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HomeMy WebLinkAboutOpen Space Preservation BondREDEMPTION PAYMENT SUMMARY THE DEPOSITORY TRUST COMPANY A subsidiary of The Depository Trust & Clearing Corporation MUNI BEARER 5/1/2005 NAME OF ISSUE F=FULL CALL, P=PARTIAL ? I ICALL, M=MATURITY 844572FF9 iS/ 90,000.00 M 9K9041A SOUTHOLD ~V,~ GO NY D05/01/98 4.850% MN05 BE 844572GA9 ~$ 80,000.00 M 9K9041B SOUTHOLD TOWN GO NY D05/01/99 4.700% MN05 BE *PLEASE COMPLETE IF COLLUMN A DIFFERS FROM COLLUMN B Upon receipt, please fill in the required information and fax back to (212) 855-8900. On payable date )lease wire Federal Funds by 2:30 )m in payment thereof to: :hase Bank 55 Water Street ABA 021 000 021 New York, NY 10041 For credit of A/C Depository Trust Company Redemption Account 066-027306 Reference #: CUSIP(S) Copy 1 170,000.00 IVAULT LOCATION / ~A NO PIGGYBACK ~A NO. / ABA NO 982 100008360 000000 /03 / · · · · i THE DEPOSITORY TRUST COMPANY A subsidiary of the Depository Trust & C~earin§ Corporation 55 WATER STREET - 50TH FL- HEN' YORK, TOWN OD SOUTHOLD 53095 MAIN RD SOUTHOLD, NY 119710959 JOHN CUSHMAN NEN YORK 10041 01566 041 ~ 050501 ATTENTION: JOHN CUSHMAN The enclose64UNIC [PAL BOOK ENTRY 0NLYsecurities are presented for redemption; [] Partial Call SOUTHOLD TOWN GO NY gO,O00.O0 80,000.00 [] Full Call 005/01/99 ~,700~ MN05 BE $ 80,000.00 $ 0.00 LETTER OF TRANSMITTAL 13-2555119 982/00008360 /03 [] Maturity 9KgO41B ,000.000000 / 0.000000 $ 80,000.00 $ $ SEE PLEASE NI~E $ 80,000.00 TO: ATTACHED LIST CHASE MANHATTAN BANK ABA O21 O00 021 FOR CREOIT OF A/C DEPOSITORY TRUST CO. REDEMPTION ACCT. 066-027306 OBI = PPA/B~4572GA9/05/O1/05 The certificate, registered in the name of CEDE & CO., along with a copy of this letter is to be sent to: <NONE) NOT APPLICABLE IF THERE A~ ] AN'~ DU( ST[3NS OR P~O~LEMS AS A RESJLT GF THIS DELrVERY, PLEASE CUNIACT THE REDEMPTION SUPERVISOR AT (212> B55-2030. Please do not reject (return} securities without first telephoning the aforementioned COPY 1 AGENTCOPY · · · · · · · · · · · · · · · · · MuNi MATURITY CERTIFICATE CERTIFICATE FROM TO 0C0000000006 000000000006 DEPOSITORY TRUST COMPANY CERTIF LISTING FOR CUSIP 844572GA9 - SOUTBOLD TOwN GO NY DENOM QUANTITY I CER~IFICATERoM CERTIFICATETo 80,000 80000.00 TOTAL SECURiTiES FOR REDEMPTION D~5/~1/99 DENOM 4.70C% MND5 ~AGE: IME: QUANTITY 21:0~):43 I REGISTEREI NO. R-6 IMPORTANT This is a Book Entry Municipal Security. Do not release to aootheroDepartment without specific authorization from the Inventory Control Supervisor. (-- Pages] 9158(1/87) UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK REGISTERED $80,000 TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF ORIGINAL ISSUE CUSIP NUMBER May 1, 2005 4.70% May 1, 1999 844572 GA9 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: EIGHTY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET. t~OR.~TH HEREIN. ~ '2'.~ ..... :~ Cede & Co. and O. ny Palm.at ~ Blt' Off are l~erel~y irrevocably pledged to the punctual payment of the principal of and interest on this Bond according to its terms. This Bond has been designated by the Town as a qualified tax pursuant to the provisions of Section 265 of the Internal Revenue Code of 1986, as amended. It is hereby certified and recited that all conditions, acts and things required by the Constitution and statutes of the State of New York to exist, to have happened and to have been performed precedent to and in the issuance of this Bond, exist, have happened and have been performed, and that the issue of bonds of which this is one, together with all other indebtedness of the Town of Southold, is within every debt and other limit prescribed by the Constitution and laws of such State. IN WITNESS WHEREOF, the TOWN OF SOUTHOLD has caused this to be executed in its name by the manual signature of its Supervisor and its corporate seal to [ impressed hereon and attested by the manual signature of its Town Clerk. -TOWN OF SOUTHOLD (SEAL) ATTEST: Supervisor Town Clerk ( Town of Southold, New York Open Space Preservation Serial Bond-1999 This Bond is one of an authorized issue, the principal amount of which is $1,900,000, the Bonds of which are of like tenor, except as to number, denomination, and maturity, and is issued pursuant to the provisions of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York (the ~LawD, the bond resolution duly adopted by the Town Board on September 2, 1997 and approved as a Proposition by the qualified voters of the Town at the Biennial Town Election held on November 4, 1997, authorizing the issuance of serial bonds of the Town to finance the acquisition of interests or developmental rights in various parcels of real property within the Town for the preservation of open spaces and areas and conserving the character of local communities, and the Certificate of Determination executed by the Supervisor as of April 19, 1999, determining the terms, form and details of issuance of said $1,900,000 serial bonds (the "Bonds") and providing for the public sale thereof (the "Certificate of DeterminationS). The Bonds are issuable in the form of registered bonds without coupons in denominations of $5,000, or any integral multiple thereof. This Bond is transferable or exchangeable, as provided in the Certificate of Determination, only upon the books of the Town kept for that purpose at the office of the Fiscal Agent, by the registered owner hereof in person, or by his attorney duly authorized in writing, upon the surrender of this bond together with a written instrument of transfer or exchange satisfactory to the Fiscal Agent duly executed by the registered owner or his attorney duly authorized in writing, and thereupon a new Bond or Bonds, in the same aggregate principal amount and of the same maturity, shall be issued to the transferee or the registered owner in exchange therefor as provided in the Certificate of Determination and upon the payment of the charges, if any, therein prescribed. The Bonds maturing on or before May 1, 2009 are not subject to redemption prior to maturity. The Bonds maturing on or after May 1, 2010 will be subject to redemption prior to maturity, at the option of the Town, on May 1, 2009 and thereafter on any date, in whole or in part, in inverse order of maturity or in equal proportionate amounts (selected by lot within a maturity), at the following redemption prices, plus accrued interest to the date of redemption: Redemption Dates Redemption Price as a Percentage of Par Amount May 1, 2009 through April 30, 2010 ................... 102% May 1, 2010 through April 30, 2011 .................... 101 May 1, 2011 and thereafter ........................... 100 The Bonds shall be redeemable upon the giving of notice which identifies the Bonds to be redeemed, by mailing such notice to the registered holders thereof at their respective addresses as shown upon the registration books of the Fiscal Agent at least 30 days prior to the date set for any such redemption. If notice of redemption shall have been given as aforesaid, the Bonds so called for redemption shall become due and payable at the applicable redemption price on the redemption date designated in such notice, and interest on such Bonds shall cease to accrue from and after such redemption date. Hawkins, Delafield & Wood 67 Wall Street New York, New York The Town Board of the Town of Southold, in the County of Suffolk, New York Ladies and Gentlemen: We have examined a record of proceedings relating to the sale and issuance of $1,900,000 Open Space Preservation Serial Bonds-1999 (the "Bonds"), of the Town of Southold (the "Town"), in the County of Suffolk, New York. The Bonds are issued pursuant to the provisions of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York, the bond resolution duly adopted by the Town Board on September 2, 1997 and approved as a Proposition by the qualified voters of the Town at the Biennial Town Election held on November 4, 1997, authorizing the issuance of serial bonds of the Town to finance the acquisition of interests or developmental rights in various parcels of real property within the Town for the preservation of open spaces and areas and conserving the character of local communities, and the Certificate of Determination executed by the Supervisor as of April 19, 1999, determining the terms, form and details of issuance of said $1,900,000 serial bonds and providing for their public sale. The Bonds are dated May 1, 1999, mature on May 1 in the principal amounts in each of the following years, and bear interest at the respective rates per annum payable November 1, 1999 and semiannually thereafter on May 1 and November 1 in each year to maturity, as set forth below: Year of Principal Interest Year of Principal Interest Maturity Amount Rate Maturity Amount Rate 2000 $ 80,000 4.70% 2010 $ 90,000 4.70% 2001 80,000 4.70 2011 100,000 4.70 2002 80,000 4.70 2012 100,000 4.70 2003 80,000 4.70 2013 100,000 4.70 2004 80,000 4.70 2014 110,000 4.70 2005 80,000 4.70 2015 110,000 4.70 2006 80,000 4.70 2016 110,000 4.70 2007 90,000 4.70 2017 110,000 4.70 2008 90,000 4.70 2018 120,000 4.70 2009 90,000 4.70 2019 120,000 4.70 The Bonds maturing on or before May 1, 2009 are not subject to redemption prior to maturity. The Bonds maturing on or after May 1, 2010 will be subject to redemption prior to maturity, at the option of the Town, on May 1, 2009 and thereafter on any date, in whole or in part, in inverse order of maturity or in equal proportionate amounts (selected by lot within a maturity) at such prices and subject to such notice and other conditions stated in the Bonds. The Bonds are issued only in fully registered form without interest coupons, in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company, an automated depository for securities and clearinghouse for securities transactions which will maintain a book-entry system for recording the ownership interests in the Bonds. Only one Bond will be initially issued for each maturity in the aggregate principal amount of such maturity. Purchases of ownership interests in the Bonds will be made in book-entry form in denominations of $5,000 or any integral multiple thereof. In our opinion, said Bonds are valid and legally binding general obligations of the Town for which the Town has validly pledged its faith and credit and, unless paid from other sources, all the taxable real property within the Town is subject to the levy of ad valorem real estate taxes to pay the Bonds and interest thereon without limitation of rate or amount. The enforceability of rights or remedies with respect to such Bonds may be limited by bankruptcy, insolvency or other laws affecting creditors' rights or remedies heretofore or hereafter enacted. The Internal Revenue Code of 1986, as amended (the WCode~), establishes certain requirements that must be met subsequent to the issuance and delivery of the Bonds in order that interest on the Bonds be and remain excludable from gross income under Section 103 of the Code. The Supervisor of the Town, in executing the Arbitrage and Use of Proceeds Certificate, has certified to the effect that the Town will comply with the provisions and procedures set forth therein and that it will do and perform all acts and things necessary or desirable to assure that interest paid on the Bonds is excludable from gross income under Section 103 of the Code. We have examined such Arbitrage and Use of Proceeds Certificate delivered concurrently with the delivery of the Bonds, and in our opinion, such certificate contains provisions and procedures under which such requirements can be met. In our opinion, the interest on the Bonds is excludable under existing statutes and court decisions, from the gross income of the recipients thereof for federal income tax purposes pursuant to Section 103 of the Code, and under existing statutes interest on the Bonds will not be treated as a preference item in calculating the alternative minimum tax that may be imposed under the Code with respect to individuals and corporations. In rendering the foregoing opinion, we have assumed the Town's compliance with the Arbitrage and Use of Proceeds Certificate. Further, in our opinion, under existing statutes the interest on the Bonds is exempt from New York State and New York City personal income taxes. Other than such record of proceedings, we have not been requested to examine or review and have not examined or reviewed the accuracy or sufficiency of the Official Statement, or any additional proceedings, reports, correspondence, financial statements or other documents, containing financial or other information relative to the Town which have been or may hereafter be furnished or disclosed to purchasers of said Bonds, and we express no opinion with respect to any such financial or other information or the accuracy or sufficiency thereof. We have examined the executed first numbered Bond of said issue and, in our opinion, the form of said Bond and its execution are regular and proper. Very truly yours, /s/ Hawkins, Delafield & Wood STATEMENT OFINSURANCE MBIA Insurance Corporation (the "Insurer") has issued a policy containing the following provisions, such policy being on file at MBIA Insurance Corporation, Armonk, New York. The Insurer, in consideration of the payment of the premium and subject to the terms of this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations, the full and complete payment required to be made by or on behalf of the Issuer to Cede & Co., as nominee for The Depository Trust Company, New York, New York, or its successor (the "Paying Agent~) of an amount equal to (i) the principal of (either at the stated maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Obligations (as that term is defined below) as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the preceding sentence shall be referred to herein collectively as the "Insured Amounts. H "Obligations" shall mean: $1,900,000 Town of Southold, Suffolk County, New York Open Space Preservation Serial Bonds-1999 Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust Company, N.A., in New York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon presemmem and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the appointmem of the Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such instruments being in a form satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such owners or the Paying Agent payment of the Insured Amounts due on such Obligations, less any amount held by the Paying Agent for the payment of such Insured Amounts and legally available therefor. This policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Obligation. As used herein, the term "owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. The term owner shall not include the Issuer or any party whose agreement with the Issuer constitutes the underlying security for the Obligations. Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Street, Armonk, New York 10504 and such service of process shall be valid and binding. This policy is non-cancellable for any reason. The premium on this policy is not refundable for any reason including the payment prior to maturity of the Obligations. This policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. MBIA INSURANCE CORPORATION ASSIGNMENT FOR VALUE RECEIVED, the Undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE the within Bond and does hereby irrevocably constitute and appoint Attorney to transfer said Bond on the books kept for registration of said Bond, with full power of substitution in the premises. Dated: Signature Guaranteed: Notice: Signature(s) must be acknowledged or proved, or in the alternative, certified as to its genuineness by an officer of a bank or trust company located and authorized to do business in New York State. Notice: The signature to this assignment must cor- respond with the name as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever. 1999 Land Preservation Bond NEW ISSUE - SERIAL BONDS ~ ~ In the oRinion of Hctwkins Delafield & Wood LLP, Bond Counsel to the Town under existine statutes and court decisions and assuming continuing compliance with certain tax certifications described herein ti) interest on [fie Bon,d,s~ is ,ex,,q~luded from erass income for federal income taxpurppsespursuanttoSectionlO3oft~telnternalRevenueCodeof'J~86, qsf~mended(the Code").,and[ii)inFerestonthellonSsisnottreated as a prej,ercnce item in calculating the alternat¢e minimum tax ira. posed on individualf and corporation~ unaer the Code; such interest, Oowever~ is inclu'deain the adjusted current earnings~o,,t ce,r~in corpora/ions for pur£oses o]. calculating the alternato, e mini,mum tax irqp~asea on SUCh corporations. I,~, ad'ditiotl, in tl~e opinion o,l.aooa c,o.u, nsel to the ,Td~,n. u~aer existjn~g statutes, inter,,e, st on the Boo,as is exempt~om personal income taxes of New Yor~ State ana its potiticat suodivisions, inctuding ~ ne City oj ~vew Yortc See Tax Matters herein. The Bonds will NOT be designated by the Town as "qualified tax-exempt obligations"pursuant to the provision of Section 265 of the Code. $14,650,000 TOWN OF SOUTHOLD SUFFOLK COUNTY, NEW YORK (the "Town") Dated: April 15, 2007 PUBLIC IMPROVEMENT SERIAL BONDS - 2007 [BOOK-ENTRY-ONLY BONDS] Principal Due: April 15, 2008-2030, inclusive Interest Due: October 15, 2007 and semi-annually thereafter BOND MATURITY SCHEDULE Amount Maturity Rate Yield Amount Maturity Rate Yield Amount Maturity Rate Yield $700,000 2008 4.00% 725,000 2009 4-~ 575~000 2010 4-~ 575,000 2011 4.25 600,000 2012 4.25 625,000 2013 4.25 625,000 2014 4.25 625}000 2015 4.25 3.42% $625000 2016 3.45 6751000 2017 3.50 6751000 2018 3.52 6751000 2019 3.57 6751000 2020 3.62 6751000 2021 3.70 6751000 2022 3.77 7251000 2023 4.25% 3.82% $ 725,000 2024 4.25% 4.23% 4.25 3.87 725,000 2025 4.25 4.25 4.25 3.95 550,000 2026 4.25 4.26 4.25 4.00 550,000 2027 4.25 4.28 4.25 4.05 550,000 2028 4.25 4.29 4.25 4.10 550,000 2029 4.25 4.30 4.25 4.15 550,000 2030 4.25 4.31 4.25 4.20 *The vayment of the principal of and interest on the Bonds when due will be insured by a financial guaranty insurance policy to be ishued by Ambac Assurance Corporation simultaneously with the delivery of the Bonds. Security andSources ofPqyment: The~ Bonds will constitute !~eneral obligations of the To.wn and will contain a l~ledge of its faith and credit for the punctual payment ot the l>rincipal of and in'[crest on the Bonds, and all the taxable real properly within the Town will be subject to the levy oT ad valorem taxes, without limitation as to rate or mount, for such purpose. Prior Redemption: The Bonds maturing on April 15, 2018 and thereafter are subiect to redemption at the ol~tion of the Town prior to maturity in whole or in part on any date on or after April 15, 2017 in accorflance with the terms descried herein. See "~)ptional Redemption under "The Bonds," herein. Form and Denomination: The Bonds will be issued as registered bonds and, when issued, will be registered in the name of Cede & Co. as nominee of The Deposi,tory Tm~s.t C~omp,any ("D, TC"),, New, ~o,rk, ,New Yo~rk, w.hic.h will .act..as th%S,~e.c~u[~ies Depository for the Bonds. Individual purchases otthe t~onus may De mane only m ooo~-entry form in aenomlnarlons ot*>,uoo or integral multiples thereof. Bondholders will not receive certificates representing their ownership interest in the Bonds purchased. Sec'Book-Entry-Only System" under "The Bonds," herein. Payment: P.ayment of the principal of and interest on the Bonds to the Beneficial Owners of the Bonds will be made by DTC Participanfs and Indirect Participants in accoLdance with s.tan, ding in~stmctions and cus, tqm .a~_. practices, ,,as i..s now the .c~s~ wi. th municlp, al securities held for the accounts oI customers in oearer iorm or reglstereu in street name. ~'ayment Will De tne responsibility of the DTC Particip. ant or Indirect Participant and not of DTC or fhe Town, subject to any statutory and regulatory requirements as may be in effect t'rom time to time. See "Book-Entry-Only System" under "The Bonds," herein. · Hawkins De, lafield & W~ood LLP~ .has ngt participated in th,e, preparatio, n of thi~.Of, ficial Statement, nor.verifi.e.d the accuracy, completeness or xmmess otthe information containea nere~n, and, accormngly, expresses no oplmon w~tia respect thereto. The Bonds are offered subject to the final approvi.ng op..inion of H~a~. kins Delafield & Wood LLP, New York, New York, Bond Counsel, and certain o-ther con~tions. It is expected that deliverl, of the Bonds tn book-entry form will be made through the facilities of DTC on or about Apri119, 2007 in New York, New York. This revised cover, dated/kpril 10, 2907, supplements.the. O~fficia! Statem. ent, o~f the To,wn~ ~at.e4 March 27~ .2007, relating to the obligations described therein and herein including certain lnionnat~on omltteu from SUCh tJmclal Statement In accora.anc, e with Securities and Exchange Commission ~Rul.e 15 c2.- 12 [tl3e ".Rule"), and sh.all constitute the Tow.n's final Officla. l S,~me.nt~wi.thl,n, the meanim, of the Rule. Other than as set torth on t,h, is revisecl cover page, the table of contents the section entitleu t~ona t~atlng and the addition of"Av~endix C - The Bond Insurer. there have been no other revisions to the ~fficial Statement. ,F, ora d. escription of the Town's a reem[ht to provide continuing disclosure as described in the Rule, see "Disclosure Undertaking bereln. g ROOSEVELT & CROSS, INC. AND ASSOCIATES TOWN OF SOUTHOLD SUFFOLK COUNTY, NEW YORK ,Town Hall 53095 Main Road Southold, NY 11971 Telephone: (631) 765-4333 Fax: (631) 765-1366 TOWN BOARD Scott A. Russell, Supervisor William P. Edwards Louisa P. Evans Albert J. Krupski, Jr. Daniel C. Ross Thomas H. Wickham Elizabeth A. Neville, Town Clerk Peter W. Harris, Superintendent of Highways John A. Cushman Il, Town Comptroller Patricia A. Fianegan, Esq., Town Attorney George Sullivan, Receiver of Taxes BOND COUNSEL Hawkins Delafield & Wood LLP New York, New York FINANCIAL ADVISOR MUNISTAT SERVICES, INC. Municipal Finance Advisory Service 12 Roosevelt Avenue Port Jefferson Station, N.Y. 11776 (631) 331-8888 E-mail: info~munistat.com Website: http://www.munistat.com No dealer, broker, salesman or other person has been authorized by the Town to give any information or to make any representations, other than those contained in this Official Statement and if given or made, such other information or representations must not be relied upon as having been authorized by the Town. This Official Statement does not constitute en offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jarisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained bythe Town fi.om sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made~ereunder shall, under any circumstances, crretta e any implication that there has been no change in the affairs of the Town since the date hereof. TABLE OF CONTENTS Page THE BONDS ............................................................................... 1 Description of the Bonds .................................................................. 1 Optional Redemption ..................................................................... Book-entry-only System .................................................................. 1 Authorization and Purpose ................................................................. 3 Secari.t~ and Source of Payment ............................................................ 3 Remedies Upon Default ..................... ' .............................................. 3 THE TOWN ............................................................................... 4 General Information ...................................................................... 4 Government ............................................................................ 4 Employees ............................................................................. 5 ECONOMIC AND DEMOGRAPHIC INFORMATION ........................................... 5 Population Characteristics ................................................................. 5 Median Income of Families ................................................................ 5 Unemployment Rate Statistics .............................................................. 6 Selected Listing of Larger Employers ........................................................ 6 INDEBTEDNESS OF THE TOWN ............................................................ 6 Constitutional Requirements ............................................................... 6 Statutory Procedure ...................................................................... 7 Computation of Debt Limit and Calculation of Net Debt Contracting Margin ......................... 8 Trend of Town Indebtedness ............................................................... 8 Details of Short-Term Indebtedness Outstanding ............................................... 9 Debt Service Requirement~ - Outstanding Bonds ............................................... 9 Calculation of Estimated Overlapping and Underlying Indebtedness ................................ 9 Authorized But Unissued Items ............................................................ 10 Capital Program ........................................................................ 10 Landfill Closure and Postclosure Care Costs .................................................. 10 FINANCES OF THE TOWN ................................................................ 11 Financial Statements and Accounting Procedures .............................................. 11 Fund Structure and Accounts ......................................................... 11 Basis of Accounting ................................................................ 11 Invesanent Policy ...................................................................... 11 Budgeta~ Procedures ................................................................... 12 Financial Operations .................................................................... 12 Revenues ............................................................................. 12 Reat Property Taxes ................................................................ 12 State Aid ......................................................................... 12 Expenditures ......................................................................... . 13 Pension Systems ................................................................. 13 ContributlunS to the Retirement Systems ............................................... 13 Other Post Employment Benefits ........................................................... 14 REAL PROPERTY TAX INFORMATION .................................................... 14 Real Property Taxes ..................................................................... 14 Tax Levy and Collection Record ........................................................... 15 Tax Collection Procedure ................................................................ 15 Tax Rates ............................................................................. 15 Large Taxable Properties ................................................................. 15 LITIGATION ............................................................................. 16 BONDHOLDER RISKS AND MARKET FACTORS AFFECTING FINANCINGS OF THE STATE AND MUNICIPALITIES OF THE STATE ...................................... 16 TABLE OF CONTENTS (Continued) Page TAX MATTERS ...................... Opinion of Bond Counsel .............................. 17 17 Certain Ongoing Federal Tax Requiremants and Covenants i iiiiiiiii~iiii~iiii~iiiiiiiiiiiiiiiii 17 Certain Collateral Federal Tax Consequences .......... 17 Original Issue Discount Bond Premium .......... ii .................................. 17 Backup Withholding ......... iiiii ............................ 18 Leg slation ................................................ 1818 DOCUMENTS ACCOMPANYING DELIVERY OF THE BONDS ................................. 18 Absence of Litigation .................................................................... 18 Legal Matters .......................................................................... 19 Closing Certificates ...... . 19 DISCLOSURE UNDERTAKING ............................................................. 19 BOND RATING ........................................................................... 20 FINANCIAL ADVISOR .................................................................... 20 ADDITIONAL INFORMATION ............................................................. 20 APPENDIX A: Financial Information APPENDIX B: Audited Financial Statements For the Fiscal Year Ended December 31, 2005 APPENDIX C: Insurance on the Bonds ii OFFICIAL STATEMENT $14,650,000 TOWN OF SOUTHOLD SUFFOLK COUNTY, NEW YORK PUBLIC IMPROVEMENT SERIAL BONDS - 2007 [BOOK-ENTRY-ONLY BONDS] This Official Statement presents certain information relating to the Town of Southold, in the County of Suffolk, in the State of New York(the "Town," "County" and "State?' respectively) in connection with the sale of $14,650,000 Public Improvement Serial Bonds - 2007 (the "Bonds"). Allquotations from and summaries and explanations of provisions of the Constitution and laws of the State and acts andproceedings of the Town contained herein do not purport to be complete and are qualified in their entirety by reference to the official compilations thereof and all references to the Bonds and the proceedings of the Town relating thereto are qualified in their entirety by reference to the definitive form of the Bonds and such proceedings. THE BONDS Description of the Bonds The Bonds will be dated April 15, 2007 and will mature on April 15, in each of the years 2008 to 2030, inclusive, in the principal amounts as set forth on the cover page hereof. The Bonds will be issued in fully registered form and when issued will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York. DTC will act as Securities Depository for the Bonds. Individual purchases oftheBonds may be made in book-entry form only, in denominations of $5,000 or integral multiples thereof. Purchasers will not receive certificates representing their interest in the Bonds. Interest on the Bonds will be payable October 15, 2007, .al)d semi-annually thereafter on April 15 and October 15, in each year until maturity. Principal and interest will be pa~d by the Town to DTC, which will in turn remit such principal and interest to its Participants, for subsequent distribution to the Beneficial Owners of the Bonds, as described herein. The Bonds may bc transferred in the manner described on the Bonds and as referenced in certain proceedings of thc Town referred to therein. The Record Date of the Bonds will be the last business day of the month preceding each interest payment date. Optional Redemption The Bonds maturing on or before April 15, 2017 will not be subject to redemption prior to maturity. The Bonds maturing on or after April 15, 2018 wffi be subject to redemption prior to maturity, at the option of the Town, on April 15, 2017 and thereafter on any date, in whole or in part, and if in part, in any order of their maturity and in any amount within a maturity (selected by lot within a maturity), at par, plus accrued interest to the date of redemption. The Bonds shall be redeemable prior to maturity upon thegiving of notice which identifies the Bonds to be redeemed, by mailing such notice to the registered holders thereof at their respective addresses as shown upon the registration books of the Fiscal Agent at least 30 daysprior to the date set for any such redemption. If notice of redemption shall have been given as aforesaid, the Bonds so called for redemption shall become due and payable at the applicable redemption price on the redemption date designated in such notice, and interest on such Bonds shall cease to accrue from and a~er such redemption date. Book-entry-only System DTC will act as securities depository for the Bonds (the Bonds ). The Bonds will bc issued as fully- registered Bonds registered in the name of Cede & Co. (DTC's partnershipnominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York BankingLaw a"bankingorganizatlon"w~th~nthemeaningoftheNewYorkBankinl~Law,, . ' ' ' amemberoftheFederal Reserve System, a clearing corporation" w~thm the meaning of the New York Uniform Commerctal Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and prowdes asset servicing for over 2 million issues of U.S. and non-U.S, equity issues, corporate and municipal debt issues, and moneymarket instrumants from over 85 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securittes transactions in de. posited securities, through electronic computerized book-entry transfers and pledges between Direct Participants-accounts. This eliminates the need for physical movement of securities certitmates. Direct Participants include both U.S. and non-U.S, securities brokers and dealers banks trust companies, clearing corporations, andcertain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S, securities brokers and dealers, banks, trust companies, and clearing corpo[,a, tions that clear through or maintain a custodial relationship ~ith 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 www.dtcc.com. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner")is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation fi.om DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsecluent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the 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 ~overned by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from t~me to time. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 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 ,d_etail information from the Town, 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 customa~, practices, as is the case with bonds 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 nor its nominee, or the Town, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Town, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Benefictal Owners will be the responsibility of Direct and Incli~ct Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Town. Under such circumstances, in the event that a successor depository is not ol0tained, Bond certificates are required to be printed and delivered. The Town may decide to discontinue use of the sy. stem of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. The information in this section concerning DTC and DTC's book-en..tyy system has been obtained from sources that the Town believes to be reliable, but the Town takes no responsibihty Ior the accuracy thereof. 2 THE TOWN WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO PARTICIPANTS, TO INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITH RESPECT TO(I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (II) THE PAYMENTS BY DTC OR ANY PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OF, OR PREM1UlVl, IP ANY, OR INTEREST ON THE BONDS; (III) ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO BONDHOLDERS; (IV) THE SELECTION BY DTC OR ANY PARTICIPANT OR INDIRECT PARTICIPANT OF ANY PERSON TORECEIVE PAYMENT IN THE EVENT OF A PART/AL REDEMPTION OF THE BONDS; OR (V) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDOWNER. Source: The Depository Trust Company Authorization and Purpose The Bonds are being issued pursuant to the Constitution and statutes of the State of New York, including among others, the Town Law and the Local Finance Law, and various bond resolutions duly adopted by the Town Boardon their respective dates, authorizing the issuance of serial bonds for various capital projects of the Town. Such projects, and their respective amounts of Bonds to be issued for each, are as follows: Date of Date Voter Amount to Authorized Approval Purpose 08-26-03 11-04-03 08-28-01 11-06-01 08°23-99 11-02-99 09-01-98 11-03-98 03-13-01 & 11-19-02 N.A. 09-07-04 N.A. 11 - 16-04 N.A. 02-27-07 N.A. 02-27-07 N.A. be Issued Open Space Preservation ........................... $ 4,000,000 Open Space Preservation ........................... 2,000,000 Open Space Preservation 2,000,000 Open Space Preservation 1,987,900 Solid Waste Management District - Land Acquisition .... 1,200,000 Payment of Settled Claim .......................... 315,000 Solid Waste Management District - Transfer Station ..... 3,000,000 Acquisition of Excavator ........................... 95,000 Acquisition of Tractor-Mower ....................... 52,100 Total ................................. $14,650,000 A portion of the proceeds of the Bonds, together with available funds in the amount of $1,895,000, will be used to redeem outstanding bond anticipation notes in the ~anount of $6,410,000; the balance of the proceeds of the Bonds will provide original funds for the above referenced projects. For further information regardingbond authorizations of the Town for capital purposes and other matters relating thereto see "Indebtedness of the Town". Security and Source of Payment Each Bond when duly issued and paid for will constitute a contract between the Town and the holder thereof. The Bonds will be general obligations of the Town and will contain a pledge of the faith and credit of the Town for the payment of t[ie principal thereof a~.d t. he .interest thereon. For the payme.n.t of .su. ch p,rincipal a~.d interest, the Town has the power and statutory authorization to levy ad valorem taxes on all taxable rea~ property tn the Town without limitation as to rate or amount. Under the Constitution of the State, the Town is re~luired to pledge its faith and credit for the payment of the principal of and interest on the Bonds, and the State is specffically precluded from restricting the power of the Town to levy taxes on real estate therefor. Remedies Upon Default Under current law, provision is made for contract creditors (including the Bondholders) of the Town to enforce payments upon such contracts, if necessary, through court action, although the present statute limits interest on the amount adjudged due to creditors to nine per centum per annum .fi'om t,h,e, date. odue to ~.e date of. payman, t; As a general rule, property and funds of a municipal corporation serving the puouc we~xare ana mterest have not oeen judicially subjected to execution or attachment to satisfy a judgment, although judicial mandates to officials to appropriate and pay judgments out of current funds or the proceeds of a tax levy have been issued. Remedies for enforcement of payment are not expressly included in the Town's contract with holders of its b.o.nds a0. d .n.o.tes, although any permanent repeal by statute or constithtional amendment of a Bondholder's remedial right to judmlal enforcement of the contract should, in the opinion of Bond Counsel, be held unconstitutional. The State has consented that any municipality in the State may file a petition with any United States district court or court of bankruptcy under any provision of the laws of the United States, now or hereatter in effect for the composition or adjustment of municipal indebtedness. Subject to such consent, under the United States Constitution, Congress has jurisdiction over such matters and has enacted amendments to the existing federal bankruptcy statute, generally to the effect and with the purpose of affording municipal corporations, under certain circumstances, with easier access to judicially approved adjustment of debts, including judicial control over identifiable and unidentifiable creditors. In recent times, certain events and legislation affecting remedies on default have resulted in litigation While courts of final jurisdiction have upheld and sustained the rights of bondholders, such courts might hold that future events including financial crises as they may occur in the State and in municipalities of the State require the exercise by the State of its emergency police powers to assure the continuation of essential services. No principal or interest payments on Town indebtedness are past due. The Town has never defaulted in the payment of the principal of and interest on any indebtedness. THE TOWN There follows in this Statement a brie£description of the Town, together with certain information concerning its economy and governmental organization its indebtedness, current major revenue sources and expenditures and general andspecific funds. General Information The Town, with a land area of 54.5 square miles, is located in eastern Suffolk County on the north fork of Long Island. Settlement took place in 1640. The Village of Greenport is located wholly within the Town. The Town also includes the area of Fishers Island which is located approximately twelve miles east of the mainland. Fishers Island is accessible only by water or air with ferry service operating between the Island and New London, Connecticut. ~ The Town is primarily a rural resort area with substantial shopping faeilitiesavailabte at Greenport, at various shopping centers within the Town, and at Riverheadjust to the west: Sortie commercial services are available within the Town in the hamlets of Southold, Cutchogue and Mattituck. · Agriculture has been a major industry in the Town since its origins. In recent years, farm crops are gradually ev.olvmg[ .fi'om basic production to nursery crops including shrubs, sod, potted plants and other ornamentals. A substantial portion of these products are shipped by ferry across Long Island Sound for distribution throughout New England. A number of vineyards have been established and wine-making is an important industry. Fishing and fish processing are now growing industries due to improved transportation facilities. The Town is also a major summer resort area, utilizing bays, inlets and Long Islandand Block Island Sounds. The main highways in the Town are New York State Route 25 and North Road. Rail transportation is provided by the Long Island Rail Road with stations at Mattituck, Southold and Greenport. Ferry service is also available between Orient Point, east of Greenport, and New London, Connecticut as well as from Greenport to She lter Island. Electric service is provided by the Long Island Power Authority; gas service isprovided by Keyspan Energy Corporation. Fire protection is the responsibility of volunteer fire and fire protection districts. The Town provides its own police protection. In the Village of Greenport, electric service and fire protection are provided by the Village. Government Six independently governed school districts are located wholly or partially within the Town, which rely on their own taxing powers granted by the State to raise revenues. The school districts use the Town's assessment roll as their basis for taxation of property located within the Town. Subject to the provisions of the State Constitution, the Town operates pursuant to the Town Law, the General Municipal Law, the Local Finance Law, other laws generally applicable to the Town, and any special laws generally applicable to the Town· Under such laws, there is no authority for the Town to have a charter, but pursuant to the Town Law and other laws generally applicable to home rule, the Town may from time to time adopt local laws which do not conflict with existing laws as enacted by the State. The legislative power of the Town is vested in the Town Board, which consists of five members, elected for a term of fo .ur years, and the Supervisor, who is the chief executive officer oftbe Town, elected for a term of two y,e~s; effective with the term c.o .mmencing January 1, 2008, the term of office of the Supervisor will be four years. such terms are staggerea such mat two or three councilmen are elected every two years. All the Town Board members are elected at large and there is no limitation to the number of terms each may serve. Employees The Town provides services through approximately 217 full-time and 59 part-time employees, some of whom are represented by organized labor. The following table presents the number of employees' represented by organized labor, name of union and contract expiration dates. Approximate Date Contract Name of Union Membership Expires Civil Service Employees Assoc ........................ 163 12-31-07 Police Benevolent Assoc ............................ 48 12-31-09 ECONOMIC AND DEMOGRAPHIC INFORMATION Population Characteristics Thc Town has had a population trend, as compared to the County and the State, as indicated below: Year Town of Suffolk New York Southold CounW State 1970 ..................................... 16,804 1980 ..................................... 19,172 1990 ..................................... 19,836 2000 ..................................... 20,599 2005 ..................................... 23,344 1,127,030 18,241,391 1,284,231 17,557,288 1,321,977 17,990,455 1,419,369 18,976,457 1,483,396 19,254,630 U.S. Bureau of the Census, Long Island Power Authority. Median Income of Families 1980 1990 Town $21,013 $43,082 County 24,194 53,247 State 20,180 39,741 2000 $61,108 72, It2 51,691 Source: U.S. Department of Commerce, Bureau of the Census. Per Capita Money Income 1980 1990 .2000 Town $8,258 $19,037 $ 27,619 County 7,576 18,481 26,577 StYe 7,496 16,501 23,389 Source: U.S. Department of Commerce, Bureau of the Census. 5 Unemployment Rate Statistics Unemployment statistics are not available for the Town as such. The smallest area for which such statistics are available (which includes the Town) is the County of Suffolk. The information set forth below with respect to such County is included for information purposes only. It should not be implied from the inclusion of such data in this Statement that the Town is necessarily representative of the County or vice versa. Annual Averages: Suffolk New York County State 2002 ............................ 2003 ............................ 2004 ............................. 2005 ............................. 2006 ............................. 4.3% 5.9% 4.3 6.2 4.5 5.9 4.2 5.0 3.9 4.5 Source: Department of Labor, State of New York Selected Listing of Larger Employers Name Eastern Long Island Hospital ....................... Mattituck-Cutchogue UFSD ....................... Plum Island ADC ................................ Town of Southold ............................... Southold UFSD ................................. San Simeon by the Sound ......................... Peconie Landing ................................. Greenport UFSD ................................ Approx. No. Type of Employees Hospital 376 PuNic School 330 U.S. Govt. Facility 290 Local Government 276 Public School 194 Nursing Home 165 Life Care Community 160 Public School 137 INDEBTEDNESS OF THE TOWN Constitutional Requirements The New York State Constitution limits the power of the Town (and other municipalities and school districts of the State) to issue obligations and to contract indebtedness. Such constitutional limitations include the following, in summary form, as generally applicable to the Town and the Bonds: Purpose and Pledge. The Town shall not give or loan any money or~roperty to or in aid of any individual, or private corporation or private undertaking or give or loan its credit to or in md of any of the foregoing or any public corporation. The Town may contract indebtedness only for a Town purpose and shall pledge its faith and credit for the payment of principal of and interest thereon. Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes or to be paid within three fiscal year periods, indebtedness shall be paid in annual installments commencing no later than two years after the date such indebtedness shall have been contracted and ending no later than the expiration of the period of probable usefulness of the object or purpose determined by statute; no installment may be more than fifty per centam in excess of the smallest prior installment, unless the Town has authorized the issuance of indebtedness having substantially level or declining annual debt service. The Town is required to provide an annual appropriation for the payment of interest due during the year on its indebtedness and for the amounts required in such year for payment of principal on its serial bonds, bond anticipation notes and capital notes. Debt Limit. The Town has the power to contract indebtedness for any Town purpose so long as the principal amount thereof shall not exceed sevenper centum of the average full valuation of taxable real estate of the Town and subject to certain enumerated exclusions and deductions such as water and certain sewer facilities and cash or appropriations for current debt service. The Constitutional method for determining full valuation consists of dividing the total assessed valuation of taxable real estate for a specified assessment roll by the final equalization ratio established for such assessment roll by the State Board of Real Property Services (the "State Board"). The State Legislature is required to prescribe the manner by which such ratio shall be determined. Average fullvaluation is determined by taking the sum of the full valuations of such last completed assessment roll and the four preceding assessment rolls anddividing such sum by five. 6 There is no constitutional limitation on the amount that may be raised by the Town by tax on real estate in any fiscal year to pay interest and principal on all indebtedness. General. The Town is further subject to constitutional limitation by the general constitutionally imposed duty of the State Legislature to restrict the power of taxation, assessment, bo. rrowin,g money, contracting indeb~edn, ess andloaning the credit of the Town so as to prevent abuses in taxation anuassessments ann m contra, ct. lnl~ n,l,~l~t~lne~s, however as has been noted under "Security and Source of Payment" the State Legislature is proh~lblt?a ~'~"s'l~e~cific'constituti'onal provision from restricting the power of the Town to levy taxes on real estate t0r the payment of interest on or principal of indebtedness theretofore contracted. Statutory Procedure In general, the State Legislature has authorized the power and procedure for the Town to borrow and incur indebtedness by the enactment of the Local Finance Law subject, of course, to the constitutional provisions set forth above. The power to spend money, however, generally derives from other law, including the Town Law and General Municipal Law of the State. Pursuant to the Local Finance Law, the Town authorizes the incurrence of indebtedness, including bonds and bond anticipation notes issued in anticipation of such bonds, by the adoption ora resolution, approved by at least two- thirds of the members of the Town Board, the finance board of the Town. Certain of such resolutions may be subject to permissive referendum, or may be submitted to the Town voters at the discretion of the Town Board; In this latter scenario, only a three-fifths vote of the Town Board is required. The Local Finance Law also provides a twenty-day statute of limitations after publication of a bond resolution, which in effect, estops thereafter legal challenges to the validity of obligations authorized by such bond resolution except for alleged constitutional violations. The Town has complied with such procedure with respect to the Bonds. Each bond resolution usually authorizes the construction, acquisition or installation of the object or pu~ose, to be financed, sets forth the plan of financing and specifies the maximum maturity of the bonds subject to the ~egal (Constitution, Local FinanceLaw and case law) restrictions relating to the period o]?probable usefulness with respect thereto. Each bond resolution also authorizes the issuance of bond anticipation notesprior t.o th, e sale o.f serial bonds. Statutory law in New York permits notes to be renewed each year, provided annual ?rinclpal reauctmns are mane and provided that such renewals generally do not extend five years beyond the original date of borrowing. However, notes issued in anticipation of the sale of serial bonds for assessable improvements are not subject to such five ~,ear · ' ma be renewed sub'ect to annual principal reductions for the entire period of probable usefulness o~the humrl~o~dforYwthich such no~Jes were origihally issued. (See "Payment and Maturity" under "Constitutional ~qrPutiremants," and "Details of Short-Term Indebtedness Outstanding.") In general, the Local Finance Law contains similar provisions providing the Town with power to issue general obligation revenue and tax anticipation notes and general obligation budget and capital notes. The following tables set forth the computation of debt limit and the calculation of total net indebtedness of the Town in accortIance with the constitutional requirements hereinabove described. The following pages set forth certain details with respect to the indebtedness of the Town. 7 Computation of Debt Limit and Calculation of Net Debt Contracting Margin (As of March 27, 2007) Fiscal Year State Ending Assessed Equalization Full December 31: Valuation Rate Valuation. 2003 ............................... $ 98,928,528 2004 ............................... 101,872,561 2005 ............................... 104,228,885 2006 ............................... 105,502,965 2007 ............................... 106,950,027 1.71% $ 5,785,294,035 1.49 6,837,084,630 1.25 8,338,310,800 1.13 9,336,545,575 1.04 10,283,656~442 Total Five Year Full Valuation ...................... $40,580,891,482 Average Five Year Full Valuation ......... ' .............. 8,116,178,296 Debt Limit - 7% of Average Full Valuation .. . i i i ' i i i ..... i ...... 568,132,480 Inclusions: Outstanding Bonds: General Purposes $10,775,000 Other ..................................................... Sub-Total ........................................................... 10,775,000 Bond Anticipation Notes .................................................... 8,244,000 Total Inclusions ........................................................ 19,019,000 Exclusions: Cash on Hand for Debt (Grant Proceeds) ..................................... 1,504,689 Appropriations ......................................................... 1,003,311 Total Exclusions ........................................................ $ 2,508,000 Total Net Indebtedness Before Issuing the Bonds ................................. 15,511,000 The Bonds Less: BANs to be l~i~l'~r~ i>~h~l.I~r'o.c~l~ · i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i. i i i i i i 14,650,000 4,515,000 Net Effect of Issuing Bonds . · .. ' 10,135,000 Total Net Indebtedness After Issuing the Bonds .................................. 25,646,000 Net Debt Contracting Margin After Issuing the Bonds ............................. $542,486,480 Percent of Debt Limit Exhausted ............................................... 4.51% Trend of Town Indebtedness The following table represents the outstanding indebtedness of the Town at the end of the last five preceding fiscal years. Fiscal Year Ending December 31: 2002 2003 2004 2005 2006 Debt Outstanding End of Year: Bonds .................. $7,615,000 Bond Anticipation Notes ... 11,020,709 Total Outstanding Debt ........ $18,635,709 $6,950,000 $6,515,000 14,768,302 12,625,600 $12,299,098 $11,349,098 11,720,000 8,244,000 $21,718,302 $19,140,600 $24,019,098 $19,593,098 Bond Anticipation Notes Maturity 04-20-07 06-08-07 08-24-07 09-07-07 Details of Short-Term Indebtedness Outstanding Purpose Various Purposes .......................................... Fishers Island Fe _rry District ..................... Fishers Island Reftise and Garbage District ............. Various Purposes .......................................... Total ................................................ a. To be funded from the proceeds of the Bonds and from available funds of the Town. Debt Service Requirements - Outstanding Bonds Fiscal Year Ending Decem§er 31: Principal Interest 2007 ....................... $ 979,098 2008 ....................... 995,000 2009 ....................... 1,025,000 2010 ....................... 1,000,000 2011 ....................... 1,025,000 2012 ....................... 940,000 2013 ....................... 800,000 2014 ....................... 815,000 2015 ....................... 810,000 2016 ....................... 735,000 2017 ....................... 745,000 2018 ....................... 760,000 2019 ....................... 320,000 2020 ....................... 200,000 2021 ....................... 200,000 Totals ................... $11,349,098 Amount $6,619,000a 1,625,000 560,000 1,110,000 $ 8,244,000 Total Does not included refunded bonds. $376,468 $1,355,566 345,309 1,340,309 312,348 1,337,348 277,957 1,277,957 242,982 1,267,982 209,413 1,149,413 180,382 980,382 153,083 968,083 124,535 934,535 98,164 833,164 72,318 817,318 45,712 805,712 26,020 346,020 15,600 215,600 8,000 208,000 $2,488,291 $13,837,389 Calculation of Estimated Overlapping and Underlying Indebtedness Applicable Applicable Overlapping Date of Percentage Total Net Unitsa Report Applicable Indebtedness Indebtedness County of Suffolk ..................... 12-11-06 3.71% Village of Greenport ................... 03-10-06 100.00 School Districts: Fishers Island ............. 06-30-06 100.00 455,000 Greenport ................. 06-30-06 100.00 270,000 Mattituck-Cutchogue ....... 06-30-06 98.49 29,113,644 New Suffolk Common ...... 06-30-06 100.00 Oyster Ponds .............. 06-30-06 100.00 150,000 Southold ................. 06-30-06 100.00 10,795,000 Fire Districts: Cutchogue ................. 12-31-05 100.00 East Marion ............... 12-31-03 100.00 410,683 Fishers Island .............. 12-31-05 100.00 Mattituck ................. 12-31-05 100.00 Orient .................... 12-31-05 100.00 25,000 Southold .................. 12-31-05 100.00 1,600,000 $36,425,459 13,583,997 $30,380,486 12,564,797 455,000 270,000 25,328,870 150,000 10,795,000 410,683 25,000 1,600,000 $ 97.693,283 $ 86,204,151 Does not include refunded bonds. Sources: Annual Financial Reports on file with the Office of the State Comptroller, or more recently published Official Statements. Authorized But Unissued Items The following Bonds are authorized but unissued: Date Authorized Purpose Amount 09-01-98 Acquisition of Rights in Land-Open Space Preservation ............... $ 2,000,000a 08-23-99 Acquisition of Rights in Land-Open Space Preservation .............. 2,000,000a 08-28-01 Acquisition of Rights in Land-Open Space Preservation .............. 2,000,000a 02-25-03 Mattituck Inlet Shore Erosion Study .............................. 82,750 08-26-03 Acquisition of Rights in Land-Open Space Preservation ............... 4,000,000a 08-16-05 Construction of New Town Animal Shelter ......................... 2,600,000 11-21-06 Improvements to Peconic Recreation Center ........................ 200,000 02-27-07 Acquisition of Air Vacuum Drain Cleaner ......................... 278,000 02-27-07 Acquisition of Rights in Land-Open Space Preservation ............... 22,500,000 02-27-07 Acquisition of Excavator ....................................... 100,00a 02-27-07 Acquisition of Tractor-Mower ................................... 60,000a Toml ................................. $35.820.750 a. To be funded in whole or in part from the proceeds of the Bonds. Capital Program The Town annually adopts a Capital Budget. Projects may be funded by State and Federal aid, reserves, proceeds of obligations, property taxes or a combination thereof. A summary of the Capital Budget for 2007 is set forth below: Department 2007 General Town .................................... $3,327,428 Hi~. ,,w..ay Dep~ .................................... 788,000 Solid waste tJistrict ............................... 465,000 Wastewater Disposal District ....................... Total ........................................... $ 4,580,428 Sources Appropriations ................................... Grants ....................................... Town Debt ................................. Total ........................................... $ 313,261 684,167 3,583,000 $ 4,580,428 Landfill Closure and Postclosure Care Costs The Town owns a landfill on a site in the unincorporated area of Cutchogue, commonly known as the Cutchogue Landfill. The Town ceased accepting waste at its Cutchogue Landfill as of October 8, 1993. P!acement of the final cover, referred to as capping, on the landfill was completed in November 2003. In addition to placement of the final cover on the landfill, state and federal regulations presently require the Town to perform certain maintenance and monitoring functions at the site for up to thirt~ years. The Town has and will continue to comply with said requirements. The ongoing post closure costs are estimated to be between $20,000 and $25,000 per year from 2007 through 2009. The Town paid $23,920 for such costs in 2006 and will continue to pay these costs in the future. Actual costs associate~with the capping totaled $7,681,720. Financing for closure activities has been provided inpart through a grant trom the New York State Department of Environmental Conservation in the amount of $2,000,000. The balance was provided through a State subsidized loan received in July, 2004 from the New York State Environmental Facilities Corporation. Costs associated with postclosure care will be covered by charges to future users of the collection facility and site and future tax revenue. 10 FINANCES OF THE TOWN Financial Statements and Accounting Procedures Thc Town maintains its financial records in accordance with the Uniform System of Accounts for Towns prescribed by the State Comptroller. The financial records of the Town are audited by independent accountants. The last such audit made availal01e for public inspection covers the fiscal year ended December 31 2005. In addition, the financial affairs of the Town are subject to periodic compliance review by the Office of the State Comptroller to ascertain whether the Town has complied with the requirements of various State and Federal statutes. In June, 1999, the Governmental Accounting Standards Board ("GASB") issued Statement 34, "Basic Financial Statements and Mana~ement's Discussions and Analysis for State and Local Governments". This Statement established new financial reporting requirements for state and local governments throughout the United States. It will required new information and restructuring of much of the information that governments have presented in the past Comparability with reports issued in all prior years will be affected. GASB required the Town to implement th~s standardfor the fiscal year ending December 31, 2003 and the Town has complied with such requirements. Fund Structure and~4ccounts The Town utilizes fund accounting to record and report its various service activities. A fund represents bo. th, a legal and an accounting entity which segregates the transactions of specific programs in accordance with special regulations, restrictions or limitations. There are three basic fund types: (1) governmental funds that are used to account for basic services and capital projects; (2) proprietary fund-s that account for operations of a commercial nature; and, (3) fiduciary funds that account for assets held in a wastee capacity. Account groups, which do not represent funds, are used to record fixed assets and long-term obligations that are not accounted for in a specific fund. The Town presently maintains the following governmental funds: General Fund, Highway Fu, nd~,and Special Districts Funds, and the Capital Projects Fund. Fiduciary funds consist ora Trust and Agency Funo. ~nere are no proprietary funds. Account groups are maintained for fixed assets and long-term debt. Basis of Accounting The Town's governmental funds are accounted for on a modified accrual basis of accounting. Under the modified accrual basis, revenues are recognized when they become susceptible to accrual - that is, when they become "measurable" and "available" to finance expenditures to the current period. Revenues are susceptible to accrual include real property taxes, intergovernmental revenues (State and Federal aid) and operating transfers. Expenditures are generally recognized under the modified accrual basis of accounting, that is when the related fun~t liability is incurred. An exception to this general rule is unmatured interest on general long-term debt which is recognized when due. Investment Policy Pursuant to State law, including Sections 10 and 11 of the General Municipal Law (the "GML"), the Town is generally permitted to deposit moneys in banks or trust companies Io.c~ted and~a, uthor, ize. d to do bus~'.m, ess in the~ State. All such deposits, including special time deposit accounts and certltlcates or aepos~t, m excess oime amount insured under the Federal Deposit~[nsurance Act, are required to be secured in accordance with the provisions of and subject to the limitations of Section 10 of the GML. The Town may also temporarily invest moneys in: (1) obligations of the United States of America; (2) obligations guaranteed by agencies oftbe United States of America where the payment of principal and interest are guaranteed Gy the UnitedStates of America; (3) obligations of the State of New¥ork; (4) with the approval of the New York State Comptroller, in tax anticipation notes or revenue anticipation notes issued by any municipality, school district, or district corporation, other than those notes issued by the Town, itself; (5) certificates of participation issued in connection with installment purchase agreements entered into by political sundivisions of the State pursuant to Section 109-b(10) of tbe GML; (6)obligatious of a New Yor~k pu, blic?,.en?fit c~orporation .which ~e, madelawful investments for muniei, palities pursuant to the enabling statute oisucn pumlc nenei.~t co,~ora.tlon; %r t?) in the case of moneys held in certain reserve funds established by the Town pursuant to law, In omlgatlons oIthe Town. All of the foregoing investments are required to be payable or redeemable at the option of the owner within such times as the proceeds will be needed to meet expenditures for purposes for which the moneys w~re provided and, in the case of obligations purchased with the proceeds of bonds or notes, shall be payable or redeemable in any event, at the option of the owner, within two years oftbe date of purchase. Unless registered or inscribed in the name 11 of the Town, such instruments and investments must be purchased through, delivered to and held in custody ufa bank or trust company in the State pursuant to a written custodial agreement as provided by Section 10 of the GML. The Town Board has adopted an investment policy and such policy conforms with applicable laws of the State governing the deposit and investment of public moneys. All deposits and investments oYthe Town are made in accordance with such policy. Budgetary Procedures The head of each administrative unit of the Town is recluired to file detailed estimates of revenues (other than rea. l property taxes) and expenditures for the next fiscal year with the budget officer (Supervisor) on or before August 15m. Estimates for each fire district situated within the Town must also be filed with the budget officer by this date. After reviewing these estimates, the budget officer prepares a tentative budget which includes his recommendations. A budget message explaining the main features of the budget is also prepared at this time. The tentative budget is filed with the Town Clerk not later than the 30th of September. Subsequently, the Town Clerk presents the tentative budget to the Town Board at the regular or special hearing which must be held on or before October 5th. The Town Board reviews the tentative budget and makes such changes as it deems necessary and that are not inconsistent with the provisions of the law. Following this review process, the tentative budget and such modifications, if any, as approved by the Board become the preliminary budget. A public hearing, notice of which must be duly published !n the, To ,wn's, ,o, fficial ¢?wspaper; o.n the prelimin.a~ budget is genera-lly required to be held on the 'thursday immediately TOHowing me genera~ e~ection. At such hearing, any person re.ay express his opinion concerning the preliminary budget; however, there is no requirement orprovlsion that the prehminary budget or any portion thereof ne voted on by members of the public. After the?ublic hearing, the Town Board may furttier change and revise the preliminary budget. The Town Board, by resolution, adopts the preliminary budget as submitted or amended no later ~an ,Novem?.er ,20th, at which, t!me, th.e, preliminary budget becomes the annual budget of the Town for the ensuing nscm year. uuagetary control during me year is the responsibility of the Supervisor who is assisted in this area by the Town Comptroller. However, any changes or modifications to the annual budget including the transfer of appropriations among line items must be approved by resolution of the Town Board. Budget Summaries for the 2006 and 2007 fiscal years may be found in Appendix A. Financial Operations The SUPervisor functions as the chief fiscal officer as provided in Section 2.of the Local Finance Law; in this role~:tl~. S%oervisor is.responsihle-.for the Town's accounting and. financial repurtingm:Mvities. In addition, the S .,u~v~.mor; ~s~.also ,the..Town's bu ~dg~t 9ffi~c~f apd. must ther.ofore prepare th~annun! ;t~ntati~budg~t for submission to me ~own noaru, t-ursuant ~o 8c~'tlon -*u ofthe Local F~nance Law:the Supl~va~or tm~b~n authorized to issue or, r.e,ne.,w ce,rtain specific types ,of n,o~,.s. As re, quired by law~ the Supervisor must execute an authorizing certificate wmcn man t~ecomes a matter oi pumic recoro. The Town Board, as a whole, serves as the finance board of the Town and is responsible for authorizing, by resolution, all material financial transactions such as operating and capital budgets andbonded debt. Town finances are operated primarily through the General and Special Revenue Funds. The General Fund receives most of its revenue from real property tax and State aid. Current operating expenditures are paid from these funds subject to available appropriations. The Town also has refuse, sewer an3 wastewater districts, which are accounted for within separate funds. The primary sources of income for these districts comes from special assessments levied against district propertias at the same time real estate taxes are levied. Capital projects and equipment purchases are accounted for ~n special capital projects funds. The Town observes a calendar year (January 1 through December 31) for operating andreporting purposes. The Town receives most of its revenues from a real property tax on all non-exempt property situated within the Town and from State Aid. A summary of such revenues for the five most recently completed fiscal years may be found in Appendix A. Real Proper~y Taxes See "Real Property Tax Information", herein. State AM The Town is dependent upon financial assistance from the State which comes primarily in the form of a state appropriation for State Aid to municipalities for operating purposes. There is no assurance, however, that the State ap. propriation for State Aid t.o~municipalities wifl continue, either pursuant to existing formulas or in any form whatsoever and, in any event ffappropriated and apportioned to the Town, payment can be made only if such monies are availab e therefore. The State ~s not constitutionally obliged to maintain or continue such aid. See Appendix A. 12 Expenditures ET The. ma[or categor!es .of expenditure for the Town are General Government Support, Public Safety, ran?porta~on,~ono.m~lc a~,d Opportuni~Home a~.d Community Services, CuJture and Recreation, mp~oyee t~enems aha t~ent ~ervlce. A summary et the expenditures for the five most recently completed fiscal years may be found in Appendix A. Pension Systems · Substantially all employees of the Town are members of the New York State and Local Emolovees' _Retirement System ("ERS") orthe New York State and Local Police and Fire Retirement System ("PFRS"J. (l~oth :Systems are referred to together hereinafter as the "Retirement Systems" where appropriate.) The Retirement Systems are cost-sharing multiple public employer retirement systems. The obligation of employers and employees to contribute and the benefits to employees are governed by ~he New York State Retirement System antiSocial Security Law (the "Retirement SystemLaw"). The Retirement Systems offer a wide range of I/lans and benefits which are related to years of service and final average salary, vesting of retirement benefits, death and disability benefits and optional methods of benefit payments. ~.11 benefits generally vest after five years of credited service. The Retirement System Law generally prowdes that all participating employers in each retirement system are jointly and severally liable for any unfunded investments. Such amounts are collected through annual billings to all participatin!~ employers. Generally, all employees, except certain part-time employees,participate in the Retirement Systems. The Retirement Systems are non-contributory with respect to mere§ers hiredprior to July 27, 1976. All e. mployees~w, ho became members on or after July 27, 1976 must contribute 3% of their gross annualsalary towards the cost of their retirement program. Chapter 86 of the Laws of 2000 eliminated the 3% for Tier 3 and Tier 4 members with 10 years of service credit. - Due to unfavorable capital market returns over recent years and negative returns in each of the past three years, the State Comptroller has sent notice to every school district and municipality in New York State that he believes that the retirement contributions will continue to increase in subsequent years. With regard to the Retirement Systems, apension reform bill was signed by the Governor into Law as Chapter 49 of the Laws of 2003. Chapter 49 changed the cycle of billing to matc~ budget cycles of the Town. Under the previous method, the Town was unsure of how much it would have to pay to the system until after its budget was implemented. Under the new system the contribution for a given fiscal year will be based on the value of the pension .fund on Se.prior April 1 instead of the following April 1 so that the Town will be able to more accurately include the cost olthe contrmution into its budget. Chapter 49 requires the Town to make a minimum contribution of 4.5% of pajfrol, l every j~'e, ar, including years in which the investment performance of the fund would make a lower .contrthut~on possmte. F ,On July.2.0, 2,00.4. the New Y,o~rk S~[e Legisl_ature p~ssed a bill amending the General Municipal Law, Local inance ~aw and the ~.erirement anu ~ocim ~ecunty Law. un Jul)_ 30, 2004~ theGovernor signed the new retirement system legislation into Law as Chapter 260 of the Laws of 2004. The bill g~ves the employer the option to move the annual payment date for contributions from December 15t~ to February 1 ~ effective December 15 2004 It increases from five to ten years, the maximum amortization period of the port~-~on ~f employer contributiohs thai exceeds 7°~ of payroll for the_ 2004-2005 fiscal ),ear of the Retirement System (April 1 - Mar6h 31). It also allows employers to issue bonds to hnance their 2005-2006 and 2006-2007 fiscal year contributions in excess of 9.5% and 10.5%, r?~spectively. ,This,amortization may be made with the Retirement System or the Town could issue a maximum of m-year genera~ omigation bonds the interest on which would be set at prevailing bond market rates on the date of sa e and wou d be taxable for federal income tax purposes. For the payment due December 15, 2007, it is estimated that the contribution will be approximately 11.5% of payroll. The Town paid its retirement obligation in full on December 15, 2006 and has included its total obligation for the 2006 fiscal year in its current budget· The Town does not plan to amortize its retirement system obligations. While the Town is aware of the l~otential negative impact on its budget and will take the appropriate stel~s to budget accordingly for the increase, there can be no assurance that its financial position will not be negatively impacted as a result of the potential increase in such contributions. Contributions to the Retirement Systems Fiscal Year Amount Ending of Decem§er 31: Contribution 2002 ....................................... $ 164,287 2003 ....................................... 684,617 2004 ....................................... 1,670,102 2005 ....................................... 2,085,137 2006 ...................................... 1,837,992 2007 (Budget) ................................ 1,827,000 13 Other Post Employment Benefits It should also be noted that the Town provides post-retirement healthcare benefits to various categories of former employees. These costs may be expected to rise substantially in the future. There is now an accounting rule that will require governmental entities, such as the Town, to account for post-retirement healthcare benefits as it accounts for vested pension benefits. GASB Statement No. 45 ("GASB 45") of the Governmental Accounting Standards Board ("GASB"), described below, requires such accounting. Although GASB 45 encourages earlier adoption, implementation is required by the following dates, based on the size of government measuredby annual revenue: Annual Revenue Greater than $100 million Between $10 million and $100 million Less than $10 million Effective for Fiscal Year Ending After: December 15, 2006 December 15, 2007 December 15, 2008 School Districts and Boards of Cooperative Education Services, unlike other municipal units of government in the State, have been prohibited from reducing retiree health benefits or increasing health care contributions received or paid by retirees below the level of benefits or contributions afforded to or rec[u, ired from active employees since the implementation of Chapter 729 of the Laws of 1994. This protection from umlateral reduction ofbanefits has been extended annually andcontinued through May 15, 2006 pursuant to Chapter 16 of the Laws of 2006. Legislative attempts to provide similar protection to retirees of otharlocal units of government in the State have not succ.eeded as of this date. Nevertheless, many such retirees of all varieties of municipal units in the State do presently receive such benefits. GASB 45 and OPEB. OPEB refers to "other post-employment benefits," meaning other than pension benefits, disability benefits and OPEB consist primarily of health care benefits, and may include other benefits such as disability benefits and life insurance. Until now, these benefits have generally been administered on a pay-as-you- go basis and have not been reported as a liability on governmental financial statements. GASB 45 will require municipalities and school districts to account for OPEB liabilities much like they already account for l~easion liabilities, generally adopting the actuarial methodologies used for pensions, with adjustments for the different characteristics of OPEB and ttie fact that most municipalities and school districts have not set aside any funds against this liability. Unlike GASB 27, which covers accounting for pensions, GASB 45 does not require municipalities or school districts to report a net OPEB obligation at the start. Under GASB 45, based on actuarial valuation, an annual required contribution ("ARC") will be determined for each municipality or school district. The ARC is the sum of(a) the normal cost for the year (the p. resent value of future benefits being earned by current employees) plus (b) amortization of the unfunded accrued liabdity (benefits already earned by current and former employees but not .yet provided for), using an amortization period of not more than 30 years. Ifa municipality or school district contrinutes an amount less than the ARC, a net OPEB obligation will result, which is required to be recorded as a liability on its financial statements. GASB 45 does not require that the unfunded liability actually be amortized nor that it be advance funded, only that the municipality or school district account for its unfunded accrued liability and compliance in meeting its ARC. The Town expects to be in compliance with the requirements of GASB 45 by or before the applicable effective date. Actuarial valuation will be required every 2 years for OPEB plans with more than 200 members, every 3 years if there are less than 200 members. REAL PROPERTY TAX INFORMATION Real Property Taxes The Town derives a significant portion of its annual revenue through a direct real property tax. The following table presents the total tax levy, by purpose, with adjustments and collection performance for each of the last five fiscal years. 14 Tax Levy and Collection Record 2003 Total Tax Levy ................ $74,603,829 Amount Collected ............. 72,211,402 Returned to County Amount .................... 2,392.427 Percentage .................. 3.20% Uncollected at End of Year of Levy ................... None Fiscal Year Ending December 31: 2004 2005 2006 2007 $79,909,681 $89,495,573 $89,934,663 $97,216,091 77,595,985 83,356,976 86,628,595 54,175,000a 2,313,696 2,138,597 3,106,068 43,041,091a 2.90% 2.39% 3.45% 44.27%a None None None NA a. As of February 6, 2007 Tax Collection Procedure Property taxes for the Town are collected by the Town tax receiver. Such taxes are due and payable in .equ. al installments on December 1 and May 10, but may be paid without penalty by January 10 and May~31, re.spe, ctlVeloYi~ The penalty added to delinquent taxes is one-twelfth the rate of interest determined by the State Uomm~ssloner o Taxation and Finance. The rate is determined each year by July 15 based on the one-year constant maturity yield index for United States Treasury securities for the quarter-year ending on the immediately preceding June 30. The rate is effective for a twelve month period commencing August I each year and in no event will be less than ten per centum per annum. The Town receives its full levy before the end of its fiscal year. Uncollected amounts are not segregated by the Town tax receiver, and any deficiency in tax collection is the County's liability. Tax Rates (Per $100 Assessed Valuation) Fiscal Year Ending December 31: 2003 2004 2005 2006 2007 General - Townwide ................ $133.38 $136.65 $139.73 $140.37 $151.02 General - Outside Village .. .......... 3.10 4.53 5.43 4.90 3.99 Highway ...................... 36.59 31.12 38.37 40.68 39.63 Larl!e Taxable Prope ,r~,'es 2007 Assessment Roll Name Type Peconic Landing at Southold ....................... LILCO, LIPA, 19larketspan, Keyspan ................. Village of Greenport-Power Planf .................... Fishers Island Dev. Corp ........................... Robins Island Holding LLC ......................... Alan Cardinale .................................. Damianos, Herodotus .............................. New York Telephone ............................. Levin Family L~mited Partnership .................... Anderson, Bradley & Francesca ..................... Norris, Susan .................................... Laurel Links & Country Club ....................... Kimogenor Pt Co ................................. Driftv~ood Cove Commercial ~ti]ity tilit~ Residential Development Private Lands Shopping Center Vineyard Utilify Motel&: Restaurant Farmland &: Private Lands Various Properties Country Club Co-Op Co-Op 'a. Assessment Roll established in 2006 for levy and collection of taxes during 2007 Fiscal Year. b. Represents approximately 5.57% of the total taxable assessed valuation of the Town for 2007. Assessed Valuation $ 1,707.704 1,5581702 5851000 3621000 3301500 2851500 234000 233 985 148 950 113 800 111 800 96 300 94 600 90 000 15 LITIGATION The Town of Southold is subject to a number of lawsuits in the ordinajy conduct of its affairs. For the most part, any pp. tential adverse decisions in such suits, either individually or in the aggregate, are not likely to have a materialadverse effect on the Town. There are certain matters worthy of special mention: Stanton, at al. ¥. Town of Southold -.This is an action in inverse condemnation and nuisance by fo_rty-two propert~ 9wn. er.s: al[eg.m~ propert~ d .amage m the fo,.nn of. eros,!on caused by a Town-owned jetty. The Town is engagan, m stuanes to aerermme me issues surrounamg the allege(l erosion, its causes, and possible solutions. Although this case was first filed in 1997, discovery has not been completed. The issues in this case are complex ,and will require extensiv, e exp.e.rt,t?sCmon¥...Th, e,p~a .,t~.~e and extent of damages, if any, are unknown at this ooint. insurance coverage may oe avaname mr potent~m namn.ty for alleged compensatory damages. The Town has denied any wrongdoing and intends vigorously to defend any ffirther prosecution of this action. S ., .~ua.d. Ent.erpr,!ses: .et al. v. Towr) of Sou?hold - Th? a.ction,..arises from the Town Board of the Town of oumom s anegea remsa~ to approve a change of zone appdcatlon reed b~.l~taintiffs, which sough, t substantially to ~ncre .ase the zonmg.density.of ~par,c.e.[ o.f la?al'owned by a iteveloper plaintiff. Plaintiffs assert claims under the Fair ~ou,s. mg Act, A~, qrjc.at}.s with. L~, ~sanmt, les .'~ct, State and Town Law, alleging housing discrimination a ainst senior nan~l, capjced, a?a 91s.anled' resmen~ who are also named, as "J.a. ne Doe" p~lamtiffs. Plaintiffs seek dec~a~aatorv relict~ granting me~r aesirea zomng, as wenn as compensatory ann punntnve damages of $ 5 million each, resoectively, for each of the six federal causes of action. Insurance coverage may be available for potential liability f6r alleged compensatory damages. Fact and expert discovery is proceeding. The Town has denned all wrongdoing and intends vigorously to contest these claims. Notices of Claim - Four noteworthy Notices of Claim have been filed against the Town relating to police matters. Three of the matters relate back to events in 2003 or 2004, none of whic--h have yet ripened into litigation. In the first claim, claimant, Jason Weber, alleged that he suffered phy. sical i.nju.ry, emotional injury, and loss of earnings by virtue of the alleged excessive force used by Town police officers in their arrest of clmmant. Claimant has su§sequently been convicted of driving while intoxicated, an underlying crime leading to the arrest at issue. C, la. imanJ,demafi, de, d,~,,$20.,,m, illion, but ,h. as~no.t s~rved the,To .wn w. it.h any lawsuit. In the second claim, the same ?)annanr n, em.,anae9 ,z mnu~on, a.s a resua or a frame s. top w.nereoy claimant was ticketed for driving with a suspended !ncen.se. m mat ~nstance, ciatmant alleged emotional injuries and loss of employment due to alleged false nmp. nsc ,nm.e. nt: p.nd, vio.latio,n 9fhis civil, ri~,hts:,.Cla,imant has not s.e. rved the Town with any. lawsuit relating to this maae.r..re.me mnm cnalm, c~mmant Mar~ t~razmer aemanded $5 million for alleged ohysical and emotional miuries and. envoi rights violations arising out ora traffic stoic. Claimant has not served ihe Town with any lawsuit relating to this matter. Insurance coverage may be available m these matters for .l~otential liability for alleged compensatory damages. The Town denies any. wrongdoing in these matters, and intenits vigorousht to contest ~ese claims in the event that lawsuits are instituted arising out of these allegations. The statute of limihttions for state law claims has run on each of these matters; the Federal statute of limitations has run on the first and third claims; and as of yet the Town has not been served with notice of any filed lawsuit. , . .,In.the fgu. rth. Noti,ce o.f Claim,..Kenne. th ~acAlpin demands $5 million in damages for physica!,, emotional ann cnvu rights nnlunes renated to an aneged nnciuent, believed to be an arrest by Town police officers on or about February 2'1, 2007 and orior arrests." The Town is not aware of any details of this puroorted claim, and intends vigorously to contest it both prior to and after the institution of a lawsuit, if any is ever filed and served. BONDHOLDER RISKS AND MARKET FACTORS AFFECTllqG FINANCINGS OF THE STATE AND MUNICIPALITIES OF THE STATE There are certain potential risks associated with an investment in the Bonds and investors should be thoroughly, familiar with this Official Statement, including its appendices, in order to m~e an informed investment decision. Investors should consider, in particular, the folrowing factors: ,.. The Town s credit rating could be affecte, d by cnrcumstances beyond the Town s control. Economm conmtnons sucn as the rate of unemployment and nnflation, termination of commercial operations by coroorate taxpayers and employers, as well as natural catastroohes, could adversely affect the assessed valuation of'Town property and its ability to maintain fund balances and'other statistical indices commensurate with its current credit rating. Accordingly, a decline in the Town's credit rating could adversely affect the market value of the Bonds. In addition, if and when a holder of any of the Bonds should elect to sell a Bond prior to its maturity, there can be no assurance that a market shall have been established, maintained and be in existence for the purchase and sale of any Bonds. The price orprincipal value of the Bonds is dependent on the vrevailing level of interest rates. If interest rates should increase, the price ora bond or note may declnne causing the bond or noteholder to potentially incur a capital loss if such bond or note is sold prior to its maturity. The financial condition of the Town as well as the market for the Bonds could be affected by a variety of factors, some of which are beyond the Town's control. There can be no assurance that adverse events in the State, including, for example, the seeking bya municipality of remedies pursuant to the Federal Bankruotey Act or otherwise, will not occur which migli.t alTect the market price of and the market for the Bonds. Ifa significant default ~or ~o,ther. fina .nqial .crisis sho.ul,d.,o.c, cur~in.t ,he affairs of the, .Stat. e or any of its agencies or political subdivisions thereby urrmer nmpamng [ne accepmmuty ox omigations issuea vy vorrowers within the State, both the ability of the Town 16 to arrange for additional borrowings and the market for and market value of outstanding debt obligations, including the Bon~ls, could be adversely affbcted. Future amendments to applicable statutes affecting the treatment of interest paid on municipal bonds, including the Bonds, for income taxation purposes could have an adverse effect on the market value of the Bonds (see "Tax Matters" herein). TAX MATTERS Opinion of Bond Counsel In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel to the Town, under existing statutes and c~ouE de. cisions and assuming coptinuingeomplianee with certain tax covenants described herein, (i) interest on the ~onus ~s ~exe, luded from gross ~n?om.e Tor Federal income tax purposes pursuant to Section 103 of the Internal .~eve, nue, Loue of 1986, as amenaed (the "Code"), and (ii) interest on the Bonds is not treated as a preference item m calcmating the alternative minimum tax imposed on individuals and corporations under the Code; such interest, hgweve.r, is mcluded in the adjusted current earnings of certain corporations for purposes of calculating the alternative minimum tax imposed on such corporations. In rendering its opinion, Bond Counsel has relied on certain representations, certifications of fact, and statements of reasonable expectations made by the Town in connection w~th the Bonds, and Bond Counsel has assumed compliance by the Town with certain ongoing covenants to comp. ly with applicable requirements of the Code to assure the exclusion of interest on the Bonds from gross income under Section 103 of the Code. In addition, in the opinion of Bond Counsel to the Town, under existing statutes, interest on the Bonds is exempt from New York State and New York City personal income taxes. th ~" Bond Counsel exl~resses no opinion regarding any other Federal or state tax consequences with respect to e t~onds. Bond Counsel renders its opinion under existing statutes and court decisions as of the issue date, and a,ssumes, nq obligat, ion to update its opi.~/ion after the issue daTte to reflect any future action, fact or circumstance~ or change m law or interpretation, or otherwise. Bond Counsel expresses no opinion on the effect of any actmn hereaTter taken or not taken in reliance upon an opinion of other counsel on the exclusion from gross income for Federal income tax purposes of interest on the Bonds, or under state and local tax law. Certain Ongoing Federal Tax Requirements and Covenants The Code establishes certain ongoingrequirements that must be met subsequent to the issuance and delivery of the Bonds in order that interest on the'Bongs be and remain excluded from gross income under Section 103 of the Code. These requirements include, but are not limited to, requirements relating to use and e.xpenditure of gross proceeds of theBonds, yield and other restrictions on investments of ~'oss proceeds, and the arbitrage r~bate requirement that certain excess earnings on gross proceeds be rebated to the Fe/teral government. Noncompliance wifh such requirements may cause interest on the Bonds to become included in gross income for Federal income tax purposes retroactive to their issue date, irrespective of the date on which such noncompliance occurs or is discovered. The Town has covenanted to comply with certain applicable requirements of the Code to assure the exclusion of interest on the Bonds from gross income under Section 103 of the Code. Certain Collateral Federal Tax Consequences I . The following is a brief discussion of certain collateral Federal income tax matters with respect to the Bonds. t does not .... puroort to address all aspects of Federal taxation, that may_ be relevant to a. particular owner ora. Bond. Prospective investors, particularly those who may be subject to special rules, are advised to consult thetr own tax advisors regarding the Federal tax consequences of owning and disposing of the Bonds. Prospective owners of the Bonds should be aware that the ownership of such obligations may result in collateral Federal income tax consequences to various categories of persons, such as corporations (including S corporations and foreilm corporations), financial institutions property and casual and lif~/insurance com anies individual recipients ot~Socia'l Security and railroad retiremen[ beffefi .~, individualtsWotherwise eligible for theI~ame~l income tax credit, and taxpayers deemed to have incurred or continued ~ndebtedness to purchase or carp/obligations the interest on which is excluded from gross income for Federal income tax purposes. Interest on the E[onds may be taken into account in determining the tax liability of foreign corporations subject to the branch profits tax imposed by Section 884 of the Code. Original Issue Discount "Original issue dis, c, ount" ("OID") is the excess of the sum of all amounts payable at the stated maturity of a Bond (excluding certain -qualified stated interest" that is unconditionally payable at least annually at preserved rates) over the issue price of'that maturity. In general, the "issue price" of a maturity means the first price at which a substantial amount of the Bonds of that maturity was sold (excluding sales to bond houses, brokers, or similar persons acting in the capacity as underwriters, placement agents, or wholesalers). In general, the issue price for each maturity of Bonds is expected to be the initial public offeringprice set forth on ~e cover page of the Official Statement. Bond Counsel further is of the opinion that, for any Bonds having OID (a "Discount'Bond"), OID that 17 has accrued and is properly allocabl,e to.the owners of the Discount Bonds under Section 1288 of the Code is excludable from gross mcome for Federal income tax purposes to the same extent as other interest on the Bonds. In general, under Section 1288 of the Code, OID on a Discount Bond accrues under a constant yield method, based on periodic compounding of interest over prescribed accrual periods using a compounding rate determined by reference to the yield on that Discount Bond. An owner's adjusted basis in a Discount Bond is increased by accrued OID for purposes of determining gain or Joss on sale, exchange, or other disposition of such Bond. Accrued OlD may be taken into account as an increase in the amount of tax-exempt income received or deemed to have been received for purposes of determining various other tax consequences of'owning a Discount Bond even though there will not be a corresponding cash payment. Owners of Discount Bonds should consult their own tax advisors with respect to the treatment of original is sue discount for Federal income tax purposes, including various special rules relating thereto, and the state and local tax consequences of acquiring, holding, and disposing of Discount Bonds. Bond Premium In general~ if an owner acquires a Bond for a purchase price (excludingaccrued interest) or otherwise at a tax basis that retlects apremium over the sum of all amounts payable on the Bond after the acquisition date (excluding certain "qualified stated interest" that is unconditionally payable at least annually at prescribed rates), that premium constitutes "bond premium" on that Bond (a"Premium B6nd"). In general, under Section 171 of the Code, an owner of a Premium Bond must am. ortize the bond premium over the remaining term of the Premium Bond, based on the owner's y. ield over the remaining term of the Premium Bond determined'based on constant yieldprinciples (in ce. rtain cases, inv,olvi,ng a Premi, um ,B, on,d callable prior to its stated maturity d. ate~ the amortization period and yield may he required to oe uet..erm,inea on me oasis of an earlier call date that results tn the lowest yi.elc[ on such bond). An owner of a Premium t~oun must amortize the bond premium by. offsetting the qualified stated interest allocable to e. ach interest accrual pe~od under the owner's regular method of accounttng against the bond premium allocable to that period. In th.e case ora ,t~, -ex.e~mpt t'r. emium IJond, if the bond premium allocable to an accrual p_eriod exceeds the qualified stated interest anocaole to that accrual period, the excess is a nondeductible loss. Under certain circumstances the owner ora Premium Bond may realize a taxablegain upon disposition of the Premium Bond even though it is sold or redeemed for an amount less than or equal to de owner's original acquisition cost. Owners of any Premium Bonds should consult their own tax advisors regarding the treatment of bond premium for Federal income tax pu.rposes, including various, special rules relating there'fop and state and local fax consequences, in connection with the acquisition, ownerslaip, amortization of bond premium on, sale, exchange, or other ~tisposition of Premium Bonds. Backup Withholding Under the Code, interest on tax-exempt obligations paid after March 31, 2007, includinginterest on the Bonds, is subject to "backup withholding" i_fthe recipient of the interest does not complete a Form W-9. Request for Taxpayer Identification Number and Certitication, or otherwise provide to the payor (i.e.l the financial institution paying the interest on behalf of the Town a taxpayer identification number). "Backup wtthholding" means that the pay. or is required to deduct and withhold a tax from the interest payment, calculated in the manner set forth in the Code. In general, it is expected that ow.n.ers, purchasing the Bonds through a brokerage account will have executed a Form W-9 in connection with the establishment of such account so that no backup withholding will occur. The backup withholding requirement does not affect the excludability of the interest on the Bonds from gross income for federal income m.purposes; A~ny ag)punts withheld pursuant to backup withholding would be allowed as a refund or a credit against the owner s reueral income tax once the required information is furnished to the Internal Revenue Service. Legislation Legislation affecting municipal bond, s is regularly under consideration by the United States Congress. There can be no assurance that legislation enacted or proposed after the date of issuance of the Bonds will not have an adverse effect on the tax-exempt status or market price of the Bonds. DOCUMENTS ACCOMPANYING DELIVERY OF THE BONDS Absence of Litigation Upon delivery of the Bonds: the. Town shall furnish a certificate of the Town Attorney, dated the date of delivery pt'the Bonds, to the effect that there is no controversy_ or litigation of any nature pendtng or th~atened.to restrain or enjoin the issuance, sale, execution or delivery of the Bonds, or in any way contesting or attecting the validity of the. Bonds or any~qf th..e pr,oceed, in~gs.taken with respect to the issuance and sale. thereof or~ the application of moneys to thepaym, ent olthe ~ona. s, and turther stating thaf there is no controversy or litigation otany nature now pending or threafened by or agains[~e T..own wherein an adverse iudgment or ruling could~nave a material adverse impact on the tin. uncial con.ditlon ottlae t~ow.n, or adversely ~af..fect the pow?r ,of the Town to levy, collect and enforce the collection ottaxes or other revenues mr me payment of the Bonds, which has not been disclosed in this Official Statement. 18 Legal Matters Legal matters incident to the authorization issuance and sale of the Bonds will be subiect to the final approving opinion of Hawkins Delafield & Wood LLP, Bond Counsel. Such opinion will be available at the time o~ delivery of the Bonds and will be to the effect that the Bonds are valid and legally binding general obligations of the Town for which the Town has validly pledged its faith and credit and, unless paid from other sources, all the taxable real prope..rty within the Town is subject to the levy of ad valore, m real e~a~te .tgxes to pay the Bgnds~and interest thereon without limitation of rate or amo.u:?t. Said opinion shall also cont.a.m.turther, sta,tements t9 tla,e etrect that (a) the enforceability of ri_g_h, ts or remedies with respect to such Bonds may be hmlted by oan~ruptcy, resolve, ney, or other laws affecting creditors rights.or remedies he. ret,ofore or .here .afte. r enacted, and (b) ~a, jid.law firn2~ 1],as n~.oto~e.en' requested to examine or review aha oas not exammeo or reviewed the acc.ur,acy or sumclency, oI t,ne tJmc~ Statement, or any additional proceedmgs~ reports, correspond.ence, finanmai statements o.r om, er .a. oc,umen , containing financial or other information relative to the Town whmh have be. an or may .be~furms. heu or.~disciosed to purchasers of the Bonds, and expresses no opinion with respect to such financial or other lniormatlon, or me accuracy or sufficiency thereof. Closing Certificates Upon the delivery of the Bonds, the Purchaser will be furnished with the following items: (i) a Certificate of the Supervisor to the etYect that as of the date of this Official Statement and at all times subsequent thereto, up to and including the time of delivery of the Bonds, this Official Statement did not and does not contain any unfrue statement ufa material fact or omtt to state a material fact necessary to make the statements herein, in the light of the circumstances under which they .w.ere m~a.de,~not mis. leadi~, g, ,an. el ~fu~.,h. er~s~Jin, g, ~.at?here?as ~ee_n_ ~n..O_aclffuV~nS~e material chan~e in the financial condition o.~ the lown smce me uate oI t~,s .tJ~t~l~Cl,[al. ~,ta~t? .ment up t,9.~u_m~,t~!~ .~ the time of de'livery of the Bonds, and having attached thereto a copy oxth~s [9iilclal ~tarement; ~l) a ~ertlilcate signed by the Supervisor evidencing payment for the Bonds; (iii) a Signature Certificate evidencing the due execution of'the Bonds; including statements that(a) no litigation of any_ nature is pending or threatened, restraining or enjoining the issuance and delivery of the Bonds or the levy and collection of taxes to pay the principal of and interest thereon, nor in any manner _questioning the proceedings and authority under which tl/e Bonds were authorized or affecting the validit3, of the Bonds thereunder, (b) neither the corporate existence or boundaries of the Town nor the title of any of the officers thereof to their respective offices is being contested, and (c) no anthoritv or proceedings for the issuance of the Bonds have been repealed, revoked or reschided and (iv) an ~rbitrage and'Use of Proceeds Certificate executed by the Supervisor, as described under "Tax Matters". DISCLOSURE UNDERTAKIING This Official Statement is in a form "deemed final".by t_he T, owp f~ the pu~oses 9f, Securities .and Excha~ng.e Commission Rule 15c2-12. At the time of the d?,!ivery,~fthe l~o,n, os,,,~e~ 9 ,wp~,w,m pr, oytoe a.,n, execu..t?a, copy o.[as "Undertaking to Provide Continuing Disclosure (the Undarta~ng ). :~amunaerta~.lng. wulcon.st~m, te~awr,~uen agreement or contract of the Town for the benefit of holders of and- owners of beneficial mterests m the t~onns, to provide, or cause to be provided: durin any succeeding fiscal year of the Town in which the Bonds are outstanding, to (a) each nationally (1) reco~,~ized municipal securities information repo.si_tory ('~SIR") and.(b) ~eNew York, State In.f.orn?ati.o.,n n~,,~;t,,~v ;~reated /"SID"~ iD certain annual t~nanciai intormation, ~n a ~onn &enera. uy co,n~s[~t%m wit,? contained or ~)d~-refer. en.,~, ,,d, in this Official Statement,un,,d~.r the head~in.~s:.~ ~ ne,,t ,o,~w~n~] "Economic and Demographic Information,,, Indebtedness .o.f the Town; mna. nc?..~,~ t.ne ~o,,wn ,. ~xSa ~ ......,,, 'r~,, ;,,¢~,,-~ation~ and "Litioation ' and in Appendix A, on oronor to the t auth aa~(.~o~wm, g me end of each fiscal year, including (i~'the audxted financial statement, if any, for the preceemng ns y of the Town, unless such audited'financial statement, if any, shall not then be available in which case the unaudited financial statement shall be provided and an audited financial statement shall be delivered to each NRMSIR and to the SID within 30 days after it becomes available and in no event later than 360 days after the end of each fiscal year; (2) to (a) each NRMSIR, or to the Municipal Securities Rulemaking Board ("MSRB "), and to (b) the SID, timely notice of the occurrence of any of the following events with respect to the Bonds, if material: o i) principal and interest pa _)sment delinquencies; (ii) non-p~yment related defaults; (iii) unscheduled draws fl'debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v') substitution of credit or liquidity providers, or their failure to perform; (vi)adverse tax opinions or events affecting the tax-exempt Status of the Bonds; (vii) modifications to rights 6f Bondholders; [viii) bond calls; (ix) def~asances; (x) release, substitution, or sale of property securing repayment oftheBonds; and (xi) rating changes. The Town may provide notice o.f the ocqu,rren, c,e of cert. a!n ~th~ _e_v?t~2.!,n .a~ ¢ i..o..n, .t OdtoheOsS ~ ol ~s t u n~ ea ~t~[~, ~of it determines that any such other event ~s matermt w~th respect ~o me DOHUS; UUt mY tu~vss u commit to provide any such notice of the occurrence of any material event except those events hsted above; and (3) to (a) each NRMSIR~ or to the MSRB, and to (b) the SID, in a timely manner, notice of a failure to provide the annual financial reformation by the date specified. 19 · h%Town s U. pdertakmg shall remain m full force and effect until such time as the principal of, redemption premiums, ir any, ann interest on the Bonds shall have been paid in full. The sole and exclusive rem .edy for breach nO[ de[}ult unde.r..the. Un, de,.rtakin, g is, an a_ct. ion..to cpml?el..spec,fic, performance of the undertakings of the Town, and pe son or enmy, mciumng a noloer otthe Donas, snail be entitled to recover monetary damages thereunder under any. circumstances. Any failure by the Town to comply with the Undertaking will not constitute a default with respect to the Bonds. . The Tow.n reserves the right, to amend or modify the Undertaking under certain circumstances set forth ther. ein prov~ioded that any such amenclment or modification will be done in a manner consistent with Rule 15c2-12 as then in enect. The Town is in compliance with all previous undertakings made pursuant to Rule 15c2-12. BOND RATING ~ Moody's Investors Se.rvice, Inc., will a:s..sign their municipal bond rating of "Aaa" respectively, to this issue ox. Bqnd,s woith ~e?nde. rsta.n, dm..g th,at up,o,n d.ellve~ of,the. Bonds, a polie~( insuring the payment wb6n due of the p.nncipaj o~,ana l?erest on me qonns,wl!l t~, lssuea ny amDac ^.ssurance Uoroorat~on. Such rating reflect onlythe views oF sucn rating agency, ann any aesirea exl~lanatlon of the slg~.ificance of such rating should 6e obtained from such rating agency. G~nerally, a ratm&agency bases its ratings on the information and materials furnished it and on investigation, studies and assumptions by the rating agency. There is no assurance that aparticular rating will apply for any given period of time or that it will not be loweredor withdrawn entirely if, in t~e iudgment of-the agency ,or!ginalI'y, establis, hing ~th.e rati.ng, circumstances so warrant. The p.nderwritar lias undertaken no responsibility to or.~.n.g, to m,e a~ent?n o.l the holo.ers of~the Bonds an), proposed revision or withdrawal. An2( downward revision or wunarawai or SUCh rating, or either of them, could nave an adverse effect on the market price of the Bonds. Such rating should not be taken as a recommendation to buy or hold the Bonds. FINANCIAL ADVISOR Munistat Services, Inc. has assisted the Town as financial advisor in certain matters with respect to the sale and issuance of the Bonds. ADDITIONAL INFORMATION South . .Ad~dition. a.l .i,n~ ~nna~tio. n. ~n2a~ be.ob, taft.ned up~on request from the office of the Town Comptroller, Town of ~ ~ pro, ~o_wn re. au, r.~J.t~. ~ !/v, ~outhom, P4ew xork 11971, televhone number 631/765-4333, or from the office o~ tvmmstat Services, Inc., 12 Roosevelt Avenue, Port Jefferson 'Station, New York 11776, telephone number 631/331-8888 and website: http://www.munistat.com. Any statements in this Official Statement involving matters of opinion or estimates, whether or not expressly so stated, are intended as such and not as representations of fact. lqo representation is made that any of such statements will be realized. This Official Statement is not to be construed as a contract or agreement between the Town and the original purchasers or holders of any of the Bonds. This Official Statement is submitted only in connection with the sale of the Bonds by the Town and may not be reproduced or used in whole or in part for any other purpose. TOWN OF SOUTHOLD, NEW YORK By: s/s SCOTT A. RUSSELL Town Supervisor and Chief Fiscal Officer March 27, 2007 20 ASSETS Cash and Investments Cash - Restricted Taxes Receivable Accounts Receivable Due From Other Funds Due From Trust Funds State and Federal Aid Receivables Due From Other Governments Supply Inventory Prepaid Expenses Deposit Total Assets 2003 $ 8,436,782 0 0 1,168 15,107 342,253 13,195 112,471 1,296 69,865 10,000 $ 9,002,137 Balance Sheet General Fund Fiscal Year Ending December 31: 2004 10,081,581 0 0 85,426 320,243 73 56,357 1,537,312 1,487 526,857 2,219 12,611,555 2005 9,292,437 0 0 24,533 176,390 68 81,849 1,867,136 1,204 498,344 0 11,941,961 LIABILITIES AND FUND EQUITY Accounts Payable Due to Other Funds Due to Other Governments Due to Trust Funds Due to Compnent Units Deferred Revenues Total Liabilities Fund Balances - Reserved: insurance claims Encumbrances Supply Inventory Prepaid Expenses Fund Balances - Unreserved: Designated - Ensuing Year's Budget Undesignated Total Fund Equity Total Liabilities and Fund Equity $ Sources: Audited Financial Reports of the Town Table itself NOT audited. $ 792,860 426,2ll 0 595 0 2,463,059 3,682,725 1,033,085 1,296 69,865 2,008,000 2,207,166 5,319,412 9,002,137 1,052,240 1,625,700 388,944 4,248 0 2,900,729 5,971,861 1,234,066 71,342 1,487 526,857 1,978,987 2,826,955 6,639,694 12,611,555 627,049 1,888,241 393,570 7,044 0 3,018,595 5,934,499 1,105,879 4,009 1,204 498,344 2,657,200 1,740,826 6,007,462 11,941,961 A-I Statement of Revenues, Expenditures and Changes in Fund Balance General Fund Town Wide Fiscal Year Ending December 31: Real Property Taxes Other Real Property Tax Items Non-Property Tax Items Departmental Income Intergovernmental Charges Use of Money & Property Licenses & Permits Fines & Forfeitures Sale of Property & Comp. for Loss Miscellaneous Local Sources State Aid Federal Aid 2QQI 2002 2003 2004 2005 $ 10,965,967 $ 12,237,940 $ 13,247,572 $ 13,962,268 $ 14,608,674 55,069 85,244 51,311 65,720 68,807 508,130 401,035 401,035 415,071 415,071 312,033 431,743 315,289 344,217 345,956 261,646 214,738 202,917 296,050 252,558 448,483 246,707 201,702 254,142 489,796 198,949 210,863 188,480 214,461 249,178 97,609 102,032 107,084 107,315 140,192 76,471 135,345 56,893 405,077 93,290 109,026 115,619 133,346 128,027 432,269 1,465,312 1,698,069 2,225,401 2,974,027 2,637,870 239,649 132,527 146,574 160,337 174,348 14,738,344 16,011,862 17,277,604 19,326,712 19,908,009 Expenditures: General Government Support Public Safety Public Health Transportation Economic Assistance & Opportunity Culture & Recreation Home & Community Services Employee Benefits Debt Service Principal & Interest 3,170,906 3,561,142 3,751,469 4,395,571 4,641,568 5,755,775 5,806,827 6,033,207 6,254,365 7,177,145 33,288 33,288 32,988 33,288 33,288 335~583 341,671 398,358 401,866 446,877 802,249 730,553 833,501 931,566 901,139 356,570 350,121 317,769 304,071 354,768 501,790 315,764 228,578 341,764 315,273 2,742,583 3,616,745 2,617,783 4,868,116 5,857,963 1,402,074 1,550,447 1,007,318 2,104,202 1,560,055 Total Expenditures 15,100,818 16,306,558 15,220,971 19,634,809 21,288,076 (362,474) (2941696) 2,056,633 (308,097) (1,380,067) 1,650,724 1,780,257 1,392,850 2,932,574 2,642,859 (1,072,732) (I,021,931) (1,910,781) (1,304,195) 0,895,023) 577,992 758,326 (517,931) 1,628,379 747,836 Excess (Deficiency) ofRevenuesOver Expenditures Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 215,518 463,630 1,538,702 1,320,282 (632,231 ) 3,101,561 3,317,080 3,780,710 5,319,412 6,639,694 Fund Balance Beginning of Year Fund Balance End of Year $ 3,317,079 $ 3,780,710 $ 5,319,412 $ 6,639,694 $ 6,007,463 Sources: Audited Financial Reports of the Town 'Fable itself NOT audited. A-2 Statement of Revenues, Expenditures and Fund Balance Highway Fund Fiscal Year Ended December 31: Real Property Taxes Other Real Property Tax Items Non-Property Tax items Intergovernmental Charges Use of Money & Property Licenses & Permits Sale of Property & Comp. for Loss Miscellaneous Local Sources lnterfund Revenues State Aid Federal Aid 2001 2002 2003 2004 2005 $ 3,165,059 $ 3,428,570 $ 3,513,902 $ 3,520,332 $ 3,805,032 6,028 11,885 6,428 3,679 9,046 396 3,098 0 0 116,821 0 15,573 0 0 79,827 34,626 18,520 23,884 77,817 5,887 10,351 8,231 4,937 11,126 9,593 0 4,033 2,960 2,796 1,416 25,937 0 16 155,054 8,517 4,852 0 0 0 223,305 0 458,686 228,337 188,147 0 0 67,699 0 0 3,616,849 3,519,319 4,093,072 3,784,145 4,249,018 Expenditures: Transportation Employee Benefits Debt Service 3,076,012 2,550,776 2,733,518 2,638,121 2,913,768 281,070 340,172 976,406 415,102 500,343 97,594 88,544 15,128 22,219 178,371 Total Expenditures 3,454,676 2,979,492 3,725,052 3,075,442 3,592,482 Excess (Deficiency) of Revenues Over Expenditures 162,173 539,827 368,020 708,703 656,536 Residual Equity Transfer Operating Transfers In Operating Transfers Out 0 0 0 0 0 (380,965) (433,271) (60,000) (690,390) (520,085) Total Other Financing Sources (Uses) (380,965) (433,271) (60,000) (690,390) (520,085} Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (218,792) 106,556 308,020 18,313 136,451 706,300 487,508 594,064 902,084 920,397 Fund Balance Beginning of Year Fund Balance End of Year $ 487,508 $ 594,064 $ 902,084 $ 920,397 $ 1,056,848 Sources: Audited Financial Reports of the Town Table itself NOT audited. A-3 Statement of Revenues, Expenditures and Changes in Fund Balance Non-Major Governmental Funds (1) Fiscal Year Ending December 31: 2001 2002 2003 2004 2005 Real Property Taxes $ 1,584,261 $ 1,465,060 $ 2,197,525 $ 2,506,945 $ 2,381,335 Other Real Property Tax Items 1,037 1,495 874 3,105 2,516 Non-Property Tax Items 97,680 110,225 117,449 336,139 213,786 Departmental Income 2,125,493 2,931,896 2,339,227 2,517,584 2,504,880 l ntergovem mental Charges 18,444 1,400 1,614 1,013 1,013 Use of Money & Property 88,750 35,650 18,147 21,365 64,092 Licenses & Permits 139,615 139,295 139,620 199,849 165,965 Fines and Forfeitures 0 0 49,000 0 0 Sale of Property & Comp. for Loss 76,928 29,772 44,450 76,069 109,137 Miscellaneous Local Sources 13,462 11,423 230 5,025 153,591 lnterfund Revenues 2,274 0 0 0 0 State Aid 102,353 72,935 161,393 72,651 75,374 Federal Aid 210,644 119,380 111,299 166,368 224,136 4,460,941 4,918,531 5,180,828 5,906,113 5,895,825 Expenditures: General Government Support Public Safety Public Health Home & Community Services Culture and Reccreation Employee Benefits Debt Service 42,052 42,783 134,969 92,514 99,895 786,251 875,307 749,904 739,198 807,4.74 5,924 6,161 6,408 6,664 6,864 0 0 3,230,201 3,225,586 3,t02,639 2,872,654 2,973,763 0 0 0 188,543 226,380 874,049 371,038 444,858 314,869 624,315 117,562 88,803 671,720 Total Expenditures 4,210,293 4,748,709 5,113,093 4,523,803 5,133,450 250,648 169,822 67,735 1,382,310 762,375 0 0 0 0 0 (491,624) (375,055) (483,500) (I,081,441) (504,720) (491,624) (375,055) (483,500) (1,081,441) (504,720) Excess (Deficiency) of Revenues Over Expenditures Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (240,976) (205,233) (415,765) 300,869 257,655 1,707,548 1,466,572 1,261,339 845,574 1,146,444 Fund Balance Beginning of Year Fund Balance End of Year $ 1,466,572 $ 1,261,339 $ 845,574 $ 1,146,443 $ 1,404,099 (1) Includes the following funds: General Fund Part Town, Special Grant Fund, East-West Fire Protection Fund, Southold Wastewater District, Fishers Island Sewer District and Solid Waste Management District. Sources: Audited Financial Reports of the Town Table itself NOT audited. A-4 FuuO General General-Outside Village H ighway-Townwide tiighway-Outside Village Community Development Risk Retention Fund Community Preservation Fund Employees Health Plan Total-Town East-West Fire P~otection District Fishers Island Ferry District Solid Waste Management District Southold Wastewater District Fishers Island Sewer District F.I. Refuse & Garbage District Orient Mosquito District Subtotal-Special Districts Orient-East Marion Park District Somhold Park District Cutchogue-New Suffolk Park Dist. Ma~ouck Park District Subtotal-Park Districts Fishers Island Fire District Orient Fire District East Marion Fire District Southold Fire District Cutchogue Fire District Mattituck Fire District Subtotal-Fire Districts Total-All Districts Grand Total Source: Annual Budget of the Town. BUDGET SUMMARY Fiscal Year Ending December 31, 2006 Appropriations Less: Less: and Provisions Estimated Unexpended for Other Uses Revenues Bal~Ice 22,209,199 1,795,416 0 4,769,679 159,000 1,055,000 4,606,000 2,411,400 37,005,694 4,679,263 $ 2,657,200 958,174 344,246 100 16,000 318,332 339,900 159,000 0 1,055,000 0 4,606,000 0 2,036,400 375,000 $ 13,812,269 $ 3,732,346 Amount tobe Raised bv Tax $ 14,872,736 492,996 (16,100) 4,11t,447 0 0 0 0 $ 19,461,079 464,393 2,000 4,350 458,043 2,389,000 1,989,000 0 400,000 4,031,733 2,096,200 168,000 1,767,533 111.790 14,000 75,000 22,790 20,000 17,700 2,300 0 563,500 0 0 563,500 76,285 0 0 76,285 $ 4,118,900 $ 249,650 7,656,701 $ 3,288.15I 27,655 37 0 27,618 315.000 0 0 315,000 141,000 0 0 141,000 504,910 18,800 60,000 426,110 988,565 $ 18,837 $ 60,000 $ 909,728 343,300 3,300 0 340.000 356,540 2,000 0 354,540 427,342 8,640 0 418.702 1,358,392 21,000 0 1,337.392 1,413,000 1,400 0 1,411,600 1,818,135 0 0 1,818,135 $ 0 5,716,709 $ 36,340 309,650 14,361,975 4,174,077 $ 4,041,996 51,367,669 $ 17,986,346_ $ 5,680,369 9,878,248_ $ 29.339,327 A-5 Fund General-Outside Village H ighway-Townwide Highway-Outside Village Community Development Risk Retention Fund Community Preservation Fund Employees Health Plan Total-Town East-West Fire Protection District Fishers Island Ferry District Solid Waste Management District Southold Wastewater District Fishers Island Sewer District F.L Refuse & Garbage District Orient Mosquito District Subtotal-Special Districts Orient-East Marion Park District Southold Park District Cutchogue-New Suffolk Park Dist. Mattituck Park District Subtotal-Park Districts Fishers Island Fire District Orient Fire District East Marion Fire District Southold Fire District Cutchogue Fire District Mattituck Fire District Subtotal-Fire Districts Total-All Districts Grand Total Source: Annual Budget of the Town. BUDGET SUMMARY Fiscal Year Ending December 31, 2007 Appropriations Less: Less: and Provisions Estimated Unexpended Amount to be for Other Uses Revenues Balance Raised by Tax $ 22,951,102 $ 4,810,191 $ 1,935,000 $ 16,205,911 1,869,139 1,002,600 459,000 407,539 0 600 16,900 (17,500) 4,938,330 406,635 486,500 4,045,195 136,000 136,000 0 0 1,015,000 1,015,000 0 0 10,697,328 5,350,000 5,347,328 0 2,662,000 2,412,000 250,000 0 $ 44,268,899 $ 15,133,026 $ 8,494,728 $ 20,641,145 509,828 4,600 6228 499,000 3,038,000 2,448,000 0 590,000 4,058,562 2,151,500 0 1,907,062 128,316 10,020 100,000 18,296 20,000 17,700 2,300 0 512,300 0 0 512,300 82,235 0 0 82,235 8,349,241 $ 4,631,820 $ 108,528 $ 3,608,893 30,695 0 0 30,695 315,000 0 0 315,000 145,000 0 0 145,000 540,027 22,500 50,000 467,527 t,030,722 $ 22,500 $ 50,000 $ 958,222 357,300 3,300 0 354,000 401,040 2,000 0 399,040 490,600 12,200 0 478,400 1,512,875 33,540 0 1,479,335 1,412,500 1,400 0 1,41t,100 1,857,967 0 0 1,857,967 6,032,282 $ 52,440 $ 0 $ 5,979,842 15,412,245 4,706,760 158,528 10,546,957 59,681~144_ $__ 19,839,786 $ 8,653,256 $ 31,188,102 A-6 TOWN OF SOUTHOLD APPENDIX B AUDfI~ED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005 FINANCIAL SECTION Independent Auditors' Report ...................................................... 1-2 REQUIRED SUPPLEMENTARY INFORMATION Management's Discussion and Analysis .................................................................................. 3-11 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Assets ........................................................................... 12 Statement of Activities ............................................................................................................................ 13 Fund Financial Statements Governmental Fund Financial Statements Balance Sheet and Reconciliation of the Governmental Funds Balance Sheet to The Statement of Net Assets .................................... 14-15 Statement of Revenues, Expenditures, and Changes in Fund Balances and Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, And Changes in Fund Balances to the Statement of Activities ............................................... 16-17 Fiduciary Fund Financial Stataments Statement of Fiduciary Net Assets ........................................................................................... 18 Notes to Financial Statements ......................................... 19-33 REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANGEMENT DISCUSSION AND ANALYSIS Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund ............................................................................................................. 34 Highway Fund ............................................................................................................. 35 OTHER SUPPLEMENTARY INFORMATION COMBINING FUND STATEMENTS: Non-major Governmental Funds Combining Balance Sheet ............................................................................................. Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ................... IDISCRETELY PRESEHTED COMPONENT UNITS Discretely Presented Component Units: Combining Statement of Net Assets ...................... Combining Statement of Activ ties .... 36 37 38 39 OTHER REPORTS Schedule of Expenditures of Federal Awards ......................................................................................... 40 Notes to Schedule of Expenditures of Federal Awards .......................................................................... 41 Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Audib'ng Standards ............... ............................................................................................................. 42 Report on Compliance with Requirements Applicable To Each Major Program and Internal Conffol Over Compliance in Accordance with OMB Cimular A-133 ...................................................................... 43-44 Schedule of Findings and Questioned Costs .................................................................................... 45-46 FINANCIAL SECTION CE;RTIFIED PUBLIC ACCOUNTANTS, E~USINESS ADVISORS ANO CONSULTANT~ 25 Suffolk Court, Hauppauge, New Y'ork H 788 651.434.9500 · Fax 631.434.9518 WWW.. awz. coIrtt INDEPENDENT AUDITORS' REPORT Honorable Supervisor and Town Board Town of Southold Southcid, New York We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the Town of Southold, New York, as of December 31, 2005, and for the year then ended, which collectively comprise the Town's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Town's management. Our respons~ility is to express an opinion on these financial statements based on our audit. Except as discussed in the following paragraph, 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. The financial statements of the component units presented discretely in these financial statements with the exception of one, the Fishers Island Ferry District, were not audited in accordance with Government Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements ara flee 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 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 opinion. The financial statements supporting the financial activities of the Town of Southold's discretely presented component units with the exception of one, the Fishers Island Ferry District, were not audited as of the report date, nor were we able to satisfy ourselves as to those financial activities by other auditing procedures. Those financial activities represent approximately 34% of the net assets of the discretely presented component units. The financial statements of the Fishers Island Fen3/District were audited by other auditors whose report thereon have bean furnished to us and in our opinion, insofar as it relates to the amounts included for that one component unit, is based solely on the reports of the other auditors. In our opinion, except for the effects of such adjustments if any as might have bean determined to be necessary had the unaudited component units financial statements been audited and based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of the Town of Southold, New York, as of December 31, 2005, and the results of its operations for the year then ended in conformity with accounting principles generally accepted in the United States of America. The Management's Discussion and Analysis and the budgetary information 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 measurament and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. -I- ,&.L.BRF. CH~, VIOOIANOf ZURF-.CK & COHPANYf RC. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Town of Southold, New York's basic financial statements. The combining and individual fund financial statements are presented for purposes of additional analysis and are not a required port of the basic financial statements, The combining and individual fund financial statements has been subjected to the auditing procedures applied in the audit of the basic financial statements of the Town of Southold, New York, and, in our opinion, is fairly presented in all material respects in relation to the basic financial statements taken as a whole. In accordance with Govemment Auditing Standards, we have also issued a report dated June 8, 2006 on our Consideration of the Town of Southold, New York internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements, taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the general purpose financial statements of the Town of Southold, New York. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole. Hauppauge, New York June 8, 2006 REQUIRED SUPPLEMENTARY INFORMATION Management's Discussion and Analysis TOWN OF SOUTHOLD MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 The following is a discussion and analysis of the Town of Southold's financial performance, providing an overview of the Town's financial activities for the year ended December 31, 2005. Use this section in conjunction with the Town's basic financial statements. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Assets and the Statement of Activities provide information about the activities of the Town as a whole and present a longer- term view of the Town's finances. For governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the Town's operafions in more detail than the government-wide statements by providing Information about the Town's most significant funds. The remaining statements provide financial information about activities for which the Town acts solely as a lrustee agent for the ben etit of those outside of the government. Reporting the Town as a Whole The Sta{ement of Net Asseis and the Statement of Activitie~ One of the most important questions asked about the Town's finances is, "Is the Town as a whole better off or worse off as a result of the year's activities?~ The Statement of Net Assets and the Statement of Activities report information about the Town as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounfing, which is similar to the accounfing used by most private-sector companies. The Statement of Activities is significantly different than a typical Statement of Revenues, Expenses, and Changes in Fund Balance. You will notice that expenses are listed In the first column with revenues from that particular program reported to the right. The result is a net (expense)/revenue. The reason for this kind of format is to highlight the relative financial burden of each of the functions on the Town's taxpayers. It also identifies how much each function draws from the general revenues or if it is seE-financing through fees and grants. All of the current year's revenues and expenses ars taken into account regardless of when cash is received or paid. These two statements report the Town's net assets and their respective changes. You can think of the Town's net assets~the difference between assets and liabilities--as one way to measure the Town's financial health, or financial position. Over time, increases or decreases in the Town's net assets are one indicator of whether its financial health Is improving or deteriorafing. You will need to consider other non-financial factors, however, such as changes in the Town's property tax base and the condition of the Town's buildings, roads, dralnage and other assets to assess the overall health of the Town. In the Statement of Net Assets and the Statement of Activities, we divide the Town into two kinds of activities: Governmental activities - The Town's basic services are reported here, Including: general government support; public safety; public health; transportation; economic assistance and opportunity; culture and recreation and home and community services. Property taxes, sales taxes, franchise fees, fines, and state and federal grants finance these activities. The Town also charges fees to customers to help it cover the cost of certain services it provides. Component units - The Town includes 7 separate legal entities in its report (one ferry district, one sanitation district, one mosquito district and four park districts). Although legally separate, these 'component units' are important because the Town is financially accountable for them. Completa financial statements of the individual component units can be obtained from their respective administrative offices (Note A). TOWN OF SOUTHOLD MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 Reportin,q the Town's Most Si.qnificant Funds Fund Finar~ial Statements The fund financial statements provide detailed information about the most significant funds--not the Town as a whole. Some funds are required to be established by State law and by bond covenants. However, the Town establishes many other funds to help it control and manage sources of funding and spending related to specific activities. The Town's basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the Town's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the Town's programs. We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds in a reconciliation that follows these fund financial statements. The Town as Trustee Reportinq the Town's Fiduciary Respqnsibilities All of the Town's fiduciary activities are reported in a separate Statement of Fiduciary Net Assets. We exclude these activities from the Town's other financial statements because the Town cannot use these assets to finance its operations. The Town is responsible for ensuring that the assets reported in these funds are used for their intended purposes. FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE Our analysis below focuses on the net assets and changes in net assets of the Town's governmental activities. Condensed Statement of Net Assets Governmental Activities as of December 31,2005 and 2004 2005 2004 Assets Current and other assets $ 26,265,665 $ 25,448,645 Capital assets 90,294,079 81,374,480 Total assets 116,559,744 106,823,125 Liabilities Other liabilities 16,289,370 14,665,546 Long-term liabilities 14,916,051 15,732,844 Total liabilities 31,205,421 30,398,390 Net assets Invested in capital assets, net of related debt 81,044,981 71,352,951 Unrestricted 4,309,342 5,071,784 Total net assets $ 85,354,323 $ 76,424,735 TOWN OF SOUTHOLD MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued) Total assets in the Towns as of December 31, 2005 were $116.5 million, an increase of $9.7 million. Total liabilities as of December 31, 2005 were $31 million, an increase of approximately $1 million. This results in a net asset balance of $85.3 million, an increase of $8.9 million. Of the Town's net asset balance $81 million were invested in capital assets, net of related debt; while $4.3 million was unrestricted. Changes in Net Assets Governmental Activities for the years ended December 31, 2005 and 2004 Program Revenues Charges for services Operating grants and contributions Capital grants and conlfibutions Total Program Revenues General Revenues Real property taxes Other real property tax items Non-property tax items Interest earnings State aid - unrestricted Other Total General Revenues Total Revenues Program Expenses General government support Public safety Public health Transportation Economic assistance and opportunity Culture and recreation Home and community services Interest on debt Total Expenses Increase in Net Assets $ 2005 2004 $ 10,723,686 $ 9,556,554 859,484 790,169 3,502,247 915,998 15,085,417 11,262,721 20,795,041 19,989,545 80,369 72,504 628,857 751,210 766,413 264,223 2,527,110 2,867,169 709,352 228,738 25,507,142 24,173,389 40,592,559 35,436,110 6,621,408 7,274,110 11,342,991 9,899,209 43,559 42,551 6,627,876 6,297,105 1,208,467 1,225,690 356,167 447,119 4,961,051 2,052,178 501,452 460,838 31,662,971 27,698,800 8,929,588 $ 7,737,310 TOWN OF SOUTHOLD MANAGEMENFS DISCUSSION AND ANALYSIS December 31, 2005 FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued) Net Cost of Services Govemmental Activities for the year ended December 31, 2005 General government support Public safety Public health Transportation Economic assistance and opportunity Culture and recreation Home and community services Interest on debt Total Cost Net Cost of Services of Services $ 6,621,408 $ 6,265,526 11,342,991 10,588,154 43,559 33,574 6,627,876 6,426,952 1,208,467 833,388 356,167 168,136 4,961,051 (8,239,628) 501,452 501,452 $ 31,662,971 $ 16,577,554 The cost of all governmental activities this year was $31.6 million. The net cost of these services, however, after subsidized by program revenues including charges for services and program grants, was $16.5 million. The Town's change in net assets after general revenues of $25.5 million was an increase of $8.9 million. Net Cost of Services Govemmental Acltvlties for the year ended December 31, 2005 Total Cost Program of Services Revenues General government support $ 6,621,408 Public safety 11,342,991 Public health 43,559 Transportation 6,627,876 Economic assistance and opportunity 1,208,467 Culture and racraafion 356,167 Home and community services 4,961,051 Interest on debt 501,452 355,882 754,837 9,985 200,924 375,079 188,031 13,200,679 31,662,971 $ 15,085,417 TOWN OF SOUTHOLD MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 FINANCIAL ANALYSIS OF THE TOWN A~ A WHOLE (continued) $12,oao,o0o Govemme~al Agtlvitle~ I $to,oo0,00o Expenses · Program Revenues $. Revenue by Source Govemmental Activities For the year ended December 31, 2005 Real properly taxes State aid - unrestricted Cha~ges for services Other general revenues Operating grants and contfibutk)ns Capital granta and conb'lbutlons $ 20,795,041 2,527,110 10,723,686 2,184,991 859,484 3,502,247 TOWN OF SOUTHOLD MANAGEMENT'S DISCUSSION AND ANALYSIS December 31,2005 FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued) THE TOWN'S FUNDS The general fund balance has decreased by approximately $600,000 due primarily to actual expenditures In excess of revenues. Although there was a decrease in fund balance, this decrease was less than amounts budgeted. The following schedule presents a summary of the governmental fund - (general, special revenue, and capital projects) revenues and expenditures for the year ended December 31, 2005, and the amount of change and percentage of totsl in relation to the prior year. Increase % 2005 2004 (Decrease) Change REVENUES Real property taxes Other real properly tax items Non-property tax items Departmental income Intergovemmental charges Use of money and pro ,perry Licenses and permits : Fines and forfeitures Sale of property and compensation for loss Miscellaneous local sources State aid Federal aid Total Governmental Fund Revenues EXPENDITURES General government support Public safety Public health Transportation Economic assistance and opportunity Culture and recreation Home and community son/ices Employee beneffis Capital Debt service principal and interest Total Governmental Fund Expenditures $ 20,795,041 $ 19,989,545 $ 805,496 3.9% 80,369 72,504 7,865 9.8% 628,857 751,210 (122,353) -19.5% 2,850,836 2,861,801 (10,965) -0.4% 7,453,845 6,342,748 1,111,097 14.9% 906,664 407,338 499,326 55.1% 426,269 419,247 7,022 1.6% 140,192 107,315 32,877 23.5% 205,223 484,106 (278,883) -135.9% 1,292,371 294,522 997,849 77.2% 3,946,391 3,825,015 121,376 3.1% 1,909,023 326,705 1,582,318 82.9% $ 40,635,081 $ 35,882,056 ~ 4,753,025 11.'~ $ 4,741,463 $ 4,458,085 $ 253,378 5.3% 7,984,619 6,993,563 991,050 12.4% 40,152 39,952 200 0.5% 3,360,645 3,039,987 320,658 9.5% 901,139 931,566 (30,427) -3.4% 3,457,407 3,567,350 (109,943) -,3.2% 315,273 304,071 11,202 3.6% 6,803,164 5,664,256 1,148,908 16.9% 12,788,366 8,758,057 4.032,309 31.5% 2,439,675 2,215,224 224,451 9.2% $ 42,831,903 $ 35,990,111 $ 6,641,792 16.0% GENERAL FUND BUDGETARY HIGHLIGHTS Over the course of the year the Town Board revises the budget as needed so that expenditures do not exceed appropriations, In all Town funds, various transfers between apprepriations were approved for this purpose. TOWN OF SOUTHOLD MANAGEMENT'S DISCUSSION AND ANALYSIS December 31. 2005 CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of December 31, 2005 the Town had $90.3 million in net capital assets including land, buildings, improvements, machinery and equipment, and infrastructure. The Town's component units had $8 million in net capital assets including land, buildings, improvements, machinery and equipment, and sewer mains. Capital Assets at December 31, Primary oovemment Land Construction in progress Buildings Improvements other than buildings Machinery and equipment Infrasl~ucture Total capital assets Less accumulated depreciation Pdmary government - Total net capital assets Component units Land Buildings Improvements other than buildings Machinery and equipment In;'[astructure Total capital assets Less accumulated depreciation Component units - Total net capital assets 2005 2004 47,772,278 $ 37,795,087 1,608,081 398.912 4,574.513 4,569,296 13,498,954 13,469,136 9,522,815 8,686.593 70,038.525 69.334.187 147.015,166 134.253,211 56,721,087 52,878,731 90,294,079 $ 81,374,480 2.213.759 $ 2,213,759 3,540,111 3,416,944 2,575.589 2.575.589 3.200,728 3,170,695 2,138,386 2,121,386 13,668,573 13,498,373 5,639,830 5,236,652 $ 8.028,743 $ 8.261,721 TOWN OF SOUTHOLD MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 CAPITAL ASSET AND DEBT ADMINISTRATION (continued) Capital Assets (continued) The capital program is a long range financing guide and not a definitive plan. Each appropriation must be authorized by Town Board resolution before being undertaken. Each may be financed by issuance of general obligation bonds, which, at times, are preceded by issuance of bond anticipation notes for various periods of time depending on the probabis usefulness of the purpose of expenditure. The following sets forth a summary of the Town's capital program. (Dollam in thousands): Equipment 2006 General Fund $ 345,900 Highway Fund 2,500 Special Districts 20.000 Total Equipment $ 368.400 Improvements General Fund $ 440,130 Spedal Districts 800,000 Total Improvements $ 1,240,130 Total Program $ 1.608.530 Additional information on the Town's capital assets can be found in Note C.3 to the financial statements. Debt Administration The Town of Southold's credit rating from Moody's Investom Services was upgraded to A1 fi'om A2 in February 2005. Debt Umit - The Town has the power to contract indebtedness for any Town purpose so long as the principal amount thereof, subject to certatn limited exceptions, shall not exceed seven pement of the average full valuation of taxable real estate of the Town, and subject to certain enumerated exclusions and deductions such as water and certain sewer facilities and cash or appropriations for current debt service. The constituUonal method for determining full valuation is calculated by taking the assessed valuation of taxable real estate as shown upon the latest completed assessment roll and dividing the same by the equalization rate as determined by the State Board of Equalization and Assessment. The State Loglalatura is required to prescribe the manner by which such ratio shall be determined. Average full valuation is determined by taking the sum of the full valuation of the last completed assessment roll and the four preceding assessment rolls and dividing such sum by five. Percentage of debt contracting power exhausted at December 31, 2005 was 2.16%. At December 31, 2005, the Town had approximately $9.2 million in long term general obligation bonds outstanding, of which $9 million was for general Town purposes. Also outstanding at year-end were bend anticipation notes in the amount of $8.8 million of which $6 million was for general Town purposes. Additional information on the Town's debt activity can be found in Note C.4 to the financial statements. -10- TOWN OF SOUTHOLD MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2005 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES Property Tax The Town has adopted a budget for the 2006 fiscal year which factors in inflation and other adjustments to revenues and expenditomS as well as prior year positive and negative fund batances. The 2006 budget includes an overall increase in real property tax revenues from the prior year of approximately 3.9% for lhe general Town governmental activities. State Aid and Local Assistance The Town receives financial assistance from Now York State and from Suffolk County. During 2005, financial assistance included state aid consisting of mortgage tax of $2.5 million, consolidated highway aid of $188 thousand, and community presen, ation aid of approximately $1 million. State aid per capita was $75.3 thous&nd and County local government assistance was $211.7 thousand. Additionally, if the State should not adopt its budget in a timely manner, municipalities and school districts in the State, Including the Town, may be affected by a delay in the payment of stats aid. The State Is not constitufionaliy obligated to maintain or continue state aid to the Town, The Town's 2006 budget included similar amounts for this financial assistance. Retirement System The New York State Employees Retirement System, having suffered some adverse effects of the weak stock market conditions, was expected to require payments in excess of amounts the State had originally anticipated for the year ended 2005. When establishing the 2005 budget, the Town had anticipated these excess payments. However, due to a change in the billing cycle, the State was able to hold the contribution rates to those the State had originally anticipated. The Town subsaquentiy re-appropriated the budgeted but unexpendad excess payment In the 2005 budget. The State's new billing cycle will require a minimum contribution rate of 4.5%. Employer contribution for subsequent years will be based on the Russell 3000 performance as of Apdl I of the preceding two years. In 2003 the Town of Southold adopted the New York State Eady Refirement Incentive Program as authorized by Chapter 69 of the Laws of 2002. The option to retire eady ran through December 31, 2002. The eligibility · varied based on tier, age and years of service, but all options required that the employees be at least f~y (50) years of age and being vested In the New York State Retirement System. As part of its contractual agreements with the unions, the Town of Southold also offers fully paid health insurance benefits (but not welfare benefits) for the retiree and their present spouse until death of the retiree. CONTACTING THE TOWN'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, and creditors with a general overview of the Town's finances and to show the Town's accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Town of Southold, Office of the Town Complrolier, Southold, New York. BASIC FINANCIAL STATEMENTS TOWN OF SOUTHOLD GOVERNMENT-WIDE FINANCIAL STATEMENTS STATEMENT OF NET ASSETS December 31, 2005 ASSETS Current Assets: Cash and investments Accounts receivable, net of allowances Due fi*om fiduciary funds Due from other governments Due fi*om primary government State and federal aid receivables Prepaid charges Inventory of material and supplies Total Current Assets Non-Current Assets: Deferred charges, net of accumulated amortization Non--depreciable capital assets Depreciable capital assets, net of depreciation Total Non-Current Assets Total Assets LIABILITIES Current Liabilities: Accounts payable and accrued liabilities Accrued interest payable Bond anticipation notes payable Due to other governments Due to fiduciary funds Uneamed revenue Other liabilities Non-current liabilities due within one year General obligation bonds payable Due to Employees Retirement System Claims and judgments payable Estimated liability far landfill closure and postclosure care costs Total Current Liabilities Non-Current Uabilities: General obligation bonds payable Due to Employees Retirement System Compensated absences Estimated liability for landffil closure and postciosure care costs Total Non-Current Liabilities Total Liabilities NET ASSETS Investment in capital assets, net of related debt Unrestricted Primary Governmental Component Activities Units $ 20,968,117 $ 1,250,827 236,215 3,561 68 2,631,939 1,127,523 1,130,599 1,204 949,145 48,767 45,140 26,095,665 2,297,440 170,000 49,380,359 15,284,596 40,913,720 5,918,714 90,464,079 21,203,310 116,559,744 23,500,750 1,344,864 442,8O2 227,617 63,941 8,875,000 2,845,000 393,570 2,271 7,944 4,402,014 392,414 755,000 195,000 45,189 220,000 19,072 16,289,370 3,941,428 8,494,098 2,855,000 48,804 5,779,826 593,323 14,916,051 2,855,000 31,205,421 6,796,428 TntalN~Asseta 81,044,981 14,093,268 4,309,342 2,611,054 $ 85,354,323 $ 16,704,322 See notes to the financial statements -12- 43.659 9.965 33,674 t.208.467 t74.830 200.249 8331~ 356,167 188.031 t68,136 4.961,05t 9,603.400 283,179 3.314.100 (8.239.628) ~ ,884,374 47,644 1.932,018 $ 1.9831139 GENERAL REVENUE8 $ 80,610 60,371 $ 170.928 TOWN OF SOUTHOLD BALANCE SHEET GOVERNMENTAL FUNDS December 3'1, 2005 ASSETS Cash and inveslments Accounts receivable, net of allowance Due from other funds Due from trust funds State and federal aid receivable Due from other govemmunts Supply inventory Prepaids Total Assets LIABIUTIE~ AND FUND BALANCES LIABILITIES Accounts payable Retained percentages Bond anOclpation nofes payable Due to o~her funds Due to tnJst funds Due to other governments Deferred revenue Total Liabilities FUND BALANCE Fund Balances - reserved: Encumbrances Supply inventory Pmpalds Insurance claims Fund Balance - unresewed: Designated - ensuing year's budget Undesignated Total Fund Equity Total Llabiliaes and Fund Equity MAJOR FUNDS Non-Major Capital Governmental Highway Projects Funds Totals General $ 9,292,437 24,533 176,390 68 81,849 1,867,136 1.204 498,344 $ 11,941.961 $ 1,022.924 $ 9,406,620 8.190 30,500 828,984 251,100 $ 1,246,136 $ 20.968,117 172,992 236,215 733,039 1.989,513 68 43,424 1,002,250 1,127,523 759,803 5,000 2,631.939 56~947 54,024 609,315 $ 1.960.46~9 $ 11 450 273 $ 2,211 '191 $ 27,563.894 627,O49 $ 72.436 $ 337,613 $ 227,184 $ 1.264,282 80.580 80.580 8.875,000 8,875.000 1.888,241 73.598 27.674 1,989,513 7,044 7,O44 393,570 393.570 3.018,595 831,185 552~234 4~402,014 5,934~499 903.621 9,366.791 807,092 17~012.003 4,009 4,009 1,204 1,204 498,344 26,686 525,030 1.105,879 1.105,879 16,000 16,000 2,657,2.00 339,900 348,596 3,345,696 1.740,826 700~948 2,083,4~2 1,028.817 5.554,073 61007,462 1.056,848 2,083.482 1,4O41099 10~551,891 $ 11,041,061..._.______~~ $ 1,060,.469 $ 11,450,27~3 $ 2,211,191 $ 27,563,894 See notes to the financial statements. TOWN OF SOUTHOLD RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS December 31, 2005 Total Fund Balances - Governmental Funds Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets less accumulated depreciation are included in the Statement of Net Assets: Capital assets - non-depreciable Capital assets - depreclable Accumulated depreciation Other long-term assets are not available to pay for current-Pealed expenditures and, therefore, are deferred in the funds Long-term liabilities applicable to the Town's governmental activities are not due and payable in the current period and accordingly are not reported in the funds. However these liabilities are included in the Statement of Net Assets: General obligation bonds payable Due to Employees Retirement System Compensated absences Claims and judgments payable Estimated liability for landfill closure and postclosure care costs Prepaid items included in the Statement of Net Assets Defen'ed charges included in the Statement of Net Assets Interest payable applicable to the Town's governmental activities are not due and payable in the current period and accordingly are not reported in the funds. However these liabilities are included in the Statement of Net Assets. Net Assets of Governmental Activities $49,380,359 97,634,807 (56,721,087) (9,249,098) (93,993) (5,779,826) (220,0oo) (612,395) 10,551,891 90,294,079 ( 15,955, 312) 521,282 170,000 (227,617) $ 85,354,323 See notes to the financial statements. TOWN OF SOUTHOLD STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the year ended December 31. 2005 Non-Major Capital Governmental General H~hwa¥ Projects Funds Totals REVENUES Real property taxes $14.608.674 $3.805.032 $2.381.335 $20.795.041 Other real property tax items 68.807 9.046 2.516 80.369 Non-property tax items 415.071 213.786 628.857 Departmental income 345.956 2.504.880 2.850.836 Intergovernrnenlal charges 252.558 $ 7.200.274 1.013 7.453.845 Use of money aed properly 489.796 77.817 274.959 64.092 906.664 licenses and permits 249.178 11.126 165.965 426.269 Fines and forfeitures 140.192 140.192 Sale of propert7 and compensation for less 93.290 2.796 109.137 205.223 Miscellaneous local sources 432.269 155.054 551.457 153.591 1.292.37t State aid 2.637.870 188.147 1.045.000 75.374 3.946.391 Federal aid 174~348 %510,539 224.136 1.909.023 Total Revenues 19~908,009 4~249~018 10~582~229 5~895~825 40~635~081 MAJOR GOVERNMENTAL FUNDS EXPENDITURES Current General gouemment support 4.641.568 Public safety 7.177.145 Public health 33.2.88 Transportation 446.877 2.913.768 Economic assistance and opportunity 901.139 Home and community services 354,768 Culture and recrea0on 315.273 Employee benefits 5.857.963 500.343 Capital ouOay Principal and interest 1.560.055 178.371 Bond issuance costs Advanced refunding escrow Total Expenditures 21.288~076 3r592~482 Excess (Deficiency) of Revenues Over Expendilures (1.380.067) 656.536 Other Finanoir~ Sources (Uses) Proceeds of refunding bonds Payments to refunded bond escrow agents Premium on special assessment debt BANs redeemed from appropriations Transfecs in 2.642.859 Transfers out (1.895r023) Total Other Finartcing Sources (Uses) 747.836 Excess {Deficiency) of Revenues and Other Sources Over Expendi~ures and Other Uses Fund Balance at Beginning of Year Fond Balances at End of Year 12.788.366 29.529 70.075 112~758 13~000r728 (2.418.499) 99.895 4.741.463 807.474 7.984.619 6.864 40.152 3.360.645 901.139 3.102.639 3.457.407 315.273 444.858 6.803.164 12.788.366 671.720 2.439.675 70.075 112~758 5~133~450 43~014.736 762.375 (2.379.655) 2.380.000 2,380,000 (2.210.000) (2.210.000) 12.833 12.833 1.065.095 1.065.095 276.969 2.919.828 (520,085) (504,720) (2.919.828) (520.085) 1.524.897 (504.720) 1,247r928 (632.231) 136.451 (893.602) 257.655 i1.131.727) 6.639.693 920.397 2.977.084 1.146.444 11.683.618 $ 6.007.46~2--$1'056'848 ~$ 2.083.482 ~$1'404'099 $10.551.891 See notes to the financial statements. TOWN OF SOUTHOLD RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES For the year ended December 31, 2005 Nat Change in Fund Balance Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported es depreciation expense. The amount by which capital outlay exceeds depreciation in the current period is: Capital outlay Depreciation expense Loss on dispositions $13,205,174 (4,082,748) (202,828) Some expenses reported In the Statement of Activities do not require the use of current financial resources and therefore, are not reported as expenditures in governmental funds: Prepaid charges Deferred charges The issuance of long-term debt and increase in obligations under capital leases provides current financial resources to governmental funds, while the repayment of the principal of long term debt and capital leases consumes the current financial resources of governmental funds. Neither transaction has any effect on net assets. Bonds issued Repayment of bond principal Due to Employees Retirement System Compensated absences Claims and judgments payable Estimated tlability for landfill closure and postclesure care costs Accrued interest payable $ (1,131,727) 8,919,598 (53,286) 170,000 (2,380,000) 3,162,431 41,841 (117,468) 378,630 18,872 (79,303) $ 8,929,588 Change in Net Assets of Governmental Activities See notes to the financial statements. -17- TOWN OF SOUTHOLD STATEMENT OF FIDUCIARY NET ASSETS December 31,2005 ASSETS Cash and investments Other receivables Due from other funds LIABILITIES Due to other funds Due to school districts Due to component units Due to other governments Other liabilities Deposits held Total Assets Total Liabilities Fishers Island Town Ferry District Totals $ 14,898,809 $ 43,462 $14,942,271 17 40,638 40,655 7,044 7,044 $ 14,905,870 $ 84,100 $14,989,970 $ 68 $ 38,829 $ 38,897 11,675,920 11,675,920 517,902 517,902 1,664,259 1,664,259 8,881 8,881 1,038,840 45,271 1,084,111 $ 14,905,870 $ 84,100 $14,989,970 See notes to the financial statements. TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Town of Southold (the q'own"), which was established in 1640, is governed by Town Law and other general laws of the State of New York and various local laws. The Town Board is the legislative body responsible for overall operations. The Town Board consists of the Supervisor who is elected for a term of two years and five council members who are elected for terms of four years. The Town Board appoints the Town Attorney, Comptroller and the Commissioner of Public Works whose terms are fixed by Town Law. The Town Clerk, Receiver of Taxes, Supedntendent of Highways, Justices and Town Trustees are all elected and serve for four years, respectively. The Town provides a full range of municipal services, including public safety, bansportation, home and community services, public works and road maintenance, recreation and perks, and general and administrative services. The financial statements of the Town of Southold have been prepared In confon'nity with accounting principles generally accepted in the United States of Arnerica (GAAP) as applied to govammental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing goverrnrnental accounting and flnandal reporting principles. The more significant of the government's accounting policies are descfibod below. 1. REPORTING ENTITY The finandal reporling entity consists of:. (a) the primary government, which is the Town of Southold; (b) organizations for which the primary govemmant is financially accountable; and (c) other organizations for which the nature and significance of their relationship wffh the Ixirnary government am such that exclusion would cause the reporting entiys financial statements to be misleading or incomplete as set terth in GASB Statement No. 14. The decision to indude a potential component unit in the Town of Soulhold reporting entity is based on several criteda sat forth in GASB Statement No. 14' including legal standing, dependency and financial accountability. Based on the application of these c~teria, the following is a summanJ of certain entities considered in determining the Town of Southold's reporting entity. Certain special districts of the Town of Southold provide sanitation, ferry, and park services to residents and businesses within the districts. These special districts are organized under New York State Town law and have sapamtely elected beards. Special districts cannot issue bonded debt without the approval and the backing of the full failh and credit of the Town. Tax levies of the special districts are collected by the Town Receiver of Taxes. As a result of this fiscal dependency, the Town is financially accountable for these special dislflcts. Accordingly, these special dislHcts have been determined to be component units of the Town and are presented discretely in a separate column In the combined financial statements to erephaslze that they are legally separate from the primary government. BASIS OF PRESENTATION The Town's basic financial statements include both government-wide (reporting the Town as a whole) and fund financial statements (reporting the Town's major funds). Government-wide Financial Statements The government-wide financial statements reports information on the Town as a whole, except fiduciary activities, with separate columns for the primary governmental activities as well as the discretely presented component units. In the govemment-wide Statement of Net Assets, the Town's govemreental activrdes .ere presented on a consolidated basis and are reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligati(~ns. The Town's net assets are reported in three pads--investments in capital assets, net of related debt; restricted net assets; and unrestricted net assets. -19- TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES (continued) 2. BASIS OF PRESENTATION (continued) The government-wide Statement of Activities reports beth the gross and net cost of each of the Town's functional categories (public safety, lmnsportation, home and community services, etc.), which are otherwise supported by general government revenues (property, sales and usa taxes, certain intergovemmantal revenues, fines, permits and charges, etc.). The Statement of A~vities reduces gross expenses (including depreciation), by related program revenues and operating and capital grants, to produce the net cost of each program. Program revenues include (a) charges for services and (b) operating and capital grants and contributions that are directly associated with the function. Operating grants include operating-specific and discretionary (either operating or capital) grants while the capital grants column reflects capital- specific grants. The net costs (by function) are normally covered by general revenue (property, taxes, intergevemmental revenues, interest inceme, etc). As a general rule the effect of interfund activity has been eliminated in general purpose financial statements. This government-wide focus is mere on the sustainabiiity of the Town as an entity and the change in the Town's net assets resulting from the current year's activities. Fund Financial Statements The fund financial statemants are similar to the financial statements presented in the previous model. The new emphasis is on the major funds in the fund financial ~[u;~f~ia. Non-major funds are summarized into a single column. The accounts of the Town ara organized on lhe basis of funds, each of which is considered a separate accounting entity. The operations of each fund am accounted for wilh a separate set of self-balancing accounts that comprise ils assets, liab~ities, fund balances, revenues, and expenditures, which are segregated for the purpose of carrying on specitic activities or attaining certain objectives In accordance with special regulations, restrictions or limitations. The vadous funds am presantsd by type In lhe fund finandal statements. Accordingly, the Town maintains the following fund types: Govemmentel Funds - Governmental funds am those through which most governmental functions am financed. The acquisition, use and balances of expendable financial resources and the related Ilabilifias are accounted for through govemmontal funds. The measurement focus of the governmental funds is upon determination of financial position and changes in financial position. Governmental funds are furlher classified as major and non-major funds. The Town reporls the following major governmental funds: General Fund - is the principal operating fund of the Town. This fund is used to account for all financial resources except those required to be accounted for in other funds. Hinhwav Funds - to maintain and operate highways. Capital Proiects Fund - used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than these financed by special assessment funds and trust funds). - 20 - TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2. BASIS OF PRESENTATION (continued) Fund Financial Statements (continued) Additionally, the Town reports the following non-major funds: Special Revenue Funds - are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specified purposes. Special Revenue Funds include the following: General Fund Part Town - to provide general services outside the Village of Greenpo~ Soecial Grant Fund - segregate and account for projects funded by Community Development revenue. Special Dislrict Funds - to provide special services to areas that encompass less than the whole town. Fiduciary Funds - Fiduciary Funds are used to account for assets held by lhe Town in a bustee or custodial capacity. Agency Fund - is for money (and/or property) received and held in the capacity of trustee, custodian or agent. Dtscretsly Presented Component Units Cerlain special districts that have separately elected boards provide transpoi[ui~,n, park, mosquito control, and sanitation services to residents and businesses within these districts, and follow government fund accounting principles. These dlsbtots, which are accounted for as discretely presented component units, are as follows: The Fishers Island Ferry District, established in 1947 Orient Mosquito District, estsblished in 1916 Fishers Island Garbage and Refuse District, established in 1952 Cutchegue-New Suffolk Park Disb'ict, established in 1953 Orient-East Marion Park District, established in 1969 Southold Park District, estsblished In 1907 Maffituck Park DisMct, established in 1941 Complete financial statements of these component units can be obtained from their respective administrative offices: Orient Mosquito District 145 Platt Road Orient, NY 11957 Cutchegue-New Suffolk Park District P.O. Box 311 Cutchogue, NY 11935 Southald Park District P.O. Box 959 Southold, NY 11971 Fishers Island Ferry Districi P.O. Box 1179 Southold, NY 11971 Fishers Island Garbage & Refuse District Fishers Island, NY 06390 Orient-East Madon Park Disfl'ict P.O. Box 12 Odent, NY 11957 Mattituck Park District P.O. Box 1413 Mattituck, NY 11952 TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3. BASIS OF ACCOUNTING/MEASUREMENT FOCUS Measurement focus refers to what is being measured whereas the basil of accounting refers to when revenues and expenditures am recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement focus applied. In the govemment-wide statements, govemmental activities are presented using the economic resources measurement focus and are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, galas, losses, assets, and liabilrfies resulting Eom exchange and exchange-like transactions are recognized when the exchange takes place. In the funds statements, gevemmentel funds use a current financial resources measurement focus and are accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susesptible to accrual (measurable and available to finance current operations). 'Measurable' means lhe amount of the lransacfion can be determined and 'available' means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The Town considers all revenues available if they are collected within 60 days after the year end. Revenues susceptible to accrual include Suffolk County local assistance at year end on behalf of the Town, fianchisa fees, and charges for services. intergovemmentsl revenues and operating transfers. Permits, fees, and other similar revenues are not susceptible to accrual because generally they are not measurable until they ara raesived in cash. In those instances where expenditures are the prima factor in determining eligibility for state and federal grants, revenues are recognized when the expenditure is incurred. In the Capital ProJects Fund, long-term debt is recognized as mvesue upon receipt of the proceeds. Expenditures are recorded on the accrual basis except that (a) expenditures for prepaid expenses are recognized when incurred; (b) principal and interest on indebtedness are recognized as expenditures when due; (c) compensated absences, such as vacation and sick leave, which vest or accumulate, am charged as expenditures when paid. Encumbrance accounting, under which purchase orders, con,acts and other commitments are recorded for budgetary control purposes in .order to rassrve that portion of the applicable appropriatioo, is employed in the govemmentai funds. Appropriations for all govemmentai funds except the eap'~-]l pmjecte fund lapse at year-end. However, encumbrances reserved against fund balances are re-appropriated in the ensuing year. Encumbrances are reported as resewatioes of fund balances since they do not constitute expenditures or liabilities. Expenditures for such commitments are recorded in the period in which the liability is incurred. 4. ASSETS, LIABILITIES AND FUND EQUITY RECEIVABLES Receivables include amounts due fram Federal, Stete, and other govemments or en~as for se~cas provided by the Town. Receivables are recorded and ravenuas recognized as earned or es specific program expenditures ara incurred. INVENTORY - MATERIALS AND SUPPLIES Inventoq/in the general and special revenue funds is valued at cost. Inventory in these funds Is accounted for under the consumption method. TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. ASSETS, LIABILITIES AND FUND EQUITY (confinued) CAPITAL ASSETS Capital assets purchased or acquired with an original cost of $5,000 or more are reported at historical cost or estimated historical cost, Contributed assets are reported at fair market value as of the date received. Additions, Improvements and other capital outlays that significantly extend the useful life of an asset are capitalized. Other costs Incurred for repairs and maintenance are expensed as incurred. Depreciation on all assets Is provided on the straight- line basis over the following estimated useful lives: Buildings Improvements and other Machinery and equipment Infrastructure 10-40 years 20 years 5-10 years 20-30 years Infrastructure assets, consisting of certain improvements other than buadings including roads, curbs, sidewalks, bridges, street lighting are capitalized along wtih other capital assets. In the fund financial statements, capital assets are recorded as capital outlay expenditures In the governmental fund upon acquisition. DEFERRED REVENUE/UNEARNED INCOME Deferred revenuas/uneamed income ara those where asset recognition c~taria have been met, but which revenue recogni~n chtaria have not been met. Such amounts include collec~ons In advance, unearned income and amounts Ihat have been deemed to be "measurable" but not 'available" to finance current expenses pursuant to generally accepted accounting principles. PREPAIDS Prepaids record payments to venders that benefit futura recording periods and ara reported on the consumption basis. Prepaids in the General and Special Revenue Funds represent insurance premiums paid for coverage that will benefit the subsequent period and for retirement benefits that will benefit a future period. LONG-TERM OBUGATIONS The liabilities for long-term obligefions consisting of genera[ obligation bonds, compensated absences, due to employee retirement system, judgments, claims and liability for landfill closure and post closure costs are recognized in the govemment-wlde financial statements. In lhe fund statements, long-term obligations are not reported as liabilities. The debt proceeds are reported as other financing sources and payment of principal and Interest reported as expenditures. 5. REVENUES AND EXPENDITURES REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES In Suffolk County, the assessment and lien of real property for taxation Is done by the County Department of Assessment, Real properly taxes become a lien on December I for both school and general taxes. The Town's assessment rolls are used for the levy of real property taxes by the Town and the School Dislficts, as well as by the County and by Special Disbiots of the County and the Town. - 2.3 - TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 Ao SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES (continued) 5. REVENUES AND EXPENDITURES (continued) REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES (continued) The Town of Southold Receiver of Taxes collects all real property taxes for the Town, Suffolk County, Town Spedal Districts and School Dis~icts. These taxes am levied on December 1, and am due in two installments, 50% on December I and 50% on May 10, payable without penalty to January 10 and May 31, respec~vely. Penal~es am imposed thereafter at the rote of one-twelfth of the rote of interest de~ermined by the State Commissioner of Taxation and Finance, after which taxes am payable to the County Treasurer. The Town retains the total amount of Town, Highway and Town Spedal Districts levies from the amount collected, and forwards the balance collected to the County which assumes collection responsibility. The Town and Town's Special Districts therefore realize annually the 100% collection of real property taxes. School District properly faxes are also levied on December 1, and are also payable in two installments. School property taxes are due in two installments, 50% on December I and 50% on May 10 payable without penalty to January 10 and May 31, respectively. The County is also responsible for uncollected school taxes. INTERFUND TRANSACTIONS Interfund transactions have been eliminated from the government-wide financial statements. In the funds statements Interfund transactions include: a) Interfund Revenues Inter[und revenues, quasi-external transactions, in the general fund represent amounts charged for sen, ices or facilities provided by the general fund. The amounta paid by the fund receiving the benetit of the sen, ice or facilities am reflected as an expenditure of that fund. b) Transfers Tmnsfem represent payments to the debt service, general fund and capital projects funds from the other funds for their appropriate sham of the debt service, general fund or cap'~al project costs. COMPENSATED ABSENCES The liability for vested or accumulated vacation or sick leave (compensated absences) is recorded as current and noncorrent obligations in the government-wide statements. The current portion of this debt is estimated based on historical trends, In the fund financial statements only the compensated absence liability payable from expandable available financial resources is incurred. The amount that is expected to be liquidated with expendable available financial resources is reported as expenditures and a Ilebllity in the funds statement in the respective fund that will pay it. 6. EQUITY CLASSIFICATIONS In the government-wide statements, equity is classified as met assets and displayed in throe components: a) Invested in capital assets, net of related debt - consists of capital assets including mslHcted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bends, notes, or ether borrowings that are attributable to the acquisition, construction, or improvement of those assets. -24- TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 6. EQUITY CLASSIFICATIONS (continued) b) Restricted net assets - consists of net assets with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation. c) Unrestricted net assets - all other net assets that do not meet the definition of 'restricted' or 'invested in capital assets, net of related debt.' In the fund statements, governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and unreserved, with unreserved further split between designated and undesignated. Portions of ftmd equity ara segregated for futura use and therefore not available for future appropriation or expenditure. Amounts reserved for encumbrances, inventory, insurance claims and debt service represent portions of fund equity, which ara required to be segregated in accordance with state law or GAAP. Designa~ons of fund balances In governmental funds indicate the utilization of these resources in the subsequent year's budget or tentative plans for futura use. SI'BNARDSHIP, COMPLIANCE AND ACCOUNTABILR'Y 1. BUDGETARY DATA Budgets are adopted annually on a basis consistent with generally accepted accounting principles. Appropriations au~orized for the currant year ara increased by the amount of encumbrances carded forward from the prior year. Budgetary controls for special revenue funds ara established in accordance with the applicable grant agreement, which may cover a period other than the Town's fiscal year. Appropdata budgetary adjustments have been made to reflect these grant agreements during the Town's fiscal year. The Town fcilows the procedures enumerated below in establishing the budgetary data reflected in the financial statements: a. No later than October 1, the Supervisor submits a tentative budget to the Town Board for the fiscal year commencing the fcilowing fiscal year. The tentative budget includes the proposed means of financing for all funds. b. After public hearings are conducted to obtain taxpayer comments, no later than November 20, the Town Board adopts the budget. c. The Town Board must approve all modiflcetions of the budgeL However, the Supen/isor is authorized to transfer certain budgeted amounts within departments. In order to show the full legal leval of budgetary compliance for the general and certain special revenue funds, detailed individual statements of revenues, expenditures and changes in fund balances - budget and actual, are presented in a separate budget report. - 25 - TOWN OF $OUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued) 2. FUND BALANCES DESIGNATION OF FUND BALANCE Portions of the unreserved balances at December 31, 2005 were designated for the subsequent year's operating budgets as follows: Fund Fund Balance Unreserved and Designated Total for Subsequent Fund Balance Fund Balance Year's Unreserved Unreserved Budget Undesignated Non-Major Funds: Town Outside Village East West Fire Protection District Southold Wastewater Distdct Fishers island Sewer District Solid Waste Management Distdct Total 845,309 $ 370,932 $ 474,377 15,112 4,350 10,762 176,657 176,657 32,546 32,546 334,475 334,475 $ 1,404,099 $ 375,282 $ 1,028,817 DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS t. CASH AND INVESTMENTS Cash consists of funds deposited in demand accounts, time deposit accounts and cerlfficates of deposit with maturities of less than three months. The Town's investments ars govemed by a formal investment policy. The Town's monies must be deposited in FDiC-insured commercial banks or trust companies located within the state. The Town is authorized to use demand accounts and cerlJficates of deposit. Permissible investments include obligations of the U.S. Treasury, U.S. Agencies and investments made by the Coopomtive Liquid Asset Security System (CLASS). CLASS is a cooperative investment plan consisting of U.S. Treasury Obligations and repurchase agreements relating to treasury obligations. Investments are stated at cost, which approximates market value. CLASS was established as a cooperative investment arrangement organized under the CLASS Municipal Cooperation A~reement made pursuant to New York General Munidpal Law, ArtJcie 3A and 5-G. It is the Town's policy to require collateral held in the name of the Town for demand deposits, money market deposits and cerlir-catas of deposit for ale deposits not covered by federal deposit insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State and its municipalitias and school dislficts. At December 31, 2005 the cash in banks was approximately $37,160,000 and collateral held against cash in banks was $60,410,000 consisting of FDIC insurance and/or securities held in the name of the Town of Southold. - 26 - TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued) INTERFUND RECEIVABLES AND PAYABLES Interfund receivables and payables for the primary government at December 31, 2005 were as follows: General Fund - Town wide Highway Fund Capital Projects Fund Part Town East-West Fire District Southold Wastewater Dislrict Fishers Island Sewer District Solid Waste Managemant Dis~'ict Amount Amount Receivable Payable $ 176,390 $ 1,888,241 828,984 251,100 73,598 152,519 6,974 92,199 4,752 325 483,244 20,700 $ 1.989.513 $ 1_98g.51.__._~3 Intarfand receivalfle and payable balances for the primary government at December 31, 2005 are expected to be paid currently. 3. CAPITAL ASSETS Balance Balance 111/05 Additions 12/31/05 Primary government Deletions Capital assets not being depreciated Land $ 37,795,087 $ 9,977,191 $ -0- $ 47,772,278 Construction in progress 396,912 1,362,656 153,487 1,608,081 Total capital assets not being depredated38,193,999 11,339,847 153,487 49,380,359 Depmciable capital assets Buirdings 4,569,296 5,217 4,574,513 Improvements other than buildings 13,469,136 29,818 13,498,954 Machinery and equipment 8,686,593 1,125,955 289,733 9,522,815 Infrastructure 69,334,187 704,338 70,038,525 Total depmciable capital assets 96,059,212 1,865,328 289,733 97,634,807 Less accumulated depreciation Buildings 1,933,832 134,698 2,068,530 Improvements other than buildings 3,020,775 521,309 3,542,084 Machinery and equipment 5,567,555 714,211 6,041,374 Infrastructure 42,356,569 2,712,530 45,069,099 Total accumulated depreciation$ 52,878,731 $ 4,082,748 56,721,087 Total net depmciable capital assets 40,913,720 Total net capitalassets $ 90,294,079 240,392 $ 24O,392 - 27 - TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued) 3. CAPITAL ASSETS (continued) Depreciation e~pense was charged to governmental ~nclions as follows: General government suppmt Public safety Transportation Economic assistance and opportunity Culture and recreation Home and community services 231,471 179,200 2,923,849 36,230 61,206 650,992 $ 4,982,748 Discretely presented component units Capital assets not being depreciated Land Construction in progress Total capital assets not being depreciated Depredabla capital assets Buildings Improvements othe~ than buildings Machinery and equipment Infrastructure Total depreciable capital assets Lass accumulated depreciation Buildings rmprovernenta other than buildings Machinery and equipment Infrastructure Total accumulated depreciation $ Total net depreciable capital assets Total net capital assets Balance Balance 1/1/05 Additions Deletions 12/31/05 $ 2,213,759 $ 2,213,759 10,592,179 $ 2,598,828 $ 16,440 13,174,567 12,805,938 2,598,828 16,440 15,388,326 3,416,944 123,167 3,540,111 2,575,569 2,575,589 3,170,695 30,033 3,200,726 2,121,386 17,000 2,138,386 11,284,614 170,200 11,454,814 1,186,077 103,656 1,,?.89,733 973,574 88,000 1,061;574 2,003,454 129,203 2,132,657 1,073,547 82,319 1,155,866 5,236,652 $ 403,178 5,639,830 5,814,954 $ 21,203,310 - 28 - TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued) 4. INDEBTEDNESS SHORTTERMDEBT Bond Anticipation Notes (BANs) - Bond anticipation notes (BANs) are used as a temp<xary means of financing capital expenditures in the capital projects fund. State law requires Ihat BANs issued for capital purposes be converted to Iong-tarm obligations within five years after the original issue date. The notes or renewal thereof may not extend more than two years beyond the original data of issue unless a portion is redeemed within two years and within each 12 month period thereafter. Liabilities for BANs am generally accounted for in the capital projects fund. BANs are expected to be paid from the proceeds of future bond issues after renewal of these notes. These BANs bear interest at vadous rates from 2.64% to 3.06% and am due at various dates through 2006. When BANs are not redeemed with the precaeds of bond issues, but instead paid from budgetary appropriations, the principal amount paid is recorded as an expenditure in the operating fund and a financing source is recorded in the capital projects fund. These notes are summarized as rolm: DescriDtion Amount Various Purposes $ 7,175,000 Various Purposes 1,700,000 New London Wharf 1,725,000 Fishers Island Garbage 1,120,000 Total ~ Interest Rate 2.64% 3.O5% 2.75% 3.06% Of the $11,720,000 in bond anticipation notes, $8,875,000 relates to the pdmary government and the remaining $2,645,000 relates to the component units. LONG TERM DEBT Summary of changes in long-term debt transactions for the year ended December 31, 2005 is as follows: Non-current Balance Balance liabilities due Non-current 1/1/05 Increases Reductions t2/31/05 ~dhin one year liabilities Primary Government: C-enernt obligntion bonds $ 10,031,529 Due to Employees Relirement Syste] 135,834 Compensated absences 5,662,358 Claims and Judgments 598,630 Esfimated liabir~ for landfill closure and pcet-dceure care coats 631,267 $ 2,380,000 $ 3,162,431 $ 9,249,098 $ 755,000 $ 8,494,098 41,841 93,993 45,189 48,804 860,53t 743,063 5,779,826 5,779,826 378,630 220,000 220,000 18,872 fi12,395 19,072 593,323 Component Units: General obligation bonds 272,569 3,000,000 222,569 3,050,000 195,000 2,855,000 TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued) INDEBTEDNESS (continued) LONG TERM DEBT (continued) General Obligation Bonds - The Town borrows money in order to acquire land or equipment or construct buildings and improvements. This enables the cost of these capital assets to be borne by the present and future taxpayers receiving the benefit of the capital assets. These long-term liabilities, which are becked by the full faith and credit of the Town, bear Interest at vari(Sus rates from 2.95% to 6.375% and have maturity dates in 2006 through 2021. Future principal and interest payments fo maturity for both the primary govemrnent and the component units ere as follows: Year Endino Principel Interest 2006 $ 950,000 $ 405,624 2007 979,098 376,466 2008 995,000 345,307 2009 1,025,000 312,347 2010 1,000,000 277,956 2011-2015 4,390,000 910,394 2016-2021 2,960.000 265,814 Totals ~ ~ Other long-term liabilltfas for claims and judgments, compensated absences, retmment system and the estimated liability for landfill dc)sum and pest cJosure costs are to be paid by the fund that gave rise to the liability. During the year ended 2005, the Town issued $2,380,000 in general obligation bonds w'~h an interest rata ranging Eom 2.50% fo 3.75% to advance refund $2,210,000 of outstanding 1993 and 1995 Serial bonds with interest rates between 5.00% and 5.10%. The net proceeds of $2,392,833 include an original issue premlum of $12,833 which were used in part to pay insurance, underwriting fees and administrative costs of $70,075 with the belanca deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the various general obligation bonds. As a result, these bonds are considered to be defeased and the liability for those bonds has been removed Eom the Town. The Toy, s advance refunded the various general obligation bonds in order to reduce its total debt sen/ice payments over the next 10 years by $100,505 and to obtain an economic gain of $66,538 (difference between the present values of the debt sewice payments on the old and new debt). RETIREMENT SYSTEM Plan Descrieton The Town of Southold parlidpates in the New York State and Local Employees' Retrement System (ERS) and Local Police and F'a'e Retimmant System (PFRS). This is a cast-sbedng multiple- employer retirement system. The System provides retirement benefits as well as death and disability beneffis. Obligation of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Secudty Law (NYSRSSL). As eat forth in the NYSRSSL, the Complroliar of the State of New York (Comptroller) serves as sole trustee and administrative head of ~e System. The CompEoller shall adopt and may amend rules and regulations for the admini$~,-~;on and lransa~on of the business of the System and for the custody and control of their funds. A pub~icJy available annual report containing financial statements and required supplemental information for the Employees' Retirement Systera may be obtained by writing to the New York State Retirement System, Governor Smith State Building, AIbeny, NY 12244. - 30 - TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued) 5. RETIREMENT SYSTEM (continued) Funding Policy The System is nonconlfibutory except for employees who joined the New York Stets and Local Employees' Retirement System after July 27, 1976 and who ha~ leas than tsn years of membership and less than ten years of credited service with a retirement system under the provisions of article fourteen or fifteen of the NYSRSSL, who contribute 3% of their salary. Prior to October 1, 2000, all employees who joined the System after July 27, 1976 were required to contribute 3% of their salary. Under the authority of the NYSRSSL, the Comptroller shall earthy annually the rates expressed as proportions of payroll of members, which shall be used In computing the cenbibuflons required to be made by employers to the pension accumulation fund. The Town is required to contribute at an acfuadally determined rate. The actual conbibeflons were equal to the actuadally required amounts and also Include add~onal ccotdbutions to fund various early retirement incentives mede available to the Town employees. The credits and miscellaneous adjustments represent modification made by the ERS for prior year's conth'butions. The required conthbutions, for the Primary government, for the currant year and two preceding years were: ERS pFRS , 2005 $1,068,200 $ 1,016~937 2004 $ 992,023 $ 679,079 ~ 2003 $ 443,861 $ 240.756 The Town's contribution to the system was 100% of the conbibutions req, ~'ed each year. 6. POST EMPLOYMENT BENEFITS In addition to providing pension benefits, the Town provides health insurance coverage and survivor benefits for retired employees and their survivors. Substantially all of the Town's employees may become eligible for these benefits if they reach normal retirement age while worldng for the Tow~. Health care benefits are provided through either a self-funded plan whose premiums are based on the benefits paid during the year or are provided In accordance waft New York Stats Health Insurance Rules and Regulations (administered by the New Yod( Stete Department of Civil Service) · reugh the New Yon~ State Empire Plan (the 'Empire Plan') whose premiums are based on the benefits paid throughout the State dudng the year. The Town recognizes the cost of providing benefits by recording its share of insurance premiums or the actual benefits paid as expenditure in the year paid. The Town's union contracts and ordinances require that it provide Its eligible enrollees wilh benefit coverage under either the self-funded plan or the Empire Plan. Under the provislcos of the Empire Plan, premiums are adjusted on a prospective basis for any losses experienced by the Empire Plan. The Town has the option to terminate its participation in the Empire Plan at any time without liability for its respective share of any previously incurred loss. Dudng the 2005 year, $3,014,128 was paid on behaff of 88 retirees and 207 active ereployeea and is recorded as an expenditure in the General Fund. 7. COMPENSATED ABSENCES Town employeea are granted vacation and sick leave and earn compensatory absences in varying amounts. In the event of termination or upon retirement, an employee ts ea~ed to payment for accumulated vacation and sick leave and unused compensatory absences at vadous rates subject to certain maximum limitetions. TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 C. DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS (continued) 7. COMPENSATED ABSENCES (continued) Estimated vacation, sick leave and compeasatory absences accumulated by govemmental fund type employees have been recorded i~ the statements of net assets. Payment of vacation time and sick leave is dependent upon many factors; therefore, timing of future payments Is not readily determinable. However, managen'~nt believes that sufficient resources will be made available for the payments of vacation, sick leave and compensatory absences when such payments become due. As of December 31, 2005, the value of the accumulated vacalico lime and sick leave was $5,779,826 for the pdmary government. COMMITMENTS AND CONTINGENCIES Risk Management The Town is seE-insured for both medical Insurance and general liability insurance. The amount of medical claims outstanding at December 31, 2005 Is $200,131. This amount has been reserved against fund balance in the General Fund. In common with other municipal~ies, the Town receives numerous notices of claims. Prior to 2005, coverage for bodily Injury and property damage wes previously written on a primary non-self Insured retention ('SIR') basis. Insurance market conditions and availability precluded the Town from obtaining coverage in 2005 without an SIR. As a result, in 2005 the Town seE-insured for bodily injury and property damage up to a maximum of $50,000 per claim. The $50,000 limitaliee was the minimum retenlion amount available to the Town. Claims in excess of $50,000 ara covered by excess liability pelides providing coverage for $10,000,000 per occurrence and in the aggregate. Although the eventual outcome of these 2005 claims cannot presently be determined, the Town's third party adminisbator has eslimated unsealed claims at December 31, 2005 to be $94 thousand. These amounts have been reserved against fund balance in the General Fund. The Town Is of the opinion that the ultimate settlement of the outstanding claims will not result in a material adverse effect on the Town's financial position. Since 2005, there have been no significant redu~ons in insurance coverage as compared to the pdor year;, in addition there were no settlements on excess of insurance coverage over the last three years. The Town Is also self-insured for unemployment benefits paid. Landfill Closure and Post-Closure Care Costs State and federal laws and regulafions require the Town to place a final cover on its landffil sites and to per[orm certain maintenance and monitoring functions at the sites for thirty years after closure. The Town ceased accepting waste at its Cutchogue landfill as of October 8, 1993. The Town entered into a stipulafion of settlement with the New York State Deparlment of Environmental Conservation in October of 1994 in which all charges of operational violalions at the Cutchogue landfill were dropped. Under the stipulaUon, the Town agreed to close and place a final cover over the landfill and. to pay a . civil penalty of $650,000 over seven years. Construction of the final cover commenced in the summer of 2001 and was completed In the fall of 2003. In addition to placement of the final cover on the landfill, state and federal regulations presenliy require the Town to perform certain maintenance and monitoring functions at the site for up to thirty years. Accordingly, as of December 31, 2005 the Town has recorded a liability of $612,395 which represents the provision to be made in future budgets for post-closure landfill costs. Actual costs may very due to inflation or deflation, changes In technology, or changes in regulations or applicable laws. Actual costs associated with the placement of the final cover totaled $7,681,719. Financing for closure activities was provided through a $2,000,000 grant from the New York State Department of Environmental Conservation with the balance provided with a state subsidized loan through the New York State Environmental Facililies Corporalion. Costs associated with post closure care wiJl be covered by charges to future landfill users and future tax revenue. - 32 - TOWN OF SOUTHOLD NOTES TO FINANCIAL STATEMENTS December 31, 2005 COMMITMENTS AND CONTINGENCIES (continued) Lease Commitments and Leased Assets The Town leases property and equipment under operating leases. Total rental expenditures on such leases for the fiscal year ended December 31, 2005 were approximately $205,000. Futura obligations over the pdmary terms of the Town's leases as of December 31, 2005 are as follows: 2006 $ 115,977 2007 94,997 2008 85,184 2009 and thereafter 684.824 Total ~ CONDENSED FINANCIAL STATEMENTS FOR THE DISCRi= i ~-LY PRESENTED COMPONENT UNITS The following represents condensed financial statements for the discretely presented component units as of and for the year ended December 31, 2005: Condensed Statement of Net Assets: Due from Capital Assets Other Current Primary Net of Curren~ Long-Term Net Disttic~ Assets Government Depreciation Uabl~ties Llablitites Assets Fishers Island Feny $ 333,136 $ 119.344 $ t5,757,994 $ 2,439,520 $ 2.700,000 $ 11,070,954 Fishers Island Refuse and Garbage 640,862 631,328 3,026,171 1,235,336 3,063,025 Cutchogue. New Suffolk Park 125,728 28,382 124,2t8 28,382 249,946 Southold Park 21.550 63.406 648,159 65,677 667,438 Orient-East Madon Park 4,152 5.559 432,985 16,002 426.724 Ma~fltuck Park 190,451 85,77t 1,204.103 141.156 155.000 1,184,169 Orient Mosquito 32,386 15.355 9,680 15,355 42,066 $ 1,34B,295 $ 949,145 $ 2t,203,310 $ 3,941,428 $ 2,855,000 $ 18.704,322 Program General Revenue Net Assets DisMct Expenses Revenue Net Expense T~x Other Change 1/1/05 12J31/05 Frshemls~andFeny $ 2,714,385 $ 1,884,374 $ 830,0tl $ 400,000 $ 2,026,871 $ (1,596,860) $ $,474,094 $ 1t,070,054 F~henl Island Refuse & Garbage 489,606 47.644 441,962 599,400 36,695 (194,136) 2,B68.889 3,063.025 Cutchogue-New Suffolk park 138.633 138,633 141,000 2,850 (5.217) 244.729 249.946 Sou~oid Park 350.088 350,088 315,000 34,090 995 668,436 667.438 Off.at. East Mafi(m Park 29.000 29,000 24,900 62 4.038 430,762 426,724 MaU)flJCk Pad< 304,002 304,002 405,930 11,025 (112,953) 1,071,216 1,184,159 Odent M(~!u~to 60.371 60,371 74.6.50 401 (14,680) 27.386 42,066 $ 4,086,085 $ 1,932,018 $ 2,154,05'/ $ 1,960,880 $ 2.111,997 $ (1,918,816) $ 14,785.512 $ 16,704,322 REQUIRED SUPPLEMENTARY INFORMATION OTHERTHAN MANAGEMENT DISCUSSION AND ANALYSIS TOWN OF SOUTHOLD GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL Year ended December 31, 2005 REVENUES Real property taxes $14,608,674 Other real property tax items 66,000 Non-property tax items 401,035 Departmental income 349,900 Intergovernmental charges 194,160 Use of money and pmpe~y 286,625 Licenses and permits 218,330 Fines and forfeitures 112,000 Sale of property and compensation for loss 45,350 Miscellaneous local soumes 86,646 State aid 2,348,264 Federal aid 270,000 Total Revenues Original Final Budget Budget Vmiance Actual Positive/(Necjative) $14,608,674 $14.608,674 66,000 68,807 2.807 401,035 415,071 14,036 349,900 345,956 (3,944) 269,823 252.558 (17,265) 286,625 489,796 203,171 218,330 249,178 30,848 112,000 140,192 28,192 70,025 .93,290 23,265 113,654 432,269 318.615 2,483,083 2,637,870 154,787 270,680 174,348 (95,652) 18.986,964 19,249,149 19,908,009 658,860 EXPENDITURES General govemment support 5,545,742 Public safety 6,889,518 Public health 33,300 Transpmlaticn 420,500 Economic assistance and opportunity 993,400 Culture and recreation 368,870 Home and community services 299,101 Employee benefits 5,811,949 Debt service - principal and interest 1,773~ 100 Total Expenditures 22.155,480 Deficiency of Revenues Over Expenditures Other Financing Sources (Uses) Transfers in Transfers out Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and OUter Uses Fund Balance at Beginning of Year Fund Balance at End of Year 5,764,043 4,941,568 1,122,475 7,189,570 7,177,145 12,425 33,300 33,288 12 466,131 446,877 19,254 982,510 901,139 81,371 398,370 354,768 43,602 316,755 315,273 1,482 5,868,274 5,857,963 10,311 1~577,799 1 r560,055 17,744 22,598,752 21,288,076 1,308,676 (3,168.496) (3,347,603) (1.380.067) 1.967.536 5,488,341 5,559,682 2,942,859 (2,916,823) (2,319,845) (2,212,079) (1,895,023) 317,055 3.168.496 3,347,603 747,836 (2,599,767) (632,231) $ (632.231) 6,639,693 $ 6.007,462 See notes to the financial statements. TOWN OF $OUTHOLD HIGHWAY FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL Year ended December 31, 2005 REVENUES Real Property Taxes Other Real Property Tax Items Non-Property Tax Items Use of Money and Pmperbj Licenses and Permits Sale of Property and Compensation for Loss Miscellaneous Local Soumes State Aid Total Revenues EXPENDITURES Transportation Employee Benefits Debt Service - Principal and Interest Total Expenditures Excess of Revenues Over Expenditures Other Financing Uses (Sources) Operating Transfers In Transfers Out Total Other Financing Uses Excess of Revenues Over Expenditures and Other Uses Fund Balance at Beginning of Year Fund Balance at End of Year Odginal Final Variance Budget Budget Actual Posifive/(Negative) $ 3,805,032 $ 3,805,032 $ 3,805,032 3,600 3,600 8,935 5,335 111 111 25,300 25,300 77,817 52,517 5,000 5,000 11,126 6,126 1,000 1,000 2,796 1,796 155,054 155,054 223,700 223,700 188,147 (35,553) 4,063,632 4,063,632 4,249,018 185,386 3,228,488 3,228,488 2,913,768 314,720 553,741 . 553,741 500,343 53,398 189,932 189,932 178,371 11,561 3,972,161 3,972,161 3,592,482 379,679 91,471 91,471 656,536 565,065 494,564 494,564 (494,564) (586,035) (586,035) (520,085). 65,950 .. (91,471) (91,471) (520,085) (428,614)' 136,451 920,396 $ 1,056,847 $ 136,451 See notes to the financial statements. -35~ OTHER SUPPLEMENTARY IN FORMATION TOWN OF SOUTNOLD COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS December 31. 2005 ASSETS Cash and investments Accounts receivable, net of aJlowan~e Due [mm other funds Due from other governments State and Federal Receivables Prepaid expenditures LIABILITIES AND FUND EQUITY LIABILITIES Accounts payable Due to other funds Deferred revenue Total Assets Total Uablli~es FUND EQUrFY Fund balance - reserved: Prepaid expenses Fund balance - unreserved: Designated - ensuing year's budget Undesignated Total Fund Equity Total Liabilities and Fund Equity East-West Fire Southold General Fund Special Protection Wastowatsr Pai~ Tow~ Grant District Dist~ct $ 740.370 $ 27.767 $ 176.492 46.769 152,519 92.199 4.752 26~686 $ 968.344 $ 5.000 Fishers Island Sewer District $ 30.994 1.289 325 $ 5~000 $ 119r965 $ 181.244 $ 32~608 $ 14.305 $ 5.000 $ 12.056 6.974 90.6~6 02~108 $ 4~587 121,035 5~000 104~854 4~587 26.686 344.246 4,350 474r377 10~762 176~657 845.309 15.112 176.657 $ 966.344 $ 5.000 $ 119t966 $ 181,244 Solid Waste Management District Totals $ 270.513 $1.245.136 124,934 172.992 483.244 733.039 5,000 27.338 54.024 $ 906,029 $ 2.211.191 62 $ 195,071 $ 227.184 20,700 27,674 355r783 552.234 62 571.854 807.092 32,546 32,546 $ 32,608 334,475 334.475 $ 906.029 26,686 348,596 .028.817 1.404.099 $ 2~2111191 TOWN OF $OUTHOLD COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS Year ended December 31, 2005 REVENUES Real property taxes Other real property tax items Non property tax Items Departmental income Intergovernmental charges Use of money and property Licenses and permits Sale of proper{,/and compensation for loss Miscellaneous local sources State aid Federal aid EXPENDITURES General government support Public safety Public health Home and community ser~ces Employee beneSts Debt son4ce, principal and interest TotaI Revenees Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses: Operating tmnsiem out Total Other Financing Uses Excess (Deficiency) of Revenues Over Expenditures and Other Uses Fund Balance at Beginning of Yeer Fund Balances at End of Year East-West Fire Southold Fishers Solid Waste General Fund Special Protection Wastewater island Sewer Management Part Town Grant Distdct District Dlstdct District Totals $ 538,773 $ 413.058 $137.450 $ 1,614 $ 1.290,440 $ 2.381,335 1,220 290 97 2 907 2.516 213,786 213.786 739,283 26,231 17,423 1,721,943 2,504,880 1.013 1,013 28,321 2,689 6,666 1.1 g0 25.226 64,092 5.200 160,765 165.965 8,556 100,581 109.137 74.427 4,621 74.543 153,591 75.374 75,374 $ 224r136 224,136 1.684.940 224~135 416.037 175,065 20~229 ,, 3~375,418 5~895,825 99.895 99.895 393,192 414,282 807.474 6.864 6,864 563.269 224,755 1,846 29,598 2.283,171 3,102,639 210,776 212 233,870 444,858 5,385 2~475 663,860 671,720 1 ~279~381 224.755 414,282 4,533 29r598 3r 180r901 5,133,450 405,559 (619) 1,755 170, 532 (9,369) 194,517 762.375 (264,969) (239,751) (504,720) (264,969) (239,751) (504,720) 140.590 (519) 1,755 170,532 (9.369) (45,234) 257.655 704.719 619 13,357 6,125 41.915 379,709 1,146,444 $ 845.309 , $ *0- $ 15,112 $176~657 $ 32.546 $ 334,475 $ 1,404,099 *37- DISCRETELY PRESENTED COMPONENT UNITS TOWN OF SOUTHOLD DISCRETELY PRESENTED COMPONENT UNITS COMBINING STATEMENT OF NET ASSETS De~ember 31, 2005 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Uneudited) (Unaudited} ASSETS Cash and Invesbnents $ 259.882 $ 617,409 $ 125,728 Prepaid charges 24~487 19~892 Total Currant Assets 452~480 1~272~190 154,110 Total Assets 16,210~474 4~298~361 278~328 $ 21.550 $ 4.182 $ 189.690 . 63,406 5.559 85,771 761 $ 32,386 15,355 Tota~ $ 1,250,827 3,561 949,t45 48,767 45,140 2,271 80,406 10.443 8,815 5,559 85,771 15,355 65~677 16~002 296~156 15,355 1,004.103 442,802 63,941 392,414 2,845,000 14.093,268 $ 16t704,322 TOWN OF BOUTHOU) DISCRETELY PRESENTED COMPONENT UNITS COMBINING STATEMENT OF ACTIVmES Year ended December 31. 2005 REVENUES Preograre revenues Real property taxes Other real properly tax items Miscellaneous revenue, other governments Interest and earnings State Aid Federal Aid Other Total Revenues EXPENSES General government support Public health Transportation Culture and recreation Horee and comreunity services Interest TotalExpenses Fishers Island Cutchogue- Southold Orient-East Mattituck Orient Fishers Refuse and New Suffolk Park Marion Park Park Mosquito Island Ear~ Garbage District Park District District District District Dis~ct District (Unaudited) (Unaudited} (Unaudited) (Unaudited) (Unaudited) (Unaudffed) Totals 1.81M.374 $ 47.644 $ 1.932,018 400,000 599,400 $ 141.000 $ 315,000 $ 24.900 $ 405,930 $ 74.650 1.960.880 281 285 566 18.449 18.449 17.420 36.698 2.850 62 11.432 401 68.863 884 684 6,898 34.090 (692) 40.296 4,311 ~245 683.742 143r850 349~090 24.962 416.955 75.051 6,004,895 80.610 80,610 60,371 60,371 2,532.192 2.532.192 138.633 350.088 29.000 296.780 814.501 16.942 478.890 495.832 84~641 10~716 7~222 102~579 2~714~385 489~606 138~633 350.088 29~000 304.002 60~371 4,086.085 Changes in Net Assets Net Assets at Beginning of Year Net Assets at End of Year 1.596.860 194.136 5.217 (998) (4,038) 112.953 14.680 1.918,810 9.474.094 2,868.889 244,729 668.436 430.762 1.071.215 27,386 14.785.512 $1110701954 $ 31063.025 $ 2491946 $ 667.438 $ 4261724 $ 1.1841169 $ 42r066 $16.704.322 OTHER REPORTS TOWN OF SOUTHOLD SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS December 31, 2005 FEDERAL FEDERAL GRANTOR/PASS CFDA THROUGH GRANTOR/PROGRAM TITLE NUMBER EXPENDITURES U.S. Department of Health & Human Services Passed throuqh Suffolk County: Nutrition Services Incentive Program 93.053 U.S Department of Health & Human Services Passed throu~lh Suffolk County: Nutrition 93.045 U.,S. Department of Homeland Security Passed thmu.qh the State of New York Buffer Zone Protection Plan 97.078 U.S Department of,~qriculture Natural Resouce Conservation Service Farm & Ranchland Protection Program 10.913 U.S Deparlment of Housin.q and Urban Development Passed throufilh Suffolk County:. Community Development Block Grant 14.218 U.S Deparlment of the Interior Fish and Wildlife Service Passed thmu.qh the State of New York Department of Environmental Conservation: Coastal Wetlands Conservation Grant 15.614 $ 21,174 103,174 510,539 224,136 1,000,000 $ 1 909,023 TOWN OF SOUTHOLD NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS December 31, 2005 Note A - Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant act/vity of the Town of Southold and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Cimular A-133, Audits of States, Local Governments, and Non-Profit Organiza~ns. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparafion of, the basic financial statements. CERTIFIED PUBLIC *~CCOUNTANT$, E~USlNE:$B ADVIBOI~!S AND COHSULTAh'TB 25 Suffolk Court, Hauppauge, New York 11788 631.434.9500 · Fax631.434.9518 www. avz. com 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 - Town Board Town of Southold Southold, New York We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Southold, Now York as of and for the year ended December 31, 2005, which collectively comprise the Town of Southold's basic financial statements, and haye issued our report thereon dated June 8, 2006, which was qualified because the Town of Southold's discretaly presented component units with the exception of one, the Fishers Island Ferry Dlslfict, were not audited as of the report date. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the stsndards apprmable to financial audits conteinud in Government Auditing Slandards, issued by the Comptroller General of the United States. Internal Control Over Financial Reportinq In planning and performing our audit, we considered the Town of Southold, New York's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide assurance on the internal conl~ol over financial reporting. Our consideration of the internal control over financial mporling would not necessarily disclose all matters in the internal conrol over financial reporl/ng that might be matsdal weaknesses. A material weakness is a condition in which the design or operation of one or mere of the internal control components does not reduce to a relatively Iow level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees In the normal course of performing their assigned functions. We noted no matters involving the internal control'over financial reporting and its operation that we consider to be material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town of Southolcrs financial statements are tree of material misstatement, we performed tests of its compliance with certain provisions of laws, mgutations, contracts, and grants, noncompliance with which could have a direct and material effect on the determlna6on of.financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required te be reported under Government Audif:ing Standards. This report is intended solely for the information of the Town Board, management, others within the organization, and federal awarding agencies and pass--through entities and is not intended to be and should not be used by anyone other than those specified parties. Hauppauge, Now York June 8, 2006 - 42 - AL~RECI-rr~ VK3OIANO~, ZURF-CK ~- COMPANY, P.C. 651.434.9500 · Fax 631.434.9518 w~.avz, cora EACH M~JOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Town Board Town of Southold Southold, New York Compliance We have audited the compliance of the Town of Southold, New York with lypes of compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31, 2005. The Town of Southold's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the Town of Southold, New York's management. Our responsibility is to express an opinion on the Town of Southold, Now York's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted In the United States of Amedca; the standards applicable to financial audits contained in Government Audi~ng Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit OrganizaObns. Those standards and OMB Circular A-133 raqulra that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance reqalramants referred to above that could have a direct and matedal effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Town of Soulhold, New York's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the Town of Southold, New York's compliance with those mqulrements. In our opinion, the Town of Southold, New York complied, in all matedal respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended December 31, 2005. Internal Control Over Compliance The management of the Town of Southold is responsible for establishing and mainteining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning end performing our audit, we considered the Town of Southold's internal control over compliance with requirements that could have a direct and material effect on a major federal program In order to determine our auditing procedures for the purpose of expressing our opinien on compliance and to test and report on the internal control over compliance in accordance with OMB Circular A-133. Our consideration of the intamaJ control over compliance would not neceesadly disclose all matters in the internal control that might be a material weakness. A material weakness is a condition in which the design or operation of one or moro of lhe internal control components does not reduce to a relatively Iow level the risk of noncompliance with applicable requiraments of laws, regulations, contracts and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing the assigned functions. We noted no matters involving the Intemal control over compliance and its operation that we consider to be material weaknesses. -43 - AI..BR~CHT~ VIOOI,~ ZUR~CK & COMI~Y~ RC. This report is intended solely for the information of the Town Board, management, others within the organization, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than those specified parties. Hauppaage, New York June 8, 2006 TOWN OF SOUTROLD SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year ended December 31, 2005 SUMMARY OF AUDIT RESULTS The auditor's report expresses a qualified opinion on the financial statements of the Town of Southold due to the fact that six of the seven component units of the Town of Southold that were dlscretaly presented were not audited. The remaining component unit, the Fishers Island Ferry District, was audited by other auditors. No reportable conditions disclosed during the audit of the financial statements are reported in the 'REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS". None of the conditions are reported as a material weakness. No instances of noncompliance material to the financial statements of the Town of Southold were disclosed during the audit. No reportable conditions disclosed during the audit of the major federal award programs are reported in the 'REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE iN ACCORDANCE WITH OMB CIRCULAR A- 133', No material weaknesses were noted. 5. The auditor's report on compliance for the U.S. Department of the Interior- Fish and Wildlife Service expresses an unqualified opinion; the report on the remaining programs are unqualified. 6. No audit findings relative to the major federal award programs for the Town of Southold are reported in this schedule. 7. The Town of Southold had two 'Typo A' programs for the year ended December 31, 2005. 8. The program tested as a major program includes: CFDA Number 15.614 Name of Federa Preqram or Cluster U.S. Department of the Interior Fish and Wildlife Service 9. The threshold for distinguishing Types A and B programs was $500,000. 10. The Town of Southold was determined to be a Iow-risk auditee. TOWN OF SOUTHOLD SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year ended December 31, 2005 FINDINGS-FINANCIAL STATEMENTS AUDIT REPORTABLE CONDITIONS - FINDINGS AND QUESTIONED COSTS- MAJOR FEDERAL AWARD PROGRAMS AUDIT - None None Questioned Cost $ APPENDIX C INSURANCE ON THE BONDS AMBAC ASSURANCE Payment Pursuant to Financial Guaranty Insurance Policy Ambac Assurance Corporation ("Ambac Assurance") has made a commitment to issue a financial guaranty insurance policy (the "Financial Guaranty Insurance Policy") relating to the Bonds effective as of the date of insurance of the Bonds. Under the terms of the Financial Guaranty Insurance Policy, Ambac Assurance will pay to The Bank of New York, in New York, New York or any successor thereto (the "Insurance Trustee"), that portion of the principal of and interest on the Bonds which shall become Due for Payment but shall be unpaid by reason of Nonpa~.ment by the Obligor (as such terms are defined in the Financial Guaranty Insurance Policy). Ambac Assurance will make such payments to the Insurance Trustee on the later oftbe date on which such principal and/or interest becomes Due for Payment or within one business d.ay followingthe, date on which Ambac Assurance shall have received notice of Nonpayment from the Trustee/Paying Agent. The insurance will extend for the term of the Bonds and, once issued, cannot be canceled by Ambac Assurance. The Financial Guaranty Insurance Policy will insure payment only on stated maturity dates and on mandatory sinking fund installment dates, in the case of principal, and on stated dates for payment, in the case of interest. If the Bonds become subject to mandatory redemption and insufficient funds are available for redemption of all outstanding Bonds,..Amb. ac.A. ss.u. rance will remain obligated t.o pay principal of and interest on outstanding Bonds on the originally sclaeduled interest and principal payment dates including mandatory sinking fund redemption dates. In the event of any acceleration oftbe principal of the Bonds, the insuredpayments will be made at such times and in such amounts as would have been made had there not been an acceleration, except to the extent that Ambac Assurance elects, in its sole discretion, to pay all or a portion of the accelerated principal and interest accrued thereon to the date of acceleration (to the extent unpaid by the Obligor). Upon payment of all such accelerated l~rincipal and interest accrued to the acceleration date, Ambac Assurance's obligations under the Financial Guaranty Insurance Policy shall be fully discharged. In the event the Trustee/Paying Agent has notice that anypayment of principal of or interest on a Bond that has become Due for Payment and that is made to a Bondholder by or on behalf of the Obligor has been deemed a ~re,fer.ential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy ?ode ln.ac, cordance with_ a fin.al, ,nonappealable orde. r of a court of competent jurisdiction, such registered owner will oe entitled to payment lrom ^moac Assurance to the extent of such recovery if sufficient funds are not otherwise available. T.he Fi.nancial Guaranty Insurance Policy does not insure any risk other than Nonpayment, (as set fourth in the Financial Guaranty Insurance Policy). Specifically, the Financial Guaranty Insurance Policy does not cover: 1.payment on acceleration, as a result of a call for redemption (other than mandatory sinking fund redemption) or as a result of any other advancement of maturity. 2. payment of any redemption, prepayment or acceleration premium; and 3. nonpayment of principal or interest caused by the insolvency or negligence of any Trustee, Paying Agent or Bond Registrar, if any. If it becomes necessary to call upon the Financial Guaranty Insurance Policy, payment of principal requires surrender of Bonds to the Insurance Trustee together with an appropriate instrument or assignmant so as to permit ownership of such Bonds to be registered in the name of Ambac Assurance to the extent of the payment under the Financial Guaranty Insurance Policy. Payment of interest pursuant to the Financial Guaranty Insurance Policy requires proof of Bondholder entitlement to interest payments and an appropriate assignment of the Bondholder's right to payment to Ambac Assurance. Upon payment of the insurance benefits, Ambac Assurance will become the owner of the Bond, appurtenant coupon, if any, or right to payment of principal or interest on such Bond and will be fully subrogated to the surrendering Bondholder s"- rights to payment. The insurance provided by the Financial Guaranty Insurance Policy is not covered by the property/casualty insurance security fund specified by the insurance laws of the State of New York. AMBAC ASSURANCE CORPORATION Ambac Assurance is a Wisconsinodomiciled stock insurance corporation regulated by the Office of the Commissioner of Insurance of the State of Wisconsin, and is licensed to do business in 50 states, the District of Columbia, the Territory of Guam, the Commonwealth of Puerto Rico and the U.S. Virgin Islands, with admitted assets of approximately $10,015,000,000 (unaudited) and statutory capital of approximately $6,371,000,000 (unaudited) as of December 31, 2006. Statutory capital consists of Ambac Assurance's policyholders' surplus and statutory contingency reserve. Standard & Poor's Ratings Services, a division of Tbe McGraw-Hill Companies, Inc., Moodyfs Investor Service and Fitch Ratings have each assigned a triple-A financial strength rating to Ambac Assurance. Ambac Assurance has obtained a ruling from the Internal Revenue Service to the effect that the insuring of an obligation by Ambae Assurance will not affect the treatment for federal income tax purposes of interest on such obligation and that insurance proceeds representing maturing interest paid by Ambac Assurance under policy ~erOVisions substantially identical to those contained in its Financial Guaranty Insurance Policy shall be treated for deral income tax purposes in the same manner as if such payments were made by the Obligor of the Bonds. Ambac Assurance makes no r.epresentation regarding the Bonds or the advisability of investing in the Bonds and makes no representation regarding, nor has it participated in the preparation of, the Official Statement other than the information supplied by Ambac Assurance and presented under the heading "Appendix C". AVAILABLE INFORMATION iTnhf~ pare. nt c, ompany of Arab? Assurance, Ambac Financial Group, Inc. (the "Company"), is subiect to the nnat~onm requ!rements ot the Securities Exchange Act of 1934, as amended (the ~'E>~chanoe A~t"'~ and in a~ccord.anc, e therewith ~les reports, proxy statements and other information with '~he Securiti~ and [(~chan~e commission (the SEC ). These reports, proxy statements and other information can be read and copied at the SEC s public reference room at 100 F Street Nr.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800- SEC-0330 for further nformation on the public reference room. The SEC maintains an interact site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding companies that file electronically with the SEC, including the Company. These reports, proxy statements and other information can also be read at the offices of the New York Stock Exchange, Inc., at 20 Broad gtreet, New York, New York 10005. Copies of Ambac Assurance's financial statements prepared in accordance with statutory accounting standards are available from Ambac Assurance. The address ofAmbae Assurance's administrative offices and its telephone number are One State Street Plaza, 19th Floor, New York, New York, 10004 and (212) 668-0340. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following document filed by the Company with the SEC (File No. 1-10777) is incorporated by reference in this Official Statement: The Company's Annual Report of Form 10-K for the fiscal year ended December 31, 2006 and filed on March 1, 2007. All documents subsequently filed by the Company pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in the same manner as described above in "AVAILABLE INFORMATION". Ambac Financial Guaranty Insurance Policy Ambac Assurance Corporation One State Street Plaza, 15th Floor New York, New York 10004 Telephone: (212) 668-0340 Obligor: Policy Number: Obligations: Premium: Ambac Assurance Corporation (Ambac), a Wisconsin stock insurance corporation, In consideration of the premium and subject to the terms of this Policy, hereby agrees to pay to The Bank of New York, 'Insurance Trustee"), for the benefit of the Holders, that portion of the (the 'Obligations") which shall become Due for Payment but shall ha unpaid by ieason of Nonpayment Ambac will make such payments to the Insurance Trustee within one (1) business da Nonpayment. Upon a Holder's presentation and surrender to the Insurane uncanceled and in bearer form and flee of any adverse claim, the Insurance Trustee will principal and interest which is then Due the surrendered Obligations and/or coupons and shall be fully subrogated to all of th, In cases where the Obligations are issued in registered form, the Insurance presentation and surrender to the Insurance Trustee of th Halder's duly authorized representative, so as to penmit ownershi [nsurance Trustee of Insurance Trustee of an instrument of asslgmment, Holder or such Holder's duly authorized interest in respect of which the insurance payment on registered Obligations to the extent c In the event that a trustee or paying Obligation which has become Due fc preferential transfer and As used herein, the a coupon of ti the the owner of pon :he Holder or such ~ name of Ambac or its upon presentation to the te Obligation and delive~ to the duly executed by the under such Obligation to receive the subrogated to all of the Holders' rights to any payment of principal of or interest on an or on behalf of the Obligor has been deemed a Code In accordance with t Holder will be entitled to payment from Arabac to the extent the Obligor or (ii) any parson whose obligations constitute the at the time of Nonpayment, is the owner of an Obligation or of 'Due for Payment", when referring to the principal of Obligations, is when application of a required sinking fund installment has been ny earlier date on which payment is due by reason of call for redemption (other than by application acceleration or other advancement of maturity; and, when refemn8 to interest on the payment of interest has been reached. As used herein, 'Nonpayment" means the failure sufficient funds to the trustee or paying agent for payment in full of all principal of and interest The premium on this Policy is not refundable for any reason, including payment of the Obligations , does not insure against lo~s of any prepayment or other acceleraUon payment which at any time may become due in respect of any Obligation, other than at the sole option of Amhac, nor against any risk other than Nonpayment. In witness whereof, Ambac has caused this Policy to be affixed with a facsimile of 1ts corporate seal and to be signed by its duly authorized offlce~s in facsimile to become effective as its original seal and signatures and binding upon Amhac by virtue of the countersignature of its duly authorized representative. THE BANK OF NEW YORK acknowledges that it has agreed to perform the duUes of Insurance Trustee under this Policy. Form No.: 2B-0012 (1/01) A- Ambac Ambac As~surance Corporation One State &wet Plaza, New York, New York 10004 Telephone: (212) 66:8-0340 Endorsement Policy lbr: Attached to and forming part of Policy No,: Effective Date of Endorsem~.~ ~ The insurance provided by this Policy is not covered ~pro~~su~~n~ce security fund specified by the insurance laws of the State~%'~%.~ ~ x~ uptYt~km4~e of~c eotmtersJgS~ature of its duly authorized representative. ~mhac A~ur~mce Corporation President Authorized Reprcs¢~tative REGISTERED NO. R-1 REGISTERF~ $80,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2000 4.70% May 1, 1999 844572 FV4 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: EIGHTY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTEREr) NO. R-2 REGISTERE~ $80,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2001 4.70% May 1, 1999 844572 FW2 REGISTERF. I'~ OWNER: CEDE & CO. PRINCIPAL SUM: EIGHTY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire Ixansfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTER F.I'~ NO. R-3 REGISTERED $80,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2002 4.70% May 1, 1999 844572 FX0 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: EIGHTY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received pwmises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire mmsfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERF~r~ NO. R-4 REGISTERED $80,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2003 4.70% May 1, 1999 844572 FY8 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: EIGHTY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May I and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-$ REGISTERleY~ $80,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2004 4.70% May 1, 1999 844572 FZ5 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: EIGHTY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-6 REGISTERF~n $80,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2005 4.70% May 1, 1999 844572 GA9 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: EIGHTY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called ~Fiscal AgentH), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-7 REGISTERP. r~ $80,000 LrNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2006 4.70% May 1, 1999 844572 GB7 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: EIGHTY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called ~Fiscal Agent~), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-8 REGISTERE~ $90,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF ORIGINAL ISSUE CUSIP NUMBER May I, 2007 4.70% May 1, 1999 844572 GC5 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: NINETY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTEREI~ NO. R-9 REGISTERED $90,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2008 4.70% May 1, 1999 844572 GD3 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: NINETY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called 'Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May I and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERF~n NO. R-lO REGISTERED $90,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2009 4.70% May 1, 1999 844572 GE1 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: NINETY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called 'Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-11 REGISTERi~D $90,0OO UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2010 4.70% May 1, 1999 844572 GF8 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: NINETY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-12 REGISTERER $100,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2011 4.70% May 1, 1999 844572 GG6 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: ONE HUNDRED THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called 'Fiscal AgentN), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November I, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTEgF~D NO. R-13 REGISTERF$~ $100,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2012 4.70% May 1, 1999 844572GH4 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: ONE HUNDRED THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called 'Fiscal Agent'), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-14 REGISTER~.r~ $100,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2013 4.70% May 1, 1999 844572 GJ0 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: ONE HUNDRED THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hail, 53095 Main Road, Southold, New York, as fiscal agent (herein called 'Fiscal Agent'), or any successor thereto, and to pay interest on such principai sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannuaily thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond a~e payable in any coin or currency of the United States of America which, at the date of payment, is legai tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-15 REGISTEREr) $110,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2014 4.70% /Vlay 1, 1999 844572 GK7 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: ONE HUNDRED TEN THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment &public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-16 REGISTEREF~ $110,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2015 4.70% May 1, 1999 844572 GL5 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: ONE HUNDRED TEN THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-17 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK REGISTERi~.I~ $110,000 TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2016 4.70% May 1, 1999 844572 GM3 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: ONE HUNDRED TEN THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called ~Fiscal Agent~), or any successor thereto, and to pay interest on such principal sum fwm May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERED NO. R-18 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK REGISTERED $110,04)0 TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2017 4.70% May 1, 1999 844572 GN1 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: ONE HUNDRED TEN THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTERF. D NO. R-19 REGISTEREI~ $120,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2018 4.70% May 1, 1999 844572 GP6 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: ONE HUNDRED TWENTY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May I, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. REGISTEREI~ NO. R-20 REGISTERI~.r~ $120,000 UNITED STATES OF AMERICA STATE OF NEW YORK COUNTY OF SUFFOLK TOWN OF SOUTHOLD OPEN SPACE PRESERVATION SERIAL BOND-1999 INTEREST MATURITY DATE RATE DATE OF CUSIP ORIGINAL ISSUE NUMBER May 1, 2019 4.70% May 1, 1999 844572 GQ4 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: ONE HUNDRED TWENTY THOUSAND DOLLARS The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal corporation of the State of New York, hereby acknowledges itself indebted and for value received promises to pay to the REGISTERED OWNER named above, or registered assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above) upon presentation and surrender of this Bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum from May 1, 1999 or from the most recent interest payment date to which interest has been paid at the INTEREST RATE (stated above), payable November 1, 1999 and semiannually thereafter on May 1 and November 1 of each year until maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on each interest payment date to the registered owner hereof at his address as it appears on the registration books of the Town maintained by the Fiscal Agent or at such other address as may be furnished in writing by such registered owner to the Fiscal Agent as of the close of business on the fifteenth day of the month preceding each interest payment date. The principal of and interest on this Bond are payable in any coin or currency of the United States of America which, at the date of payment, is legal tender for the payment of public and private debts; provided, however, that interest on this fully registered Bond shall be paid by wire transfer or clearinghouse funds as set forth above. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH HEREIN. punctual payment of the principal of and interest on this Bond according to its terms. This Bond has been designated by the Town as a qualified tax exem pursuant to the provisions of Section 265 of the Internal Revenue Code of 1986, as amended. It is hereby certified and recited that all conditions, acts and things required by the Constitution and statutes of the State of New York to exist, to have happened and to have been performed precedent to and in the issuance of this Bond, exist, have happened and have been performed, and that the issue of bonds of which this is one, together with all other indebtedness of the Town of Southold, is within every debt and other limit prescribed by the Constitution and laws of such State. IN WITNESS WHEREOF, the TOWN OF SOUTHOLD has caused thi to be executed in its name by the manual signature of its Supervisor and its corporate seal impressed hereon and attested by the manual signature of its Town Clerk. (SEAL) ATTEST: · TOWN OF SOUTHOLD Supervisor (-/Town Clerk Town of Southold, New York Open Space Preservation Serial Bond-1999 This Bond is one of an authorized issue, the principal amount of which is $1,900,000, the Bonds of which are of like tenor, except as to number, denomination, and maturity, and is issued pursuant to the provisions of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York (the 'Law"), the bond resolution duly adopted by the Town Board on September 2, 1997 and approved as a Proposition by the qualified voters of the Town at the Biennial Town Election held on November 4, 1997, authorizing the issuance of serial bonds of the Town to finance the acquisition of interests or developmental fights in various parcels of real property within the Town for the preservation of open spaces and areas and conserving the character of local communities, and the Certificate of Determination executed by the Supervisor as of Apffi 19, 1999, determining the terms, form and details of issuance of said $1,900,000 serial bonds (the NBonds') and providing for the public sale thereof (the HCertificate of DeterminationS). The Bonds are issuable in the f(~rm of registered bonds without coupons in denominations of $5,000, or any integral multiple thereof. This Bond is transferable or exchangeable, as provided in the Certificate of Determination, only upon the books of the Town kept for that purpose at the office of the Fiscal Agent, by the registered owner hereof in person, or by his attorney duly authorized in writing, upon the surrender of this bond together with a written instrument of transfer or exchange satisfactory to the Fiscal Agent duly executed by the registered owner or his attorney duly authorized in writing, and thereupon a new Bond or Bonds, in the same aggregate principal amount and of the same maturity, shall be issued to the transferee or the registered owner in exchange therefor as provided in the Certificate of Determination and upon the payment of the charges, if any, therein prescribed. The Bonds maturing on or before May 1, 2009 are not subject to redemption prior to maturity. The Bonds maturing on or after May 1, 2010 will be subject to redemption prior to maturity, at the option of the Town, on May 1, 2009 and thereafter on any date, in whole or in part, in inverse order of maturity or in equal proportionate amounts (selected by lot within a maturity), at the following redemption prices, plus accrued interest to the date of redemption: Redem~ Redemption Price as a Percenta,,e of Par Amount May 1, 2009 through April 30, 2010 ................... 102% May 1, 2010 through April 30, 2011 .................... I01 May 1, 2011 and thereafter ........................... 100 The Bonds shall be redeemable upon the giving of notice which identifies the Bonds to be redeemed, by mailing such notice to the registered holders thereof at their respective addresses as shown upon the registration books of the Fiscal Agent at least 30 days prior to the date set for any such redemption. If notice of redemption shall have been given as aforesaid, the Bonds so called for redemption shall become due and payable at the applicable redemption price on the redemption date designated in such notice, and interest on such Bonds shall cease to accrue from and after such redemption date. Hawkins, Delafield & Wood 67 Wall Street New York, New York The Town Board of the Town of Southold, in the County of Suffolk, New York Ladies and Gentlemen: We have examined a record of proceedings relating to the sale and issuance of $1,900,000 Open Space Preservation Serial Bonds-1999 (the "Bonds"), of the Town of Southold (the HTownH), in the County of Suffolk, New York. The Bonds are issued pursuant to the provisions of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York, the bond resolution duly adopted by the Town Board on September 2, 1997 and approved as a Proposition by the qualified voters of the Town at the Biennial Town Election held on November 4, 1997, authorizing the issuance of serial bonds of the Town to finance the acquisition of interests or developmental rights in various parcels of real property within the Town for the preservation of open spaces and areas and conserving the character of local communities, and the Certificate of Determination executed by the Supervisor as of April 19, 1999, determining the terms, form and details of issuance of said $1,900,000 serial bonds and providing for their public sale. The Bonds are dated May 1, 1999, mature on May 1 in the principal amounts in each of the following years, and bear interest at the respective rates per annum payable November 1, 1999 and semiannually thereafter on May 1 and November 1 in each year to maturity, as set forth below: Year of Principal Interest Year of Principal Interest Maturity Amount Rate Maturity Amount Rate 2000 $ 80,000 4.70% 2010 $ 90,000 4.70% 2001 80,000 4.70 2011 100,000 4.70 2002 80,000 4.70 2012 I00,000 4.70 2003 80,000 4.70 2013 100,000 4.70 2004 80,000 4.70 2014 110,000 4.70 2005 80,000 4.70 2015 110,000 4.70 2006 80,000 4.70 2016 110,000 4.70 2007 90,000 4.70 2017 110,000 4.70 2008 90,000 4.70 2018 120,000 4.70 2009 90,000 4.70 2019 120,000 4.70 The Bonds maturing on or before May 1, 2009 are not subject to redemption prior to maturity. The Bonds maturing on or after May 1, 2010 will be subject to redemption prior to maturity, at the option of the Town, on May 1, 2009 and thereafter on any date, in whole or in part, in inverse order of maturity or in equal proportionate amounts (selected by lot within a maturity) at such prices and subject to such notice and other conditions stated in the Bonds. The Bonds are issued only in fully registered form without interest coupons, in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company, an automated depository for securities and clearinghouse for securities transactions which will maintain a book-entry system for recording the ownership interests in the Bonds. Only one Bond will be initially issued for each maturity in the aggregate principal amount of such maturity. Purchases of ownership interests in the Bonds will be made in book-entry form in denominations of $5,000 or any integral multiple thereof. In our opinion, said Bonds are valid and legally binding general obligations of the Town for which the Town has validly pledged its faith and credit and, unless paid from other sources, all the taxable real property within the Town is subject to the levy of ad valorem real estate taxes to pay the Bonds and interest thereon without limitation of rate or amount. The enforceability of rights or remedies with respect to such Bonds may be limited by bankruptcy, insolvency or other laws affecting creditors' rights or remedies heretofore or hereafter enacted. The Internal Revenue Code of 1986, as amended (the 'Code'), establishes certain requirements that must be met subsequent to the issuance and delivery of the Bonds in order that interest on the Bonds be and remain excludable from gross income under Section 103 of the Code. The Supervisor of the Town, in executing the Arbitrage and Use of Proceeds Certificate, has certified to the effect that the Town will comply with the provisions and procedures set forth therein and that it will do and perform ail acts and things necessary or desirable to assure that interest paid on the Bonds is excludable from gross income under Section 103 of the Code. We have examined such Arbitrage and Use of Proceeds Certificate delivered concurrently with the delivery of the Bonds, and in our opinion, such certificate contains provisions and procedures under which such requirements can be met. In our opinion, the interest on the Bonds is excludable under existing statutes and court decisions, from the gross income of the recipients thereof for federal income tax purposes pursuant to Section 103 of the Code, and under existing statutes interest on the Bonds will not be treated as a preference item in calculating the alternative minimum tax that may be imposed under the Code with respect to individuals and corporations. In rendering the foregoing opinion, we have assumed the Town's compliance with the Arbitrage and Use of Proceeds Certificate. Further, in our opinion, under existing statutes the interest on the Bonds is exempt from New York State and New York City personal income taxes. Other than such record of proceedings, we have not been requested to examine or review and have not examined or reviewed' the accuracy or sufficiency of the Official Statement, or any additional proceedings, reports, correspondence, financial statements or other documents, containing financial or other information relative to the Town which have been or may hereafter be furnished or disclosed to purchasers of said Bonds, and we express no opinion with respect to any such financial or other information or the accuracy or sufficiency thereof. We have examined the executed first numbered Bond of said issue and, in our opinion, the form of said Bond and its execution are regular and proper. Very truly yours, /s/ Hawkins, Delafield & Wood STATEMENT OF INSURANCE MBIA Insurance Corporation (the "Insurer~) has issued a policy containing the following provisions, such policy being on file at MBIA Insurance Corporation, Armonk, New York. The Insurer, in consideration of the payment of the premium and subject to the terms of this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations, the full and complete payment required to be made by or on behalf of the Issuer to Cede & Co., as nominee for The Depository Trust Company, New York, New York, or its successor (the NPaying Agent") of an amount equal to (i) the principal of (either at the stated maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Obligations (as that term is defined below) as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the preceding sentence shall be referred to herein collectively as the "Insured Amounts. ~ 'Obligations~ shall mean: $1,900,000 Town of Southold, Suffolk County, New York Open Space Preservation Serial Bonds-1999 Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the - Insurer from the Paymg Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust Company, N.A., in New York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then flue. Upon presentment and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the .Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such instruments being in a form satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such owners or the Paying Agent payment of the Insured Amounts due on such Obligations, less any amount held by the Paying Agent for the payment of such Insured Amounts and legally available therefor. This policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Obligation. As used herein, the term "owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for ..... ~,~iS~.. '.~ ~ ,~.~.~ ,~ ~ ~-~,~j ..... ~'i!,.~j ...... ~.~ ,.~ ..... ~.,~._.~ .... ~ ~.,, such pu.ose. The term omer shall not include ~e Issuer or any na~ whose a~r~ment wi~ Issuer ~nsamt~ the underlying security for the Obligations. Any se~i~ of pro~s on me Insurer may be made to the Insurer at at 113 ~ng' Strut, A~onk, New York 10504 and such se~i~ of pro~s sM I be valid and binding. This policy is non~n~llable for any r~son. The premium on this policy re~n~ble for any r~son including the payment prior to maturity of the Obligations. policy not mver~ by the Propeay/Casualty Insuran~ S~urity Fund sp~ifi~ This is in Article 76 of ~e New York I~uran~ ~w. MBIA INSURANCE CO.OPTION ~'j~}'~;m~[ ; }~ r ",;,~J'~ }" ~';'~' '~" ' "~;~1:TM ' ' '~'~ ;~i ASSIGNMENT FOR VALUE RECEIVED, the Undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE the within Bond and does hereby irrevocably constitute and appoint Attorney to transfer said Bond on the books kept for registration of said Bond, with full power of substitution in the premises. Dated: Signature Guaranteed: Notice: Signature(s) must be acknowledged or proved, or in the alternative, certified as to its genuineness by an officer of a bank or trust company located and authorized to do business in New York State. Notice: The signature to this assignment must cor- respond with the name as it appears upon the face of the within bond in eve~ particular, without alteration or enlargement or any change whatever. THE DEPOSITORY TRUST COMPANY 55 Water Street New York, New York 10041 Phone: (212) 558-8520 Telecopy: (212) 344-1533 EXAMINATION SAFEKEEPING AGREEMENT Reft (Description of issue, number of certificates, number of CUSIPs assigned to issue and $ value of securities) TOWN OF SOUTHOLD, IN THE COUNTY OF SUFFOLK, NEW YORK OPEN SPACE PRESERVATION SERIAL BONDS - 1999, dated 05/01/99, maturing 05/01/2000-2019 CUSI~ # 844572 FV4-GQ4 (TWENTY CERTIFICATES) $ VALUE $1,900,000 The Depository Trust Company (DTC) acknowledges receipt from Hawkins, Delafield & Wood (the trustee, transfer agen' underwriter or other agent of the issuer, hereafter referred to as the "Agent") of possession, custody and control of the above securities fc safekeeping. DTC is authorized to hold these securities in safekeeping until DTC is instructed by telephone or in writiag by one of the belo designated representatives of the Agent either to: (1) deliver the securities by book-entry to the DTC account of the lead underwriter (c to the DTC account of its clearing agent) or (2) return the said seeurlties to the Agent. In the event DTC is instructed to return said securities, DTC shall return the securities to the Agent as soon as practicable, but, in an event, no later than the DTC business day following the day such instruction is received. DTC shall hold the Agent, its officers and employees, harmless from any liability, loss, damage, and reasonable expense of any kind connection with any loss, damage, theft or destruction of any kind of said securities while they are in the possession, eust~ly or control DTC, its officers or employees or in the event securities are released from the control of DTC without the specific approval of the Ager pursuant to this Safekeeping Agreement. By: The Depository Trust Company Title: Title: SUPERVISOR Date: Date: Authorized Representative of Trustee/Agent ~ T!~ FP~[ONE NO. PRINT NAME ORGANIZATION ..~ DTC accepts authorization of closings on the phone number listed below: (212) 855-3752 (212) 855-3753 (212) 855-3755 (212) 855-3754 SUPERVISOR'S CERTIFICATE OF AWARD I, JEAN W. COCHRAN, Supervisor of the Town of Southold, in the County of Suffolk, New York (the "Town~), HEREBY CERTIFY AND REPORT AS FOLLOWS: 1. On May 4, 1999, at 11:00 A.M. (Prevailing Time), bids were received at the offices of Hawkins, Delafield & Wood, 67 Wail Street, New York, New York. 2. At that time and place, two (2) sealed bids were received for the purchase of $1,900,000 Open Space Preservation Serial Bonds-1999 of the Town (the HBonds") pursuant to the Notice of Sale of said Bonds heretofore duly published in conformity with the requirements of the Certificate of Determination executed by the Supervisor as of April 19, 1999, and said bids were thereupon opened and publicly read. 3. The sealed bids so opened and publicly read were each in legally acceptable form and were each accompanied by the check required by said Notice of Sale and constituted signed proposals to purchase all of the Bonds. 4. Forthwith upon receiving, opening, reading and considering said sealed bids, I caused to be publicly announced that Roosevelt & Cross, Inc. & Associates, New York, New York was the successful bidder to whom the Bonds are to be awarded, at the purchase price of $1,900,000 plus accrued interest at the rates to be borne by the Bonds from the date of the Bonds to the date of payment of the purchase price, said bid of said successful bidder (copy attached) being the best bid received under the terms of the Notice of Sale therefor and providing the lowest net interest cost over the life of the Bonds, computed as follows: Gross Interest ........................ $1,010,500.00 Less Premium Bid Over Par ............... 0.00 Net Interest Cost ...................... $1,010,500.00 316157.1 018803 CERT Effective Net Interest Rate ................ 4.7000% 5. As designated by the aforementioned successful bidder, said Bonds shall bear interest from their date in each year until maturity at the respective rate per annum stated in the following table: Bonds maturing in each of the years 2000 to 2019, inclusive, at 4.70% such rate of interest being the rate necessary for the Town to sell said Bonds. 6. I thereupon returned to the other bidder the good faith check received with its aforesaid sealed bid. 7. Said Bonds will be delivered to the said successful bidder hereinabove referred to upon receipt of payment in accordance'with the provisions of the Notice of Sale. IN W1TNESS WHEREOF, I have hereunto set my hand as of the 18t~ day of May, 1999. pervisor 316157.1 018803 CERT TOWN CLERK'S CERTIFICATE I, ELIZABETH A. NEVILLE, Town Clerk of the Town of Southold, in the County of Suffolk, New York, HEREBY CERTIFY that I have compared the foregoing Certificate of Award of the Supervisor and the same is a true and complete copy of said Certificate filed with the Town Board on May __, 1999. I FURTHER CERTIFY that no resolution electing to reassume any of the powers or duties delegated to the Supervisor by the resolution cited in the Certificate of Determination referred to in said Certificate of Award, has been adopted by said Town Board. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of said Town, this __ day of May, 1999. (SEAL) Town Clerk 316157.1 018803 CERT IN TIlE COI~TY OF SUFFOLK, NEW YORK $1~0380 OPEN SPACE PRESERVATION SEBIAL BONm*I~9 ~AL~ 11.'00 o'6ad[ AM New Yodt ~ ~ May L 1999. interest payable May I and November 1 in each year comme~cin8 November 1. 1999. Bonds mature in principal installmenls on May 1 as follows: S 80000 in 2000 $ 80 000 in 200! $ 80,000 in 2002 $ 80,000 in 2003 S 80,000 in · $ 80500 in 2005 S80,000 in 2006 90,000 in 2007 S 90,000 in 2009 S 90,000 in 2010 * S 100.000 in 201 ! 100,000 in 2012 : 100,000 in 2013 -$ II0,000in2014 ' ~ $ 110.000in2015 * $ li0.000 in 2016 $ 110,000in2017 * $ 120.000 in 2018 $ 120.000 in 20lq · (~callabie maturities) The Town reserves the risht to ChanSe the time and/or date of the bid openin8, and notice thereof shall be provided at least 24 hours prior to the time set forth above and transmitted over the Thomson Maak.~ News bids, ~xmmapanied by SM,OOO .~ ~fidders must refer to tho Notice ~ Sale foe thc COml~ terr~ aad conditloal of the side. tidal Statement may be obtainnd~ from Munhtat Inc.. 12 Roosevelt Avenue, Jefferson Station, New York telepboue number (5t6) 331-8888; fax: (516) 331-8~34. Dated:. April 19, 1999 Jdo~r. JEAN W. COC~RAN 1674-1TA22 STATE OF NEW YORK) )SS: COUNTY OF SUFFOL,K) kJ ~ ~ ~- (~L J t I / ~ of Mattltuck, in said county, being duly sworn, says that he/she is Principal clerk of THE SUFFOLK TIMES, a weekly newspaper, published at Mattituck, in the Town of Southold, County of Suffolk and State of New York, and that the Notice of which the annexed is a printed copy, has been regu- larly published in said Newspaper once each week for ~ week_s sucqessively, on the ~:,~J'x~ day comn~encing Sworn to before me this Oa of 19 ~ Principal Clerk 19 ~' ~0TRRY Fb ~:~ SD ~E 4[ ~.~ Y,)..:, NO. ~2-lb :').i ;,2, SUFI".)LK ~OF SO~OLn, ~INTHE COUNTY OF SUFFOLK, May 1 as follow~: - ~$ O0,O00 in ~010' $100~000 in 3011. $100~00 in 2012. $100,000 hi 2013. $110,000 in 2014. $110~900 h 3015' ~BO. O00 in SO0~ $110,000 in 3018' ~ ~ ~ ~, ~d & W~. ~ m~ ~ ~ ~ ~ No~ of ~e for ~e ~1~ f~ ~'~,~ 11~6, ~ n~ (51~ ~1-~; ~: (516) Da~: ~ 19, 1~ ~ON. ~ W. ~ Copy of Advertisement City and County of New York, ss.:- Diane Leyson, being duly sworn, says that she is the Advertising Clerk of THE BOND BUYER, a daily newspaper printed and published at One State Street Plaza, in the Cily of New York, County of New York, State of New York; and the notice, of which the annexed is a printed copy, was regularly published in said THE BOND BUYER on 4-27-99 Advertising Clerk Subscribed and sworn to bejSre me this 27th April day of 1999 Notary Public, State of New York No. 01BY4955198 Qualified in Kings County Commission Expires August 28, 1999 T__~_OF SOUTHOLD~ NEW YORK NOTICE OF PROPOSITIONS TO BE SUBMITTED AT THE BIENNIAL TOWN ELECTION TO BE HELD ON NOVEMBER 2, 1999 NOTICE IS HEREBY GIVEN that at the Biennial Town Election of the Town of Southold ("Town"), in the County of Suffolk, New York, to be held on November 2, 1999, between the hours of 6:00 o'clock A.M. (Prevailing Time) and 9:00 o'clock P.M (Prevailing Time), the following Propositions will be submitted to the qualified voters of the Town for their approval or disapproval, to wit: PROPOSITION No.1 SHALL THE BOND RESOLUTION ENTITLED: "Bond Resolution of the Town of Southold, New York, adopted August 23, 1999, authorizing the acquisition of interests or rights in real property, including, but not limited to, developmental rights in open agricultural lands, within said Town, for the preservation of open spaces and areas and to maintain and enhance the conservation of natural resources, provided, however, that no such interest or rights in real property shall be acquired until all relevant provisions of the state environmental quality review act have been complied with and a final declaration as to environmental impact has been duly declared, stating the estimated maximum cost thereof is $2,000,000, appropriating said amount therefor, authorizing the issuance of $2,000,000 serial bonds of said Town to finance said appropriation, stating that land installment purchase obligations are authorized to be issued pursuant to this bond resolution and determining that this bond resolution shall be subject to a mandatory referendum," BE APPROVED? An abstract of said bond resolution, concisely stating the purpose and effect thereof, is as follows: FIRST: RECITING that pursuant to Section 247 of the New York General Municipal Law ("Section 247"), the Town of Southold ("Town"), is authorized to acquire interests or rights in real property for the preservation of open spaces and areas and maintaining and enhancing the conservation of natural or scenic resources, as defined therein; that such acquisition of interests or rights in real property throughout the Town must be found, determined and deemed to be necessary, in the public interest and a proper public purpose of the Town in accordance with the provisions of Section 247 and the Town desires to implement the land acquisition and financing program hereinafter set forth and to authorize the issuance of land installment purchase obligations for such purpose; 329793.1 020032 DOC SECOND: AUTH~ZING the Town to improv~nd preserve Town 'waterways, including,~ut not limited to, pre~rvation of tidal wetlands, salt marshes, creeks, bays, Long Island Sound, estuaries and fresh water wetlands and to provide public access to waterways, drainage and run-off, all in the interest of improving water quality and waterways; provided, however, that no such right, including the fee or any lesser interest, development right, easement, covenant, or other contractual right in any piece or parcel of such lands shall be so acquired until all relevant provisions of the State Environmental Quality Review Act ("SEQRA"), have been complied with and a final declaration as to environmental impact has been duly declared by the entity duly authorized to make such determination and declaration; STATING the estimated maximum cost thereof is $2,000,000; APPROPRIATING $2,000,000 to pay said cost; and STATING the plan of financing includes the issuance of $2,000,000 serial bonds of the Town, and the levy and collection of taxes upon all the taxable real property within the Town to pay the principal of said bonds and interest thereon; THIRD: AUTHORIZING the issuance of $2,000,000 serial bonds of the Town pursuant to the Local Finance Law of the State of New York ("Law") to finance said appropriation; FOURTH: DETERMINING and STATING the period of probable usefulness applicable to the class of objects or purposes for which said bonds are authorized to be issued is thirty (30) years; that all or a portion of such bonds or any bond anticipation notes may be issued in the form of a land installment purchase obligation or obligations pursuant to Section 29.10 of the Law; the proceeds of the bonds may be used to reimburse the Town for expenditures made after the effective date hereof for the purpose for which said bonds are authorized; and the proposed maturity of said serial bonds will exceed five (5) years; FIFTH: DETERMINING that said bonds and any bond anticipation notes issued in anticipation of said bonds and the renewals of said bond anticipation notes shall be general obligations of the Town; and PLEDGING to their payment the faith and credit of the Town; SIXTH: DELEGATING to the Supervisor the powers and duties as to the issuance of said bonds and any bond anticipation notes issued in anticipation of said bonds, or the renewals thereof; and SEVENTH: DETERMINING that a Proposition for the approval or disapproval of this bond resolution shall be submitted to the qualified voters of the Town at the Biennial Town Election to be held on November 2, 1999 and that this bond resolution shall take effect upon such approval. Said Proposition shall appear in substantially the following form on the ballot label to be inserted on the voting machines to be used for voting at said Biennial Town Election: 329793.1 020032 DOC YES NO PROPOSITION NO. 1 SHALL the Bond Resolution adopted August 23, 1999 authorizing issuance of $2,000,000 Bonds of the Town of Southold to finance an appropriation of like amount for acquisition of interests or rights in real property, including development rights in open agricultural lands to preserve open spaces and areas, subject to compliance with the State Environmental Quality Review Act, BE APPROVED? PROPOSITION No.2 SHALL THE BOND RESOLUTION ENTITLED: "Bond resolution of the Town of Southold, New York, adopted August 23, 1999, authorizing the improvement and preservation of town waterways, including, but not limited to, preservation of tidal wetlands, salt marshes, creeks, bays, Long Island Sound, estuaries and fresh water wetlands, providing of public access to such waterways, drainage and run- off, all in the interest of improving water quality and waterways; provided, however, that no such improvement, preservation or providing of access, drainage or run-off shall be commenced until all relevant provisions of the state envirnomental quality review act have been complied with and a final declaration as to environmental impact has been duly made, stating the estimated maximum cost thereof is $250,000, appropriating said amount therefor, authorizing the issuance of $250,000 serial bonds of said town to finance said appropriation, stating that land installment purchase obligations are authorized to be issued pursuant to this bond resolution and determining that this bond resolution shall be subject to a mandatory referendum," BE APPROVED? ~llows: An abstract of said bond resolution, concisely stating the purpose and effect thereof, is as FIRST: AUTHORIZING the Town to improve and preserve Town waterways, including, but not limited to, preservation of tidal wetlands, salt marshes, creeks, bays, Long Island Sound, estuaries and fresh water wetlands and to provide public access to waterways, drainage and run-off, all in the interest of improving water quality and waterways; provided, however, that no such right, including the fee or any lesser interest, development right, easement, covenant, or other contractual right in any piece or parcel of such lands shall be so acquired until all relevant provisions of the State Environmental 329793.1 020032 DOC Quality Review Act CSEQRA") :omplied with and a final d~ation as to environmental impact has been duly made by the entity duly authorized to make such determination and declaration; STATING the estimated maximum cost thereof is $250,000; APPROPRIATING $250,000 to pay said cost; and STATING the plan of financing includes the issuance of $250,000 serial bonds of the Town, and the levy and collection of taxes upon all the taxable real property within the Town to pay the principal of said bonds and interest thereon; SECOND: AUTHORIZING the issuance of $250,000 serial bonds of the Town pursuant to the Local Finance Law of the State of New York ("Law") to finance said appropriation; THIRD: DETERMINING and STATING the period of probable usefulness applicable to the object or purpose for which said bonds are authorized to be issued is thirty (30) years; that all or a portion of such bonds or any bond anticipation notes may be issued in the form of a land installment purchase obligation or obligations pursuant to Section 29.10 of the Law; the proceeds of the bonds may be used to reimburse the Town for expenditures made after the effective date hereof for the purpose for which said bonds are authorized; and the proposed maturity of said serial bonds will exceed five (5) years; FOURTH: DETERMINING that said bonds and any bond anticipation notes issued in anticipation of said bonds and the renewals of said bond anticipation notes shall be general obligations of the Town; and PLEDGING to their payment the faith and credit of the Town; FIFTH: DELEGATING to the Supervisor the powers and duties as to the issuance of said bonds and any bond anticipation notes issued in anticipation of said bonds, or the renewals thereof; and 329793.1 020032 DOC SIXTH: DETERtNG that a proposition for the approv~[ disapproval of this bond resolution shall be submitted to the qualified voters of the Town at the Biennial Town Election to be held on November 2, 1999 and that this bond resolution shall take effect upon approval of such proposition. Said Proposition shall appear in substantially the following form on the ballot label to be inserted on the voting machines to be used for voting at said Biennial Town Election: YES NO Proposition No.2 SHALL the Bond Resolution adopted August 23, 1999 authorizing issuance of $250,000 Bonds of the Town of Southold to finance an appropriation of like amount for improvement and preservation of Town waterways, in the interest of improving water quality and waterways, subject to compliance with the State Environmental Quality Review Act, BE APPROVED? Such Biennial Town Election shall be conducted at the time and places and in accordance with procedures determined pursuant to applicable law and by the Suffolk County Board of Elections. Dated: October , 1999 Elizabeth A. Neville Southold Town Clerk 329793,1 020032 DOC I2.'29:47 AM Suffolk County Board of Elections Unofficial Results Breakdown For General Election held on Tuesday, November 2, 1999 November3,1999 19 Out of 19 Election Districls have cafled in ') 100.00% Reporting 6,518 Oul of 15,026 eligible have pulled the lever ") 43.38% Turnout ED Eligible ED~: I Yes 226 1' 27 EI~: 2 Yes 671 11; 217 ED~. 3 Yes 563 106 156 ED,f: 4 Yes 512 66 129 ED~: 5 Yes 408 86 63 ED#: 6 Yes 77'7 88 124 ED#: 7 Yes 773 13(3 16,6 ED#: 8 Ye., 98~ 193 27~ ED#-' 9 Yes 1,325 27S ED#: 10 Ye`" '65E 127 171 F. Df: 11 Ye." 76; 14~ 21(; ED~ 12 Ye`` g7~ 16E 2~ ED~. 13 Ye.' 1~231 21~ 231 El)fi: 14 Ye.' 697 14~ 19~ ED~ 15 Ye~ 96.' ED~. 16 Ye~ 61.~ 137 15( ED~. 17 Ye~ 83t 16~ 20~ EDIt: 18 Ye~ lr060 22; 267 EDIt: 19 Ye~ 984 20';, 29z To,allot 19/'19 15,026 2,76~ Southol~ Page 83-E-1 12:29:48 AM Sutlolk County Board ol Elections Unofficial Results Breakdown For General Election held on Tuesday, November 2, 1999 November3,1999 19 Out of 19 Election Districts have called In ") 100.00% Reporting 6,598 Out of 15,026 eligible have pulled the lever ") 43.91% Turnout ED~'. I Yes 22~ 12 28 ED~. 2 Yes 671 80 25g ED~': 3 Yes 563 78 18G ED~. 4. Yes 512 48 153 ED~': 5 Yes 408 61 91 ED~. 6 Yes 777 69 15(~ ED~. 7 ye.~ 773 9'; 207 ED~. 8 Yet 988 143 331 ED~, 9 Ye.~ 1,327 20~ 46C ED#: 10 Ye`` 65~ 8~ 20~. ED#: 11 Ye`` 76; 104 24E ED#: 12 Ye., 977 11E 30; ED~: 13 Ye... lr231 14z 30~ ED#: 14 Ye.' 697 8{ 25, ED#: 15 Ye.' 96.'. 12; 30( ED#: 16 Ye.' 61.~ 9( 20' EDi;: 17 Ye~ 83~ 11~ 251 ED#: 16 Yes 1,06( 14' 353 ED~: 19 Yes 98, 13,~ 353 Total roi 19119 15,02( 1 ,g41 4,64~ Soufhol,~ 19119 Page 84-E-1 NOTICE OF PROPOSITIONS TO BE SUBMITTED AT THE BIENNIAL TOWN ELECTION TO BE HELD ON NOVEMBER 2,1999 NOTICE IS HEREBY GIVEN that at the Biennial Town Election of the Town of Sonthold ("Town"), in the County of Suffolk, New York, to be be[d on November 2, 1999, between the hours of 6:00 o'clock a.m. (Prevailing Time) and 9:00 o'clock p.m. (Prevailing Tune), the following Propositions wifi be sub- mitted to the qualified voters of the Town for their approval or disap- proval, to wit: [PROPOSITION NO. 1 SHALL THE BOND RESO- LUTION ENTITLED: "Bond Resolution of the Town of Southuld, New York, adopted August 23,1999, authorizing the acquisition of inter- ests or rights in real property, including, but not limited to, devel- opmental rights in open agricultural lands, within said Town, for the preservation of open spaces and areas and to maintain and enhance the conservation of natural resources, provided, however, that no such interest or fights in real property shall be acquired until all relevant provisions of the state environmental quality review act have been complied with and a final declaration as to environmental impact has been duly declared, stat- ing the estimated maximum cost thereof is $2,000,000, appropriating said amount therefor, authorizing the issuance of $2,000,000 serial bonds of said Town to finance said appropriation, stating that land in- stallment purchase obligations are authorized to be issued pursuant to this bond resolution and deter- mining that this bond resolution shall be subject to a mandatory referendum," BE APPROVED? An abstract of said bond resolu- tion, concisely stating the purpose and effect thereof, is as follows: FIRST: RECITING that pur- suant to Section 247 of the New York General Municipal Law ("Section 247"), the Town of Southuld ("Town"), is authorized to acquire interests or rights in real property for the preservation of open spaces and areas and main- raining and enhancing thc couser- ration of natural or scenic re- sources, as defined therein; that such acquisition of interests or fights in real property throughout the Town must be found, determined and dec,bed to be necessary, in the pub- lic interest and a proper public pur- pose of the Town in accordance with the provisions of Section 247 and the Town desires to implement the land acquisition and financing pro- gram hereinafter set forth and to authorize thc issuance of land installment purchase obligations for such purpose; SECOND: AUTHORIZING the Town to improve and preserve Town waterways, including, but not limited to; Prcser%ti6n Of tidal ~et-' lands, salt marshes, creeks, bays, Long Island Sound, estuaries and fresh water wetlands and to provide public access to waterways,, drainage and run.off, ail in thc inter- cst of improving water quality and waterways; provided, however, that no such right, including the fee or any lesser interest, development right, easement, covenant, or other contractual right in any piece of par- cel of such lands shah be so acquired until all relevant provi- sions of the State Environmental Quality Review Act ("SEQRA"), have been complied with and a final declaration as to environmental impact has been duly declared by thc entity duly authorized to make such determination and declaration; STATING the estimated maximum cost thereof is $2,000,000; APPRO- pRIATING S~2,000,000 to pay said cost; and STATING the plan of financing includes thc issuance of $2,000,000 serial bonds of thc Town, and the levy and collection of taxes upon aH the taxable real property within the Town to pay the principal of said bonds and interest thereon; THIRD: AUTHORIZING the issuance of $2,000,000 serial bonds of the Town pursuant to the Local Finance Law of the State of New York ("Law") to finance said ap- propriation; FOURTH: DETERMINING and STATING the period of pcoba- ble usefulness applicable to thc class of objects or pm'poses for which said bonds are authorized to be issued is thirty (30) years; that all or a portion of such bonds or ~ny bond anticipation notes may be issued in the form of a land installment pur- chase obligation or obligations pur- suant to Section 29.10 of the Law; the proceeds of the bonds may bc used to reimburse the Town for expenditures made after the effec- tive date hereof for the purpose for which said bonds are authorized; and the proposed maturity of said serial bonds will exceed five (5) years; FIFTH: DETERMINING that said bonds and any bond anticipa- tion notes issued in anticipation of said bonds and the renewals of said bond anticipation notes shall be general obligations of thc Town; and PLEDGING to their payment the faith and credit of the Town: SIXTH: DELEGATING to the Supervisor the powers and duties as to the issuance of said bonds and any bond anticipation notes issued in anticipation of said bonds, or the renewals thereof; and SEVENTH: DET~KMINING that a Proposition f~r the approval or disapproval of ~ be~d rennin* riGa shall be submitted to the qmdi- fled voters of the Town at the Biennial Town Election to be held on November 2, 1999 and that this bond resolution shah take effect upon such approval. Said Proposition shall appear in substantially the following form on the ballot label to be inserted on the voting machine to be used for vot- ing at said Biennial Town Election: pROPOSITION NO. 1 SHALL the Bond Resolution adopted August 23, I999 authoriz- ing issuance of $2,000,000 Bonds of the Town of Southold to finance an a~$pfi~fiOn o~ li~e amount for acquisition of interests or rights in real property, including develop- ment rights in open agricultural lands to preserve open spaces and areas, subject to compliance with the State Environmental Quality Review Act, BE APPROVED? SHALL THE BOND RESO- LUTION ENTITLED: "Bond Resolution of the Town of Southuld, New York, adopted August 2~, 1999, authorizing the improvement and preservation of town waterways, including, but not limited to, preservation of tidal wetlands, salt marshes, creeks, bays, Long Island Sound, estuaries and fresh water wedands, providing of public access to such waterways, drainage, and rue-off, ail in the interest of improv- ing water quality and waterways; provided, however, that no such improvement, preservation, or pro- viding of access, drainage or mn-off shall be commenced until all rele- vant provisions of the State Environmental Quality Review Act have been complied with and a final declaration as to environmental impact has been duly made, stating the estimated maximum cost there- of is $250,000 appropriating said amount thereof, authorizing the is- susnce of $250,0~0 serial bonds of said town to finance said appro- pfiation, stating .that land install- ment purchase obligations are authorized to be issued pursuant to this bond resolution and deter- mining that this bond resolution shall be subject to a mandatory ref- crcndnm," BE APPROVED? An abstract of said bond resolu- tion, concisely stating the puspe~e and effect thereof, is as follows: FIRST: AUTHORIZING the Town to improve and preserve Town waterways, including, but not limited to, preservation of tidal wet- lands, salt marshes, creeks, bays, Long Island Sound~ estuaries and fresh water wetlands and to provide public access to waterways, drainage and turnoff, all in the interest of improving water quality and water- ways; provided, however, that no such right, including the fee of any lesser interest, development right, easement, covenant, or other contractual fight in any piece or parcel of such lands shall be so acquired until all relevant pr0vi- siGns of the State Environmental Quality Review Act ("SEQRA"), have been complied with and a final declaratinn as to environmental impact has been duly made by the entity duly authorized to make such determination and declaration; STATING the estlmntmi maximum cost thereof k $250,000; APPROPRIATING $250,000 to pay said coat; and STATING the plan of financing includes the is- seance of $250,000 serial bonds of the Town, and the levy and collec- tion of taxes upon all the taxable real property within thc Town to pay the principal of said bonds and interest thereon; SECOND: AUTHORIZING the issuance of $250,000 serial bonds 6f the Town pursuant to the Local Finance Law of the State of New York ("Law") to finance said appro- priation. THIRD: DETERMINING and STATING the period of probable usefulness applicable to the ob~act or purpose for which said bonds nm authorized to b~ issued is thirty (30) years; that all or a portion of much bonds or any bond anticipation notes may be issues in the form of a land installment purchase obliga- tion or obligations pursuant to Section 29.10 of the Law; the pro- ceeds of the bonds may be used to reimburse the Town for expendi- tures made after the effective date hereof for the purpose for which said bonds are authorized; and the proposed maturity of said serial bonds will exceed five (5) years; FOURTH: DETERMINING that said bonds and any bond an- ticipation notes issued in anticipa- tion of said bonds and the renewals of said bond anticipatinu notes shall be general obligations of the Town: and PLEDGING to their payment the faith and credit of the Town; FIFTH: DELEGATING to the Supervisor the powers and duties as to the issuance of said bonds and any bond anticipation notes issued in anticipation of said bonds, or the renewals thereof; and SIXTH: DETERMINING that a proposition for the approval or dis- approval of this bond resolution shall be submitted to the qualified voters of the Town at the Biennial Town Election to be held GU November 2, 1999 and that this bond resolution shah take effect upon approval of such proposition. Said Proposition shall appear in suhrtanthafiy the following form on the ballot label to be inserted on the voting machines to be used for vnt- lng at said Biennial Town Election: PROPOSITION NO. 2 SHALL the Bond Resolution adopted August 23, ]999 authoriz- ing issuance of $250,000 Bonds of the Town of Sonthold to finance an appropriation of like amount for improvement and preservation of Town waterways, in the interest of improving water quality and water- ways, subject to compliance with the State Environmental Quality Review Act, BE APPROVED? Such Biennia{ Town Election shall be conducted at the time and places and in accordance with pro- cedures determined pursuant to applicable law and by the Suffolk County Board of Election~ Dated: October 12, 1999 ELIZABETH A. NEVILLE SOUTHOLD TOWN CLERK STATE OF NEW YORK) )SS: C~L~NTY OF SUF, F~OL,K! '~L/~ -(?-- ~)~){ [(L~ of Mattituck, in saic county, being duly sworn, says that he/she Principal clerk of THE SUFFOLK TIMES, weekly newspaper, published at Mattituck, the Town of Southold, County of Suffolk ant State of New York, and that the Notice of whicl the annexed is a printed copy, has been regu larly publishe~ in said Newspaper once eac! week for ~ weeks successively the {/-~ $'~ da commencing on L) Principal clerk rn t before me this Swo ~o= ....... ;-g, TATE 07 NEW day NO a. /~O-O~SlON EXPIRES MAY 31 3 NOTICE The resolution pubiisbod herewith has been adopted on 23rd day of AugusL 1999, and a Proposition therefoL has been approved by a majority of the qualified voters of the Town voting thereon at the Biennial Town Election held on November 2, 1999. The validity of thc obligations authorized by such resolution may be hereafter contested only if such obfigations were authorized for an object or purpose for which the TOWN OF SOUTHOLD, in the County of Suffolk, New York, is not authorized to expend money or if the provisions of law which should have been complied with as of the date of publication of this notice were not substantially complied with, and an action, suit or proceeding contesting such validity is commenced within twenty days after the date of publica- tion of this notice, or such obligations were authorized in violation of the provisions of the constitution. ELIZABETH A. NEVILLE Town Clerk BOND RESOLUTION OF THE TOWN OF SOUTHOLD, NEW YORK,ADOPTED AUGUST 1999, AUTHORIZING THE ACOUISITION OF INTERESTS OR RIGHTS IN REAL PROP- ER'I'Y, INCLUDING, BUT NOT LIMITED TO, DEVELOPMENT RIGHTS IN OPEN AGRI- CULTURAL LANDS, WITHIN SAID TOWN, FOR THE PRESERVATION OF OPEN SPACES AND AREAS AND TO MAINTAIN AND ENHANCE THE CONSERVATION OF NATURAL OR SCENIC RESOURCES, PROVIDED, HOWEVER, THAT NO SUCH INTERESTS OR RIGHTS IN REAL PROPERTY SHALL BE ' ACQUIRED UNTIL ALL REL- EVANT PROVISIONS OF THE STATE ENVIRONMENTAL QUALITY REVIEW ACT HAVE BEEN COMPLIED WITH AND A FINAL DECLA- RATION AS TO ENVIRi~N- MENTAL IMPACT HAS BEEN DULY DECiARED, STATING THE ESTIMATED MAXIMUM COST THEREOF IS APPROPRIATING SAID AMOUNT THEREFOR, AUTHORIZING THE ISSUANCE OF $2,000,000 SERI- AL BONDS OF SAID TOWN TO FINANCE SAID APPROPRIA- TION, STATING THAT LAND INSTALLMENT PURCHASE OBLIGATIONS ARE AU- THORIZED TO BE ISSUED PURSUANT TO THIS BOND RESOLUTION AND DE- TERMINING THAT THIS BOND RESOLUTION SHALL BE SUBJECT TO A MANDA- TORY REFERENDUM. Red~ls WI-LEREAS, pursuant to Section 24/ of the General Municipal Law, constituting Chapter 24 of the Consolidated Laws of the State of New York (herein called "Section 24'/"), tho Town of Southold, Suffolk County, New York (herein called "Town"), is authorized to acquire interests or rights in real property for the preservation of open spaces and areas as defined in Section 247; and WHEREAS, such acquisition of interests or rights in land situate throughout the Town for the preser- vation of open spuc~ and areas and maintaining and enhancing the con- scrvarion of natural or sceni~ resources, as defined in ~ction 247, must be found, determined and deemed to be necessary, in the pubhc interest and a proper public purpose of the Town in accordance with the findings and determinations of the State Legislature as set forth in Section 247; and WHEREAS, in pursuance thereof, the Town desires to implement the land acquisition and financing pro- gram hereinafter set forth and to authorize the issuance of land install- ment purchase obligations for the purpose ol financing the acquisition of such interests or rights in real property: now, therefore THE TOWN BOARD OF THE TOWN OF SOUTHOLD, IN THE COUNTY OF SUFFOLK, NEW YORK, HEREBY RESOLVES (by the favorable vote of not less than three-fifths of all the members of said Town Board) AS FOLLOWS: Section 1. The Town is hereby authorized to acquire by purchase, gift, grant, bequest, devise, lease or otherwise, the fee or any lesser inter- est, development right, easement, covenant or other contractual tight necessary to achieve the purposes of Section 247, in various parcels of real property, including, but not limited to, development rights in open agri- cultural lands, actually used in bona fide agricultural production within the Town, for the preservation of open spaces and areas and to main- tain and enhance the conservation of natural or scenic resources, as may be authorized from time to time by the Town Board of the Town, after due notice and a public hearing, pursuant to the provisions of Section 247 and applicable provisions of the Town of Southold Code, including incidental costs incurred in relation thereto, such acquisition being hereby found, determined and deemed to be neces- sary and in the public interest and a proper public purpose of the Town in accordance with the findings and determinations set forth in Section 247; provided, however, that no such right, including the.fee or any lesser interest, development right, ease- ment, covenant, or other contractual right in any piece or parcel of such lands shall be so acquired until ali relevant provisions of the State Environmental Quality Review Act (herein called "SEQRA"), constitut- ing Article 8 of the New York Environmental Conservation Law, have been complied with and a final declaration as to environmental impact has been duly declared by the entity duly authorized to make such determination and declaration. The estimated n~aximum cost of said class of objects or purposes, including preliminary costs and costs incidental thereto and the financing ~hereof, is $2,000,000, and said amount is here- by appropriated therefor. The plan of financing includes the issuance of $2,000,000 serial bonds of the Town to finance said appropriation and the levy and collection of taxes on all the taxable real property in the Town to pay the principal of said bonds and the interest thereon as the same shall become due and payable. Section 2. Serial bonds of the Town in the principal amount of $2,000,000 are hereby authorized to be issued pursuant to the provisions of the Local Finance Law, constituting Chapter 33-a of the Consolidated .Laws of the State of New York (here- in called "Law"), to finance said appropriation. Section 3.The following additional matters are ~hereby determined, stat- ed and declared: (a) The period of probable use- fulness of said class of objects or par- poses, as described herein, for which the serial bonds authorized pursuant to this resolution are to be issued, within the limitations of Section 11.00 (a) 21. of the Law, is thirty (30) years, (b) All or a portion of the in- debtedness to be contracted by the Town for the purpose of financing the acquisition of such interests or rights in renl property tony be issued in the form of a land instellment put- ch~e obli~afinn or obligations pur- snnnt to the provisions of Section 29.10 of the Law; any portion of said estimated maximum cost that is not financed by the issuance of a land installment obligation or obligations may be financed through the issuance of such bonds or bond antic- ipation notes issued in anticipation of the sale of such bonds~ (c) The proceeds of the bonds herein authorized and any bond anticipation notes issued in antici- pation of said bonds may be applied to reimburse the Town for expendi- tures made after the effective date of this resolution for the purpose or purposes for which said bonds are authorized. The Ioregoing statement of intent with respect to reimburse- ment is made in conformity with Treasury Regulation Section L150-2 ol the United States Treasury Department. of Mattituck, in said five (5) years. Section 4. Each of the bonds au- thorized by this resolution and any bond anticipation notes issued in anticipation of the sale of said bonds as well as any bond pumhase obliga- Sion shall contain the recital of valid- ity as prescribed by Section 52.00 of the Law and said bonds and any notes issued in anticipation of said bonds, shall be general obligations of the Town, payable as to both princi- pal and interest by general tax upon all the taxable real property within the Town without limitation of rate or amount. The faith and credit of the Town are hereby irrevocably pledged to the punctual payment of the prin- cipal of and interest on said bonds and any notes issued in anticipation of the sale of said bonds and provi- sion shall be made annually in the budget of the Town by appropriation ..... for (a) the amortization and redemp- tion of the bonds and any notes in anticipation thereof to mature in such year and (b) the payment of interest to be due and payable in such year. Section 5. Subject to the provisions of this resolution and of the Law and pursuant to the provisions of Section 21.00 relative to the authorization of the issuance of bonds with substan- tially level or declining annual debt service and of Section 30.~0 relative to the authorization of the issuance of bond anticipation notes and of Section 50.00 and Sections 56.00 to 60.00 of the Law, the powers and duties of the Town Board relative to authorizing bond anticipation notes and prescribing thc terms, form and contents and as to the sale and issuance of the bonds herein autho- rized and of any bond anticipation notes issued in anticipation of said bonds, and the renewals of said bond anticipation notes, are hereby dele- gated to the Supervisor, the chief fis- cal officer of the Town. Section 6. The validity of the bonds authorized by this resolution and of any notes issued in anticipation of the sale of said bonds, may be con- tested only if: (a) suc~ obligations are au- thorized for an object or purpose for which the Town is not autho- rized to expend money, or (b) the provisions of law which should be complied with at the date of the publication of such res- olution are not substantially com- plied with, and an action, suit or proceeding con- testing such validity, is commenced within twenty days after the date of such publication, or (c) such obligations are au- tborized la violation of the provi- sions of the constitution. Section 7. A proposition for the approval or disapproval of this bond resolution shall be submitted to the qualified voters of the Town at the Biendial Town Election to be held on November 2, 1999, and this bond res- olution shall take effect upon the approval of the Propesition by said voters of the Town at that Election. 1062-1TNll ~ SUFFOLK TIMES, a ilished at Mattituck, in County of Suffolk and that the Notice of which :d copy, has been regu- · Newspaper once each we.elf~_succ e s sively, ~ee I~ day (~/ Principal Clerk Ct. ~K COUNTY AY 31 c (d) The proposed maturity of said rn, says that he / she is $2,000,000 serial bonds will exceed November ll, 1999 $CBOE BOARD OF ELECTIONS COUNTY OF SU'~OLK P.O. BOX 7OO YAPI:IANI~ N~W YOI~K 11980-0700 ~ 001 Honorable Elizabeth Ann Neville Town Clerk, Town of Southold Southold Town Hall 53095 Main Rd Southold NY 11971 Dear Mrs Neville: We, Barbara P. Barci and Gerald Bdclstcin, Commissioners of Elections in and for the · County of Suffolk, pursuant to imtmctions received from your office, have directed to be placed on the ballot, at the November 2~, 1999 General Election~ the following proposition: - ..11/~/99, THU 16:21 FAX 5168524574 SCBOE 3:21:56 PM Sufloik County Board of Elections Nove~nber 11, 1SSS Final Results For General Election held on Tuesday, November 2, 1999 SOld - (Rights in Prop.)PROPOSAL Six, A PROPOSITION ~nswer Votes Share ~es 3,82c. 57,78% ~1'o 2,791! 42.22°/, Voids 1 Blanks 2,00.~ Whole..Number '19 Out of t9 Election Districts have called in ..) 100.00% Reporting 6,627 Out of t$,02a Eligible have pulled the Lever ") 44.10% Turnout Page 1 NOTICE The resolution published herewith has been adopted on 23rd day of August, 1999, and a Proposition therefor has been approved by a majority of the qualified voters of the Town voting thereon at the Biennial Town Election held on November 2, 1999. The validity of the obligations authorized by such resolution may be hereafter contested only if such obligations were authorized for an object or purpose for which the TOWN OF SOUTHOLD, in the County of Suffolk, New York, is not authorized to expend money or if the provisions of law which should have been complied with as of the date of publication of this notice were not substantially complied with, and an action, suit or proceeding contesting such validity is commenced within twenty days after the date of publication of this notice, or such obligations were authorized in violation of the provisions of the constitution. ELIZABETH A. NEVILLE Town Clerk 3222793 021321 RES Land Preservation ! of 8 BOND RESOLUTION OF THE TOWN OF SOUTHOLD~ NEW YORK, ADOPTED AUGUST 23, 1999, AUTHORIZING THE ACQUISITION OF INTERESTS OR RIGHTS IN RElkL PROPERTY, INCLUDING, BUT NOT LIMITED TO, DEVELOPMENT RIGHTS IN OPEN AGRICULTURAL LANDS, WITHIN SAID TOWN, FOR THE PRESERVATION OF OPEN SPACES AND AREAS AND TO MAINTAIN AND ENHANCE THE CONSERVATION OF NATURAL OR SCENIC RESOURCES, PROVIDED, HOWEVER, THAT NO SUCH INTERESTS OR RIGHTS IN REAL PROPERTY SHALL BE ACQUIRED UNTIL ALL RELEVANT PROVISIONS OF THE STATE ENVIRONMENTAL QUALITY REVIEW ACT HAVE BEEN COMPLIED WITH AND A FINAL DECLARATION AS TO ENVIRONMENTAL IMPACT HAS BEEN DULY DECLARED, STATING THE ESTIMATED MAXIMUM COST THEREOF IS $2,000,000, APPROPRIATING SAID AMOUNT THEREFOR, AUTHORIZING THE ISSUANCE OF $2,000,000 SERIAL BONDS OF SAID TOWN TO FINANCE SAID APPROPRIATION, STATING THAT LAND INSTALLMENT PURCHASE OBLIGATIONS ARE AUTHORIZED TO BE ISSUED PURSUANT TO THIS BOND RESOLUTION AND DETERMINING THAT THIS BOND RESOLUTION SHALL BE SUBJECT TO A MANDATORY REFERENDUM. Recitals WHEREAS, pursuant to Section 247 of the General Municipal Law, constituting Chapter 24 of the Consolidated Laws of the State of New York (herein called "Section 247"), the Town Land Preservation 2 of 8 221742.2 020032 RBS of Southold, Suffolk County, authorized to acquire interests the preservation of open spaces 247; and New York (herein called "Town"), is or rights in real property for and areas as defined in Section WHEREAS, such acquisition of interests or rights in land situate throughout the Town for the preservation of open spaces and areas and maintaining and enhancing the conservation of natural or scenic resources, as defined in Section 247, must be found, determined and deemed to be necessary, in the public interest and a proper public purpose of the Town in accordance with the findings and determinations of the State Legislature as set forth in Section 247; and WHEREAS, in pursuance thereof, the Town desires to implement the land acquisition and financing program hereinafter set forth and to authorize the issuance of land installment purchase obligations for the purpose of financing the acquisition of such interests or rights in real property: now, therefore THE TOWN BOARD OF THE TOWN OF SOUTHOLD, IN THE COUNTY OF SUFFOLK, NEW YORK, HEREBY RESOLVES (by the favorable vote of not less than three-fifths of all the members of said Town Board) AS FOLLOWS: Section 1. The Town is hereby authorized to acquire by purchase, gift, grant, bequest, devise, lease or otherwise, the fee or any lesser interest, development right, easement, covenant or other contractual right necessary to achieve the purposes of Land Preservation 3 of 8 221742.2 020032 Section 247, in various parcels of real property, .including, but not limited to, development rights in open agricultural lands, actually used in bona fide agricultural production within the Town, for the preservation of open spaces and areas and to maintain and enhance the conservation of natural or scenic resources, as may be authorized from time to time by the Town Board of the Town, after due notice and a public hearing, pursuant to the provisions of Section 247 and applicable provisions of the Town of Southold Code, including incidental costs incurred in relation thereto, such acquisition being hereby found, determined and deemed to be necessary and in the public interest and a proper public purpose of the Town in accordance with the findings and determinations set forth in Section 247; provided, however, that no such right, including the fee or any lesser interest, development right, easement, covenant, or other contractual right in any piece or parcel of such lands shall be so acquired until all relevant provisions of the State Environmental Quality Review Act.(herein called "SEQP, A"), constituting Article 8 of the New York Environmental Conservation Law, have been complied with and a final declaration as to environmental impact has been duly declared by the entity duly authorized to make such determination and declaration. The estimated maximum cost of said class of objects or purposes, including preliminary costs and costs incidental thereto and the financing thereof, is $2,000,000, and said amount is hereby appropriated therefor. The plan of financing includes the issuance of $2,000,000 serial bonds of the Town to finance said Land Preservation 4 of 8 221742.2 020032 RES appropriation and the levy and collection of taxes on all the taxable real property in the Town to pay the principal of said bonds and the interest thereon as the same shall become due and payable. Section 2. Serial bonds of the Town in the principal amount of $2,000,000 are hereby authorized to be issued pursuant to the provisions of the Local Finance Law, constitutinG Chapter 33-a of the Consolidated Laws of the State of New York (herein called "Law"), to finance said appropriation. Section 3. The followinG additional matters are hereby determined, stated and declared:. (a) The period of probable usefulness of said class of objects or purposes, as described herein, for which the serial bonds authorized pursuant to this resolution are to be issued, within the limitations of Section 11.00 (a) 21. of the Law, is thirty (30) years. (b) All or a portion of the indebtedness to be contracted by the Town for the purpose of financinG the acquisition of such interests or rights in real property may be issued in the form of a land installment purchase obligation or obligations pursuant to the provisions of Section 29.10 of the Law; any portion of said estimated maximum cost that is not financed by the issuance of a land installment obligation or obligations may be financed through the issuance of such bonds or bond anticipation notes issued in anticipation of the sale of such bonds. Land Preservation 5 of 8 221742.2 020032 RES (c) The proceeds of the bonds herein authorized and any bond anticipation notes issued in anticipation of said bonds may be applied to reimburse the Town for expenditures made after the effective date of this resolution for the purpose or purposes for which said bonds are authorized. The foregoing statement of intent with respect to reimbursement is made in conformity with Treasury Regulation Section 1.150-2 of the United States Treasury Department. (d) The proposed maturity of said $2,000,000 serial bonds will exceed five (5) years. Section 4. Each of th9 bonds authorized by this resolution and any bond anticipation notes issued in anticipation of the sale of said bonds as well as any bond purchase obligation shall contain the recital of validity as prescribed by Section 52.00 of the Law and said bonds and any notes issued in anticipation of said bonds, shall be general obligations of the Town, payable as to both principal and interest by general tax upon all the taxable real property within the Town without limitation of rate or.amount. The faith and credit of the Town are hereby irrevocably pledged to the punctual payment of the principal of and interest on said bonds and any notes issued in anticipation of the sale of said bonds and provision shall be made annually in the budget of the Town by appropriation for (a) the amortization and redemption of the bonds and any notes in anticipation thereof to mature in such year and (b) the payment of interest to be due and payable in such year. Land Prservation 6 of 8 221742.2 020032 RES Section 5: Subject to the provisions of. this resolution and of the Law and pursuant to the provisions of Section 21.00 relative to the authorization of the issuance of bonds with substantially level or declining annual debt service and of Section 30.00 relative to the authorization of the issuance of bond anticipation notes and of Section 50.00 and Sections 56.00 to 60.00 of the Law, the powers and duties of the Town Board relative to authorizing bond anticipation notes and prescribing the terms, form and contents and as to the sale and issuance of the bonds herein authorized and of any bond anticipation notes issued in anticipation of said bonds, and the renewals of said bond anticipation notes, are hereby delegated to the Supervisor, the chief fiscal officer of the Town. Section 6. The validity of the bonds authorized by this resolution and of any notes issued in anticipation of the sale of said bonds, may be contested only if: (a) such obligations are authorized for an object or purpose for which the Town is not authorized to expend money, or (b) the provisions of law which should be complied with at the date of the publication of such resolution are not substantially complied with, and an action, suit or proceeding contesting such validity, is commenced within twenty days after the date of such publication, or (c) such obligations are authorized in violation of the provisions of the constitution. Section 7. A proposition for the approval or disapproval of this bond resolution shall be submitted to the qualified voters of the Town at the Biennial Town Election to be Land prservation 7 of 8 held on November 2, 1999, and this bond resolution shall take effect upon the approval of the Proposition by said voters of the Town at that Election. PLEASE PUBLISH ON NOVEMBER 11. 1999 AND FORWARD TWO (2) AFFIDAVITS OF PUBLICATION TO ELIZABETH A. NEVILLE. TOWN CLERK. TOWN HALL. PO BOX 1179. SOUTHOLD. NY 11971. Copies to the following: The Suffolk Times Town Board Members Superintendent of Highays Town Attorney Town Clerk's Bulletin Board Land Preservation 8 of 8 ELIZABETH A. NEVILLE TOWN CLERK REGISTI{AR OF VITAL STATISTICS MARRIAGE OFFICER RECORDS MANAGEMENT OFFICER FREEDOM OF INFORMATION OFFICER Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Fax (516) 765-6145 Telephone (516) 765-1800 OFFICE OF THE TOWN CLERK TOWN OF SOUTHOLD TOWN OF SOUTHOLD PROPOSITION No. 1 SHALL THE BOND RESOLUTION ENTITLED: "Bond Resolution of the Town of Southold, New York, adopted August 23, 1999, authorizing the acquisition of interests or rights in real property, including, but not limited to, developmental rights in open agricultural lands, within said Town, for the preservation of open spaces and areas and to maintain and enhance the conservation of natural resources, provided, however, that no such interest or rights in real property shall be acquired until all relevant provisions of the state environmental quality review act have been complied with and a final declaration as to environmental impact has been duly declared, stating the estimated maximum cost thereof is $2,000,000, appropriating said amount therefor, authorizing the issuance of $2,000,000 serial bonds of said Town to finance said appropriation, stating that land installment purchase obligations are authorized to be issued pursuant to this bond resolution and determining that this bond resolution shall be subject to a mandatory referendum," BE APPROVED? ELIZABETH A. NEVILLE TOWN CLERK REGISTt{2~ OF VITAL STATISTICS MARRIAGE OFFICER RECORDS MANAGEMENT OFFICER FREEDOM OF INFORMATION OFFICER Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Fax (516) 765-6145 Telephone (516) 765-1800 OFFICE OF THE TOWN CLERK TOWN OF SOUTHOLD TOWN OF SOUTHOLD PROPOSITION No. 2 SHALL THE BOND RESOLUTION ENTITLED: "BOND RESOLUTION OF THE TOWN OF SOUTHOLD, NEW YORK, 3%DOPTED AUGUST 23, 1999, AUTHORIZING THE IMPROVEMENT AND PRESERVATION OF TOWN WATERWAYS, INCLUDING, BUT NOT LIMITED TO, PRESERVATION OF TIDAL WETLANDS, SALT MARSHES, CREEKS, BAYS, LONG ISLAND SOUND, ESTUARIES AND FRESH WATER WETLAiqDS, PROVIDING OF PUBLIC ACCESS TO SUCH WATERWAYS, DRAINAGE AND RUN-OFF, ALL IN THE INTEREST OF IMPROVING WATER QUALITY AND WATERWAYS; PROVIDED, HOWEVER, THAT NO SUCH IMPROVEMENT, PRESERVATION OR PROVIDING OF ACCESS, DRAINAGE OR RUN-OFF SHALL BE COMMENCED UNTILALL RELEVANT PROVISIONS OF THE STATE ENVIRNOMENTAL QUALITY REVIEW ACT HAVE BEEN COMPLIED WITH AND A FINAL DECLARATION AS TO ENVIRONMENTAL IMPACT HAS BEEN DULY M3kDE, STATING THE ESTIMATED MAXIMUM COST THEREOF IS $250,000, APPROPRIATING SAID AMOUNT THEREFOR, AUTHORIZING THE ISSUANCE OF $250,000 SERIAL BONDS OF SAID TOWN TO FINANCE SAID APPROPRIATION, STATING THAT LAND INSTALLMENT PURCHASE OBLIGATIONS kRE AUTHORIZED TO BE ISSUED PURSUANT TO THIS BOND RESOLUTION AND DETERMINING THAT THIS BOND RESOLUTION SHALL BE SUBJECT TO A MANDATORY REFERENDUM," BE APPROVED? TOWN OF SOUTHOLD, NEW YORK NOTICE OF PROPOSITION TO BE SUBMITTED AT THE SPECIAL TOWN ELECTION TO BE HELD ON NOVEMBER 2,1999 NOTICE IS HEREBY GIVEN that a Special Town Election of the town of Southold will be held at the same time as the Genera] Election on November 2, 1999, between the hours of 6:00 o'clock A.M. (Prevailing Time) and 9:00 o'clock EM. (Prevailing Time), and tbat the following proposition will be sub- mitted to the qualified voters of the Town of Southold for their approval or disapproval and will appear on the ballot in substantially the follow- ing form, to wit: PROPOSITION SHALL THE RESOLUTION ENTITLED: "Bond Resolution of the Town of Southold, New York, adopted August 23, 1999~ authorizing the improvement and preservation of Town waterways, including, but not limited to, preservation of tidal wetlands, salt marshes, creeks, bays, Long Island Sound, estuaries and fresh water wetlands, providing of pub- lic access to such waterways, drainage, and run-off, all in the interest of improving water quali- ty and waterways; provided, how- ever, that no such improvement, preservation, or providing of access, drainage or run-off sba0 be commenced until all relevant provisions of the State Environmental Quality Review Act have been complied with and a final declaration as to environ- mental impact has been duly made, stating the estimated maxi- mum cost thereof is $250,000.00 appropriating said amount there- oL authorizing the issuance of $250,000.00 serial bonds of said town to finance said appropria- tiom stating that land installment purchase obligations are autho- rizod to be issued pursuant to this bond resolution and determining that this bond resolution shall be subject to a mandatory referen- dum,'' be approved? NOTICE 1S FURTHER GIVEN that the polling places in each of the respective election districts of the Town of Southold shall be the same polling places as shall be used for voting at the General Election held on that day. An abstract of said bond resolu- tion, concisely stating the purpose and effect thereoL is as follows: FIRST: AUTHORIZING the Town to improve and preserve Town waterways, including, but not limited to, preservation of tidal wet- lands; salt marshes, creeks, bays, Long Island Sound, estuaries and fresh water wetlands and to provide public access to waterways, drainage and run-off, all in the interest of improving water quality and water- ways; provided, however, that no such right, including the fee or any lesser interest, development right, September 2, 19 easement, covenant, or other con- tractual right in any piece or parcel of such lands shall be so acquired until all relevant provisions of the State Environmental Quality Review Act ("SEQRA"). have been complied with and a final declara- tion as to environmental impact has been duly made by the entity duly authorized to make such determi- nation and declaration; STATING the estimated maximum cost thereof is $250,000; APPROPRIATING $250,000 to pay said cost; and STAT- ING the plan of financing includes the issuance of $250,000 serial bonds of the Town, and the levy and col- lection of taxes upon all the taxable real property within the Town to pay the principal of said bonds and interest thereon; SECOND: AUTHORIZING the issuance of $250,000 serial bonds of the Town pursuant to the Local Finance Law of the State of New York ("Law'~) to finance said appro- priation; THIRD: DETERMINING and STATING the period of probable usefulness applicable to the object or purpose for which said bonds are authorized to be issued is thirty (30) years; that all or a portion of such bonds or any bond anticipation notes may be issued in the form of a land installment purchase obligation or obligations pursuant to Section 29.10 of the Law: the proceeds of the bonds may be used to reimburse the Town for expenditures made after the effective date hereof for the purpose for which said bonds are authorized; and the proposed maturity of said serial bonds will ex- ceed five (5) years: FOURTH: DETERMINING that said bonds and any bond an- ticipation notes issued in anticipa- tion of said bonds and the renewals of said bond anticipation notes shall be general obligations of the Town; and PLEDGING to their payment the failh and credit of the Town; F1FTH: DELEGATING to the Supervisor the powers and duties as to the issuance of said bonds and any bond anticipation notes issued in anticipation of said bonds, or the renewals thereof; and SIXTH: DETERMINING that a proposition for the approval or dis- approval of this bond resolution shall be submitted to the qualified voters of the Town at the Biennial lown Election to be held on November 2, 1999 and that this bond resolution shall take effect upon approval of such proposition. Said Proposition shall appear in substantially the following form on the ballot label to be inserted on the voting machines to be used for vot- ing at said Biennia[ Town Election. Dated: August 23~ 1999 ELIZABETH A. NEVILLE SOUTHOLD TOWN CLERK 1822-1TS2 STATE OF NEW YORK) )SS: COUNTY OF SUFF©LK) (L~[.Eh'~LO~7,~ ~_~_~ OT aattituck, in said county, being duly sworn, says that he/she is Principal clerk of THE SUFFOLK TIMES, a weekly newspaper, published at Mattituck, in the Town of Southold, County of Suffolk and State of New York, and that the Notice of which the annexed is a printed copy, has been regu- larly published in said Newspaper once each week for ] wee~:j successively, commencing on the c>9 day of .~-,~L - 19C~i Prir~cip~ ~lerk Sworn to before _me this ~7cF~. day of ,~e-t,~'. 19 ch ¢' aU,~iJ0~ 31, 2_cio / TOWN OF SOUTHOLD, NEW YORK NOTICE OF PROPOSITION TO BE SUBMITTED AT THE SPECIAL TOWN ELECTION TO BE HELD ON NOVEMBER 2,19~9 NOTICE IS HEREBY GIVEN that a Special Town Election of the town of Soot. hold will be held at the same time as the General Election on November 2, 1999, between the hours of 6:00 o'clock A.M. (Prevailing Trine) and 9:00 o'clock EM. (Prevailing Time), and that the following proposition will be sub- I ~ ~0 the qunlifu~d voters Of the To~n of Somhold for their approval m' disapproval and will appear on the ballot in aube~nrially the follow- ing form, to wit: PROPOSrI~ION SHALL THE REtSOLUTION ENTITLED: "Bond Resolution of the Town of Southold, New York, adopted August 23, 1999, authorizing the acquisition of interests of rights in real property, including, but not limited to, developmental rights in open agricultural lands, within said Town, Ior the preservation of open spaces and areas and to maintain and enhance the con- servation of natural resources, provided, however, that no such interest or rights in real property shall be acquked until all relevant provisions of the state environ- mental quality review act hav~ been complied with and a final declaration as to environmental impact has been duly declared, stating the estimated maximum cost thereof is $2,000,000.00, appropriating said amount there- fore, authorizing the issuance of $2,000,000.00 serial bonds of said town to finance said appropria- tion, stating that land installment purchase obligations are autho- rized to be issued pursuant to this bond resolution and determining that this bond reaolution shall be subject to a mandatory referen- dum,'' be approved? NOTICE IS FURTHER GIVEN that the polling places in each of the respective election districts of the Town of Southold shall be the same polling places as shall be used for voting at the General Election held on that day. An abstract of said bond resolu- tion, ~roncisely stating the purpose and effect thereof, is as follows: FIRST: RECITING that pur- suant to Section 247 of the New York General Municipal Law ("Section 247"), the Town of Southold ("Town"), is authorized to acquire interests or rights in real property for the prese[vation of open spaces and areas and main- taining and enhancing the conser- vation of natural or scenic re- sources, as defined therein; that such acquisition of interests or rights in real property throughout the Town must be found, determined and deemed to be necessary, in the public interest and a proper public purpose of the Town in accordance with the provisions of Section 247 and the Town desires to implement the land acquisition and financing program hereinafter set forth and to authorize the issuance of land installment purchase obligations for such purpose; SECOND: AUTHORIZING the Town to acquire by purchase, gift, grant, bequest, devise, lease or oth- erwise, the fee or any lesser interest, development right, easement, covenant or other contractual right necessa~ to achieve the purposes of Section 247, in various parcels of real property, including, but not lim- ited to, development rights in open agricultural lands, actually used in bona fide agricultural production within the Town, for the preserva- as may be authorized from time to time by the Town Board of the Town, after due notice and a pubE hearing, pursuant to the provisions of Section 247 and applicable provi- sions of the Town of Southold Code, including incidental costs incurred in relation therelo, such acquisition being hereby found, determined and deemed to be necessary and in the public interest and a proper public purpose of the Town in accordance with the findings and determina- tions set forth in Section 247; pro- vided, however, that no such right, including the fee or any lesser inter- in any piece or parcel of such lands shall be so acquired until all relevant provisions of the State Environmental Quality Review Act ("SEQRA"), have been complied with and a final declaration as to environmental impact has been duly declared by the entity duly autho- and declaration; STATING the esti- mated maximum cost thereof is $2,000,000; APPROPRIATING $2,000~000 to pay said cost; and STATING the plan of financing includes the issuance of $2,000,000 serial bonds of the Town, and the levy and collection of taxes upon ail the taxable real property within the Town to pay the principal of said THIRD: AUTHORIZING the issuance of $2,000,000 serial bonds of the Town pursuant to the Local Finance Law of the State of New York {"Law") to finance said ap- propriation; FOURTH: DETERMINING and STATING the period of proba- ble usefulness applicable to the class of objects or purposes for which said bonds are authorized to be issued is thirty (30) years; that all or a portion of such bonds or any bond anticipa- tion notes may be issued in the form of a land installment purchase oblig- ation or obligations pursuant to Section 29.10 of the Law; the pro- ceeds of the bonds may be used to reimburse the Town for expendi- hereof for the purpose for which said bonds are authorized; and the proposed maturity of said serial bonds will exceed five (5) years; FIFTH: DETERMINING that said bonds and any bond anticipa- tion notes issued in anticipation of said bonds and the renewals of said bond anticipation notes shall be general obligations of the Town; and PLEDGING to their payment the faith and credit of the Town; SIXTH: DELEGATING to the Supervisor the powers and duties as to the issuance of said bonds and any bond anticipation notes issued in anticipation of said bonds, or the SEVENTH: DETERMINING that a Proposition for the approval or disapproval of this bond resolu- tion shall be submitted to the quali- fied voters of the Town at the Biennial Town Election to be held on November 2, 1999 and that this bond resolution shall take effect STATE OF NEW YORK) )SS: ~_OUN, TY OF SUFFOLK) . ~r)~.I~'~'[-/.f3C~ L0P~/of Mattituck, in said county, being duly sworn, says that he/she Is 'HE SUFFOLK TIMES, a lublished at Mattltuck, in rd, County of Suffolk and ~d that the Notice of which upon such approval, ated copy, has been regu- Dated: August 23, 1999 ELIZABETH A. NEVILLE aid Newspaper once each SOUTHOLD TOWN CLERK weeks, successively, 1821-1TS2 --com~menc)ng on the'., c~~d- day of ~'L'~D L 19q-~ Principal Clerk Sworn to before me this day of ~ ~L~o.7~ TOWN OF SOUTNOLD. NEW YORK NOTICE OF PROPOSITION TO BE SUBMI I I £D AT THE SPECIAL TOWN ELECTION TO BE HELD ON NOVEMBER 2. 1999 NOTICE IS HEREBY GIVEN that a Special Town Election of the Town of Southold will be held at the same time as the General Election on November 2, 1999, between the hours of 6:00 o~clock A.M. (Prevailing Time) and 9:00 o'clock P.M. (Prevailing Time), and that the following proposition will be submitted to the qualified voters of the Town of Southold for their approval or disapproval and will appear on the ballot in substantially the following form, to wit: PROPOSITION SHALL THE RESOLUTION ENTITLED: "Bond Resolution of the Town of Southold, New York, adopted August 23, 1999, authorizing the acquisition of interests of rights in real property, including, but not limited to, developmental rights in open agricultural lands, within said Town, for the preservation of open spaces and areas and to maintain and enhance the conservation of natural resources, provided, however, that no such interest or rights in real property shall be acquired until all relevant provisions of the state environmental quality review act have been complied with and a final declaration as to environmental impact has been duly declared, stating the estimated maximum cost thereof is $2,000,000.00, appropriating said amount therefore, authorizing the issuance of $2,000,000.00 serial bonds of said town to finance said appropriation, stating that land installment purchase obligations are authorized to be issued pursuant to this bond resolution and determining that this bond resolution shall be subject to a mandatory referendum," be approved? NOTICE IS FURTHER GIVEN that the polling places in each of the respective election districts of the Town of Southold shall be the same polling places as shall be used for voting at the General Election held on that day. An abstract of said bond resolution, concisely stating the purpose and effect thereof, is as follows: FIRST:~ECITING that pursuant ction 247 of the New York General Municipal Law ("Section , the Town of Southold ("Town"), is authorized to acquire interests or rights in real property for the preservation of open spaces and areas and maintaining and enhancing the conservation of natural or scenic resources, as defined therein; that such acquisition of interests or rights in real property throughout the Town must be found, determined and deemed to be necessary, in the public interest and a proper public purpose of the Town in accordance with the provisions of Section 247 and the Town desires to implement the land acquisition and financing program hereinafter set forth and to authorize the issuance of land installment purchase obligations for such purpose; SECOND: AUTHORIZING the Town to acquire by purchase, gift, grant, bequest, devise, lease or otherwise, the fee or any lesser interest, development right, easement, covenant or other contractual right necessary to achieve the purposes of Section 247, in various parcels of real property, including, but not limited to, development rights in open agricultural lands, actually used in bona fide agricultural production within the Town, for the preservation of open spaces and areas and to maintain and enhance the conservation of natural or scenic resources, as may be authorized from time to time by the Town Board of the Town, after due notice and a public hearing, pursuant to the provisions of Section 247 and applicable provisions of the Town of Southold Code, including incidental costs incurred in relation thereto, such acquisition being hereby found, determined and deemed to be necessary and in the public interest and a proper public purpose of the Town in accordance with the findings and determinations set forth in Section 247; provided, however, that no such right, including the fee or any lesser interest, development right, easement, covenant, or other contractual right in any piece or parcel of such lands shall be so acquired until all relevant provisions of the State Environmental Quality Review Act ("SEQRA"), have been complied with and a final declaration as to environmental impact has been duly declared by the entity duly authorized to make such determination and declaration; STATING the estimated maximum cost thereof is $2,000,000; APPROPRIATING $2,000,000 to pay said cost; and STATING the plan of financing includes the issuance qf $2,000,000 serial bonds of the Town, and the levy and collection of taxes upon all the taxable real property within the Town to pay the principal of said bonds and interest thereon; THIRD: AUTHORIZING the issuance of $2,000,000 serial bonds of the Town pursuant to the Local Finance Law of the State of New York ("Law") to finance said appropriation; FOURTH: DETERMINING and STATING the period of probable usefulness applicable to the class of objects or purposes for which said bonds are authorized to be issued is thirty (30) years; that all or a portion of such bonds or any bond anticipation notes may be issued in the form of a land installment purchase obligation or obligations pursuant to Section 29.10 of the Law; the proceeds of the bonds may be used to reimburse the Town for expenditures made after the effective date hereof for the purpose for which said bonds are authorized; and the proposed maturity of said serial bonds will exceed five (5) years; FIFTH: DETERMINING that said bonds and any bond anticipation notes issued in anticipation of said bonds and the renewals of said bond anticipation notes shall be general obligations of the Town; and PLEDGING to their payment the faith and credit of the Town; SIXTH: DELEGATING to the Supervisor the powers and duties as to the issuance of said bonds and any bond anticipatior notes issued in anticipation of said bonds, or the renewals thereof; and SEVENTH: DETERMINING that a Proposition for the approval or disapproval of this bond resolution shall be submitted to the qualified voters of the Town at the Biennial Town Election to be held on November 2, 1999 and that this bond resolution shall take effect upon such approval. Dated: Augsut 23. 1999 ELIZABETH A. NEVILLE SOUTHOLD TOWN CLERK PLEASE PUBLISH ON SEPTEMBER 2, 1999, AND FORWARD TWO (2) AFFIDAVITS OF PUBLICATION TO ELIZABETH NEVILLE, TOWN CLERK, TOWN HALL, PO BOX 1179, SOUTHOLD, NY 11971. Copies to the following: The Suffolk Times Town Board Members Town Attorney Town Clerk's Bulletin Board STATE OF NEW YORK COUNTY OF SUFFOLK ELIZABETH A. NEVILLE, being duly sworn, deposes and say: That she is and at all times hereinafter mentioned she was the duly elected, qualified and acting Town Clerk of the Town of Southold, in the County of Suffolk, State of New York; That on August 23, 1999, she has caused to be 'conspicuously posted and fastened up on the sign board of the Town maintained pursuant to Subdivision 6 of Section 30 of the Town Law, a copy of the Notice of the Biennial Town Election to be held on November 2, 1999 setting forth the Proposition to be submitted to the qualified voters of the Town at such Special Election together with an abstract of the bond resolution duly adopted by the Town Board on August 23, 1999 for the approval or disapproval of which such Proposition is to be submitted, a copy of which notice is annexed hereto and made a part hereof. Elizal~th A.' Neville Subscribed and sworn to before me this 23rd day of August 1999. Notar~ Public, Suffolk County Southold, Town }{all, A.M. EXTRACT OF MINUTES Meeting of the Town Board of the Town of Southold, in the County of Suffolk, New York August 23, 1999 A special meeting of the Town Board of the Town of in the County of Suffolk, New York, was held at Southold, New York, on August 23, 1999 at 9:00 (Prevailing Time). There were present: Board Members: Hon. Jean W. Cochran, and Councilwoman Alice J. Hussie Councilman William D. Moore Councilman John M. Romanelli Councilman Brian G. Murphy the o'clock Supervisor; There were absent: Justice Louisa P. Evans Also present: Elizabeth A. Neville, Town Clerk Gregory F. Yakaboski, Town Attorney Supervisor Cochran offered the following resolution and moved its adoption: 221742.2 020032 RES BOND RESOLUTION OF THE TOWN OF SOUTHOLD, NEW YORK, ADOPTED AUGUST 23, 1999, AUTHORIZING THE ACQUISITION OF INTERESTS OR RIGHTS IN REAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, DEVELOPMENT RIGHTS IN OPEN AGRICULTURAL LANDS, WITHIN SAID TOWN, FOR THE PRESERVATION OF OPEN SPACES AND AREAS AND TO MAINTAIN AND ENHANCE THE CONSERVATION OF NATURAL OR SCENIC RESOURCES, PROVIDED, HOWEVER, THAT NO SUCH INTERESTS OR RIGHTS IN REAL PROPERTY SHALL BE ACQUIRED UNTIL ALL RELEVANT PROVISIONS OF THE STATE ENVIRONMENTAL QUALITY REVIEW ACT HAVE BEEN COMPLIED WITH AND A FINAL DECLARATION AS TO ENVIRONMENTAL IMPACT HAS BEEN DULY DECLARED, STATING THE ESTIMATED MAXIMUM COST THEREOF IS $2,000,000, APPROPRIATING SAID AMOUNT THEREFOR, AUTHORIZING THE ISSUANCE OF $2,000,000 SERIAL BONDS OF SAID TOWN TO FINANCE SAID APPROPRIATION, STATING THAT LAND INSTALLMENT PURCHASE OBLIGATIONS ARE AUTHORIZED TO BE ISSUED PURSUANT TO THIS BOND RESOLUTION AND DETERMINING THAT THIS BOND RESOLUTION SHALL BE SUBJECT TO A MANDATORY REFERENDUM. Recitals WHEREAS, pursuant to Section 247 of the General Municipal Law, constituting Chapter 24 of the Consolidated Laws of the State of New York (herein called "Section 247"), the Town 221742.2 020032 RES of Southold, Suffolk County, New York (herein called "Town"), is authorized to acquire interests or rights in real property for the preservation of open spaces and areas as defined in Section 247; and WHEREAS, such acquisition of interests or rights in land situate throughout the Town for the preservation of open spaces and areas and maintaining and enhancing the conservation of natural or scenic resources, as defined in Section 247, must be found, determined and deemed to be necessary, in the public interest and a proper public purpose of the Town in accordance with the findings and determinations of the State Legislature as set forth in Section 247; and WHEREAS, in pursuance thereof, the Town desires to implement the land acquisition and financing program hereinafter set forth and to authorize the issuance of land installment purchase obligations for the purpose of financing the acquisition of such interests or rights in real property: now, therefore THE TOWN BOARD OF THE TOWN OF SOUTHOLD, IN THE COUNTY OF SUFFOLK, NEW YORK, HEREBY RESOLVES (by the favorable vote of not less than three-fifths of all the members of said Town Board) AS FOLLOWS: Section 1. The Town is hereby authorized to acquire by purchase, gift, grant, bequest, devise, lease or otherwise, the fee or any lesser interest, development right, easement, covenant or other contractual right necessary to achieve the purposes of 221742.2 020032 RES Section 247, in various parcels of real property, ~including, but not limited to, development rights in open agricultural lands, actually used in bona fide agricultural production within the Town, for the preservation of open spaces and areas and to maintain and enhance the conservation of natural or scenic resources, as may be authorized from time to time by the Town Board of the Town, after due notice and a public hearing, pursuant to the provisions of Section 247 and applicable provisions of the Town of Southold Code, including incidental costs incurred in relation thereto, such acquisition being hereby found, determined and deemed to be necessary and in the public interest and a proper public purpose of the Town in accordance with the findings and determinations set forth in Section 247; provided, however, that no such right, including the fee or any lesser interest, development right, easement, covenant, or other contractual right in any piece or parcel of such lands shall be so acquired until all relevant provisions of the State Environmental Quality Review Act (herein called "SEQRA"), constituting Article 8 of the New York Environmental Conservation Law, have been complied with and a final declaration as to environmental impact has been duly declared by the entity duly authorized to make such determination and declaration. The estimated maximum cost of said class of objects or purposes, including preliminary costs and costs incidental thereto and the financing thereof, is $2,000,000, and said amount is hereby appropriated therefor. The plan of financing includes the issuance of $2,000,000 serial bonds of the Town to finance said 221742.2 020032 RES appropriation and the levy and collection of taxes on all the taxable real property in the Town to pay the principal of said bonds and the interest thereon as the same shall become due and payable. Section 2. amount of $2,000,000 to the provisions of Serial bonds of the Town in the principal are hereby authorized to be issued pursuant the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York (herein called "Law"), to finance said appropriation. Section 3. The following additional matters are hereby determined, stated and declared:. (a) The period of probable usefulness of said class of objects or purposes, as described herein, for which the serial bonds authorized pursuant to this resolution are to be issued, within the limitations of Section 11.00 (a) 21. of the Law, is thirty (30) years. (b) All or a portion of the indebtedness to be contracted by the Town for the purpose of financing the acquisition of such interests or rights in real property may be issued in the form of a land installment purchase obligation or obligations pursuant to the provisions of Section 29.10 of the Law; any portion of said estimated maximum cost that is not financed by the issuance of a land installment obligation or obligations may be financed through the issuance of such bonds or bond anticipation notes issued in anticipation of the sale of such bonds. 221742.2 020032 RES (c) The proceeds of the bonds herein authorized and any bond anticipation notes issued in anticipation of said bonds may be applied to reimburse the Town for expenditures made after the effective date of this resolution for the purpose or purposes for which said bonds are authorized. The foregoing statement of intent with respect to reimbursement is made in conformity with Treasury Regulation Section 1.150-2 of the United States Treasury Department. (d) The proposed maturity of said $2,000,000 serial bonds will exceed five (5) years. Section 4. Each of the bonds authorized by this resolution and any bond anticipation notes issued in anticipation of the sale of said bonds as well as any bond purchase obligation shall contain the recital of validity as prescribed by Section 52.00 of the Law and said bonds and any notes issued in anticipation of said bonds, shall be general obligations of the Town, payable as to both principal and interest by general tax upon all the taxable real property within the Town without limitation of rate or amount. The faith and credit of the Town are hereby irrevocably pledged to the punctual payment of the principal of and interest on said bonds and any notes issued in anticipation of the sale of said bonds and provision shall be made annually in the budget of the Town by appropriation for (a) the amortization and redemption of the bonds and any notes in anticipation thereof to mature in such year and (b) the payment of interest to be due and payable in such year. 221742.2 020032 RES Section 5. Subject to the provisions of. this resolution and of the Law and pursuant to the provisions of Section 21.00 relative to the authorization of the issuance of bonds with substantially level or declining annual debt service and of Section 30.00 relative to the authorization of the issuance of bond anticipation notes and of Section 50.00 and Sections 56.00 to 60.00 of the Law, the powers and duties of the Town Board relative to authorizing bond anticipation notes and prescribing the terms, form and contents and as to the sale and issuance of the bonds herein authorized and of any bond anticipation notes issued in anticipation of said bonds, and the renewals of said bond anticipation notes, are hereby delegated to the Supervisor, the chief fiscal officer of the Town. Section 6. The validity of the bonds authorized by this resolution and of any notes issued in anticipation of the sale of said bonds, may be contested only if: (a) such obligations are authorized for an object or purpose for which the Town is not authorized to expend money, or (b) the provisions of law which should be complied with at the date of the publication of such resolution are not substantially complied with, and an action, suit or proceeding contesting such validity, is commenced within twenty days after the date of such publication, or (c) such obligations are authorized in violation of the provisions of the constitution. Section 7. A proposition for the approval or disapproval of this bond resolution shall be submitted to the qualified voters of the Town at the Biennial Town Election to be held on November 2, 1999, effect upon the approval Town at that Election. and this bond resolution shall take of the Proposition by said voters of the 221742.2 020032 RES The adoption of the foregoing resolution was seconded by Concilman Moore and duly put to a vote on roll resulted as follows: AYES: NOES: Councilman Brian G. Murphy Councilman John M. Romanelli Councilman William D. Moore Councilwoman Alice 3. Hussie Supervisor Jean W. Cochran None The resolution was declared adopted. call, which offered the following resolution ~ouncilman Romanelli and moved its adoption: THE TOWN BOARD OF THE TOWN OF SOUTHOLD, IN THE COUNTY OF SUFFOLK, NEW YORK, HEREBY RESOLVES AS FOLLOWS: Section 1. At the Biennial Town Election of the Town of Southold (herein called "Town"), in the County of Suffolk, New York, to be held on November 2, 1999, between the hours of 6:00 o'clock A.M. (Prevailing time) and 9:00 o'clock P.M. (Prevailing Time) or as much longer as may be necessary to enable the voters then present to cast their votes, Proposition No. 1 , in substantially the following form, shall be submitted to the qualified voters of the Town and shall be included in the Notice of such Biennial Town Election: 221742.2 020032 RES PROPOSITION No. 1 SHALL THE bond RESOLUTION ENTITLED: "Bond Resolution of the Town of Southold, New York, adopted August 23, 1999, authorizing the acquisition of interests or rights in real property, including, but not limited to, developmental rights in open agricultural lands, within said Town, for the preservation of open spaces and areas and to maintain and enhance the conservation of natural resources, provided, however, that no such interest or rights in real property shall be acquired until all relevant provisions of the state environmental quality review act have been complied with and a final declaration as to environmental impact has been duly declared, stating the estimated maximum cost thereof is $2,000,000, appropriating said amount therefor, authorizing the issuance of $2,000,000 serial bonds of said Town to finance said appropriation, stating that land installment purchase obligations are authorized to be issued pursuant to this bond resolution and determining that this bond resolution shall be subject to a mandatory referendum," BE APPROVED? An abstract of said bond resolution, concisely stating the purpose and effect thereof, is as follows: FIRST: RECITING that pursuant to Section 247 of the New York General Municipal Law ("Section 247"), the Town of Southold ("Town"), is authorized to acquire interests or rights in real property for the preservation of open spaces and areas and maintaining and enhancing the conservation of natural or scenic resources, as defined therein; that such acquisition of interests or rights in real property throughout the Town must be found, determined and deemed to be necessary, in the public interest and a proper public purpose of the Town in accordance with the provisions of Section 247 and the Town desires to implement the land acquisition and financing program hereinafter set forth and to authorize the issuance of land installment purchase obligations for such purpose; SECOND: AUTHORIZING the Town to acquire by purchase, gift, grant, bequest, devise, lease or otherwise, the fee or any lesser interest, development right, easement, covenant or other contractual right necessary to achieve the purposes of Section 247, in various parcels of real property, including, but not limited to, development rights in open agricultural lands, actually used in bona fide agricultural production within the Town, for the preservation of open spaces and areas and to maintain and enhance the conservation of natural or scenic resources, as may be authorized from time to time .by the Town Board of the Town, after due notice and a public hearing, pursuant to the provisions of Section 247 and applicable provisions of the Town of Southold Code, including incidental costs incurred in relation thereto, such acquisition being hereby found, determined and deemed to be necessary and in the public interest and a proper public purpose of the Town in accordance with the findings and determinations set forth in Section 247; provided, however, that no such right, including the fee or any lesser interest, development right, easement, covenant, or other contractual right in any piece or parcel of such lands shall be so acquired until all relevant provisions of the State Environmental Quality Review Act ("SEQRA"), have been complied with and a final declaration as to environmental impact has been duly declared by the entity duly authorized to make such determination and declaration; STATING the estimated maximum cost thereof is $2,000,000; APPROPRIATING $2,000,000 to pay said cost; and STATING the plan of financing includes the issuance of $2,000,000 serial bonds of the Town, and the levy and collection of taxes upon all the taxable real property within the Town to pay the principal of said bonds and interest thereon; THIRD: AUTHORIZING the issuance of $2,000,000 serial bonds of the Town pursuant to the Local Finance Law of the State of New York ("Law") to finance said appropriation; FOURTH: DETERMINING and STATING the period of probable usefulness applicable to the class of objects or purposes for which said bonds are authorized to be issued is thirty (30) years; that all or a portion of such bonds or any bond anticipation notes may be issued in the form of a land installment purchase obligation or obligations pursuant to Section 29.10 of the Law; the proceeds of the bonds may be used to reimburse the Town for expenditures made after the effective date hereof for the purpose for which said bonds are authorized; and the proposed maturity of said serial bonds will exceed five (5) years; FIFTH: DETERMINING that said bonds and any bond anticipation notes issued in anticipation of said bonds and the renewals of said bond anticipation notes shall be general obligations of the Town; and PLEDGING to their payment the faith and credit of the Town; SIXTH: DELEGATING to the Supervisor the powers and duties as to the issuance of said bonds and any bond anticipation notes issued in anticipation of said bonds, or the renewals thereof; and SEVENTH: DETERMINING that a Proposition for the approval or disapproval of this bond resolution shall be 221742.2 020032 RES submitted to the qualified voters of the Town at the Biennial Town Election to be held on November 2, 1999 and that this bond resolution shall take effect upon such approval. Said Proposition shall appear in substantially the following form on the ballot label to be inserted on the voting machines to be used for voting at said Biennial Town Election: YES: NO: PROPOSITION No. 1 SHALL THE BOND RESOLUTION ENTITLED: "Bond Resolution of the Town of Southold, New York, adopted August 23, 1999, authorizing the acquisition of interests or rights in real property, including, but not limited to, developmental rights in open agricultural lands, within said Town, for the preservation of open spaces and areas and to maintain and enhance the conservation of natural resources, provided, however, that no such interest or rights in real property shall be acquired until all relevant provisions of the state environmental quality review act have been complied with and a final declaration as to environmental impact has been duly declared, stating the estimated maximum cost thereof is $2,000,000, appropriating said amount therefor, authorizing the issuance of $2,000,000 serial bonds of said Town to finance said appropriation, stating that land installment purchase obligations are authorized to be issued pursuant to this bond resolution and determining that this bond resolution shall be subject to a mandatory referendum," BE APPROVED? 221742.2 020032 Section 2. The Town Clerk is hereby authorized and directed to publish at least once in ""THE SUFFOLK TIMES," a newspaper published in Mattituck, New York, hereby designated the official newspaper of the Town for such publication, and to post on the sign board of the Town maintained pursuant to subdivision 6 of Section 30 of the Town Law, said publication and posting to be at least ten (10) days before the Biennial Town Election, the Notice thereof, including the said Proposition for the approval or disapproval of the Bond Resolution adopted at this meeting. Section 3. The polling places in each of the respective election districts of the Town shall be the same polling places as shall be used at General Elections. Section 4. After said bond resolution shall take effect, the Town Clerk is hereby directed to cause said bond resolution to be published, in full, in the newspaper referred to in Section 2 hereof, and hereby designated the official newspaper of the Town for said publication, together with a Notice in substantially the form as provided by Section 81.00 of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York. Section 5. immediately. This resolution shall take effect 221742,2 020032 RES The adoption of the foregoing resolution was seconded by Councilwoman Hussie and duly put to a vote on roll call, which resulted as follows: AYES: NOES: Councilman Brian G. Murphy Councilman John M. Romanelli Councilman William D. Moore Councilwoman Alice J. Hussie Supervisor Jean W. Cochran None The resolution was declared adopted. 221742.2 020032 CERTIFICAT__E I, ELIZABETH A. NEVILLE, Town Clerk of the Town of Southold, in the County of Suffolk, State of New York, HEREBY CERTIFY that the foregoing annexed extract from the minutes of a meeting of the Town Board of said the Town of Southold duly called and held on August 23, 1999, has been compared by me with the original minutes as officially recorded in my office in the Minute Book of said To%rn Board and is a true, complete and correct copy thereof and of the whole of said original minutes so far as the same relate to the subject matters referred to in said extract. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of said the Town of Southold this 23rd day of August, 1999. (SEAL) Town Clerk~ 221742.2 020032 P~S