Insurer, as the case may be, and the instrument contemplated by Section 7.02 above shall be executed solely by the Insurer and the Holders of the Bonds subject to such Insurance Policy shall have no right to receive such notification or give such approvals and consents or to execute such certificate except that the adoption of Supplemental Resolutions that would have any of the effects described in (A) through (E) in Section 7.02 above shall require the approval and consent of all Holders of Bonds then Outstanding and the Insurer. [End of Article VII] ARTICLE VIII MISCELLANEOUS SECTION Defeasance. If the Issuer shall pay or cause to be paid, or there shall otherwise be paid to the Holders of all Bonds, the principal or Redemption Price, if applicable, and interest due or to become due thereon (in the case of Direct Subsidy Bonds, without regard to Direct Subsidy Payments), at the times and in the manner stipulated therein and in this Resolution, then the pledge of the Pledged Funds, and all covenants, agreements and other obligations of the Issuer to the Bondholders, shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Paying Agents shall pay over or deliver to the Issuer all money or securities held by them pursuant to this Resolution which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. Any Bonds or interest installments appertaining thereto, whether at or prior to the maturity or redemption date of such Bonds, shall be deemed to have been paid within the meaning of this Section 8.01 if (A) in case any such Bonds are to be redeemed prior to the maturity thereof, there shall have been taken all action necessary to call such Bonds for redemption and notice of such redemption shall have been duly given or provision shall have been made for the giving of such notice, and (B) there shall have been deposited in irrevocable trust with a banking institution or trust company by or on behalf of the Issuer either moneys in an amount which shall be sufficient, or Federal Securities the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with such bank or trust company at the same time shall be sufficient, to pay the principal of or Redemption Price, if applicable, and interest due and to become due on said Bonds (in the case of Direct Subsidy Bonds, without regard to Direct Subsidy Payments) on and prior to the redemption date or maturity date thereof, as the case may be. Except as hereafter provided, neither the Federal Securities nor any moneys so deposited with such bank or trust company nor any moneys received by such bank or trust company on account of principal of or Redemption Price, if applicable, or interest on said Federal Securities shall be withdrawn or used for any purpose other than, and all such moneys shall be held in trust for and be applied to, the payment, when due, of the principal of or Redemption Price, if applicable, of the Bonds for the payment or redemption of which they were deposited and the interest accruing thereon to the date of maturity or redemption; provided, however, the Issuer may substitute new Federal Securities and moneys for the deposited Federal Securities and moneys if the new Federal Securities and moneys are sufficient to pay the principal of or Redemption Price, if applicable, and interest on the refunded Bonds. For purposes of determining whether Variable Rate Bonds shall be deemed to have been paid prior to the maturity or redemption date thereof, as the case may be, by the deposit of moneys, or specified Federal Securities and moneys, if any, in accordance with this Section 8.01, {25394/004/ DOCv4} B-49 {25394/004/ DOCv4} B-50 the interest to come due on such Variable Rate Bonds on or prior to the maturity or redemption date thereof, as the case may be, shall be calculated at the Maximum Interest Rate; provided, however, that if on any date, as a result of such Variable Rate Bonds having borne interest at less than the Maximum Interest Rate for any period, the total amount of moneys and specified Federal Securities on deposit for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be deposited on such date in respect of such Variable Rate Bonds in order to satisfy this Section 8.01, such excess shall be paid to the Issuer free and clear of any trust, lien, pledge or assignment securing the Bonds or otherwise existing under this Resolution. In the event the Bonds for which moneys are to be deposited for the payment thereof in accordance with this Section 8.01 are not by their terms subject to redemption within the next succeeding sixty (60) days, the Issuer shall cause the Registrar to mail a notice to the Holders of such Bonds that the deposit required by this Section 8.01 of moneys or Federal Securities has been made and said Bonds are deemed to be paid in accordance with the provisions of this Section 8.01 and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal of or Redemption Price, if applicable, and interest on said Bonds. Nothing herein shall be deemed to require the Issuer to call any of the Outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the Issuer in determining whether to exercise any such option for early redemption. SECTION Sale of Bonds. The Bonds shall be issued and sold at public or private sale at one time or in installments from time to time and at such price or prices as shall be consistent with the provisions of the Act, the requirements of this Resolution and other applicable provisions of law and as shall be approved by Supplemental Resolution of the Issuer. SECTION Validation. To the extent deemed advisable by the City Attorney, the City Attorney is hereby authorized to institute appropriate proceedings for the validation of the Series 2009 Bonds and any and all other proceedings necessary for the Issuer to determine its authority to issue the Series 2009 Bonds and to construct, reconstruct or renovate the Initial Project in accordance with the Interlocal Agreement, and the proper officers of the Issuer are hereby authorized to verify on behalf of the Issuer any pleadings in such proceedings. SECTION Capital Appreciation Bonds. For the purposes of (i) receiving payment of the redemption price of a Capital Appreciation Bond if redeemed prior to maturity, (ii) receiving payment if the principal of all Bonds is declared immediately due and payable, (iii) computing Annual Debt Service, and (iv) computing the amount of Holders required for any notice, consent, request or demand hereunder for any purpose whatsoever, the principal amount of a Capital Appreciation Bond shall be deemed to be its Compounded Amount. SECTION General Authority. The members of the City Commission of the Issuer and the Issuer's officers, attorneys and other agents and employees, including but not limited to the City Manager, the Finance Director, the City Clerk, and the City Attorney, are hereby authorized to perform all acts and things required of them by this Resolution or desirable or consistent with the requirements hereof for the full, punctual and complete performance of all of the terms, covenants and agreements contained in the Bonds and this Resolution, and they are hereby authorized to execute and deliver all documents which shall be required by Bond Counsel or the initial purchasers of the Bonds to effectuate the sale of the Bonds to said initial purchasers, including the execution of any documents or instruments which are necessary to secure an Insurance Policy. SECTION No Third Party Beneficiaries. Except such other Persons as may be expressly described herein or in the Bonds, nothing in this Resolution, expressed or implied, is intended or shall be construed to confer upon any Person, other than the Insurer and the Holders, any right, remedy or claim, legal or equitable, under and by reason of this Resolution, or any provision hereof or thereof, or of the Bond, all provisions hereof and thereof being intended to be and being for the sole and exclusive benefit of the Insurer and the Holders from time to time. SECTION No Personal Liability. Neither the members of the City Commission of the Issuer nor any person executing the Bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. SECTION Severability of Invalid Provisions. If any one or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements and provisions of this Resolution and shall in no way affect the validity of any of the other covenants, agreements or provisions hereof or of the Bonds issued hereunder. SECTION Repeal of Inconsistent Instruments. All resolutions, or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. SECTION Effective Date. This Resolution shall take effect immediately upon its adoption. [End of Article VIII] {25394/004/ DOCv4} B-51 B-13 {25394/004/ DOCv4} B-52

72 PASSED by title only, after posting on the bulletin board at the City Hall for at least three (3) days prior to reading, as authorized by Article IV, Section 2(h) of the Charter of the City of Sarasota, ADOPTED by the City Commission of the City of Sarasota, Florida, this 2 nd day of November, (SEAL) ATTEST: Billy E. Robinson City Auditor and Clerk Richard Clapp, Mayor RESOLUTION NO. 10R-2139 A RESOLUTION AMENDING AND SUPPLEMENTING RESOLUTION NO. 10R-2135 OF THE CITY OF SARASOTA, FLORIDA; AUTHORIZING AND APPROVING THE NEGOTIATED SALE OF NOT TO EXCEED $9,500,000 IN THE AGGREGATE PRINCIPAL AMOUNT OF SALES TAX PAYMENTS REVENUE BONDS, SERIES 2009 (FEDERALLY TAXABLE BUILD AMERICA BONDS RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS - DIRECT SUBSIDY) BY THE CITY FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF CONSTRUCTION, RECONSTRUCTION AND RENOVATION OF A FACILITY FOR A RETAINED SPRING TRAINING FACILITY; DELEGATING TO THE FINANCE DIRECTOR OF THE CITY, UNDER THE CONDITIONS STATED HEREIN, THE AUTHORITY TO EXECUTE A BOND PURCHASE CONTRACT WITH THE UNDERWRITER THEREBY FIXING CERTAIN DETAILS OF THE BONDS HEREIN AUTHORIZED; APPROVING THE FORMS OF THE BOND PURCHASE CONTRACT, PRELIMINARY OFFICIAL STATEMENT AND CONTINUING DISCLOSURE CERTIFICATE; APPOINTING A REGISTRAR AND PAYING AGENT; APPOINTING THE BOND INSURER AND APPROVING THE COMMITMENT FOR THE FINANCIAL GUARANTY INSURANCE POLICY; PROVIDING CERTAIN OTHER ACTIONS WITH RESPECT TO SUCH BONDS; PROVIDING FOR READING BY TITLE ONLY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Commission of the City of Sarasota, Florida (the "City") adopted Resolution No. 10R-2135 on November 2, 2009 (the "Original Resolution") as amended and supplemented from time to time, and as particularly amended and supplemented hereby, is collectively referred to as the "Resolution"; and WHEREAS, all capitalized undefined terms used herein shall have the meanings ascribed thereto in the Resolution; and WHEREAS, by the Resolution, the City authorized the issuance of not to exceed $9,500,000 City of Sarasota, Florida Sales Tax Payments Revenue Bonds, Series 2009 (Federally Taxable Build America Bonds Recovery Zone Economic Development Bonds Direct Subsidy) (the "Series 2009 Bonds") to finance the cost of constructing, reconstructing and renovating the Initial Project and to pay certain expenses relating to the issuance of the Series 2009 Bonds; and {25394/004/ DOCv4} B-53 {25394/004/ DOCv4} B-54 WHEREAS, Raymond James & Associates, Inc. (the "Underwriter") has indicated that it is willing to enter into the hereinafter defined Bond Purchase Contract with the City pursuant to which Bond Purchase Contract the Underwriter will agree to purchase the Series 2009 Bonds hereinafter described; and WHEREAS, due to the present volatility of the market, the need to access such market very quickly, the willingness of the Underwriter to purchase the Series 2009 Bonds at interest rates favorable to the City, and the critical importance of timing of the sale of the Series 2009 Bonds, the City has determined to sell the Series 2009 Bonds through a negotiated sale to the Underwriter, and it is hereby determined that it is in the best interest of the public and the City to delegate to the Finance Director the authority to fix the final details of the Series 2009 Bonds, based upon the advice of the Financial Advisor, and accept the offer of the Underwriter to purchase the Series 2009 Bonds at a negotiated sale pursuant to the terms of a Bond Purchase Contract, the form of which is attached hereto as Exhibit A (the "Bond Purchase Contract"), if certain conditions set forth in this resolution are satisfied and to take certain other actions necessary for the issuance of the Series 2009 Bonds; and WHEREAS, the City desires to sell its Series 2009 Bonds pursuant to the Bond Purchase Contract upon satisfying such conditions; and WHEREAS, the Underwriter, prior to acceptance by the City of its offer, will provide the City with all applicable disclosure information required by Section , Florida Statutes, to be attached to or otherwise included as part of the Bond Purchase Contract; and WHEREAS, the City wishes to approve the form of a draft Preliminary Official Statement regarding the Series 2009 Bonds, a form of which is attached hereto as Exhibit B (the "Preliminary Official Statement") and authorize the circulation of the Preliminary Official Statement and execution of a final Official Statement in substantially the form of the Preliminary Official Statement; and WHEREAS, the City wishes to approve the form of Continuing Disclosure Certificate to provide required continuing secondary market disclosure, a proposed form of which is attached hereto as Exhibit C (the "Continuing Disclosure Certificate"); and WHEREAS, the City wishes to amend the Resolution to obtain financial guaranty insurance for some or all of the Series 2009 Bonds; and WHEREAS, this Resolution shall constitute a Supplemental Resolution under the terms of the Resolution. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF SARASOTA, FLORIDA: SECTION 1. Award of Sale of Series 2009 Bonds. Due to the willingness of the Underwriter to purchase the Series 2009 Bonds at net interest costs favorable to the City and the critical importance of timing of the sale of the Series 2009 Bonds, it is hereby determined that it is in the best interest of the public and the City to sell the Series 2009 Bonds at a negotiated sale (rather than through a competitive bid) and such sale to the Underwriter (upon satisfaction of the conditions herein contained and pursuant to the terms and conditions contained in the Bond Purchase Contract) is hereby authorized and approved. SECTION 2. Fixing Details of Series 2009 Bonds; Authority of Finance Director. (A) The City hereby delegates to the Finance Director, the authority to (i) determine the dated date, (ii) determine the principal amount provided that such amount, together with any original issue premium, does not exceed $9,500,000, (iii) determine the maturity dates and amounts, (iv) determine the interest rates, prices and yields, (v) determine the optional and/or extraordinary optional redemption features, if any, (vi) determine the mandatory redemption features, if any, (vii) determine the sale date and the delivery date, (viii) determine all other details of the Series 2009 Bonds, (ix) take such further action as shall be required for carrying out the purposes of this Resolution all with respect to the Series 2009 Bonds, and (x) execute and deliver, on behalf of the City, the Bond Purchase Contract; provided, however, that the Finance Director shall not have the authority to take any action pursuant to this Section 2(A), including but not limited to the execution and delivery of the Bond Purchase Contract, unless the Finance Director shall have received from the Underwriter (i) all applicable disclosure information required by Section , Florida Statutes, and (ii) such other information as the Finance Director shall deem necessary, upon the advice of RBC Capital Markets Corporation, the financial advisor to the City (the "Financial Advisor"), which demonstrates to the Finance Director that (A) the aggregate principal amount of the Series 2009 Bonds, together with any original issue premium, is not in excess of $9,500,000, (B) the final maturity of the Series 2009 Bonds is not later than December 31, 2037, (C) the purchase price of the Series 2009 Bonds (i.e., original principal amount of the Series 2009 Bonds less underwriting discount) is not less than 98% of the original principal amount of the Series 2009 Bonds, and (D) the true interest cost rate on the Series 2009 Bonds is not greater than 8.50%. (B) All actions of the Finance Director taken pursuant to the authority contained in this Section 2 shall be evidenced by a certificate to be executed by the Finance Director (the "Certificate of Finance Director") and filed with the City Auditor and Clerk. The execution of the Certificate of the Finance Director shall constitute complete evidence of the actions of the Finance Director and shall constitute the action of the City. Subject to satisfaction of the conditions in Section 2(A) hereof, the Finance Director is hereby authorized and directed to execute and deliver the Bond Purchase Contract. The execution and delivery thereof in the manner described in the preceding sentence shall constitute complete approval of such Bond Purchase Contract by the City, including any changes to the form being approved, and shall be deemed to be a part of this instrument as fully and to the same extent as if incorporated verbatim herein. {25394/004/ DOCv4} B-55 B-14 {25394/004/ DOCv4} B-56

73 SECTION 3. Authorization of Series 2009 Bonds. For the primary purpose of constructing, reconstructing and renovating the Initial Project, there is hereby authorized Sales Tax Payments Revenue Bonds, Series 2009 (Federally Taxable Build America Bonds Recovery Zone Economic Development Bonds Direct Subsidy) of the City in the aggregate principal amount of not exceeding $9,500,000 (Nine Million Five Hundred Thousand Dollars). The City may change the series designation in the event that the Series 2009 Bonds are not issued in calendar year The Series 2009 Bonds shall consist of one fully registered bond for each maturity, numbered consecutively from R-1 upwards, shall be dated as of such date or dates, shall bear interest at a rate or rates not exceeding the maximum rate then permitted by law, such interest being payable at such time and in such amounts, shall be stated to mature (subject to the right of prior redemption) in such amounts, shall have such Registrar and Paying Agent, shall be redeemable at such times and prices, all as shall be determined herein and/or by the Certificate of Finance Director of the City pursuant to the authority delegated pursuant to Section 2 hereof. Interest on the Series 2009 Bonds shall be payable in the manner provided in the Bond Resolution. SECTION 4. Book-Entry Only System. A blanket letter of representation dated August 6, 1996 has been entered into by the City (the "Letter of Representation") with The Depository Trust Company ("DTC"). It is intended that the Series 2009 Bonds be registered so as to participate in a global book-entry system with DTC as set forth herein and in such Letter of Representation. The Series 2009 Bonds shall be initially issued in the form of a single fully registered bond of each maturity. Upon initial issuance, the ownership of such Series 2009 Bonds shall be registered by the Registrar in the name of Cede & Co., as nominee for DTC. With respect to Series 2009 Bonds registered by the Registrar in the name of Cede & Co., as nominee of DTC, the City, Registrar and Paying Agent shall have no responsibility or obligation to any broker-dealer, bank or other financial institution for which DTC holds Series 2009 Bonds from time to time as securities depositary (each such broker-dealer, bank or other financial institution being referred to herein as a "Depository Participant") or to any person on behalf of whom such a Depository Participant holds an interest in the Series 2009 Bonds (each such person being herein referred to as an "Indirect Participant"). Without limiting the immediately preceding sentence, the City, Registrar and Paying Agent shall have no responsibility or obligation with respect to (a) the accuracy of the records of DTC, Cede & Co., or any Depository Participant with respect to the ownership interest in the Series 2009 Bonds, (b) the delivery to any Depository Participant or any Indirect Participant or any other person, other than a registered owner of a Series 2009 Bond as shown in the bond register, of any notice with respect to the Series 2009 Bonds, including any notice of redemption or (c) the payment to any Depository Participant or Indirect Participant or any other person, other than a registered owner of a Series 2009 Bond as shown in the bond register, of any amount with respect to principal of, premium, if any, or interest on, the Series 2009 Bonds. No person other than a registered owner of a Series 2009 Bond as shown in the bond register shall receive a Series 2009 Bond certificate with respect to any Series 2009 Bond. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions hereof with respect to the payment of interest by the mailing of checks or drafts to the registered owners of Series 2009 Bonds appearing as registered owners in the registration books maintained by the Registrar at the close of business on regular record date, the name "Cede & Co." in this Resolution shall refer to such new nominee of DTC. In the event that (a) the City determines that DTC is incapable of discharging its responsibilities described herein and in the Letter of Representation, (b) the Agreement among the City, the Paying Agent and DTC evidenced by the Letter of Representation shall be terminated for any reason or (c) the City determines that it is in the best interests of the beneficial owners of the Series 2009 Bonds that they be able to obtain certificated Series 2009 Bonds, subject to compliance with the requirements between any agreements between the City and DTC with respect thereto, the City shall notify DTC of the availability through DTC of Series 2009 Bond certificates and the Series 2009 Bonds shall no longer be restricted to being registered in the bond register in the name of Cede & Co., as nominee of DTC. At that time, the City may determine that the Series 2009 Bonds shall be registered in the name of and deposited with a successor depository operating a universal book-entry system, as may be acceptable to the City, or such depository's agent or designee, and if the City does not select such alternate universal book-entry system, then the Series 2009 Bonds may be registered in whatever name or names registered owners of Series 2009 Bonds transferring or changing Series 2009 Bonds designate, in accordance with the provisions hereof. Notwithstanding any other provision of this Resolution to the contrary, so long as any Series 2009 Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Series 2009 Bond and all notices with respect to such Series 2009 Bond shall be made and given, respectively, in the manner provided in the Letter of Representation. SECTION 5. Financial Guaranty Insurance; Provisions Relating to Financial Guaranty Insurance Policy; Provisions in Effect During Term of Financial Guaranty Insurance Policy. (A) The City has received or expects to receive a commitment for financial guaranty insurance from Assured Guaranty Corp. ("Assured Guaranty") to issue its financial guaranty insurance policy (the "Policy") insuring all or a portion of the scheduled principal of and interest on the Series 2009 Bonds (the Series 2009 Bonds so insured shall be referred to in this Section 5 as the "Insured Series 2009 Bonds"). The City hereby accepts said commitment and authorizes the Finance Director to execute and deliver any documents which may be necessary to evidence the same. If the Policy is issued in accordance with the terms hereof, Assured Guaranty, or any successor thereto or assignee thereof, shall be deemed to be an "Insurer" and the Policy shall be deemed an "Insurance Policy" for all purposes of the Resolution in connection with the Insured Series 2009 Bonds. (B) In the event the City determines it is in its best interest to purchase the Policy, the following provisions relating to the Policy and certain other provisions of the Resolution shall apply to the Insured Series 2009 Bonds secured by the Policy so long as such Policy is in full force and effect, Assured Guaranty has honored all obligations thereunder and any Insured Series 2009 Bonds secured by the Policy shall remain Outstanding, and the following provisions {25394/004/ DOCv4} B-57 {25394/004/ DOCv4} B-58 shall govern, notwithstanding anything to the contrary set forth in the Resolution (the provisions of (i) subsection (B)8. below being for the benefit of the Bondholders and Assured Guaranty and (ii) subsections (B)1. through 7. inclusive and 9. through 12. inclusive being for the sole benefit of Assured Guaranty, any one of which may be waived by Assured Guaranty without the consent of Series 2009 Bondholders): 1. Notices and Other Information. a. Any notice that is required to be given to holders of the Insured Series 2009 Bonds (the "Insured Series 2009 Bondholders"), nationally recognized municipal securities information repositories or state information depositories pursuant to Rule 15c2-12(b) (5) adopted by the Securities and Exchange Commission or to the Paying Agent pursuant to the Resolution shall also be provided to Assured Guaranty, simultaneously with the sending of such notices. In addition, to the extent that the City has entered into a continuing disclosure agreement with respect to the Insured Series 2009 Bonds, all information furnished pursuant to such agreement shall also be provided to Assured Guaranty, simultaneously with the furnishing of such information. All notices required to be given to Assured Guaranty shall be in writing and shall be sent by registered or certified mail, or personally delivered or telecopied to: Assured Guaranty Corp. 31 West 52nd Street New York, New York Attn: Risk Management Department (Re: Policy No. ) Telecopy No.: 212/ Confirmation: 212/ riskmanagementdept@assuredguaranty.com (In each case in which notice or other communication refers to an Event of Default, a claim on the Policy or any event with respect to which failure on the part of Assured Guaranty to respond shall be deemed to constitute consent or acceptance, then such demand, notice or other communication shall be marked to indicate "URGENT MATERIAL ENCLOSED" and shall also be sent to the attention of the General Counsel at the same address and telecopy number 212/ and at generalcounsel@assuredguaranty.com.) b. Assured Guaranty shall have the right to receive such additional information as it may reasonably request. c. The City will permit Assured Guaranty to discuss the affairs, finances and accounts of the City or any information Assured Guaranty may reasonably request regarding the security for the Insured Series 2009 Bonds with appropriate officers of the City, and will use commercially reasonable efforts to enable Assured Guaranty to have access to the facilities, books and records of the City on any business day upon reasonable prior notice. d. The Paying Agent shall notify Assured Guaranty of any failure of the City to provide notices, certificates and other information under the Resolution. 2. Defeasance. In the event that the principal and/or interest due on the Insured Series 2009 Bonds shall be paid by Assured Guaranty pursuant to the Policy, the Insured Series 2009 Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the City, and the assignment and pledge of the Pledged Funds and all covenants, agreements and other obligations of the City to the registered owners shall continue to exist and shall run to the benefit of Assured Guaranty, and Assured Guaranty shall be subrogated to the rights of such registered owners including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Insured Series 2009 Bonds. In addition, Assured Guaranty will require the following items no later than five (5) days prior to the funding of the escrow: a. An opinion of counsel to the effect (i) that the defeasance will not adversely impact the exclusion from gross income for federal income tax purposes of interest on the Insured Series 2009 Bonds or refunded bonds, if applicable, and (ii) that the Insured Series 2009 Bonds are no longer Outstanding under the Resolution. b. An escrow agreement and an opinion of counsel regarding the validity and enforceability of the escrow agreement. c. The escrow agreement shall provide that: (i) Any substitution of securities shall require a verification by an independent certified public accountant ("Verification") and the prior written consent of Assured Guaranty. {25394/004/ DOCv4} B-59 B-15 {25394/004/ DOCv4} B-60

74 3. Paying Agent. (ii) The City will not exercise any optional redemption of Insured Series 2009 Bonds secured by the escrow agreement or any other redemption other than mandatory sinking fund redemptions unless (i) the right to make any such redemption has been expressly reserved in the escrow agreement and such reservation has been disclosed in detail in the official statement for the refunding bonds, and (ii) as a condition of any such redemption there shall be provided to Assured Guaranty a Verification as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following such redemption. (iii) The City shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of Assured Guaranty. a. Assured Guaranty shall receive prior written notice of any name change of the Paying Agent or the removal, resignation or termination of the Paying Agent. b. No removal, resignation or termination of the Paying Agent shall take effect until a successor, acceptable to Assured Guaranty, shall be appointed. c. The Paying Agent may be removed at any time, at the request of Assured Guaranty, for any breach of its obligations under the Resolution. 4. Amendments and Supplements. With respect to amendments or supplements to the Resolution, which do not require the consent of the Series 2009 Bondholders, Assured Guaranty must be given prior written notice of any such amendments or supplements. With respect to amendments or supplements to the Resolution, which require the consent of the Insured Series 2009 Bondholders, Assured Guaranty's prior written consent is required. Any amendments or supplements to the Resolution, which are consented to by Assured Guaranty, shall be sent to the rating agencies that have assigned a rating to the Insured Series 2009 Bonds. Notwithstanding any other provision hereof, in determining whether the rights of Insured Series 2009 Bondholders will be adversely affected by any action taken pursuant to the terms and provisions hereof, the Paying Agent shall consider the effect on the Insured Series 2009 Bondholders as if there were no Policy. 5. Assured Guaranty as Third Party Beneficiary. Assured Guaranty is explicitly recognized as being a third party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder. 6. Control Rights. Assured Guaranty shall be deemed to be the holder of all of the Insured Series 2009 Bonds for purposes of (i) exercising all remedies and rights with respect to the Insured Series 2009 Bonds and directing the Paying Agent to take actions or for any other purposes following an Event of Default, and (ii) granting any consent, direction or approval or taking any action permitted by or required hereunder by the holders of such Insured Series 2009 Bonds. Anything hereof to the contrary notwithstanding, upon the occurrence and continuance of an Event of Default, Assured Guaranty shall be entitled to control and direct the enforcement of all rights and remedies granted to the Insured Series 2009 Bondholders or the Paying Agent for the benefit of the Insured Series 2009 Bondholders under the Resolution. 7. Consent Rights of Assured Guaranty. a. Any provision hereof expressly recognizing or granting rights in or to Assured Guaranty may not be amended in any manner that affects the rights of Assured Guaranty thereunder without the prior written consent of Assured Guaranty. b. Wherever the Resolution requires the consent of Insured Series 2009 Bondholders, Assured Guaranty's consent shall also be required. c. Any reorganization or liquidation plan with respect to the City instituted under the provisions of the Federal Bankruptcy Act, or under any similar act in any jurisdiction which may now be in effect or hereafter enacted must be approved in writing by Assured Guaranty. In the event of any such reorganization or liquidation, Assured Guaranty shall have the right to vote on behalf of all Insured Series 2009 Bondholders. 8. Payment Procedure Under the Policy. a. At least two (2) business days prior to each payment date of the Insured Series 2009 Bonds, the Paying Agent will determine whether there will be sufficient funds to pay all principal of and interest on the Insured Series 2009 Bonds due on the related payment date and shall immediately notify Assured Guaranty or its designee on the same business day by telephone or electronic mail, confirmed in writing by registered or certified mail, of the amount of any {25394/004/ DOCv4} B-61 {25394/004/ DOCv4} B-62 deficiency. Such notice shall specify the amount of the anticipated deficiency, the Insured Series 2009 Bonds to which such deficiency is applicable and whether such Insured Series 2009 Bonds will be deficient as to principal or interest or both. If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify Assured Guaranty or its designee. b. The Registrar, shall after giving notice to Assured Guaranty as provided above, make available to Assured Guaranty and, at Assured Guaranty's direction, to any fiscal agent, the registration books of the City maintained by the Registrar and all records relating to the funds maintained hereunder. c. The Paying Agent shall provide Assured Guaranty and any fiscal agent with a list of registered owners of Insured Series 2009 Bonds entitled to receive principal or interest payments from Assured Guaranty under the terms of the Policy, and shall make arrangements with Assured Guaranty, the fiscal agent or another designee of Assured Guaranty to (i) mail checks or drafts to the registered owners of Insured Series 2009 Bonds entitled to receive full or partial interest payments from Assured Guaranty and (ii) pay principal upon Insured Series 2009 Bonds surrendered to Assured Guaranty, the fiscal agent or another designee of Assured Guaranty by the registered owners of Insured Series 2009 Bonds entitled to receive full or partial principal payments from Assured Guaranty. d. The Paying Agent shall, at the time it provides notice to Assured Guaranty of any deficiency pursuant to paragraph 1. above, notify registered owners of Insured Series 2009 Bonds entitled to receive the payment of principal or interest thereon from Assured Guaranty (i) as to such deficiency and its entitlement to receive principal or interest, as applicable, (ii) that Assured Guaranty will remit to them all or a part of the interest payments due on the related payment date upon proof of its entitlement thereto and delivery to Assured Guaranty or any Fiscal Agent, in form satisfactory to Assured Guaranty, of an appropriate assignment of the registered owner's right to payment, (iii) that, if they are entitled to receive partial payment of principal from Assured Guaranty, they must surrender the related Insured Series 2009 Bonds for payment first to the Paying Agent, which will note on such Insured Series 2009 Bonds the portion of the principal paid by the Paying Agent and second to Assured Guaranty or its designee, together with the an appropriate assignment, in form satisfactory to Assured Guaranty, to permit ownership of such Insured Series 2009 Bonds to be registered in the name of Assured Guaranty, which will then pay the unpaid portion of principal, and (iv) that, if they are entitled to receive full payment of principal from Assured Guaranty, they must surrender the related Insured Series 2009 Bonds for payment to Assured Guaranty or its designee, rather than the Paying Agent, together with an appropriate assignment, in a form satisfactory to Assured Guaranty, to permit ownership of such Insured Series 2009 Bonds to be registered in the name of Assured Guaranty. e. In addition, if the Paying Agent has notice that any holder of the Insured Series 2009 Bonds has been required to disgorge payments of principal or interest on the Insured Series 2009 Bonds previously due for payment pursuant to a final non-appealable order by a court of competent jurisdiction that such payment constitutes an avoidable preference to such holder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify Assured Guaranty or its designee of such fact by telephone or electronic notice, confirmed in writing by registered or certified mail. f. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for holders of the Insured Series 2009 Bonds as follows: (i) If and to the extent there is a deficiency in amounts required to pay interest on the Insured Series 2009 Bonds, the Paying Agent shall (a) execute and deliver to Assured Guaranty, in form satisfactory to Assured Guaranty, an instrument appointing Assured Guaranty as agent for such holders in any legal proceeding related to the payment of such interest and an assignment to Assured Guaranty of the claims for interest to which such deficiency relates and which are paid by Assured Guaranty, (b) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the Policy payment from Assured Guaranty with respect to the claims for interest so assigned, and (c) disburse the same to such respective holders; and (ii) If and to the extent of a deficiency in amounts required to pay principal of the Insured Series 2009 Bonds, the Paying Agent shall (a) execute and deliver to Assured Guaranty, in form satisfactory to Assured Guaranty, an instrument appointing Assured Guaranty as agent for such holder in any legal proceeding related to the payment of such principal and an assignment to Assured Guaranty of the Insured Series 2009 Bond surrendered to Assured Guaranty in an amount equal to the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from Assured Guaranty is received), (b) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the Policy payment {25394/004/ DOCv4} B-63 B-16 {25394/004/ DOCv4} B-64

75 therefore from Assured Guaranty, and (c) disburse the same to such holders. g. Payments with respect to claims for interest on and principal of Insured Series 2009 Bonds disbursed by the Paying Agent from proceeds of the Policy shall not be considered to discharge the obligation of the City with respect to such Insured Series 2009 Bonds, and such Insured Series 2009 Bonds shall remain Outstanding for all purposes, shall not be defeased or otherwise satisfied and shall not be considered paid by the City, and Assured Guaranty shall become the owner of such unpaid Insured Series 2009 Bond and claims for the interest in accordance with the tenor of the assignment made hereunder; and the assignment and pledge of the Pledged Funds and all covenants, agreements and other obligations of the City to the registered owners shall continue to exist and shall run to the benefit of Assured Guaranty, and Assured Guaranty shall be subrogated to the rights of such registered owners including, without limitation, any rights that such owners may have in respect of securities law violations arising from the offer and sale of the Insured Series 2009 Bonds. h. Irrespective of whether any such assignment is executed and delivered, the City and the Paying Agent hereby agree for the benefit of Assured Guaranty that: (i) they recognize that to the extent Assured Guaranty makes payments directly or indirectly (e.g., by paying through the Paying Agent), on account of principal of or interest on the Insured Series 2009 Bonds, Assured Guaranty will be subrogated to the rights of such holders to receive the amount of such principal and interest from the City, with interest thereon as provided and solely from the sources stated in the Resolution and the Insured Series 2009 Bonds; and (ii) they will accordingly pay to Assured Guaranty the amount of such principal and interest, with interest thereon as provided in the Resolution and the Insured Series 2009 Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Insured Series 2009 Bonds to holders, and will otherwise treat Assured Guaranty as the owner of such rights to the amount of such principal and interest. i. Assured Guaranty shall be entitled to pay principal or interest on the Insured Series 2009 Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the City (as such terms are defined in the Policy) and any amounts due on the Insured Series 2009 Bonds as a result of acceleration of the maturity thereof in accordance hereof, whether or not Assured Guaranty has received a Notice (as defined in the Policy) of Nonpayment or a claim upon the Policy. j. In addition, Assured Guaranty shall to the extent it makes any payment of principal or interest on the Insured Series 2009 Bonds become subrogated to the rights of the recipients of such payments in accordance with the terms of the Policy, and to evidence such subrogation (i) in the case of claims for interest, the Registrar shall note Assured Guaranty's rights as subrogee on the registration books of the City maintained by the Registrar, upon receipt of proof of payment of interest thereon to the registered holders of the Insured Series 2009 Bonds, and (ii) in the case of claims for principal, the Registrar, if any, shall not Assured Guaranty's rights as subrogee on the registration books of the City maintained by the Registrar, upon surrender of the Insured Series 2009 Bonds together with receipt of proof of payment of principal thereof. k. The City hereby agrees to pay or reimburse Assured Guaranty (A) from Pledged Funds for all amounts paid by Assured Guaranty under the terms of the Policy, and, (B) any and all charges, fees, costs and expenses which Assured Guaranty may reasonably pay or incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, in connection with (i) any accounts established to facilitate payments under the Policy, (ii) the administration, enforcement, defense or preservation of any rights in respect of the Resolution or any other financing document including defending, monitoring or participating in any litigation or proceeding (including any bankruptcy proceeding in respect of the City or any affiliate thereof) relating to the Resolution, any party hereof or the transaction contemplated by the Resolution, (iii) the foreclosure against, sale or other disposition of any collateral securing any obligations under the Resolution, or the pursuit of any remedies under the Resolution, to the extent such costs and expenses are not recovered from such foreclosure, sale or other disposition, or (iv) any amendment, waiver or other action with respect to, or related to, the Resolution whether or not executed or completed; costs and expenses shall include a reasonable allocation of compensation and overhead attributable to time of employees of Assured Guaranty spent in connection with the actions described in clauses (ii) - (iv) above. In addition, Assured Guaranty reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Resolution. The City will pay interest on the amounts owed in this paragraph from the date of any payment due or paid, at the per annum rate of interest publicly announced from time to time by JP Morgan Chase Bank, National Association at its principal office in New York, New York as its prime lending rate (any change in such prime rate of interest to be effective on the date such change is announced by JPMorgan Chase Bank, National Association) plus 3% per annum (the "Reimbursement Rate"). {25394/004/ DOCv4} B-65 {25394/004/ DOCv4} B-66 The Reimbursement Rate shall be calculated on the basis of the actual number of days elapsed over a 360-day year. In the event JPMorgan Chase Bank ceases to announce its prime rate publicly, the prime rate shall be the publicly announced prime rate or base lending rate of such national bank, as Assured Guaranty shall specify. l. In addition to any and all rights of reimbursement, subrogation and any other rights pursuant hereto or under law or in equity, the City agrees to pay or reimburse Assured Guaranty, to the extent permitted by law, any and all charges, fees, costs, claims, losses, liabilities (including penalties), judgments, demands, damages, and expenses which Assured Guaranty or its officers, directors, shareholders, employees, agents and each Person, if any, who controls Assured Guaranty within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, may reasonably pay or incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, of any nature in connection with, in respect of or relating to the transactions contemplated by the Resolution by reason of: (i) any omission or action (other than of or by Assured Guaranty or the Underwriter) in connection with the offering, issuance, sale, remarketing or delivery of the Insured Series 2009 Bonds; (ii) the negligence, bad faith, willful misconduct, misfeasance, malfeasance or theft committed by any commissioner, director, officer, employee or agent of the City in connection with any transaction arising from or relating to the Resolution; (iii) the violation by the City of any law, rule or regulation, or any judgment, order or decree applicable to it; (iv) the breach by the City of any representation, warranty or covenant under the Resolution or the occurrence, in respect of the City, under the Resolution of any Event of Default or any event which, with the giving of notice or lapse of time or both, would constitute any Event of Default; or (v) any untrue statement or alleged untrue statement of a material fact contained in any official statement relating to the Insured Series 2009 Bonds, if any, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such claims arise out of or are based upon any untrue statement or omission in information included in an official statement, if any, and furnished by the Underwriter, DTC or by Assured Guaranty in writing expressly for use therein. 9. Reporting Requirements. The City shall furnish to Assured Guaranty: a. The fiscal budget of the City within thirty (30) days after adoption of such budget. b. Annual audits of the City prepared by an independent certified public accountant, together with a certificate of the City stating that no Event of Default has occurred or is continuing under the Resolution, within 270 days of the completion of the City's Fiscal Year. c. Prior to issuing any Additional Bonds, any disclosure document or financing agreement pertaining to such Additional Bonds, which disclosure document or financing agreement shall include, without limitation, the applicable maturity schedule, interest rate or rates, redemption and security provisions pertaining to any Additional Bonds. d. Notice of any litigation or investigation that may have a material adverse affect on the levy, collection or distribution of Sales Tax Payments, the Direct Subsidy Payments or the City's ability to covenant to budget and appropriate Non-Ad Valorem Revenues within thirty (30) days of the commencement of any such litigation or investigation. 10. Interest Rate Exchange Agreements. Notwithstanding any provisions of the Resolution to the contrary, any interest rate exchange agreement, payable from and secured by the Pledged Funds ("Interest Rate Exchange Agreement") entered into by the City, shall meet the following conditions: (i) the Interest Rate Exchange Agreement must be entered into to manage interest costs related to, or a hedge against (a) assets then held, or (b) debt then outstanding, or (c) debt reasonably expected to be issued within the next twelve (12) months, and (ii) the Interest Rate Exchange Agreement shall not contain any leverage element or multiplier component greater than 1.0x unless there is a matching hedge arrangement which effectively off-sets the exposure from any such element or component. Unless otherwise consented to in writing by Assured Guaranty, any uninsured net settlement, breakage or other termination amount then in effect shall be subordinate to debt service on the Insured Series 2009 Bonds and on any debt on parity with the Insured Series 2009 Bonds. The City shall not terminate any such Interest Rate Exchange Agreement unless it demonstrates to the satisfaction of Assured Guaranty prior to the payment of any such termination amount that such payment will not cause the City to be in default under the Resolution, including but not limited to, any monetary obligations thereunder. All counterparties or guarantors to any Interest {25394/004/ DOCv4} B-67 B-17 {25394/004/ DOCv4} B-68

76 Rate Exchange Agreement must have a rating of at least "A-" and "A3" by Standard & Poor's, a division of the McGraw Hill Companies ("S&P") and Moody's Investors Services, Inc. ("Moody's"). If the counterparty or guarantor's rating falls below "A-" or "A3" by either S&P or Moody's, the counterparty or guarantor shall execute a credit support annex to the Interest Rate Exchange Agreement, which credit support annex shall be acceptable to Assured Guaranty. If the counterparty or the guarantor's longterm unsecured rating falls below "Baa1" or "BBB+" by either Moody's or Standard & Poor's, a replacement counterparty or guarantor, acceptable to Assured Guaranty, shall be required. 11. Subordinated Indebtedness. Without the prior written consent of Assured Guaranty, the City shall not incur subordinated indebtedness pursuant to Section 5.01 of the Resolution which permits the lender to accelerate the maturity thereof in the event of a default thereunder. 12. Books and Records. The City will keep books and records of the receipt of the Sales Tax Payments and Direct Subsidy Payments in accordance with generally accepted accounting principles, and Assured Guaranty shall have the right at all reasonable times to inspect the records, accounts and data of the City relating thereto. SECTION 6. Preliminary Official Statement. The preparation and distribution of a Preliminary Official Statement relating to the Series 2009 Bonds, the form of which is attached hereto as Exhibit B, is hereby approved and authorized, as is the use thereof by the Underwriter in connection with the sale of the Series 2009 Bonds. The distribution of the final Official Statement relating to the Series 2009 Bonds (as it may be amended and supplemented from time to time in accordance with the provisions of the Bond Purchase Contract, the "Official Statement") is hereby authorized, and the execution of such Official Statement by the City Manager and the Finance Director is hereby authorized. The Finance Director of the City is hereby authorized to execute and deliver a certificate of the City which deems such Preliminary Official Statement "final" within the contemplation of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). SECTION 7. Continuing Disclosure. The City hereby covenants and agrees that, in order to assist the Underwriter in complying with the continuing disclosure requirements of the Rule with respect to the Series 2009 Bonds, it will comply with and carry out all of the provisions of a continuing disclosure certificate to be executed by the City prior to the time the City delivers the Series 2009 Bonds to the Underwriter, as it may be amended from time to time in accordance with the terms thereof (the "Continuing Disclosure Certificate"). The City hereby approves the form of the Continuing Disclosure Certificate attached hereto as Exhibit C. The Finance Director is hereby authorized to execute and deliver such Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with such Continuing Disclosure Certificate shall not be considered an Event of Default under the Resolution. However, the Continuing Disclosure Certificate shall be enforceable by the Series 2009 Bondholders in the event that the City fails to cure a breach thereunder within a reasonable time after written notice from a Series 2009 Bondholder to the City that a breach exists. Any rights of the Series 2009 Bondholders to enforce the provisions of the covenant shall be on behalf of all Series 2009 Bondholders and shall be limited to a right to obtain specific performance of the City's obligations thereunder. SECTION 8. Appointment of Paying Agent and Registrar. U.S. Bank National Association, is hereby appointed as Paying Agent and Registrar with respect to the Series 2009 Bonds. Subject to satisfaction of the conditions described in Section 2(A) hereof, the Finance Director is hereby authorized and directed to execute and deliver an agreement with the Registrar and Paying Agent. The execution and delivery thereof in the manner described in the preceding sentence shall constitute complete approval of such agreement by the City. SECTION 9. Amendments to the Resolution. [Amendments Intentionally Omitted Here and Integrated into Composite Bond Resolution Above]. SECTION 10. General Authority. The members of the City Commission of the City and the City's officers, attorneys and other agents and employees, including but not limited to the City Manager, the Finance Director, the City Clerk and the City Attorney, are hereby authorized to perform all acts and things required of them by this Resolution or desirable or consistent with the requirements hereof for the full, punctual and complete performance of all of the terms, covenants and agreements contained in the Series 2009 Bonds and this Resolution, and they are hereby authorized to execute and deliver all documents which shall be required by Bond Counsel or the initial purchasers of the Series 2009 Bonds or Assured Guaranty to effectuate the sale of the Series 2009 Bonds to said initial purchasers, including the execution of any documents or instruments which are necessary to secure the Policy. SECTION 11. No Third Party Beneficiaries. Except such other Persons as may be expressly described herein or in the Series 2009 Bonds, nothing in this Resolution, expressed or implied, is intended or shall be construed to confer upon any Person, other than the City and the Holders, any right, remedy or claim, legal or equitable, under and by reason of this Resolution, or any provision hereof or thereof, or of the Series 2009 Bond, all provisions hereof and thereof being intended to be and being for the sole and exclusive benefit of the City and the Holders from time to time. SECTION 12. No Personal Liability. Neither the members of the City Commission of the City nor any person executing the Series 2009 Bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance thereof. {25394/004/ DOCv4} B-69 {25394/004/ DOCv4} B-70 SECTION 13. Severability of Invalid Provisions. If any one or more of the covenants, agreements or provisions of this Resolution shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements and provisions of this Resolution and shall in no way affect the validity of any of the other covenants, agreements or provisions hereof or of the Series 2009 Bonds issued hereunder. SECTION 14. Repeal of Inconsistent Instruments. All resolutions, or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. SECTION 15. Effective Date. This Resolution shall take effect immediately upon its adoption. SECTION 16. This Resolution shall take effect immediately upon its adoption. PASSED by title only, after posting on the bulletin board at the City Hall for at least three (3) days prior to reading, as authorized by Article IV, Section 2(h) of the Charter of the City of Sarasota, ADOPTED by the City Commission of the City of Sarasota, Florida, the 7 th day of December, [THIS PAGE INTENTIONALLY LEFT BLANK] By: Name: Richard Clapp Title: Mayor Approved as to Form: Billy E. Robinson City Auditor and Clerk [EXHIBITS INTENTIONALLY OMITTED] {25394/004/ DOCv4} B-71 B-18

77 APPENDIX C General Purpose Financial Statements for the Fiscal Year Ended September 30, 2009

78 [THIS PAGE INTENTIONALLY LEFT BLANK]

79 City of Sarasota, Florida Comprehensive Annual Financial Report Fiscal Year Ended September 30, 2009

80 ABOUT THE COVER View of the Playful Dolphin Fountain and the Sarasota Skyline at Bayfront Park The Bayfront Park, with its panoramic views of Sarasota Bay, is a favorite gathering spot for walking, outdoor fun and enjoying a beautiful day.

81 COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF SARASOTA, FLORIDA For the Fiscal Year Ended September 30, 2009 Prepared By The Financial Administration Department Christopher H. Lyons, CPA, CGFO, CPFO Finance Director

82 In accordance with the City of Sarasota's commitment to its recycling and environmental programs, this document is printed on recycled paper by the City s Duplicating Department.

83 City of Sarasota, Florida Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2009 Table of Contents INTRODUCTORY SECTION Letter of Transmittal... Certificate of Achievement... List of Principal Officials... Organization Chart... Page i-iv v vi vii FINANCIAL SECTION Independent Auditor s Report Management s Discussion and Analysis Basic Financial Statements Government-Wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Penny Sales Tax Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Community Redevelopment Statement of Net Assets - Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds Statement of Cash Flows - Proprietary Funds Statement of Fiduciary Net Assets - Fiduciary Funds Statement of Changes in Fiduciary Net Assets - Fiduciary Funds Component Unit Government-Wide Statements: Statement of Net Assets Statement of Activities Notes to the Financial Statements Required Supplementary Information General Employees Pension Plan Firefighters Pension Plan Police Officers Pension Plan Other Post Employment Benefits Plan Combining & Individual Fund Statements & Schedules General Fund: Schedule of Revenues - Budget and Actual - General Fund Schedule of Expenditures - Budget and Actual - General Fund Community Redevelopment: Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual

84 FINANCIAL SECTION (continued) Page Nonmajor Governmental Funds: Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Special Revenue Funds: Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: Housing and Community Development State Housing Initiative Partnership Development Services Gas Tax Special Law Enforcement (Forfeiture) Golden Gate Point Tourist Development Tax Miscellaneous Grants Multi-purpose Debt Service Funds: Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: 1994 Refunding Bonds Refunding Bonds General Obligation Bonds General Obligation Bonds Sales Surtax Bonds Build America Bonds First Florida First Florida A First Florida B First Florida First Florida First Florida Nonmajor Enterprise Funds: Combining Statement of Net Assets - Nonmajor Enterprise Funds Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Nonmajor Enterprise Funds Combining Statement of Cash Flows - Nonmajor Enterprise Funds Internal Service Funds: Combining Statement of Net Assets - Internal Service Funds Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Internal Service Funds Combining Statement of Cash Flows - Internal Service Funds Fiduciary Funds: Combining Statement of Plan Net Assets - Fiduciary Funds Combining Statement of Changes in Plan Net Assets - Fiduciary Funds Combining Statement of Changes in Assets and Liabilities - Agency Funds STATISTICAL SECTION Financial Trends: Net Assets by Component Changes in Net Assets Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Revenue Capacity: Assessed Value and Actual Value of Taxable Property Direct and Overlapping Property Tax Rates Principal Property Taxpayers Property Tax Levies and Collections Base Water and Sewer Rates Debt Capacity: Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding

85 STATISTICAL SECTION (continued) Page Direct and Overlapping Governmental Activities Debt Legal Debt Margin Information Pledged-Revenues Coverage Demographic and Economic Information: Demographic and Economic Statistics Principal Employers in Sarasota County Operating Information: Full-time Equivalent City Government Employees by Function/Program Operating Indicators by Function/Program Capital Assets Statistics by Function/Program SINGLE AUDIT/GRANTS COMPLIANCE Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Report on Compliance with Requirements Applicable to Each Major Federal Program and State Financial Assistance Project and on Internal Control over Compliance in Accordance with OMB Circular A-133 and Chapter , Rules of the Auditor General Schedule of Findings and Questioned Costs for the Year Ended September 30, Schedule of Expenditures of Federal Awards and State Financial Assistance for the Year Ended September 30, Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance

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87 March 15, 2010 The Honorable Mayor, Members of the City Commission, Citizens of the City of Sarasota Sarasota, Florida Dear Mayor and City Commissioners: We are pleased to submit the Comprehensive Annual Financial Report (CAFR) of the City of Sarasota, Florida, for the fiscal year ending September 30, This report is presented in conformity with generally accept accounting principles (GAAP), was prepared by the City s Finance Department, and audited by an independent firm of certified public accountants, Purvis, Gray and Company, LLP, as mandated by both local ordinances and State Statute. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presented data, including all disclosures, rests with the management of the City. We believe the data as presented is accurate in all material respects and is reported in a manner designed to fairly set forth the financial position and results of operations of the City of Sarasota as measured by the financial activity of its various funds. The City is required to undergo an annual single audit in conformity with the provisions of the U.S. Office of Management and Budget s Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, and Chapter Rules of the Auditor General, State of Florida. Information related to this single audit, including a schedule of expenditures of Federal awards and State financial assistance, the report of independent auditors on internal controls over financial reporting and compliance with applicable laws and regulations, and a schedule of findings and questioned costs are included. Management of the City is responsible for establishing and maintaining a system of internal controls designed to ensure the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data is complied to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. The internal controls are designed to provide reasonable, but not absolute, assurance that the financial statements will be free from material misstatement. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Management s discussion and analysis (MD&A) immediately follows the independent auditor s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Profile of the City The City of Sarasota, Florida, was incorporated in The current Charter was revised and approved by the voters of the City on September 3, 1996, and became effective November 1, The City has operated under the Commission - City Manager form of government since The City Commission consists of five elected citizens who are qualified voters in the City. The Commission appoints the City Manager, who is the chief administrative officer of the City, and directs the business of the City and its various departments. The Commission determines policy, adopts legislation, approves the City s budget, Post Office Box 1058, Sarasota, Florida st Street, Sarasota, Florida Telephone (941) Web Site i

88 sets taxes and fees, appoints the City Auditor and Clerk and the City Attorney, as well as the members of all boards and committees. The City provides a range of municipal services. The public safety operation includes police protection, as well as building, code compliance and zoning. Recreational services include various tennis courts located throughout the City, a 45-hole golf course, numerous neighborhood parks, a children s water park on the bayfront, a sports stadium, and a state-of-the-art skateboard park. Public Works provides essential street and highway maintenance, traffic signalization and landscape maintenance as well as solid waste collection. The Public Utilities division provides water and sewer service and reuse water for irrigation. In addition, the City operates a municipal auditorium and the Van Wezel Performing Arts Hall. Other services provided include neighborhood and development services, redevelopment, and community development as well as general administrative services. The financial statements in this report include the funds of all the activities under the jurisdiction of the City Commission. This includes the Community Redevelopment Agency (CRA), the Golden Gate Point Special District (GGP), and the St. Armands Business Improvement District (BID). The CRA was created to provide for the rehabilitation, conservation and redevelopment of the downtown area. The purpose of the GGP is to construct and maintain enhancements and improvements within the public rights of way on Golden Gate Point. The BID was created as a dependent taxing authority with the power to levy up to two mills, with City Commission approval, for the purpose of purchasing supplemental services (maintenance, security, sanitation, promotions, infrastructure, and capital improvements). The boundaries of the BID are made up of all parcels of real property located within the CT Zone District in the vicinity of St. Armands Circle. Local Economy The City of Sarasota is located by the Gulf of Mexico on the southwest coast of Florida and covers an area of 24 square miles with an estimated population of 53,160. The City, once the winter home of the Ringling Bros. and Barnum & Bailey Circus, is a mecca for those seeking a high quality of life. The City is a major resort area with an average year round temperature of 71 0 F and miles of pristine white sand beaches that beckon to the hundreds of thousands of tourists that visit year round. The City is the new winter home of the Baltimore Orioles major league baseball team. The City owns and operates the Van Wezel Performing Arts Hall, the premier showcase for the performing arts on the Florida southwest coast. In 2007, the City completed phase I of the 29 acre Payne Park which converted the former trailer park to a beautiful neighborhood landscaped park on the fringe of downtown, with lighted walking and jogging trails, tennis courts, wide open rolling green spaces, a fountain, parking area, restrooms, and a skateboard park. The City s functional (seasonal plus tourist) population swells to almost 100,000 during the winter months. The provision for tourist accommodations, restaurants, entertainment, financial institutions, and health services constitutes a major source of employment, and contributes significantly to the stability of the local economy. Employment figures for the area have eroded from the last fiscal year, as the effect of the economic slowdown continues to impact many areas of the local economy. Sarasota County had an unemployment rate of 12.3% in September 2009 as compared to the statewide rate of 11.1% and the national rate of 9.8%. In major publications, Sarasota continues to earn high ratings as a City that is economically vibrant while successfully managing its growth and providing a high quality of life. This includes excellent schools, low crime, and excellent neighborhoods. The City of Sarasota has avoided urban sprawl and overcrowding because the City fathers have put a premium on green space, culture, and an accessible downtown. Long-Term Financial Planning The annual budget serves as the foundation for the City s financial planning and control. All departments of the City are required to submit requests to the City Manager. The City Manager uses these requests as the starting point for developing the proposed budget. The City Manager then presents the proposed ii

89 budget to the City Commission for review during the month of July. The City Commission is required to hold public hearings on the proposed budget and to adopt a final budget no later than September 30 th, the close of the City of Sarasota s fiscal year. The appropriated budget is prepared by fund and department (e.g., Police, Neighborhood and Development, etc.). Department heads may make transfers within a department. Budget-to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. The downturn in the economy and housing market plus the 11% decrease for the City s taxable property has affected the City s operating revenues and levels of services. Reductions in general governmental services and expenditures, plus other cost reduction initiatives, have helped the City to maintain a healthy unreserved, undesignated fund balance in the General Fund of $16.2 million, which is a 30% ratio to expenditures and an excellent funding level. Relevant Financial Policies In recent years, the City Commission has adopted or amended financial policies with the purpose of maintaining a prudent level of financial resources to support the level of service the City provides to its residents. Policies cover the areas of contingency planning in the event of emergencies; debt management, including debt issuance and management, debt affordability and debt capacity; fees and charges that reflect the cost of City programs and the portion to be recovered from users; and a revenue policy to ensure reliability and sufficiency of City revenues to support its operations. In addition, the City s investment policy was amended in 2001 to improve the safety, yield and liquidity of the City s investments. Major Initiatives The City is nearing the completion of a nearly 100,000 square foot six story Police headquarters building, which was approved by the City taxpayers. The new Police headquarters will replace the current facility which was built in the 1950 s. This new facility will be hurricane hardened to withstand a category 5 storm, and will consolidate the current off-site police operations under one roof. The new building will include parking for 200 vehicles, and will serve as the City s emergency operations center, including a community meeting room for public use. The Golden Gate Point Streetscape Special District completed the reconstruction of the Golden Gate Point street with brick pavers, plus sidewalks, old fashion street lighting, enhanced landscaping, trees, and other amenities in the Golden Gate Point district. The Golden Gate residents tax themselves to pay the debt service on the $5.8 million bonds, plus the additional maintenance for these improvements. Last year the City Commission approved the extension of the Community Redevelopment Agency to include the Newtown area in order to provide funds for the Newtown Redevelopment Plan. Funding was approved beginning in the fiscal years through The Community Redevelopment Agency (CRA) will allocate approximately 1/2 of the available un-appropriated funds for the Newtown redevelopment projects, and the other 1/2 for future projects within the Downtown CRA area. This change provides a funding source for these two important initiatives over the next seven years. As the construction industry and the general economy have softened in Sarasota, the City is fast tracking some of the projects approved in the Phase III Penny Sales Tax referendum which became effective October The $10 million Robert L. Taylor Community Recreation Center will begin construction in the early spring of 2010, with a completion date of March The community redevelopment and economic development of the Newtown area is one of the top five priorities for the City. The Robert L. Taylor Complex when completed will include basketball courts, community meeting and activity rooms, a fitness center, children and teen activity center, and a new community swimming pool. The new Robert L. Taylor Community Complex will be a major focal point for the area to generate strong neighborhood programs and community outreach for people of all ages. iii

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92 LISTING OF CITY OFFICIALS ELECTED OFFICIALS Richard T. Clapp... Mayor Kelly M. Kirschner... Vice-Mayor Fredd Glossie Atkins... Commissioner Suzanne Atwell... Commissioner Terry L. Turner... Commissioner APPOINTED OFFICIALS Robert J. Bartolotta... City Manager Pamela M. Nadalini... City Auditor and Clerk Robert M. Fournier, Esq.... City Attorney DEPARTMENT DIRECTORS Marlon C.J. Brown... Deputy City Manager Peter J. Abbott...Chief of Police Mary R. Bensel... Executive Director Van Wezel Performing Arts Hall Chance Craig... Director of Information Technology William G. Hallisey... Director of Public Works Kurt S. Hoverter...Director of Human Resources Timothy D. Litchet... Director of Neighborhood & Development Services Christopher H. Lyons... Finance Director vi

93 City of Sarasota, Florida Table of Organization UBLIC City Commission Boards & Committees City Auditor & Clerk Public Information Officer City Manager City Attorney Clerk Human Resources Police Deputy City Manager Financial Administration Information Technology Auditing Employee Services & Development Accounting, Payroll & Accounts Payable Central Records Benefits Budget Pensions Television/ Audio Visual Services Human Resources Managment Human Relations Board Risk Management Treasury Purchasing Mail Room & Courier Duplicating Commission Support Van Wezel Performing Arts Hall Public Works Recreation Facilities Neighborhood & Development Services Utility Billing Facilities Management Landscape Maintenance Water Wastewater Streets & Highway Maintenance Ed Smith Stadium & Sports Complex Bobby Jones Golf Complex Planning & Development Downtown & Newtown Redevelopment Construction Services Municipal Auditoriums Solid Waste Collection Vehicles & Equipment Maintenance Skateboard Park Children's Fountain Building, Zoning & Code Compliance Housing & Community Development Submitted in Accordance with Article V, Section 4 and 5 Article VI, Section 4 and Article VII, Section 3 of the City Charter Parking Management Line Key: Direct Supervision - Indirect Supervision vii

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95 INDEPENDENT AUDITORS REPORT The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of the City of Sarasota, Florida (the City), as of and for the year ended September 30, 2009, which collectively comprise the City s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate discretely presented component units and remaining fund information of the City as of September 30, 2009, and the respective changes in financial position, and cash flows where applicable, thereof, and the respective budgetary comparison for the general fund, penny sales tax fund and community redevelopment fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated February 10, 2010, on our consideration of the City s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of our audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. 1

96 The Honorable Mayor and Members of the City Commission City of Sarasota Sarasota, Florida INDEPENDENT AUDITORS REPORT (Concluded) The management s discussion and analysis and required supplementary information as listed in the table of contents, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City s basic financial statements. The introductory section, combining and individual fund statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards and state financial assistance is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and Chapter , Rules of the Auditor General of the State of Florida, and is also not a required part of the basic financial statements of the City. The combining and individual fund statements and schedules and the schedule of expenditures of federal awards and state financial assistance, have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. February 10, 2010 Sarasota, Florida 2

97 Management s Discussion and Analysis The purpose of financial reporting, in general, is to provide readers of the financial statements with information that will help them make decisions or draw conclusions about an entity. As management of the City of Sarasota (the City ), we offer readers of the City s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30, We encourage you to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i-iv of this report and the City s financial statements beginning on page 17. Financial Highlights The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $380,287,980 (net assets). Of this amount, $40,710,467 (unrestricted net assets) may be used to meet the government s ongoing obligations to citizens and creditors. The government s total net assets increased by $9,114,213, or 2.5 percent for the year. Total revenues decreased $2,840,247, or 1.9 percent in comparison to the prior year. Total expenses (excluding the Sports Stadium impairment loss special item) increased $1,036,556, or 0.8 percent in comparison to the prior year. As of the close of the current fiscal year, the City s governmental funds reported combined ending fund balances of $137,554,520, an increase of $5,369,231 for the year. At the end of the current fiscal year, unreserved fund balance for the general fund was $19,124,755 or 35.4% of total general fund expenditures. Of this amount, $2,937,500 has been designated for revenue stabilization. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City s basic financial statements. The City s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) notes to the financial statements, and 3) fund financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements The focus of the government-wide financial statements is on the overall financial position and activities of the City of Sarasota. Reporting is similar to that of a private-sector business. The City s government-wide financial statements include the statement of net assets and statement of activities. As described below, these statements do not include the City s fiduciary funds because resources of these funds cannot be used to finance the City s activities. However, the financial statements of fiduciary funds are included in the City s fund financial statements, because the City is financially accountable for those resources, even though they belong to other parties. The statement of net assets presents information on all of the City s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents revenue and expenses and shows how the government s net assets changed during the most recent fiscal year. All changes in net assets are reported in a manner similar to the approach used by a private-sector business in that revenues are recognized when earned or 3

98 City of Sarasota, Florida Management s Discussion and Analysis September 30, 2009 established criteria are satisfied and expenses are reported when incurred. Accordingly, revenues are reported even when they may not be collected for several months after the end of the accounting period and expenses are recorded even though they may not have used cash during the current period. Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, physical environment, transportation, culture and recreation and economic environment. The business-type activities of the City include the water and sewer utility, the Van Wezel Performing Arts Hall, solid waste collection, golf course, auditoriums, sports stadium and parking system. The City s government-wide financial statements can be found on pages of this report. Fund Financial Statements Unlike government-wide financial statements, the focus of fund financial statements is directed to specific activities of the City rather than the City as a whole. Except for the General Fund, separate funds are established to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds Governmental fund financial statements consist of a balance sheet and a statement of revenues, expenditures, and changes in fund balances. These statements are prepared on an accounting basis that is significantly different from that used to prepare the government-wide financial statements. In general, these financial statements have a short-term emphasis and, for the most part, measure and account for cash and other assets that can easily be converted to cash. For example, amounts reported on the balance sheet include items such as cash and receivables collectible within a short period of time, but do not include capital assets such as land and buildings. Fund liabilities include amounts that are to be paid within a short period after the end of the fiscal year. The difference between a fund s total assets and total liabilities is labeled as the fund balance, and generally indicates the amount that can be used to finance the next fiscal year s activities. The statement of revenues, expenditures and changes in fund balances for governmental funds reports only those revenues and expenditures that were collected or paid during the current period or very shortly after the end of the year. For the most part, the balances and activities accounted for in the governmental funds are also reported in the governmental activities columns of the government-wide financial statements. However, because of the difference in accounting basis used to prepare fund financial statements and government-wide financial statements, there are often significant differences between the totals presented. For this reason, there is an analysis after the balance sheet that reconciles the total fund balances to the amount of net assets presented in the governmental activities column on the statement of net assets. Also, there is an analysis after the statement of revenues, expenditures, and changes in fund balances that reconciles the total change in fund balances for all governmental funds to the change in net assets as reported in the governmental activities column in the statement of activities. The City presents in separate columns funds that are most significant to the City (major funds) and all other governmental funds are aggregated and reported in a single column (nonmajor funds). The City s governmental fund financial statements are presented on pages Proprietary funds Proprietary fund financial statements consist of a statement of net assets, statement of revenues, expenses, and changes in fund net assets and statement of cash flows. These statements are prepared 4

99 City of Sarasota, Florida Management s Discussion and Analysis September 30, 2009 on an accounting basis that is similar to the basis used to prepare the government-wide financial statements. For financial reporting purposes, proprietary funds are grouped into enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water and sewer utility, performing arts hall, solid waste collection, golf course, auditoriums, stadium and parking system. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City s various functions. The City uses separate internal service funds to account for its fleet maintenance activities, management information systems, benefits and self-insurance programs, and its equipment replacement activities. Because all of these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary fund financial statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the major enterprise funds, which are Water and Sewer, Van Wezel Performing Arts Hall and Solid Waste Collection. The remaining nonmajor enterprise funds are combined and presented as other funds on the proprietary funds financial statements. All internal service funds are considered to be nonmajor funds and are combined into a single, aggregated presentation in the proprietary fund financial statements. The proprietary fund financial statements can be found on pages of this report. Fiduciary funds Fiduciary fund financial statements consist of a statement of fiduciary net assets and a statement of changes in fiduciary net assets. Assets held by the City for other parties, either as a trustee or as an agent, and that cannot be used to finance the City s own operating programs are reported in the fiduciary funds. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The fiduciary fund financial statements can be found on pages of this report. Component Units Discretely presented component unit financial statements can be found on pages of this report. Notes to the financial statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages of this report. Other information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City s progress in funding its obligation to provide pension and other post-employment benefits to its employees. Required supplementary information can be found on pages of this report. Budgetary comparison schedules for the General Fund and Community Redevelopment Fund can be found on pages and then combining statements for nonmajor governmental, nonmajor enterprise, internal service, and fiduciary funds begin on page

100 City of Sarasota, Florida Management s Discussion and Analysis September 30, 2009 Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government s financial position. In the case of the City, assets exceeded liabilities by $380,287,980 at the close of the most recent fiscal year. The following schedule is a summary of the Statement of Net Assets found on page 17 of this report: City of Sarasota s Net Assets Governmental Activities Business-type Activities Total Current and other assets $ 181,151,484 $ 168,319,072 $ 63,920,426 $ 45,535,006 $ 245,071,910 $ 213,854,078 Internal balances -- (42,610) -- 42, Capital assets, net of depreciation 178,595, ,618, ,782, ,045, ,378, ,663,658 Total assets 359,747, ,894, ,702, ,623, ,450, ,517,736 Current and other liabilities 27,623,045 19,754,305 19,137,566 16,046,629 46,760,611 35,800,934 Long-term liabilities outstanding 93,227,256 76,740,892 52,174,184 34,802, ,401, ,543,035 Total liabilities 120,850,301 96,495,197 71,311,750 50,848, ,162, ,343,969 Net assets: Investment in capital assets net of related debt 137,954, ,000,217 93,364, ,285, ,319, ,285,533 Restricted 70,136,846 53,058,466 38,121,603 22,979, ,258,449 76,038,116 Unrestricted 30,804,957 39,340,634 9,905,510 10,509,484 40,710,467 49,850,118 Total net assets $ 238,896,752 $ 225,399,317 $ 141,391,228 $ 145,774,450 $ 380,287,980 $ 371,173,767 The overall position of the City improved in both the 2009 and 2008 fiscal years. Changes in net assets over time can be one of the best and most useful indicators of financial position. The total net assets of the City increased $9 million, from $371 million in 2008 to $380 million in 2009, a 2.5% increase. Net assets of the governmental activities increased while net assets of business-type activities decreased, primarily as a result of operations. A significant portion of the City s net assets (60.8%) reflects its investment in capital assets (e.g., land, buildings, improvements, infrastructure and equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City s investment in its capital assets is reported net of related debt, it should still be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City s net assets (28.5%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($40,710,467) may be used to meet the government s ongoing obligations to citizens and creditors. 6

101 City of Sarasota, Florida Management s Discussion and Analysis September 30, 2009 At the end of the current fiscal year, the City reported positive balances in all three categories of net assets, for both governmental and business-type activities. The following is a summary of the information presented in the Statement of Activities found on pages 18 and 19 of this report: City of Sarasota s Changes in Net Assets Governmental Activities Business-type Activities Total Revenues: Program Revenues: Charges for services $ 3,928,249 $ 4,983,971 $ 52,794,642 $ 54,759,452 $ 56,722,891 $ 59,743,423 Operating grants and contributions 15,775,263 8,404, , ,848 15,907,477 8,606,220 Capital grants and contributions 528, ,811 22, , ,811 General Revenues: Property taxes 33,442,478 37,508, ,442,478 37,508,142 Other taxes 22,063,751 23,807, ,063,751 23,807,185 Other 14,099,941 15,099,536 1,113,308 1,336,668 15,213,249 16,436,204 Total revenues 89,838,074 90,443,017 54,062,664 56,297, ,900, ,740,985 Expenses: Governmental Activities: General government 10,575,101 10,287, ,575,101 10,287,848 Public safety 36,258,670 37,511, ,258,670 37,511,528 Physical environment 8,202,267 3,492, ,202,267 3,492,376 Transportation 7,619,536 8,355, ,619,536 8,355,780 Culture & recreation 1,880,557 2,167, ,880,557 2,167,296 Economic environment 7,076,916 6,936, ,076,916 6,936,439 Interest on long-term debt 4,191,843 3,899, ,191,843 3,899,134 Business-type Activities: Water and Sewer ,568,006 30,199,955 29,568,006 30,199,955 Van Wezel Performing Arts Hall ,203,957 9,149,354 8,203,957 9,149,354 Solid Waste ,691,991 9,818,963 9,691,991 9,818,963 Other ,713,894 6,127,509 5,713,894 6,127,509 Total expenses 75,804,890 72,650,401 53,177,848 55,295, ,982, ,946,182 Increase in net assets before other items 14,033,184 17,792, ,816 1,002,187 14,918,000 18,794,803 Transfers (535,749) (1,815,427) 535,749 1,815, Special item (5,803,787) -- (5,803,787) -- Increase in net assets 13,497,435 15,977,189 (4,383,222) 2,817,614 9,114,213 18,794,803 Net assets - beg. of year 225,399, ,422, ,774, ,956, ,173, ,378,964 Net assets - end of year $ 238,896,752 $ 225,399,317 $ 141,391,228 $ 145,774,450 $ 380,287,980 $ 371,173,767 7

102 City of Sarasota, Florida Management s Discussion and Analysis September 30, 2009 Governmental Activities Total revenues for governmental activities decreased $604,943 or 0.7% when compared to the prior year. While some revenues had increases, they were more than offset by other revenues that decreased. The decrease in revenues for the current year is the result of the following: Operating grants and contributions increased by $7,370,891 from that reported in the prior year. $5,647,900 of this increase is revenue received for the beach renourishment project on Lido Key. This project was funded with FEMA hurricane reimbursements, a grant from the Florida Department of Environmental Protection and Sarasota County Tourist Development Tax funding. Charges for services decreased by $1,055,722. $896,525 of this decrease is attributed to a steep decline in building permit revenue. In the previous year, some significant condominium and retail projects were completed. The downturn in the housing market, economic factors and access to financing has really slowed down the development of condominium and mixed use commercial projects in the City. City property tax revenues decreased by $3,693,889 for the current year. Although the City s millage rate for the current year decreased slightly, from to mills, most of the drop is attributed to a decrease in new construction and property values. The Sarasota County portion of property taxes for the Community Redevelopment Agency decreased $371,776 over that reported last year. Both of these represent the overall decrease in property taxes of $4,065,664 over that reported in the prior year. Sales taxes reported in governmental activities decreased $1,331,240, or 12.8% in comparison to the prior year. This is attributed to a decrease in construction, consumer spending and the current economic downturn. Total expenses for governmental activities increased $3,154,489 or 4.3% in comparison to the prior year. The increase in the current year expenses is attributed to physical environment expenses increasing by $4,709,891 during the current year. This increase was due to the expenses incurred in renourishing the public beach on Lido Key. Some of this increase was offset from overall governmental activities cost savings from personnel reductions and other cost cutting measures implemented for the 2009 year. The following graph shows the composition of revenues for the City s governmental activities: Revenues by Source - Governmental Activities Other 9.77% Charges for services 4.37% Operating grants and contributions 17.56% Capital grants and contributions 0.59% Franchise fees 5.92% Other taxes 3.69% Property taxes 37.23% Public service taxes 10.73% Sales tax 10.13% 8

103 City of Sarasota, Florida Management s Discussion and Analysis September 30, 2009 The following chart compares expenses with program revenues for the City s governmental activities: Expenses and Program Revenues - Governmental Activities (in thousands) $38,000 $36,000 $34,000 $32,000 $30,000 $28,000 $26,000 $24,000 $22,000 $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 General government Public safety expenses Physical environment Transportation Culture and recreation program revenues Economic environment Interest on long-term debt Business-type Activities Total revenues decreased by $2,235,304 for the current year. $1,276,614 of the decrease is attributed to water and sewer services customers becoming more conservation minded as well as the decline in the general economy and housing construction. Another $504,868 of the decrease is due to lower revenue from solid waste commercial customers scaling back due to economic conditions. Total expenses decreased by $2,117,933 or 3.8% from the prior year. Overall, all of the business-type activities have decreased expenses by eliminating full-time employment positions and trimming operational costs. The following graph shows the composition of revenues for the City s business-type activities: Revenues by Source - Business-type Activities Charges for services 97.65% Other 2.06% Capital grants and contributions 0.04% Operating grants and contributions 0.24% 9

104 City of Sarasota, Florida Management s Discussion and Analysis September 30, 2009 The following chart compares expenses with program revenues for the City s business-type activities: Expenses and Program Revenues - Business-type Activities (in thousands) $32,000 $30,000 $28,000 $26,000 $24,000 $22,000 $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Water & Sewer Van Wezel Performing Arts Hall Solid Waste Other funds expenses program revenues Financial Analysis of the City s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds The fund financial statements for the governmental funds are provided on pages The focus of the City s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City s governmental funds reported combined ending fund balances of $137,554,520, an increase of $5,369,231 for the year. Approximately 56% of this amount ($77,352,022) constitutes unreserved fund balance, which is available for spending at the City s discretion subject to budgetary constraints, legal, or other restrictions. The remainder of the fund balance is reserved as it is not available for new spending due to existing commitments for: 1) to liquidate contracts and for purchase orders of the prior period ($21,240,712), 2) for capital projects from bonds and loans issued ($28,281,181), 3) to pay debt service ($10,021,736), and 4) for other reserves ($658,869). The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unreserved, undesignated fund balance of the General Fund was $16,187,255, while total fund balance reached $20,505,663. As a measure of the General Fund s liquidity, it may be useful to compare both unreserved, undesignated fund balance and total fund balance to total fund expenditures. Unreserved, undesignated 10