TAMPA WATER Supplying Water To The Region DATE: April 8, 2008 TO: Gerald J Seeber, General Manager AGENDA ITEM H1 FROM: Koni M. Cassini, Director of Finance and Administration' SUBJECT: Supplemental Bond Resolution for Utility System Revenue Bonds, Series 2008 - Approve the resolution and delegate certain authority to the Chairman, General Manager & General Counsel SUMMARY: RECOMMENDATION: Approve the Supplemental Bond Resolution to issue fixed interest rate revenue bonds to fund a portion of the costs of the Board approved System Configuration II projects and associated system improvements. The net funding is anticipated not to exceed $125 million and will complete the funding requirements for the necessary improvements to meet the projected needs in 2012. Approve the Supplemental Bond Resolution for the Utility System Revenue Bonds, Series 2008 DISCUSSION: In October 2006, the Board selected System Configuration II for project selection and further implementation. This selection was to meet the additional supply needs projected for 2012. Within this selection the Board chose Downstream Enhancements Phases A/B and associated System Interconnect Projects. The funding for these projects will come from moneys on hand, these Series 2008 Bonds, grant funds from the South West Florida Water Management District (SWFWMD), and State and possibly Federal funding. The Board also approved a co-funding agreement in December 2006 with SWFWMD for 50% of the program costs which were originally anticipated to be 1235,122,500. Accordingly, the funding agreement was established at $116,000,000. The Board selected a team of underwriters in late 2002 to support the agency's capital needs in funding System Configuration II/III and enable the agency to have a team of financial institutions in place to review and make recommendations to our Financial Advisor for optimizing our investment earnings and debt structures. Within that selection, the Board designated three of the underwriters as Senior Underwriters Bear Stearns, Citi, and Raymond James & Associates. For this financing, staff is recommending that Raymond James & Associates be designated the lead underwriter due to thek recent recommendations and advice regarding this Bond issue. Interest rates currently are near historical lows. To enable the financing to take place at the most economically advantageous time, staff is requesting approval now rather than waiting an additional 60 days for the next Board meeting. The approval will allow appropriate time for planning and timing considerations in order to make sure that the proposed transaction is completed both ontime and in the most cost effective manner possible. Our Bond Counsel has prepared the attached Resolution which authorizes the sale and issuance of Series 2008 Bonds in a principal amount not to exceed $125,000,000. The anticipated project costs are $92,000,000. Costs of issuance and some capitalized interest will also be financed from the Bond issue. The not to exceed amount is an all inclusive number and allows some flexibility to sell the debt as the interest rate market fluctuates. The final details and information regarding the sale of the Series 2008 Bonds will be reported to the Board after they are sold. The Resolution provides for the following actions:
Gerald J. Seeber April 8, 2008 Page 2 1. Establishes the maximum principal amount of the Bonds to be issued (not to exceed $125,000,000). 2. Affirms the purpose of the issue. 3. Affirms that the Bonds will be sold pursuant to a negotiated sale (using the Board approved underwriting team). 4. Provides certain details and terms for the bonds and establishes various financial parameters that must be satisfied before the Bonds may be sold. 5. Delegates certain audiority to the General Manager (all within the parameters set forth in the Resolution). 6. Approves the form of Purchase Contract. 7. Approves the form of the Continuing Disclosure Deposit Agreement. 8. Authorizes the General Manager to select the Paying Agent and Registrar. 9. Authorizes the General Manager to use municipal bond insurance for the Bonds and to select the most cost effective bond insurer, all upon advice of the Authority's Financial Advisor (provided it is cost effective to purchase such insurance). 10. Authorizes the distribution of the Preliminary Official Statement and the execution and delivery of Official Statement (the document which summarizes the details of the sale, financial information and projections of the Agency and its members). 11. Establishes a 2008 Account within the Construction Fund for the project. 12. Details where the proceeds of Bonds are to be applied. The staff, General Counsel, Bond Counsel, and Financial Advisor recommend approval of the Resolution and authorization to proceed in accordance with the following tentative schedule: April 21, 2008 Board meeting authorizing issuance April 29/30, 2008 Rating Agency & Insurer meetings Mid - May 2008 Price bonds End of May 2008 Closing BACKGROUND: The Board has anticipated the need to issue revenue bonds for System Configuration II since its selection in 2008. The Board has some remaining bond proceeds on hand from projects which were not selected for implementation prior to 2006 and has also generated funds from prior bond refundings to support the capital program as well. The agency is now in a position where it is under contract and will continue to bid and award the final contracts over the next 12 18 months and needs to raise the remaining capital dollars necessary to support the construction of System Configuration II and the associated interconnects. T:\Finance_Admin\agenda\2008 Agenda Items\April 21, 2008\Supplemental Bond Resolution.doc
RESOLUTION NO. 2008- RESOLUTION SUPPLEMENTING A RESOLUTION ENTITLED "A RESOLUTION OF THE BOARD OF DIRECTORS OF TAMPA BAY WATER, A REGIONAL WATER SUPPLY AUTHORITY, AUTHORIZING THE ISSUANCE BY TAMPA BAY WATER, A REGIONAL WATER SUPPLY AUTHORITY, OF NOT EXCEEDING $170,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF UTILITY SYSTEM REVENUE BONDS, SERIES 1998A AND NOT EXCEEDING $240,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF UTILITY SYSTEM REVENUE BONDS, SERIES 1998B TO RESTRUCTURE CERTAIN OUTSTANDING INDEBTEDNESS AND TO FINANCE THE COST OF ACQUIRING CERTAIN UTILITY FACILITIES AND MAKING IMPROVEMENTS TO THE UTILITY SYSTEM; PLEDGING THE NET REVENUES DERIVED FROM OR RESULTING FROM THE OPERATION OF SUCH UTILITY SYSTEM TO SECURE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SAID BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SAID BONDS; AND PROVIDING FOR AN EFFECTIVE DATE FOR THIS RESOLUTION;" AUTHORIZING THE ISSUANCE BY THE AUTHORITY OF NOT EXCEEDING $125,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF UTILITY SYSTEM REVENUE BONDS, SERIES 2008 IN ORDER TO FINANCE THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF CERTAIN CAPITAL IMPROVEMENTS TO THE AUTHORITY'S UTILITY SYSTEM; AUTHORIZING A NEGOTIATED SALE OF SAID BONDS; DELEGATING CERTAIN AUTHORITY TO THE GENERAL MANAGER FOR THE AUTHORIZATION, EXECUTION AND DELIVERY OF A PURCHASE CONTRACT WITH RESPECT THERETO, THE APPROVAL OF THE TERMS AND DETAILS OF SAID BONDS AND THE DETERMINATION OF THE SPECIFIC UNDERWRITERS FOR THE BONDS; ESTABLISHING A BOOK-ENTRY SYSTEM OF REGISTRATION FOR THE BONDS; DELEGATING CERTAIN AUTHORITY TO THE GENERAL MANAGER WITH RESPECT TO THE APPOINTMENT OF THE REGISTRAR AND PAYING
AGENT FOR SAID BONDS; AUTHORIZING THE DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT WITH RESPECT THERETO; DELEGATING TO THE GENERAL MANAGER THE AUTHORITY TO DETERMINE WHETHER TO UTILIZE MUNICIPAL BOND INSURANCE FOR THE BONDS AND TO SELECT THE INSURER IF IT IS DETERMINED TO UTILIZE MUNICIPAL BOND INSURANCE; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE BOARD OF DIRECTORS OF TAMPA BAY WATER, A Regional Water Supply Authority: SECTION 1. FINDINGS. It is hereby found and determined that: (A) On August 31, 1998, the Board of Directors (the "Governing Body") of Tampa Bay Water, A Regional Water Supply Authority (the "Issuer"), duly adopted Resolution No. 98-07TBW (as amended and supplemented, the "Resolution"), the title of which Resolution is quoted in the title of this Supplemental Resolution, pursuant to which the Issuer issued its Tampa Bay Water, A Regional Water Supply Authority, Utility System Revenue Bonds, Series 1998A (the "Series 1998A Bonds") and Tampa Bay Water, A Regional Water Supply Authority, Utility System Revenue Bonds, Series 1998B (the "Series 1998B Bonds" and collectively with the Series 1998A Bonds, the "Series 1998 Bonds"). (B) On October 14, 1999, the Issuer issued its Utility System Revenue Bonds, Series 1999 (the "Series 1999 Bonds") pursuant to the Resolution in order to finance various improvements to its System (as defined in the Resolution). (C) On August 30, 2001, the Issuer issued its Utility System Refunding and Improvement Revenue Bonds, Series 2001A (the "Series 2001A Bonds") pursuant to the Resolution in order to refund a portion of the Series 1999 Bonds and to finance various improvements to its System. (D) On November 2, 2001, the Issuer issued its Utility System Revenue Bonds, Series 2001B (the "Series 2001B Bonds") pursuant to the Resolution in order to finance various improvements to its System. 2
(E) On May 15, 2002, the Issuer issued its Utility System Variable Rate Revenue Bonds, Series 2002 (the "Series 2002 Bonds") pursuant to the Resolution in order to finance various improvements to its System. (F) On March 2, 2004, the Issuer issued its Utility System Refunding Revenue Bonds, Series 2004 (the "Series 2004 Bonds") pursuant to the Resolution in order to refund a portion of the Series 1998A Bonds, the Series 1998B Bonds and the Series 2001B Bonds. (G) On March 9, 2005, the Issuer issued its Utility System Refunding and Improvement Revenue Bonds, Series 2005 (the "Series 2005 Bonds") pursuant to the Resolution in order to refund a portion of the Series 1998A Bonds, the Series 1998B Bonds and the Series 2001B Bonds and to finance various improvements to its System. (H) On October 2, 2006, the Issuer issued its Utility System Refunding and Improvement Revenue Bonds, Series 2006 (the "Series 2006 Bonds") pursuant to the Resolution in order to refund a portion of the Series 2002 Bonds, to refinance certain indebtedness of the Issuer and to finance various improvements to its System. (I) The Issuer has determined that the System requires certain capital improvements which should be acquired, constructed and equipped in order to improve the health, safety and welfare of the inhabitants within the Issuer's geographic boundaries. Such capital improvements are described in Exhibit A hereto and are more particularly described in the records, plans and specifications on file with the Issuer, as the same may be amended and supplemented from time to time (the "2008 Project"). (J) The Resolution provides for the issuance of Additional Bonds payable on parity in all respects with the outstanding Series 1998 Bonds, the Series 1999 Bonds, the Series 2001A Bonds, the Series 2001B Bonds, the Series 2002 Bonds, the Series 2004 Bonds, the Series 2005 Bonds and the Series 2006 Bonds (collectively, the "Outstanding Bonds") for the purposes of paying a portion of the Costs of the 2008 Project, upon meeting certain requirements set forth in the Resolution. (K) The Issuer deems it to be in its best interest to issue its Tampa Bay Water, A Regional Water Supply Authority, Utility System Revenue Bonds, Series 2008 (the "Series 2008 Bonds") in an aggregate principal amount of not exceeding $125,000,000 for the principal purpose of financing a portion of the Costs of the 2008 Project. The Series 2008 Bonds shall be issued on parity in all respects with the Outstanding Bonds pursuant to the terms of the Resolution. (L) All the covenants, pledges and conditions in the Resolution shall be applicable to the Series 2008 Bonds herein authorized and said Series 2008 Bonds shall be on a parity with and shall rank equally as to lien on and source and security for payment from the Pledged Funds with the Outstanding Bonds, any Additional Bonds that 3
subsequently are issued pursuant to the Resolution and certain Hedge Payments, and shall constitute "Bonds" within the meaning of the Resolution. The Issuer is current in all deposits in the various funds, accounts and subaccounts established by the Resolution and all payments theretofore required to have been deposited or made by it under the provisions of the Resolution and the Issuer has complied with the covenants and agreements of the Resolution. (M) The principal of and interest on the Series 2008 Bonds and all required sinking fund, reserve account and other payments shall be limited obligations of the Issuer, payable from the Pledged Funds in the manner provided in the Resolution. The Series 2008 Bonds shall not constitute a general obligation, or a pledge of the faith, credit or taxing power, if any, of the Issuer, any of the Member Governments, the State of Florida, or any political subdivision thereof, within the meaning of any constitutional or statutory provisions. None of the Issuer, the Member Governments, the State of Florida, nor any political subdivision thereof, shall be obligated (1) to exercise its ad valorem taxing power, if any, in any form on any real or personal property of or in the geographic boundaries of the Issuer or otherwise to pay the principal of the Series 2008 Bonds, the interest thereon, or other costs incidental thereto, or (2) to pay the same from any other funds of the Issuer except the Pledged Funds to the extent and in the manner provided in the Resolution. (N) Due to the potential volatility of the market for tax-exempt obligations such as the Series 2008 Bonds and the complexity of the transactions relating to such Series 2008 Bonds, it is in the best interest of the Issuer to sell the Series 2008 Bonds by a negotiated sale, allowing the Issuer to enter the market at the most advantageous time, rather than at a specified advertised date, thereby permitting the Issuer to obtain the best possible price and interest rate for the Series 2008 Bonds. (P) The Issuer anticipates receiving a favorable offer to purchase the Series 2008 Bonds from the Underwriters (as determined and defined in Section 14 hereof), all within the parameters set forth herein. (Q) Inasmuch as the Issuer desires to sell the Series 2008 Bonds at the most advantageous time and not wait for a scheduled Governing Body meeting, so long as the herein described parameters are met, the Issuer hereby determines to delegate the award and sale of the Series 2008 Bonds to the General Manager within such parameters and to delegate to the General Manager the authority to determine, upon the advice of the Issuer's Financial Advisor, which of the Issuer's previously approved underwriters shall purchase the Series 2008 Bonds, whether the Series 2008 Bonds shall be insured by a municipal bond insurance policy and, if it is determined to insure the Series 2008 Bonds, which municipal bond insurer shall insure the Series 2008 Bonds, all to the extent provided herein. 4
(R) The Resolution provides that the Series 2008 Bonds shall mature on such dates and in such amounts, shall bear such rates of interest, shall be payable in such places and shall be subject to such redemption provisions as shall be determined by Supplemental Resolution adopted by the Issuer; and it is now appropriate that the Issuer set forth the parameters and mechanism to determine such terms and details. SECTION 2. DEFINITIONS. When used in this Supplemental Resolution, the terms defined in the Resolution shall have the meanings therein stated, except as such definitions may be hereinafter amended or defined. SECTION 3. AUTHORITY FOR THIS SUPPLEMENTAL RESOLUTION. This Supplemental Resolution is adopted pursuant to the provisions of the Act and the Resolution. SECTION 4. AUTHORIZATION OF THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF THE 2008 PROJECT. The Issuer does hereby authorize the acquisition, construction and equipping of the 2008 Project. SECTION 5. DESCRIPTION OF THE SERIES 2008 BONDS. The Issuer hereby authorizes the issuance of a Series of Bonds in the aggregate principal amount of not exceeding $125,000,000 to be known as the "Tampa Bay Water, A Regional Water Supply Authority, Utility System Revenue Bonds, Series 2008" or such other Series designation or designations as the General Manager may determine, for the purposes of financing Costs of the 2008 Project, capitalizing a portion of the interest on the Series 2008 Bonds, if so determined by the General Manager pursuant to Section 9(A) hereof, and paying costs and expenses relating to the issuance of the Series 2008 Bonds, including the premium for any Bond Insurance Policy selected by the General Manager pursuant to Section 15 hereof. The aggregate principal amount of the Series 2008 Bonds shall be determined by the General Manager, provided such aggregate principal amount does not exceed the amount provided above. The Series 2008 Bonds shall be dated as of their date of issuance or such other date as the General Manager may determine, shall be issued in the form of fully registered Bonds in the denomination of $5,000 or any integral multiple thereof, shall be numbered consecutively from one upward in order of maturity preceded by the letter "R," shall bear interest from the dated date determined therefor, payable semi-annually, on October 1 and April 1 of each year (the "Interest Dates"), commencing on October 1, 2008, or such other date or dates determined by the General Manager. Interest on the Series 2008 Bonds shall be payable by check or draft of the Paying Agent appointed in accordance with Section 13 hereof, made payable and mailed to the Holder in whose name such Bond shall be registered at the close of business on the date which shall be the 15th day (whether or not a business day) of the calendar month next preceding the Interest Date, or, at the request of such Holder, by bank wire transfer to the 5
account of such Holder. Principal of the Series 2008 Bonds is payable to the Holder upon presentation, when due, at the designated corporate trust office of the Paying Agent. The principal of or Redemption Price, if applicable, and interest on the Series 2008 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. The Series 2008 Bonds shall bear interest at such rates and yields, shall mature on October 1 of each of the years and in the principal amounts corresponding to such years, and shall have such redemption provisions as determined by the General Manager, subject to the conditions set forth in Section 6 hereof. All of the terms of the Series 2008 Bonds will be included in a purchase contract which shall be in substantially the form attached hereto and made a part hereof as Exhibit B (the "Purchase Contract"). The General Manager is hereby authorized to execute the Purchase Contract in substantially the form attached hereto as Exhibit B with such modifications as he deems appropriate upon satisfaction of the conditions described in Section 6 hereof. SECTION 6. CONDITIONS TO EXECUTION OF PURCHASE CONTRACT. The Purchase Contract shall not be executed by the General Manager until such time as all of the following conditions have been satisfied: (A) Receipt by the General Manager of a written offer to purchase the Series 2008 Bonds by the Underwriters substantially in the form of the Purchase Contract attached hereto as Exhibit B, said offer to provide for or demonstrate, among other things, (i) not exceeding $125,000,000 aggregate principal amount of Series 2008 Bonds, (ii) an underwriting discount (including management fee and expenses) not in excess of 1.00% of the par amount of the Series 2008 Bonds, (iii) a true interest cost of not more than 5.95% per annum and (iv) the maturities of the Series 2008 Bonds, with the final maturity being not later than October 1, 2038. (B) With respect to any redemption terms for the Series 2008 Bonds, the first call date may be no later than October 1, 2018 and no call premium may exceed 1.0% of the par amount of that portion of the Series 2008 Bonds to be redeemed. Term Bonds may be established with such Sinking Fund Installments as the General Manager deems appropriate and upon the advice of the Issuer's Financial Advisor. (C) The General Manager shall have determined, upon advice of the Issuer's Financial Advisor, whether the Series 2008 Bonds shall be secured by a municipal bond insurance policy and, if it is determined that the Series 2008 Bonds will be insured, which insurer shall so insure the Series 2008 Bonds, all in accordance with Section 15 hereof. (D) The General Manager shall have determined, upon advice of the Issuer's Financial Advisor, which investment banking firms shall constitute the Underwriters for the Series 2008 Bonds, in accordance with Section 14 hereof. 6
(E) The General Manager shall have selected, upon advice of the Issuer's Financial Advisor, the Paying Agent and Registrar for the Series 2008 Bonds. (F) Receipt by the General Manager of a disclosure statement and a truth-inbonding statement of the Underwriters dated the date of the Purchase Contract and complying with Section 218.385, Florida Statutes. (G) Receipt by the General Manager of a good faith deposit from the Underwriters in an amount not less than 1% of the principal amount of the Series 2008 Bonds set forth on the cover page of the hereinafter described Preliminary Official Statement. Upon satisfaction of all the requirements set forth in this Section 6, the General Manager is authorized to execute and deliver the Purchase Contract containing terms complying with the provisions of this Section 6. The General Manager may rely upon the advice of the Issuer's Financial Advisor as to satisfaction of the provisions of this Section 6. SECTION 7. REDEMPTION PROVISIONS FOR SERIES 2008 BONDS. The Series 2008 Bonds may be redeemed prior to their respective maturities from any moneys legally available therefor upon the notice and conditions provided in the Resolution and upon the terms and provisions as determined by the General Manager, in his discretion and upon the advice of the Issuer's Financial Advisor. SECTION 8. FULL BOOK-ENTRY. Notwithstanding the provisions set forth in Section 2.08 of the Resolution, the Series 2008 Bonds shall be initially issued in the form of a separate single certificated fully registered Bond for each of the maturities of the Series 2008 Bonds. Upon initial issuance, the ownership of each such Bond shall be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). As long as the Series 2008 Bonds are registered in the name of Cede & Co., all of the Outstanding Series 2008 Bonds shall be registered in the registration books kept by the Registrar in the name of Cede & Co., all payments of principal on the Series 2008 Bonds shall be made by the Paying Agent by check or draft or by bank wire transfer to Cede & Co., as Holder of the Series 2008 Bonds, upon presentation of the Series 2008 Bonds to be paid, to the Paying Agent. With respect to Series 2008 Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation to any direct or indirect participant in the DTC book-entry program (the "Participants"). Without limiting the immediately preceding sentence, the Issuer, the Registrar and the Paying Agent shall have no responsibility or obligation with respect to (A) the accuracy of the records of 7
DTC, Cede & Co. or any Participant with respect to any ownership interest on the Series 2008 Bonds, (B) the delivery to any Participant or any other Person other than a Bondholder, as shown in the registration books kept by the Registrar, of any notice with respect to the Series 2008 Bonds, including any notice of redemption, or (C) the payment to any Participant or any other Person, other than a Bondholder, as shown in the registration books kept by the Registrar, of any amount with respect to principal of or Redemption Price, if applicable, or interest on the Series 2008 Bonds. The Issuer, the Registrar and the Paying Agent may treat and consider the Person in whose name each Series 2008 Bond is registered in the registration books kept by the Registrar as the Holder and absolute owner of such Bond for the purpose of payment of principal or Redemption Price, if applicable, and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Paying Agent shall pay all principal of or Redemption Price, if applicable, and interest on the Series 2008 Bonds only to or upon the order of the respective Holders, as shown in the registration books kept by the Registrar, or their respective attorneys duly authorized in writing, as provided herein and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal of or Redemption Price, if applicable, and interest on the Series 2008 Bonds to the extent of the sum or sums so paid. No Person other than a Holder, as shown in the registration books kept by the Registrar, shall receive a certificated Bond evidencing the obligation of the Issuer to make payments of principal or Redemption Price, if applicable, and interest pursuant to the provisions of the Resolution. Upon delivery by DTC to the Issuer 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 in the Resolution with respect to transfers during the 15 days next preceding an Interest Date or first mailing of notice of redemption, the words "Cede & Co." in this Supplemental Resolution shall refer to such new nominee of DTC; and upon receipt of such notice, the Issuer shall promptly deliver a copy of the same to the Registrar and the Paying Agent. Upon (A) receipt by the Issuer of written notice from DTC (i) to the effect that a continuation of the requirement that all of the outstanding Series 2008 Bonds be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, is not in the best interest of the beneficial owners of the Series 2008 Bonds or (ii) to the effect that DTC is unable or unwilling to discharge its responsibilities and no substitute depository willing to undertake the functions of DTC hereunder can be found which is willing and able to undertake such functions upon reasonable and customary terms, or (B) determination by the Issuer that such book-entry only system is burdensome or undesirable to the Issuer and compliance with any applicable DTC rules and procedures, the Series 2008 Bonds shall no longer be restricted to being registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of 8
DTC, but may be registered in whatever name or names Holders shall designate, in accordance with the provisions of the Resolution. In such event, the Issuer shall issue and the Registrar shall authenticate, transfer and exchange the Series 2008 Bonds of like principal amount, Series and maturity, in denominations of $5,000 or any integral multiple thereof to the Holders thereof. The foregoing notwithstanding, until such time as participation in the book-entry only system is discontinued, the provisions set forth in the Blanket Issuer Letter of Representations shall apply to the payment of principal of, premium, if any, and interest on the Series 2008 Bonds. SECTION 9. APPLICATION OF SERIES 2008 BOND PROCEEDS. Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, the proceeds derived from the sale of the Series 2008 Bonds shall be applied by the Issuer simultaneously with the delivery thereof as follows: (A) An amount equal to the capitalized interest, if any, shall be deposited to the Interest Account and shall be used to pay interest on the Series 2008 Bonds. The amount of capitalized interest, if any, shall be determined by the General Manager, upon the advice of the Issuer's Financial Advisor, provided such amount shall not exceed the amount necessary to capitalize interest on the Series 2008 Bonds through April 1, 2011. (B) A sufficient amount of the Series 2008 Bond proceeds shall be applied to the payment of costs and expenses relating to the issuance of the Series 2008 Bonds, including the premium for the hereinafter described Bond Insurance Policy if the General Manager selects bond insurance for the Series 2008 Bonds pursuant to Section 15 hereof. (C) An amount of the Series 2008 Bond proceeds necessary to cause the amount on deposit in the Reserve Account (taking into account any cash, investments and Reserve Account Insurance Policy on deposit therein) to equal the Reserve Account Requirement shall be deposited into the Reserve Account. (D) The balance of the Series 2008 Bond proceeds shall be deposited into the 2008 Account (established pursuant to Section 10 hereof) of the Construction Fund and shall be used to pay Costs of the 2008 Project. SECTION 10. ESTABLISHMENT OF 2008 ACCOUNT OF THE CONSTRUCTION FUND. Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, pursuant to Section 4.03 of the Resolution, the Issuer hereby establishes a separate account within the Construction Fund to be known as the "2008 Account." Funds on deposit in the 2008 Account shall be applied to pay the Costs of the 2008 Project. SECTION 11. PRELIMINARY OFFICIAL STATEMENT. The Issuer hereby authorizes the distribution and use of the Preliminary Official Statement in substantially the form attached hereto as Exhibit C in connection with the offering of the 9
Series 2008 Bonds for sale. If between the date hereof and the mailing of the Preliminary Official Statement, it is necessary to make insertions, modifications or changes in the Preliminary Official Statement, the General Manager is hereby authorized to approve such insertions, changes and modifications. The General Manager is hereby authorized to deem the Preliminary Official Statement "final" within the meaning of Rule 15c2-12(b)(1) under the Securities Exchange Act of 1934 in the form as mailed. Execution of a certificate by the General Manager deeming the Preliminary Official Statement "final" as described above shall be conclusive evidence of the approval of any insertions, changes or modifications. SECTION 12. OFFICIAL STATEMENT. The form, terms and provisions of the Official Statement relating to the Series 2008 Bonds shall be substantially as set forth in the Preliminary Official Statement. Subject to the satisfaction in all respects of the conditions set forth in Section 6 hereof, the Chairman and the General Manager are hereby authorized and directed to execute and deliver said Official Statement in the name and on behalf of the Issuer, and thereupon to cause such Official Statement to be delivered to the Underwriters with such changes, amendments, modifications, omissions and additions as may be approved by the Chairman and the General Manager. Said Official Statement, including any such changes, amendments, modifications, omissions and additions as approved by the Chairman and the General Manager and the information contained therein are hereby authorized to be used in connection with the sale of the Series 2008 Bonds to the public. Execution by the Chairman and the General Manager of the Official Statement shall be deemed to be conclusive evidence of approval of such changes. SECTION 13. APPOINTMENT OF PAYING AGENT AND REGISTRAR. Subject in all respects with the satisfaction of the conditions set forth in Section 6 hereof, such banking institution or trust company as shall be selected by the General Manager pursuant to Section 6 hereof shall be the designated Registrar and Paying Agent for the Series 2008 Bonds. The Chairman and the Secretary are hereby authorized to enter into any agreement which may be necessary to effect the transactions contemplated by this Section 13 and the Resolution. SECTION 14. DETERMINATION OF UNDERWRITERS. Raymond James & Associates, Inc. shall be the senior managing underwriter with respect to the Series 2008 Bonds and Citigroup Global Markets Inc. and Bear Stearns & Co. Inc. shall be co-senior underwriters with respect to the Series 2008 Bonds (collectively, the "Senior Underwriters"). If at the time of the marketing of the Series 2008 Bonds it is determined by the General Manager, upon the advice of the Issuer's Financial Advisor, that the principal amount of the Series 2008 Bonds is likely to be less than $100,000,000, then the Senior Underwriters shall be the sole underwriters for the Series 2008 Bonds. If at the time of the marketing of the Series 2008 Bonds it is determined by the General Manager, upon the advice of the Issuer's Financial Advisor, that the principal amount of the Series 10
2008 Bonds is likely to be $100,000,000 or greater, then the underwriters for the Series 2008 Bonds shall include the Senior Underwriters and Morgan Stanley & Co. Incorporated, Banc of America Securities LLC, A.G. Edwards & Sons, Inc., RBC Dain Rauscher, Inc. and Merrill Lynch & Co. Notwithstanding the foregoing, the General Manager, upon the advice of the Issuer's Financial Advisor, may change the composition of the underwriters for the Series 2008 Bonds prior to the execution and delivery of the Purchase Contract by eliminating any of the firms set forth in the immediately preceding sentence or including any investment banking firms that are successors in interest to, or lawful assignees of, the foregoing investment banking firms. The investment banking firms that are ultimately selected and set forth in the Purchase Contract shall constitute the "Underwriters" for purposes of the Resolution and this Supplemental Resolution. SECTION 15. MUNICIPAL BOND INSURANCE. The General Manager is hereby authorized and directed to determine, in reliance upon the advice of the Issuer's Financial Advisor, on or prior to the date of the sale of the Series 2008 Bonds, whether the Series 2008 Bonds will be insured by a municipal bond insurance policy. If the General Manager determines to utilize a municipal bond insurance policy for the Series 2008 Bonds, the General Manager is hereby authorized and directed to select any of the following four municipal bond insurers as the issuer of such municipal bond insurance policy: Financial Security Assurance Inc., or any successor in interest or assignee thereof ("Financial Security"), Assured Guaranty Corp., or any successor in interest or assignee thereof ("Assured Guaranty"), MBIA Insurance Corporation, or any successor in interest or assignee thereof ("MBIA") or Ambac Assurance Corporation, or any successor in interest or assignee thereof ("Ambac Assurance"). If the General Manager determines that the Series 2008 Bonds will be insured by a municipal bond insurance policy such policy shall be deemed to be the "Bond Insurance Policy" with respect to the Series 2008 Bonds for purposes of the Resolution and this Supplemental Resolution. Whichever municipal bond insurer the General Manager selects to issue the Bond Insurance Policy, Financial Security, Assured Guaranty, MBIA or Ambac Assurance, shall be deemed to be the "Insurer" of the Series 2008 Bonds for purposes of the Resolution and this Supplemental Resolution. In selecting a municipal bond insurer, the General Manager shall select the municipal bond insurer that offers and commits to provide its standard municipal bond insurance policy or policies which, upon advice of the Issuer's Financial Advisor, is most economically advantageous for the Issuer. The General Manager is hereby authorized to execute such documents and instruments necessary to cause the selected municipal bond insurer to insure the Series 2008 Bonds. Attached hereto as Exhibits D, E, F and G are certain provisions relating to the respective standard municipal bond insurance policies of Financial Security, Assured Guaranty, MBIA and Ambac Assurance, respectively. If the General Manager selects a municipal bond insurer for the Series 2008 Bonds as provided above in this Section 15, 11
the provisions substantially in the form contained in the Exhibit corresponding to such insurer (with such modifications and changes as the General Manager deems appropriate) shall be incorporated herein and all of the provisions contained in the Exhibit corresponding to the municipal bond insurer not selected by the General Manager with respect to the Series 2008 Bonds as provided above shall be disregarded and shall be considered void and of no force and effect. Any modifications or changes deemed appropriate by the General Manager to the provisions contained in Exhibits D, E, F or G shall be evidenced by the execution of an agreement between the Issuer and the Insurer. If the General Manager determines that the Series 2008 Bonds shall not be insured by any municipal bond insurance policy, then all of the provisions contained in Exhibits D, E, F or G shall be disregarded and shall be considered void and of no force and effect. SECTION 16. SECONDARY MARKET DISCLOSURE. Subject in all respects to the satisfaction of the conditions set forth in Section 6 hereof, the Issuer hereby covenants and agrees that, in order to provide for compliance by the Issuer with the secondary market disclosure requirements of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement to be executed by the Issuer and dated the date of delivery of the Series 2008 Bonds, as it may be amended from time to time in accordance with the terms thereof. The Chairman and the Secretary are hereby authorized to execute the Continuing Disclosure Agreement. The Continuing Disclosure Agreement shall be substantially in the form attached hereto as Exhibit H with such changes, amendments, modifications, omissions and additions as shall be approved by the Chairman and the Secretary. Notwithstanding any other provision of the Resolution, failure of the Issuer to comply with such Continuing Disclosure Agreement shall not be considered an Event of Default under the Resolution; provided, however, to the extent permitted by law, the sole and exclusive remedy of any Series 2008 Bondholder for the enforcement of the provisions of the Continuing Disclosure Agreement shall be an action for mandamus or specific performance, as applicable, by court order, to cause the Issuer to comply with its obligations under this Section 16 and the Continuing Disclosure Agreement. For purposes of this Section 16, "Series 2008 Bondholder" shall mean any person who (A) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2008 Bonds (including persons holding Series 2008 Bonds through nominees, depositories or other intermediaries), or (B) is treated as the owner of any Series 2008 Bonds for federal income tax purposes. SECTION 17. GENERAL AUTHORITY. The members of the Governing Body, the Secretary and the officers, attorneys and other agents or employees of the Issuer are hereby authorized to do all acts and things required of them by this Supplemental Resolution, the Resolution, the Official Statement, the Continuing Disclosure Agreement or the Purchase Contract or desirable or consistent with the requirements hereof or the Resolution, the Official Statement, the Continuing Disclosure Agreement or the Purchase Contract for the full punctual and complete performance of 12
all the terms, covenants and agreements contained herein or in the Series 2008 Bonds, the Resolution, the Official Statement, the Continuing Disclosure Agreement and the Purchase Contract and each member, employee, attorney and officer of the Issuer or the Governing Body and the Secretary is hereby authorized and directed to execute and deliver any and all papers and instruments and to do and cause to be done any and all acts and things necessary or proper for executing the transactions contemplated hereunder. If the General Manager is unavailable or unable at any time to perform any duties or functions hereunder, including, but not limited to, those described in Section 6 hereof, the Chairman is hereby authorized to act on his behalf. The General Manager is further authorized to make all necessary certifications pursuant to Treasury Regulations Section 1.148-2(e)(2)(ii). SECTION 18. SEVERABILITY AND INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein contained 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 or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Series 2008 Bonds. SECTION 19. RESOLUTION TO CONTINUE IN FORCE. Except as herein expressly provided, the Resolution and all the terms and provisions thereof are and shall remain in full force and effect. SECTION 20. EFFECTIVE DATE. This Supplemental Resolution shall become effective immediately upon its adoption. 13
(SEAL) ADOPTED at a meeting of the Board of Directors on the 21 st day of April, 2008. TAMPA BAY WATER, A Regional Water Supply Authority ATTEST: By: Susan Latvala, Chairman Gerald J. Seeber, Secretary APPROVED AS TO FORM: Date: Richard Lotspeich, General Counsel 14
EXHIBIT A GENERAL DESCRIPTION OF 2008 PROJECT The 2008 Project includes the following projects which make up the System Configuration II Program and related System interconnects, as all are more particularly described in the plans and specifications on file with the Issuer and in the form of the Preliminary Official Statement attached to the Supplemental Resolution as Exhibit C, as the same may be amended from time to time by the Governing Body: Expansion of the Surface Water Treatment Plant Expansion of the Tampa Bypass Canal Pump Station Expansion of the Tampa Bay Water Regional High Service Pump Station Expansion of the Repump Station New South-Central Hillsborough Intertie Booster Pumping Station Offstream Reservoir Pump Station SCHIP Phase II Northwest Hillsborough Pipeline Morris Bridge Booster Pump Station Cypress Creek Pump Station Expansion Brandon Well Testing (BUDW#5 Relocation) Valrico Hills/Seaboard Utilities Acquisition, Permitting and Construction SCHIP Phase III (Hydrogen Sulfide Removal at Lithia) Future Surface Water Expansion Study (previously known as Enhancements Project Phases C and D) Master Water Plan Projects: planning, feasibility, scientific evaluations and preliminary engineering on Master Water Plan projects Pinellas County Improvements: Blending Facility Tie-in West Pasco Infrastructure Central Pasco County Improvements Projects Regional System Surge Protection
EXHIBIT B FORM OF PURCHASE CONTRACT
DRAFT-1 GrayRobinson, P.A. March 21, 2008 TAMPA BAY WATER A REGIONAL WATER SUPPLY AUTHORITY $ Utility System Improvement Revenue Bonds Series 2008 PURCHASE CONTRACT May, 2008 Tampa Bay Water, A Regional Water Supply Authority 2575 Enterprise Road Clearwater, Florida 33763 Members of Tampa Bay Water: Raymond James & Associates, Inc. (the "Representative"), on behalf of itself and Bear, Stearns & Co. Inc. and Citigroup Global Markets Inc. (collectively, the "Underwriters") offers to enter into this Purchase Contract with Tampa Bay Water, A Regional Water Supply Authority ("Tampa Bay Water"), which, upon acceptance of this offer by Tampa Bay Water, will be binding upon Tampa Bay Water and upon the Underwriters. This offer is made subject to written acceptance hereof by Tampa Bay Water at or before 6:00 p.m., Eastern daylight savings time, on the date hereof and, if not so accepted, will be subject to withdrawal by the Underwriters upon notice delivered to Tampa Bay Water at any time prior to the acceptance hereof by Tampa Bay Water. 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties, covenants and agreements set forth herein, the Underwriters hereby agree to purchase from Tampa Bay Water, and Tampa Bay Water hereby agrees to sell to the Underwriters, all (but not less than all) of the aggregate principal amount of $ of its Utility System Improvement Revenue Bonds, Series 2008 (the "Bonds"). The Bonds shall be dated the Date of Closing as referred to in Paragraph 7 of this Purchase Contract (the "Date of Closing"). The purchase price for the Bonds shall be $ (which is the original principal amount of the Bonds, net of Underwriters' discount of $ plus [less] original issue premium [discount] of $ ). The Bonds shall be as described in and shall be issued and secured under the provisions of Resolution No. 98-07, adopted by Tampa Bay Water on August 31, 1998, as amended and supplemented by Resolution No. 99-04, adopted by Tampa Bay Water on July 19, 1999, Resolution No. 99-05 adopted by Tampa Bay Water on September 20, 1999, Resolution No. 2001-04 adopted by Tampa Bay Water on January 22, 2001, as amended and supplemented by Resolution No. 2001-12 adopted by Tampa Bay Water on April 16, 2001, Resolution No. 2003-003 adopted by Tampa Bay Water on March 17, 2003, as amended and supplemented by Resolution No. 2005-004 adopted by Tampa Bay Water on February 14, 2005, as amended and supplemented by Resolution No. 2006-004 adopted by Tampa Bay Water on August 21, 2006, and as supplemented by Resolution No. 2008- adopted by Tampa Bay Water on March 21, 2008 (collectively, the "Bond Resolution"). The Bonds shall mature at the times and in the
amounts and bear interest at the rates set forth in Appendix I hereto. The Bonds are subject to redemption as set forth in Appendix II hereto. The information required by Section 218.385(2), (3) and (6), Florida Statutes, to be provided to Tampa Bay Water by the Underwriters is set forth in Appendix III hereto. Capitalized terms not otherwise defined herein shall have such meanings as set forth in the Official Statement (as defined herein). 2. Delivery of Official Statement and Other Documents. (a) Prior to the date hereof, Tampa Bay Water shall have provided to the Underwriters for their review the Preliminary Official Statement dated, 2008 (the "Preliminary Official Statement") that Tampa Bay Water shall deem final as of its date, except for certain omissions in connection with the pricing of the Bonds as permitted by Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Rule"). The Underwriters have reviewed such Preliminary Official Statement prior to the execution of this Purchase Contract. (b) With your acceptance hereof, you will deliver, at your expense, to the Underwriters within seven (7) business days of the date hereof (or within such shorter period as may be requested by the Underwriters in order comply with Rules G-32 and G-36 of the Municipal Securities Rulemaking Board) such number of copies of a Final Official Statement dated the date hereof (the "Final Official Statement"), as shall be reasonably requested by the Underwriters, together with all supplements and amendments thereto, substantially in the form of the Preliminary Official Statement, with only such changes therein as shall have been accepted by the Underwriters, signed on behalf of Tampa Bay Water by the Chairman and the General Manager. It is understood that in undertaking to deliver the Final Official Statement pursuant to this paragraph, Tampa Bay Water is not taking any responsibility for the accuracy or completeness of the information in the Final Official Statement [concerning Financial Guaranty Insurance Company (the "Insurer") or its Bond Insurance Policy,] or The Depository Trust Company ("DTC") and its book-entry system of registration. (c) The Underwriters shall give notice to Tampa Bay Water on the date after which no participating underwriter, as such term is defined in the Rule, remains obligated to deliver a Final Official Statement pursuant to paragraph (b)(4) of the Rule. (d) At or prior to the Closing, referred to in Paragraph 7 of this Purchase Contract (the "Closing"), the Underwriters shall file, or cause to be filed, the Final Official Statement with a nationally recognized municipal securities information repository. (e) At Closing, Tampa Bay Water shall deliver, or cause to be delivered to the Underwriters copies of the Bond Resolution, certified to by the General Manager, all substantially in the form heretofore delivered to the Underwriters, with only such changes therein as agreed upon by the Underwriters. 3. Representation of the Underwriters as to Authority. The Underwriters have been duly authorized to execute this Purchase Contract and have been duly authorized to act hereunder. Raymond James & Associates, Inc. has been duly authorized to act as the Representative of the Underwriters. 4. Public Offering. The Underwriters agree to make an offering of all the Bonds at not in excess of the initial public offering prices or yields set forth on the inside cover page of the Final Official Statement. The Underwriters reserve the right to make concessions to dealers and to change such initial public offering prices as the Underwriters reasonably deem necessary in connection with the marketing of the Bonds. Tampa Bay Water hereby authorizes the Underwriters to use the Final Official Statement and the information contained therein in connection with the offering and sale of the Bonds and ratifies and 2