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NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO BONDHOLDERS ((1 V)THE SELECTION
BY DTC OR ANY PARTICIPANT OR IND RECT PARTICIPANT OF ANY PERSON TZECEIVE PAYMENT
j IN THE EVENT OF A PARTIAL REDEMPTION OF THE BONDS;OR(V)ANY CONSENT GIVEN OR OTHER
ACTION TAKEN BY DTC AS BONDOWNER.
Certificated Bonds
DTC may discontinue providing its services with respect to the Bonds at any time by giving notice to the
Town and discharging its responsibilities with respect thereto under applicable law, or the'Iown may terminate its
participation in the system o book-entry-only transfers through DTC�at any time. In the e�,ent that such book-entry-
only system is discontinued, the following provisions will apply: Tlic Bonds will be in registered form in
denominations of$5,000; or integral multiples thereof. Principal of and interest on the Bonds when due will be
payable at the principal corporate trust office of a bank or trust company to be named by the"Town as the fiscal agent.
Certificated Bonds may be transferred or exchanged at no cost to the owner of such Bonds at any time prior to
maturity at the corporate trust office of the fiscal agent for Bonds of the same or any other authorized denomination
or denominations in the same aggregate principal amount upon the terms set forth in the certificate of the Town
Supervisor authorizing the sale of the Bonds and fixing the details thereof and in accordance with the Local Finance
f Law.
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,General Municipal Law and the Local Finance Lav,and various bond resolutions duly
adopted by the Town Board on their respective dates,authorizing the issuance of serial bonds for two capital projects
in and for the Town.
Such projects, and the respective principal amounts of Bonds to be issued for each,are as follows:
Date Amount to
{ Authorized Purpose be issued
j 02-27-07 Open Space Preservation . . . . . . • . • . . . • . . • . . . . . . . . . . . . . . . . . $7,500,000
02-26-08 Land Acquisition and Building Improvements . . . . . • . . . . . . . . . . . . . . . 1,350,000
` Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . M-50
I
The proceeds of the Bonds will provide original funds for the above referenced projects.
For further information regarding bond 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 owner 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 the principal thereof and the interest thereon. For the payment of such principal and
interest, the Town has the power and statutory authority to levy ad valorem taxes on all the taxable real property
within the Town without limitation as to rate or amount. Under Article VIII of the State Constitution, the Town is
required to pledge its faith and credit for the payment of the principal of and interest on the Bonds and the State
Legislature is specifically precluded from restricting the power of the "Town to levy taxes on taxable real estate
thereof.
f Remedies Upon Default
[ Under current law, provision is made for contract creditors (including the Bondholders) of the Town to
I 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 from the date due to the date of payment. As
a general rule,property and funds of a�municipal corporation serving the public welfare and interest have not been
` judicially subjected to execution or attachment to satisfy a judgment, although judicial mandates to officials to
i
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
bonds and notes,although any permanent repeal by statute or constitutional amendment of a Bondholder's remedial
right to judicial 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 hereafter in effect,for the
composition or adjustment of municipal indebtedness. Subject to such consent,under the United States Constitution,
Congress hasJurisdiction 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
3
I
ONE CHASE MANHATTAN PLA~
NEW ¥ORK~ NY IOOO5
W~NW. hAWKIN S,CO M
May 29, 2008
Financial Security Assurance, Inc.
31 West 52nd Street
New York, New York 10019
Dear Ladies & Gentlemen:
We are bond counsel to the Town of Southold, in the County of Suffolk, Ne~v
York (the "Town"), and are rendering today our final approving opinion with respect to the
Town's $8,850,000 Public Improvement Serial Bonds-2008, dated May 15, 2008. We deliver to
you herewith a copy of our approving opinion and advise you that you may rely on such opinion
as if it were addressed to you.
Very truly yours,
May 29, 2008
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 authorization, sale and
issuance of $8,850,000 Public Improvement Serial Bonds-2008 (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 Laxv,
constituting Chapter 33-a of the Consolidated Laws of the State of New York, two bond
resolutions duly adopted by the Town Board on their respective dates, authorizing the issuance
of serial bonds of the Town to finance open space preservation and the acquisition of land and
construction of building improvements, and the Certificate of Determination executed by the
Supervisor as of May 2, 2008, determining the terms, form and details of issuance of said
$8,850,000 serial bonds and providing for their public sale.
The Bonds are dated May 15, 2008, mature on May 15 in the principal amounts in
each of the following years, and bear interest at the respective rates per annum payable
November i5, 2008 and semiannually thereafter on May 15 and November 15 in each year until
maturity, as set forth below:
Year of Principal Interest Year of Principal Interest
Maturity Amount Rate Maturity Amount Rate
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
$325
325
325
000
000
000
350 000
350 000
350 000
375,000
375,000
375,000
400,000
400,000
4.00% 2020 $400,000 4.00%
4.00 2021 425,000 4.00
4.00 2022 425,000 4.00
4.00 2023 425,000 4.00
4.00 2024 450,000 4.00
4.00 2025 450,000 4-1/8
4.00 2026 450,000 4.25
4.00 2027 450,000 4.25
4.00 2028 475,000 4.25
4.00 2029 475,000 4.25
4.00 2030 475,000 4.25
The Bonds maturing on or before May 15, 2018 will not be subject to redemption
prior to maturity. The Bonds maturing on or after May 15, 2019 will be subject to redemption
prior to maturity, at the option of the Town, on May 15, 2018 and thereafter, on any date, in
whole or in part, at par, and subject to notice and other conditions as 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 fbr 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 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 of the Town 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, under existing statutes and court decisions, (i) interest on the
Bonds is excluded from gross income for federal income tax purposes pursuant to Section 103 of
the Code, and (ii) interest on the Bonds is not treated as a preference item in calculating the
alternative minimum tax imposed on individuals and corporations under the Code; such interest,
however, is included in the adjusted current earnings of certain corporations tbr purposes of
calculating the alternative minimum tax imposed on such corporations. In rendering the opinion
in this paragraph, we have (i) relied on the representations, certifications of fact, and statements
of reasonable expectations made by the Town in the Arbitrage and Use of Proceeds Certificate
and other documents in connection with the Bonds, and (ii) assumed compliance by the Town
with certain provisions and procedures set tbrth in the Arbitrage and Use of Proceeds Certificate
relating to compliance with applicable requirements of the Code to assure the exclusion of
interest on the Bonds from gross income under Section 103 of the Code.
Further, in our opinion, under existing statutes, interest on the Bonds is exempt
from personal income taxes of New York State and its political subdivisions, including The City
of Nexv York.
Except as stated above, we express no opinion regarding any other federal or state
tax consequences with respect to the Bonds. We render our opinion under existing statutes and
court decisions as of the issue date, and we assume no obligation to update our opinion after the
issue date to reflect any future action, fact or circumstance, or change in law or interpretation, or
otherwise. We express no opinion on the effect of any action hereafter 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 on the exemption from state and local tax law of interest
on the Bonds.
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.
This opinion is issued as of the date hereof, and we assume no obligation to
update, revise or supplement this opinion to reflect any action hereafter taken or not taken, or any
facts or circumstances, or changes in law or in interpretations thereof, that may hereafter occur,
or for any other reason.
Very truly yours,
REGISTERED REGISTERED
NO. R-1 $325,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE OR~IGa~I~AL NUMBER
May 15, 2009 4.00% y 15, 2008 844572 KC0
OWNS.:
PRINCIPAL SUM: THREE HUNDRED TWENTY-FIVE 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, To;vn Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay inte[est on such principal sum
from May 15, 2008 or from the most recent interest payrr ~1~ I[~[to ;vhich interest has
been paid at the INTEREST RATE (stated above~, ~,~l~a~ ~e-~rnber 15, 2008 and
semiannually thereafter on May 15 and No~.~Pt~l[~tc*~year until maturity Interest
hereon shall be payable by wire tra~e~,~house funds by the Town or its agent on
each interest payment date to the rd~r~ed 6"~ne~ hereof at his address as it appears on the
registration books of the Town mainlined 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 last day of the month preceding each interest pay~nent 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
payment of the principal of and interest on this bond according to its terms.
It is hereby certified and recited that all conditions, acts and things required by th~
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 bond
to be executed in its name by the manual signature of its Supervisor and its corporate ~eal to be
impressed hereon and attested by the manual signature of its Town Clerk.
TOWN OF SO
~~ By
Town of Southold, New York
Public Improvement Serial Bond-2008
This bond is one of an authorized combined issue, the aggregate principal
amount of which is $8,850,000, the bonds of which are of like tenor, except as to number,
denomination, interest rate 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"), two bond resolutions duly adopted by the Town Board on their
respective dates, authorizing the issuance of serial bonds of the Town to finance open
space preservation and the acquisition of land and construction of building improvements,
and the Certificate of Determination executed by the Supervisor as of May 2, 2008,
determining the terms, form and details of issuance of said $8,850,000 serial bonds (the
"Bonds") and providing for the public sale thereof (the "Certificate of Determination").
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 withbya writtenregisteredinstrumentownerOf ortransferhis or
exchange satisfactory to the Fiscal Agent duly executed the
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 15, 2018 will not be subject to
redemption prior to maturity. The Bonds maturing on or after May 15, 2019 will be
subject to redemption prior to maturity, at the option of the Town, on May 15, 2018 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 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 dates 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 LLP
One Chase Manhattan Plaza
New York, New York 10005
The Town Board of
the Town of Southold,
in the County of Suffblk, New York
Ladies and Gentlemen:
We have examined a record of proceedings relating to the auth,o, nzatio,,n,,
sale and issuance of $8,850,:000 P,u, blic Improvement Serial Bonds-2008 (the Bonds ), of
the To~vn of Southold (the Town ), in the County of Suffolk, New York.
The Bonds are issued pursuant to the provisions of the Local F nance' Law
const]tutzng Chapter 33-a of the Consolidated Laws of the State of New York, two bond
resolutions duly adopted by the Town Board on their respective dates, authorizing the
issuance of serial bonds of the Town to finance open space preservation and the acquisition
of land and construct]on of budding improvements, and the Certificate of Determination
executed by the Supervisor as of May 2, 2008, determ~mng the terms, form and details of
issuance of said $8,850,000 serial bonds and providing for their public sale.
The Bonds are dated May 15, 2008, mature on May 15 in the principal
amounts in each of the following years, and bear interest at the respective rates per annum
payable November 15, 2008 and semiannually thereafter on May 15 and November 15 in
each year until maturity, as set forth below:
Year of Principal Interest Year of Principal Interes
Maturity Amount Rate Maturity Amount Rate
2009 $325,000 4.00% 2020 $400,000 4.000,
2010 325,000 4.00 2021 425,000 4.00
2011 325,000 4.00 2022 425,000 4.00
2012 350,000 4.00 2023 425,000 4.00
2013 350,000 4.00 2024 450,000 4.00
2014 350,000 4.00 2025 450,000 4-1/8
2015 375,000 4.00 2026 450,000 4.25
2016 375,000 4.00 2027 450,000 4.25
2017 375,000 4.00 2028 475,000 4.25
2018 400,000 4.00 2029 475,000 4.25
2019 400,000 4.00 2030 475,000 4.25
whole befOreat and subject 15examined201the 8tOBondsWlllnotlce andexcludablebe other
The Bonds maturing on or May not subject to
- .
redemntion nrior to maturity The Bonds maturing on or after May 15, 2019 will be
subject to redemption prior to maturity, at the option of the Town, on May 15, 2018 and
thereafter, on any date, in or in part, par,
conditions as 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 nterests
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 n denominations of $5,000 or any integral multiple thereof.
In our oninion, said Bonds are valid and legally binding general obligations of the Town
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 ~ncome 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 Is from
gross income under Section 103 of the Code. We have such Arbitrage and Use
of Proceeds Certificate of the Town delivered concurrently with the delivery of the Bonds,
requirements and in our opinion, can be such met. certificate contains provisions and procedures under which such
In our opinion under existing statutes and court decisions, (I) interest on the
Bonds is excluded from gross income for federal income tax purposes pursuant to Section
103 of the Code, and (ii) interest on the Bonds is not treated as a preference item in
calculating the alternative minimum tax imposed on individuals and corporations under the
Code; such interest, however is included in the adjusted current earnings of certain
comorations for ~urnoses of calculatin~ the alternative minimum tax imr>osed on such
~ · - -- · . . ~. . ·
corporations In renderlmz the opinion In this paragraph we have 0) relied on the
revresentatlous, certifications of fact, and statements of reasonable expectations made by
the Town in the Arbitrage and Use of Proceeds Certificate and other documents in
connection with the Bonds and (ii) assumed compliance by the Town with certain
provisions and procedures set forth In the Arbitrage and Use of Proceeds Certificate
relating to compliance with applicable requirements of the Code to assure the exclusion of
interest on the Bonds from gross income under Section 103 of the Code.
Further, in our opinion, under existing statutes, interest on the Bonds is
exempt from personal income taxes of New York State and its political subdivisions,
including The City of New York.
Except as stated above, we express no oplmon reg~ding any other federal or state
tax consequences with respect to the Bonds. We render our opinion under existing statutes
and cou~ decisions as of ~e issue date, and we assume no obligation to update our opinion
a~er the issue date to reflect any ~ture action, fact or circumstance, or change in law or
~nteCretat~on, or othe~ise. We express no opinion on the effect of~y action herea~er
taken or not t~en in reli~ce upon an opinion of other counsel on the exclusion from gross
,ncome for federaltax income tax pu~oSeSon of interest on the Bonds, or on the exemption from
state and local law of interest the Bonds.
Other th~ such record of proceedings, we have not been requested to
examine or rewew and have not examined or reviewed ~e accuracy or sufficiency of the
Official Statement, or any gdditional proceedings, repo~s, correspondence, financial
statements or other documents, contmmng financial or other ~nfo~atmn relative to the
Town which have been or may hereafter be ~mished or disclosed to purchasers of said
Bonds, ~d we express no opinion with respect to any such financial or other info~ation
or the accuracy or sufficiency thereof.
We have exmined the executed first numbered Bond of said issue ~d, in
our opinion, the form of said Bond and its execution are regular and proper.
. This opinion is issued as of the date hereog and we assme no obligation to
update, revise or supplement this opinion to reflect any action hereafter taken or not taken,
or any hcts or circmstances, or ch~ges in law or in inte~retations thereog that may
hereafter occur, or for ~y other reason.
Very truly yours,
/s/Hawkins Delafield & Wood LLP
STATEMENT OF INSURANCE
Financial Security Assurance, Inc. ( FSA ), New York, New York, has
dehw~d ,ts m~,~,pa~ ~ond ,n~c, po ,~y (the Pohcy ) w,~h respect to th~ ~h~5~~:
payments due ofpnnc~pal of and ~nterest on th~s Bond to the To~ of Southold S~~
County, New York, or its successor, as paying agent (the "Paying Agent") for the
$8,850,000 Pubhc Improvement Senat Bonds 2008. Smd Pohcy ~s on file and available
for inspection at the principal office of the Paying Age~[ ~d~ copy thereof m~~
obtained from FSA or the Paying Agent. -
ASSIGNMENT
FOR VALUE RECEIVED, the Undersigned hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
PLEASE PRaT OR TYPEW~TE NAME AND ADD'SS ~CLUD~G
POSTAL ZIP CODE OF ASSIGNEE
the within Bond m~d does hereby i~evocably 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 Gun,teed: Notice: The signature to
this
Notice: Signature(s) must be asstgment must cor-
acknowledged or proved, or in the respond with the nme as
alternative, certified as to its it appe~s upon the face
genuineness by ~ officer ofa ba~ of the within bond in
or trust company located ~d authorized ' every particular, without
to do business in New York State. alteration or enlargement
any change whatever
REGISTERED REGISTERED
NO. R~2 $325,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2010 4.00% May 15, 2008 844572 KD8
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suftblk, 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 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in 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 last day of the month preceding each interest payment date. The prinmpal
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 IIERE1N
REGISTERED REGISTERED
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TO,¥NO SOUT.OL,,
PUBLIC IMPROVEMENT SERIAL BOND-2008
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2011 4.00°~, May 15, 2008 844572 KE6
PRINCIPAL SUM: THREE HUNDRED TWENTY-FIVE 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
Southo?, 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 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in 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 last 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, ~s legal tender for the payment of public and
private debts; provided, however that interest on this fully registered bond shall be pa d by
wire transfer or clearinghouse funds as set forth above
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
....... , · . ,
REGISTERED
REGISTERED
NO. R-4 $350,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE ORICINAL NU IBER
ISSUE
May 15, 2012 4.00% May 15, 2008 844572 KF3
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: THREE HUNDRED FIFTY 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 15, 2008 or from the most recent interest payment date to which interest has
been paid at the 1NTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in 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
~nay be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last 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
~vire transfer or clearinghouse funds as set forth above
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTIt HEREIN
REGISTERED REGISTERED
NO. R-5 $350,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2013 4.00% May 15, 2008 844572 KG1
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: THREE HUNDRED FIFTY 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 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in 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 last 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 TillS
BOND SET FORTH HEREIN
REGISTERED ~GISTERED
NO. R-6 $350,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
MATURITY INTEREST DATE OF CUSIP
DATE ~TE O~GINAL NUMBER
ISSUE
Ma~ 15 2014 4 00% May 15, 2008 844572 KH9
REGISTERED OWNER: CEDE & CO.
PmNCIPAL-SUM: THREE HUNDRED FIFTY THOUSAND DOLLARS
The TOWN OF SOUTHOLD in the Count of Suffolk, a mun ci al
Y P
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the ~GISTERED O~R named above, or registered
assigns on the MATU~TY DATE (stated above), the PK~CIP~ SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold Town Hall 53095 Ma n Road, Southo d, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principaI sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been prod at the INTE~ST ~TE (stated above), payable November 15, 2008 and
semiannually therea~er on May 15 and November 15 in each year until maturity. Interest
hereon shall be oayab e by wire transfer or clearinghouse ~nds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as ~t appears on the
registration books of the To,Tn maintained by the Fiscal Agent or at such other address as
may be ~rnished in writing by such registered owner to the F~scal Agent as of the close of
business on the last day of the month preceding each interest payment date The principal
of and ~nterest on th~s bond are payable m any coin or currency of the Umted 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 ~lly registered bond shall be paid by
w~re transfer or cleannghouse ~nds as set fo~h above
~FERENCE IS M~E TO THE F~T~R PROVISIONS OF THIS
BOND SET FORTH HE~.
~GISTERED REGISTERED
NO. R-7~ $375,000
UNITED STATES OF AME~CA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SER~L BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE ~TE O~GINAL NUMBER
ISSUE
May 15, 2015 4.00% May 15, 2008 844S72 K J5
~GISTERED OWNER: CEDE & CO.
P~NCIPAL SUM: THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County o~ Su~blk, a municipal
corporation ogthe State o~ New York, hereby acknowledges itselg indebted and ~or value
received promises to pay to the ~GISTE~D O~ named above, or registered
assigns, on the MAT~TY DATE (stated above), the P~NCIP~ SUM (stated above)
upon presentation and surrender o~this bond at the o~ce o~the Town Clerk, Town
Southold, Town Hall, 53095 Main ~oad, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
flora May 15, 2008 or flora the most recent interest payment date to which interest has
been paid at the ~TE~ST ~TE (stated above), payable November 15, 2008 and
semiannually thereaaer on May 15 and Novembe~ 15 in each year until maturity Interest
hereon shall be payable by wire transger or clearinghouse ~nds 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 o~ the Town maintained by the Fiscal Agent or at such other address as
may be ~rnished in writing by such registered owner to the Fiscal Agent as o~the close
business on the last day o~the month preceding each interest payment date. The principal
ogand interest on this bond are payable in any coin
America which, at the date oFpayment, is legal tender ~or the payment o~public and
private debts; provided, however> that interest on this ~ily registered bond shall be paid by
wire transfer or clearinghouse ~nds as set ~oah above
~FERENCE IS M~E TO T~ F~T~ PROVISIONS OF THIS
BO~ SET FORTH
,~ ,~i~TERED
~,~J a REGISTERED
NO. R-8 $375,000
UNITED STATES OF AME~CA
STATE OF NEW YO~
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SE~L BOND-2008
MATU~TY INTEREST DATE OF CUSIP
DATE RATE O~GINAL NUMBER
ISSUE
May 15, 2016 4.00% May 15, 2008 844572 ~2
~GISTERED OWNER: CEDE & CO.
P~NCIPAL SUM: THREE HUND~D SEVENTY-FIVE 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 ~G1STERED O~R named above, or registered
assigns, on the MAT~TY DATE (stated above), the PR~CIPAL S~ (stated above)
and surrender of this bond at the office of the Town Clerk, Town of
presentation
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 pripcipal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the ~ST ~TE (stated above), payable November 15, 2008 and
semiannually therea~er on May 15 and November 15 in each year until maturity Interest
hereon shall be payable by wire transfer or clearinghouse ~nds 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 ~rnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last 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 ~lly registered bond shall be paid by
wire transfer or clearinghouse ~nds as set fo~h above
~FE~NCE IS M~E TO T~ F~T~R PROVISIONS OF THIS
BOND SET FORTH ~
REGISTERED REGISTERED
NO. R-9 $375,000
UNITED STATES OF AMERICA
I~'ATURITY P U B L IICN 5~'}ii; N D-2 0 0 8 CUSIP
RATE ORIGINAl. NUMBER
DATE
ISSUE
May 15, 2017 4.000/0 May 15, 2008 844572 KC0
REGISTERED OWNER: CEDE & CO
PRINCIPAL SUn' TUREE .UNDRED SEVENTY-FIVE TUOUSAND DOLnAaS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
· .
corporation of the State of New York, hereby acknow edges ~tself indebted and for value
rece ved promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
boon presentation and surrender .°fth's bond at the office of the Town Clerk, Town.of
Southold, Town Hall, 53095 Ma n Road Southold New York as fiscal agent (here n
, ,, · · -
ca ed ' Fiscal Aaent ), or any successor thereto and to pay interest on such principal sum
.... date which interest has
from May 15, 2008 or from the most recent interest payment to
been paid at the INTEREST RATE (stated above) payable November 15, 2008 and
semmnnually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
....
each interest oavment date to the remstered owne' hereof at h s address as t appears on thc
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 cose of
business on the last day of the month preceding each interest payment date The principal
.....
of and tnterest on th~s bond are payable ~n any co~n or currency of the Umted States of
America which at the date of payment, is legal tender for the payment of pubhc and
rivate debts; rovided, however that interest on this fully registered bond shall be paid by
wire transfer or cleannghouse funds as set forth above
.EFURENCE IS MAIOE TO Tim FURTkrE PROVISIONS OF TInS
SET FORT. H REm
REGISTERED REGISTERED
NO. R-10 $400,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SER~L BOND-2008
MATU~TY INTEREST DATE OF CUSIP
DATE ~TE OmGINAL NUMBER
May 15, 2018 4.00% May 15, 2008 844572 KM8
~GISTERED OWNER: CEDE & CO.2
P~NCIPAL SUM: FOUR HUND~D 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~
e ivea om es o.aytoth ,ST OW am dabov ,
assigns, on the MAT~ITY DATE (stated above), the P~NCIP~ 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 F~scal Agent ), or any successor thereto, and to pay lntqrest on such pnnclpal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the ~TE~ST ~TE (stated above), payable November 15, 2008 and
semiannually therea~er on May I5 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse ~nds 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 ~rnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last 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 ~lly registered bond shall be paid by
wire transfer or clearinghouse ~nds as set foah above.
~EFE~NCE IS M~E TO T~ F~T~ P~OYIS1ONS OF T~S
BO~ SET FORTH
. _..
NO. R-11 . $400,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SE~L BOND-2008
MATUmTY INTEREST DATE OF CUSIP
DATE ~TE O~GINAL NUMBER
SSUE
May 15, 2019 4.00% May 15, 2008 844572 KN6
~GISTERED OWNER: CEDE & CO.
P~NCIPAL SUM: FOUR HUNDRED THOUSAND DOLLARS
The TOWN OF SOUTHOLD, ~n the County of Suffolk, a mumc~pal
corporation of the State of New York, hereby ackno;vledges ~tself ~ndebted and for value
· . .
received promises to pay to the ~GISTE~D OW~R named above, or registered
assigns on the MAT~TY DATE (stated above), the P~NCiP~ SUM (stated above)
upon presentation and surrender ofth~s bond at the office of the Town Clerk, Town of
Southold, Town Hall 53095 Mare Road Southold New York as fiscal agent (herein
called "Fiscal' Agent"), or any successor thereto, ~d to pay ~nterest on such pnnc~pal sum
from May 15, 2008 or from the most recent interest payment date to Which interest has
been paid at the raTE.ST ~TE (stated above), payable November 15, 2008 and
semiannually therea~er on May 15 and November 15 m 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 h~s address as ~t appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
private debts; provided, however, that interest on this ~lly registered bond shall be paid by
w~re transfer or cleannghouse ~nds as set fo~h above.
REFE~NCE IS M~E TO T~ FURT~R PROVISIONS OF THIS
BO~ SET FORTH ~[N
REGISTERED REGISTERED
NO. R-12 $400,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE ~TE ORIGINAL NUMBER
ISSUE
May 15, 2020 4.00% May 15, 2008 844572 KPI
~GISTERED OWNER: CEDE & CO.
PmNCIPAL SUM: FOUR HUND~D 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 ~GISTE~D OWNER named above, or registered
assigns, on the MAT~TY DATE (stated above), the P~C1P~ S~ (stated above)
presentation
and surrender of this bond at the office of the Town Clerk, Town of
upon
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor theretp, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTE~ST ~TE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity Interest
hereon shall be payable by wire transfer or clearinghouse ~nds 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 ~rnished in writing by such registered o~er to the Fiscal Agent as of the close of
business on the last 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 ~lly registered bond shall be paid by
wire transfer or clearinghouse ~nds as set fo~h above
REFE~NCE IS ~DE TO THE FURT~R PRO~SIONS OF THIS
BOND SET FORTH ~IN
}~ REGISTERED REGISTE~D
~ NO. R-13 $425,000
2~ UNITED STATES OF AMEmCA
~ STATE OF NEW YO~
COUNTY OF SUFFOLK
,~. TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SE~L BOND-2008
MATU~TY INTEREST DATE OF CUSIP
DATE ~TE O~GINAL NUMBER
ISSUE
May 15, 2021 4.00% May 15, 2008 844572 KQ9
REGISTERED OWNER: CEDE & CO.
HUND~D TWENTY-FIVE THOUSAND DOLLARS
PRINCIPAL
SUM:
FOUR
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby ackno~vledges itself indebted and for value
received promises to pay to the ~GISTE~D OW~R named above, or registered
assigns, on the MAT~ITY DATE (stated above), the P~NCIPAL S~ (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 15, 2008 or from the most recent interest payment date to which interest has
been paid at the ~TE~ST ~TE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity Interest
hereon shall be payable by wire transfer or clearinghouse ~nds 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 ~rnished in writing by such registered o~er to the Fiscal Agent as of the close of
business on the last 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 ~lly registered bond shall be paid by
wire transfer or clearinghouse funds as set fo~h above
~FE~NCE 1S M~E TO T~ F~T~R PROVISIONS OF THIS
BOND SET FORTH HE~
REGISTERED REGISTERED
NO R-14 $425,000
UNITED SLATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERU~,L BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2022 4.00% May 15, 2008 844572 KR7
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: FOUR HUNDRED TWENTY-FIVE 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 Hal!; 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 15, 2008 or from th~ most recent interest payment date to which interest has
been at the INTEREST RATE (stated above), payable November 15, 2008 and
paid
semiannually thereafter on May 15 and November 15 in 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 last 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 1S MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
NO. R-IS $425,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUN O SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SE~L BOND-2008
MATU~TY INTEREST DATE OF CUSIP
DATE ~TE ORIGINAL NUMBER
ISSUE
May 15, 2023 4.00% May 15, 2008 844572 KS5
~GISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: FOUR HUND~D TWENTY-FIVE 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 ~GISTE~D O~R named above, or registered
assigns, on the MAT~TY DATE (stated above), the P~CIP~ S~ (stated above)
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 15, 2008 or from the most recent interest payment date to which interest has
been paid at the ~TE~ST ~TE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity Interest
hereon shall be payable by wire transfer or clearinghouse ~nds 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 ~rnished in writing by such registered o;~er to the Fiscal Agent as of the close of
business on the last 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 ~lly registered bond shall be paid by
wire transfer or clearinghouse ~nds as set fo~h above
~FE~NCE IS M~E TO T~ FURTHER PROVISIONS OF THIS
BOND SET FORTH HERE~
REGISTERED REGISTERED
NO. R-16 $450,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SE~L BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE ~TE O~GINAL NUMBER
ISSUE
May 15, 2024 4.00% May 15, 2008 844572 KT3
REGISTERED OWNER: CEDE & CO.
P~NCIPAL SUM: FOUR HUNDRED FIFTY THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknoxvledges itself indebted and for value
received promises to pay to the ~GISTE~D O~R named above, or registered
assigns, on the MAT~ITY DATE (stated above), the P~CIP~ S~ (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 15, 2008 or from the most recent interest payment date to which interest has
been paid at the ~TE~ST RATE (stated above), payable November 15, 2008 and
semiannually therea~er on May 15 and November 15 in each year until maturity Interest
hereon shall be payable by wire transfer or clearinghouse ~nds 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 ~rnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last 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 ~lly registered bond shall be paid by
wire transfer or clearinghouse ~nds as set fo~h above
~FERENCE IS M~E TO T~ FURT~R PROVISIONS OF THIS
BO~ SET FORTH ~IN.
~GISTERED REGISTERED
NO. a-17 ~ $450,000
UNITED STATES O~ AME~CA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SE~L BOND-2008
DATE ~TE ORIGINAL NUMBER
ISSUE
May 15, 2025 4-1/8% May 15, 2008 844572 Kg0
~GISTERED OWNER: CEDE & CO. '
PmNCIPAL SUM: FOUR HUND~D FIFTY THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suflblk, a municipal
corporation of the State of New York hereby acknowledges itself indebted and for value
received promises to pay to the ~GISTE~D O~R named above, or registered
assigns, on the MAT~ITY DATE (stated above), the P~NC1P~ SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hal~ 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 ~ay 15, 2008 or from the most recent interest payment date to which interest has
been paid at the ~TEREST ~TE (stated above), payable November 15, 2008 and
semiannually therea~er on May 15 and November 15 in each year until maturity Interest
hereon shall be payable by wire transfer or clearinghouse ~nds 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 ~rnished in writing by such registered o~er to the Fiscal Agent as of the close of
business on the last 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 th~s ~lly registered bond shall be paid by
wire transfer or clearinghouse ~nds as set foah above
~FE~NCE IS M~E TO THE FURTHER PROVISIONS OF THIS
REGISTERED REGISTERED
UNITED STATES OF AME~CA
S FATE OF NEW YO~
COUNTY OF SWVOL
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SE~L BONO-2008
MATURITY INTEREST DATE OF CUSIP
DATE ~TE ORIGINAL NUMBER
.av 15, 2026 4.25% May 15, 2008 844572 KV8
REGISTERED OWNER: CEDE & CO.
PmNC1PAL SUM: FOUR HUND~D FIFTY TIIOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County oS Suffolk, a municipal
corporation of the State of New York, hereby acknowledges ~tself ~ndebted' ' and for value
received promises to pay to the ~GISTE~D O~R named above, or registered
assigns on the MATUmTY DATE (stated above), the PmNCIP~ S~ (stated above)
upon presentat,on and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Ha , 53095 Main Road Southold, New York, as fiscal agent (herein
.... thereto, and to interest' on such ' '
.... called Fiscal Agent
from May 15, 2008 or from the most recent interest payment date to which ~nterest has
been paid at the ~TE~ST ~TE (stated above), payable November I5, 2008 and
semiannually thereaRer on May 15 and November 15. in each year until maturity. Interest
hereon shall be ~avable by wire transfer or clearinehouse ~nds by the Town or its agent on
each interest payment date to the registered owner hereof at h s address as ~t appears on the
registrat on books of the Town ma'ntmned' by the F~scal' Agent or at such other address as
may be ~rmshed ~n writing by such red stered owner to the Fiscal Agent as of the close of
business on the aft day of the month preceding each nterest payment date. The pnnc~pal
of and interest on this bond are payable m any coin or currency of the Umted States of
Amer ca which, at the date of payment, is legal tender for the payment of public and
nr vate debts nrov ded however, that interest on th~s fully registered bond shall be prod by
wire transfer or clearinghouse ~nds as set fo~h above
SST
REGISTERED REGISTERED
NO. R-19 $450,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
May 15, 2027 4.25% May 15, 2008 844572 KW6
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: FOUR HUNDRED FIFTY 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 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in 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 last 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 REGISTERED
NO R 20 $475,000
' UNITED STATES OF AMEmCA
STATE OF NEW YORK
COUNTY OE SUEEO[I
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SE~L BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE ~TE O~GINAL NUMBER
May 15, 2028 4.25% May 15, 2008 844572 ~X4
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: FOUR HUNDRED SEVENTY-FIVE THOUSAND DOLLARS
...... . The TOWN OF SOUTHOLD, m the County. oF Suffolk:. a mumc~pal
corporanon of the State of New York, hereby acknowledges ttself indebted and for value
received promises to pay to the ~GISTE~D O~R named above, or registered
assigns, on the MAT~TY DATE (stated above), the P~NCIPAL S~ (stated above)
upon presentation and surrender ofth~s 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 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTRUST ~TE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturitv. Interest
hereon shall be payable by wire transfer or clearinghouse ~nds by the Town or its agent on
each ~nterest payment date to the registered owner hereof at h~s address as ~t appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be ~rnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last 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 ~lly registered bond shall be paid by
wire transfer or clearinghouse ~nds as set fo~h above.
REFERENCE IS MADE TO T~ FURT~R PROVISIONS OF THIS
BOND SET FORTH ~iN
~ ~', ~, ,,
REGISTERED REGISTERED
NO. R-21
UNITED STA FES OF AMERICA
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATU~TY INTEREST DATE OF CUSIP
DATE ~TE O~GINAE NUMBER
ISSUE
May 15, 2029 4.25% May 15, 2008 844572 KY2
~GISTERED OWNER: CEDE & CO.
P~NCIPAL SUM: FOUR HUND~D SEVENTY-FIVE 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 ~GISTERED O~R named above, or registered
assigns, on the MAT~TY DATE (stated above), the P~CIP~ S~ (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 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTE~ST ~TE (stated above), payable November 15, 2008 and
semiannually therea~er on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse ~nds by the Town or its agent on
each interest payment date to thc 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 fi~rnished in writing by such registered o~er to the Fiscal Agent as of the close of
business on the last 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 hlly registered bond shall be paid by
wire transfer or clearinghouse ~nds as set foah above
~FE~NCE IS M~E TO T~ F~T~R PROVISIONS OF THIS
BOND SET FORTH
.Y
~GISTERED REGISTERED
NO
R
22
$475,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPRO~MENT SE~L BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE ~TE ORIGINAL N UMBER
ISSUE
May 15, 2030 4.25% May 15, 2008 844572 ~9
REGISTERED OWNER: CEDE & CO.
-P~NCIPAL SUM: FOUR HUND~D SEVENTY-FIVE TItOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suftblk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the ~GISTE~D O~R named above, or registered
assigns, on the MAT~TY DATE (stated above), the P~CIPAL S~ (stated above)
upon presentation and surrender of this bond at the o~ce of the To~vn Clerk, Town of
Southold, Toxvn Hall, 53095 Main Road, Southold, Nexv York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTE~ST ~TE (stated above), payable November 15, 2008 and
semiannually therea~er on May 15 and November 15 in each year until maturity Interest
hereon shall be payable by xvire transfer or clearinghouse ~nds 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 ~rnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last 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 ofpublic and
private debts; provided, however, that interest on this ~lly registered bond shall be paid by
wire transfer or clearinghouse ~nds as set fo~h above.
~FERENCE 1S M~E TO T~ F~T~R PROVISIONS OF THIS
BO~ SET FORTH HE~IN
· y
THE DEPOSITORY TRUST COMPAN
55 Water Street
New York, New York 10041
SUBJECT TO COUNT
A~ention:
Phone:
Tclecopy:
Underv, xiting Packaging Department
(212) 558-8520
(212) 344-1533
SAFEKEEPING AGREEMENT
AND EXAMINATION
Reft (Description of issue, number of certificates, number of CUSiPs assigned to issue and $ value of securities)
Town of Southold, in fl~e County of Suflblk, New York
$8,850,000 Public huprovement Serial Bonds - 2008, dated May 15, 2008, matunng May 15, 2009 - 2030
CUSIP # 844572 KC0 - KZ9 (TWENTY-TWO CERTIFICATES) $ VALUE $8,850,000
The Depository Trust Colnpany (DTC) acknowledges receipt from Hawkins Delafield & Wood LLP (tile m~stee, transfer agent, undcn~riter
or other agent of the issuer, hereafter referred to as the "Agent") of possession, custody and control of the above securities for safekeeping.
DTC is aufllorized to hold these securitics in safekeeping tmtil DTC is instructed by telephone or in writing by one of the below designated
representatives of the Agent cidler to: (1) deliver the securities by book-entD' to the DTC account of the lead underwriter (or to thc DTC
account of its cleating agent) or (2) return the said secnrities to rite Agent
In the event DTC is instn~cted to return said securities, DTC shall return fl~e securities to fl~c Agent as soou us practicable,
but, in any event, no later than the DTC business day' following the day snch instruction is received
DTC shall hold tile Agent, its officers and employees, harnfless from any liability, loss, damage, and reasonable expense of
any kind itl connection with any loss damage, theft or destruction of any kind of said secnrities ;',hilc riley are in file possession, custodv or
cohtrol of DTC, its officers or emplo}'ccs or in the event secnritics are r&leased from file control of DTC x~ithout the sp~afic approval o) the
Agent purstnnt to this Safekeeping Agreement ~
By:
Title:
Date:
Authorized Representative of Trustee/Agent
ORGANIZA FION (
ORGANIZATION (
DTC accepts authorization of closings on the phone number listed below:
(212) 855-3752 (212) 855-3753
(212) 855-3755 (212) 855-3754
The Depository Tru~4~ ,om ,~2ny
ORGANIZATION
5435201 031862MSC
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* * 55 BROADWAY 2~ND FLOOR
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DR VAL DATE DR A DY
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TOWN OF SOUTRHOLD, NY
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PRE APPROVE D
ID DATE
INFO
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ERR 'TEXT
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PROCES~ DATE 2008/150
(THU) 5. 29' 08 9:15/ST. 9:14/N0, 486~955420 P I2
29MayO8 09~10:46 0100 *+ GDC INQUIR~NT 1 OF 1 ** P~0414
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ORD CUE
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* * 55 BROADWAy 22ND FLOOR
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DR VAL DATE DR A/DV CBCH
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ORG DATE 29 MAy 05
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TP ADV RNTYP N
ACCNT /8900297363
PARTY
$K OF NYC
BANK OF NEW YORK
N~W YORK NY 10005-~901
CBAM
cMAM
FINANCIAL SECURITY ASSURANCE INC.
DETAIL RKF:
PAYMT
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MESSAGE
NEXT SEQ
ACTION CTS
TOWN OF SOUTHOLD, NY
PRE APPROV~ D
TD DAT~
~NFO
?RESS PF6
PHONED
INV~
ERR TEXT
TO ~ETURN
PROCESS DATE 2008/150
SUPERVISOR'S CERTIFICATE OF AWARD
I, SCOTT A RUSSELL, Supervisor of the Town of Southold, in the County of
Suffolk, New York (the "Town"), HEREBY CERTIFY AND REPORT AS FOLLOWS:
1. On May 13, 2008, at 11:00 o'clock AM (Prevailing Time), bids were
received at the offices of Munistat Services, lnc, 12 Roosevelt Avenue, Port Jefferson Station,
New York.
2 At that time and place, seven (7) sealed bids were received for the purchase of
$8,850,000 Public Improvement Serial Bonds-2008 of the Town (the "Bonds") 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 May 2, 2008, 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., and Associates, New York,
New York was the successful bidder to whom the bonds are to be awarded, at the purchase price
of $8,850,049 75 together with 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 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:
541998 I (}31862 CERI
Gross Interest ...................
Less Premium Bid Over Par
Net Interest Cost
Net Interest Rate
$4,473,00000
49 75
$4,472,95075
4 1158%
5 As designated by the aforementioned successful bidder, said Bonds shall bear
interest from their date in each year until maturity at the respective rates per annum stated in the
follo~ving table:
Bonds maturing in each of the years 2009 to 2024, inclusve, at 400%;
Bond maturing in the year 2015, at 4-1/8%; and
Bonds maturing in each of the years 2026 to 2030, inclusive, at 4 25%,
such rates of interest being the rates necessary tbr the Town to seI1 said Bonds
6 i thereupon returned to said other bidders the Good Faith Check (as defined in
the Notice of Sale of the Town dated May 2, 2008) received, if any, with their aforesaid sealed
bids.
7 Said Bonds will be delivered to the said successful bidder hereinabove referred
to upon receipt of payment in accordance xvith the provisions of the Notice of Sale.
IN WITNESS WHEREOF, I have hereunto set my hand as of the 13th day of
Supervisor
541998 I O31862 CERT
TOWN CLERK'S CERTIFICATE
I, ELIZABETH A. NEVILLE, Town Clerk of the Town of Southold, in the
County of Suflblk, 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 or before May 29, 2008
I FURTHER CERTIFY that no resolution electing to reassume any of the powers
or duties delegated to the Supervisor by the resolutions cited in the Certificate of Determination
referred to in said Certificate of Award, has been adopted by said Town Board
(SEAL)
IN WITNESS WHEREOF,
I have hereunto set my hand and affixed the
corporate seal of said Town, this ~ day of
May, 2008.
;f~'~n ~,lerk ( --
541998 I 031862 CERT
UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE
Section 1. Definitions
"Annual Information" shall mean the information specified in Section 3 hereof.
"GAAP" shall mean generally accepted accounting principles as in effect from
time to time in the United States.
"Holder" shall mean any registered owner of the Securities and any beneficial
owner of Securities within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934.
"Issuer" shall mean the To~vn of Southold, in the County of Suffolk, a municipal
corporation of the State of New York.
"MSRB" shall mean the Municipal Securities Rulemaking Board established in
accordance with the provisions of Section 15B(b)(1) of the Securities Exchange Act of 1934.
"NRMSIR" shall mean each nationally recognized municipal securities
information repository within the meaning of Rule 15c2-12.
"Rule 15c2-12" shall mean Rule 15c2-12 under the Securities Exchange Act of
1934, as an~ended through the date of this Undertaking, including any official interpretations
thereof.
"Securities" shall mean the Issuer's $8,850,000 Public Improvement Serial
Bonds-2008, dated May 15, 2008, maturing in various principal amounts on May 15 in each of
the years 2009 to 2030, inclusive, and delivered on the date hereof.'
"State Information Depository" shall mean the New York State Information
Depository, if and when created.
Section 2. Obligation to Provide Continuing Disclosure. (a) The Issuer hereby
undertakes, fbr the benefit of Holders of the Securities, to provide or cause to be provided either
directly or through Munistat Services, Inc., I2 Roosevelt Avenue, Port Jefferson Station, New
York 11776:
(i) to each NRMSIR and to the State Information Depository, no later than
180 days after the end of each fiscal year, the Annual Information relating to such fiscal year,
together with audited financial statements of the Issuer for such fiscal year if audited financial
statements are then available; provided, however, that if audited financial statements are not then
available, unaudited financial statements shall be provided with the Annual Information, and
audited financial statements, if any, shall be delivered to each NRMSIR and to the State
Information Depository within thirty (30) days after they become available and in no event later
than 360 days after the end of each fiscal year; and
541998.1 031862 CERT
(ii) to (a) each NRMSIR, or to the MSRB, and to (b) the State Inlbrmation
Depository, in a timely manner, notice of any of the following events with respect to the
Securities, if material:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3)
unscheduled draws on debt service reserves reflecting financial
difficulties;
(4)
unscheduled draws on credit enhancements reflecting financial
difficulties;
substitution of credit or liquidity providers, or their failure to
perform;
(6)
adverse tax opinions or events affecting the tax-exempt status of the
Securities;
(7) modifications to rights of Securities holders;
(8) bond calls;
(9) defeasances;
(10) release, substitution, or sale of property securing repayment of the
Securities; and
(11) rating changes.
(iii) to (a) each NRMSIR, or to the MSRB, and to (b) the State Information
Depository, in a timely manner, notice of a failure to provide by the date set forth in Section
2(a)(i) hereof any Annual Information required by Section 3 hereof.
(b) Nothing herein shall be deemed to prevent the Issuer from disseminating any
other information in addition to that required hereby in the manner set forth herein or in any
other manner. If the Issuer disseminates any such additional information, the Issuer shall have
no obligation to update such information or include it in any future materials disseminated
hereunder.
(c) Nothing herein shall be deemed to prevent the Issuer from providing notice of
the occurrence of certain other events, in addition to those listed above, if the Issuer determines
that any such other event is material with respect to the Securities; but the Issuer does not
undertake to commit to provide any such notice of the occurrence of any material event except
those events listed above.
541998.1 031862 CERT
Section 3. Annual information. (a) The required Annual Information shall consist
of the financial information and operating data for the preceding fiscal year, in a form generally
consistent with the information contained or cross-referenced in the Issuer's final official
statement relating to the Securities under the headings: "The Town," "Economic and
Demographic Information,' "Indebtedness of the Town,"" Finances of the Town," "Real
Property Tax Information," and "Litigation ," and in Appendix A.
(b) All or any portion of the Annual Information may be incorporated in the
Annual Information by cross reference to any other documents which have been filed with (i) the
NRMSIRs and the State Information Depository, or (ii) the Securities and Exchange
Commission. If such a document is a final official statement, it also must be available from the
MSRB.
(c) Annual Information for any fiscal year containing any modified operating
data or financial information (as contemplated by Section 7(e) hereof) for such fiscal year shall
explain, in narrative form, the reasons for such modification and the effect of such modification
on the Annual Information being provided for such fiscal year. Ifa change in accounting
principles is included in any such modification, such Annual Information shall present a
comparison between the financial statements or information prepared on the basis of the
modified accounting principles and those prepared on the basis of the former accounting
principles.
Section 4. Financial Statements. The Issuer's annual financial statements for
each fiscal year shall be prepared in accordance with GAAP as in effect from time to time. Such
financial statements shall be audited by an independent accounting firm.
Section 5. Remedies. If the Issuer shall fail to comply with any provision of this
Undertaking, then any Holder of Securities may enforce, for the equal benefit and protection of
all Holders similarly situated, by mandamus or other suit or proceeding at law or in equity, this
Undertaking against the Issuer and any of the officers, agents and employees of the Issuer, and
may compel the Issuer or any such officers, agents or employees to perform and carry out their
duties under this Undertaking; provided that the sole and exclusive remedy for breach of this
Undertaking shall be an action to compel specific performance of the obligations of the Issuer
hereunder and no person or entity shall be entitled to recover monetary damages hereunder under
any circumstances. Failure to comply with any provision of this Undertaking shall not constitute
an event of default on the Securities.
Section 6. Parties in Interest. This Undertaking is executed and delivered solely
for the benefit of the Holders. No other person shall have any right to enforce the provisions
hereof or any other rights hereunder.
Section7. Amendments. WithouttheconsentofanyholdersofSecurities, the
Issuer at any time and from time to time may enter into any amendments or changes to this
Undertaking for any of the following purposes:
(a) to comply with or conform to any changes in Rule 15c2-12 (whether required
or optional);
541998.1 031862 CERT
(b) to add a dissemination agent for the information required to be provided
hereby and to make any necessary or desirable provisions with respect thereto;
(c) to evidence the succession of another person to the Issuer and the assumption
of any such successor of the duties of the Issuer hereunder;
(d) to add to the duties of the Issuer for the benefit of the Holders, or to surrender
any right or power herein conferred upon the Issuer;
(e) to modify the contents, presentation and format of the Annual Information
from time to time to conform to changes in accounting or disclosure principles or practices and
legal requirements followed by or applicable to the Issuer or to reflect changes in the identity,
nature or status of the Issuer or in the business, structure or operations of the Issuer or any
mergers, consolidations, acquisitions or dispositions made by or affecting any such person;
provided that any such modifications shall comply with the requirements of Rule 15c2-12 or
Rule 15c2-12 as in effect at the time of such modification; or
(f) to cure any ambiguity, to correct or supplement any provision hereof which
may be inconsistent with any other provision hereof, or to make any other provisions with
respect to matters or questions arising under this Undertaking which, in each case, comply with
Rule 15c2-12 or Rule 15c2-12 as in effect at the time of such amendment or change; provided
that no such action pursuant to this Section 7 shall adversely affect the interests of the Holders in
any material respect. In making such determination, the Issuer shall rely upon an opinion of
nationally recognized bond counsel.
Section 8. Termination. This Undertaking shall remain in full force and effect
until such time as all principal, redemption premiums, if any, and interest on the Securities shall
have been paid in full or the Securities shall have otherwise been paid or legally defeased
pursuant to the their terms. Upon any such legal defeasance, the Issuer shall provide notice of
such defeasance to each NRMSIR or the MSRB, and the State Information Depository. Such
notice shall state whether the Securities have been defeased to maturity or to redemption and the
timing of such maturity or redemption.
Section 9. Undertaking to Constitute Written A~reement or Contract This
Undertaking shall constitute the written agreement or contract for the benefit of Holders of
Securities, as contemplated under Rule 15c2-12.
Section I0. Governing Law. This Undertaking shall be governed by the laxvs of
the State of New York determined without regard to principles of conflict of law.
IN WITNESS WHEREOF, the undersigned has duly authorized, executed and
delivered this Undertaking as of May 29, 2008.
TOWN OF SOUTHOLD
Supervisor
541998.1 031862 CERT
CLOSING CERTIFICATES
RELATING TO THE BONDS OF THE
TOWN OF SOUTHOLD, 1N
THE COUNTY OF SUFFOLK, NEW YORK
OFFICERS' CERTIFICATE AS TO SIGNATURES AND LITIGATION
YVE, the undersigned officers of the Town of Southold, in the County of Suffolk,
a municipal corporation of the State of New York and herein referred to as the "Issuer",
HEREBY CERTIFY that on or before the date hereof, each of the Issuer's $8,850,000 Public
Improvement Serial Bonds-2008 (the "Bonds"), dated May 15, 2008, and more fully described in
Schedule X attached hereto and hereby made a part hereof, xvere duly and completely executed
in the name and on behalf of the Issuer by the manual signatures of the undersigned officers of
the Issuer, each of whom did and does hereby adopt such respective signatures, and the
impressing thereon of the official seal of the Issuer, and that on the date hereof, we are the duly
chosen, qualified and acting officers of the lssuer holding the respective offices indicated by the
official titles set opposite our several signatures hereto, for terms expiring on the respective dates
set opposite such titles
WE FURTHER CERTIFY that the seal which is impressed upon this certificate
has been impressed upon each of the Bonds and is the legally adopted, proper and only official
corporate seal of the Issuer
WE FURTHER CERTIFY that no litigation of any nature is no~v pending or
threatened restraining or enjoining the issuance or delivery of said Bonds or the Ievy or
collection of any taxes to pay the interest on or principal of said Bonds, or in any manner
questioning the authority or proceedings for the issuance of said Bonds or the levy or collection
541998 I 031862 CERT
of said taxes, or relating to said Bonds or affecting the validity thereof or the levy or collection of
said taxes, that neither the corporate existence or boundaries of the Issuer nor the title of any of
the present officers thereof to their respective offices is being contested, that no authority or
proceedings for the issuance of said Bonds has or have been repealed, revoked or rescinded, and
that no Bonds of the Issuer have been heretofore issued under or pursuant to such proceedings
IN WITNESS WHEREOF, we have hereunto set our hands and said corporate
seal has hereunto been affixed as of the 29th day of
May, 2008
OFFICIAL TITLE
Supervisor
Town Clerk
TERM OF OFFICE
EXPIRES
December 31, 2011
December 31, 2009
(SEAL)
I HEREBY CERTIFY that the signatures of the officers of the above-named Village,
which appear above, are truc and genuinc and that 1 know said officers and knox~ them to hold the
respective offices set opposite their signatures
Signature
Title Name and Address of Bank
541998 1 031862 CERf
ATTORNEY' S CERTIFICATE
I, Patricia A Finnegan, Esq, HEREBY CERTIFY that I am a licensed attorney at
law of the State of New York, having offices at 53095 Main Road, Southold, New York, and am
the duly chosen, qualified and acting Town Attorney of the Issuer hereinafter named, that I am
familiar with the acts and proceedings heretofore had and or taken by said Issuer or by its
officers relative to the authorization, sale and issuance of $8,850,000 Public Improvement Serial
Bonds-2008, of the Toxvn of Southold, in the County of Sufiblk, a municipal corporation of the
State of New York, and herein referred to as the "Issuer", all as described and set forth in
Schedule X annexed hereto and by this reference made a part hereof; that no litigation of any
nature is now pending or threatened restraining or enjoining the issuance or delivery of said
Bonds or the levy or collection of any taxes to pay the interest on or principal of said Bonds, or
in any manner questioning the authority or proceedings for the issuance of said Bonds or for the
levy or collection of said taxes, or relating to said Bonds or affecting the validity thereof or the
levy or collection of said taxes; that neither the corporate existence or boundaries of the Issuer
nor the title of any of the present officers thereof to their respective offices is being contested;
and that.no authority or proceedings for the issuance of said Bonds has or have been repealed,
revoked or rescinded
I HEREBY FURTHER CERTIFY that there is no controversy or litigation of any
nature now pending or threatened by or against the Issuer, wherein an adverse judgment or ruling
could have a material adverse impact on the financial condition of the Issuer or adversely affect
the power of the Issuer to levy, collect or enforce the collection of taxes or other revenues for the
payment of the Bonds, which has not been disclosed in the Official Statement relating to the
Bonds
1N WITNESS WHEREOF,
I have hereunto set my hand as of the 29th day of
5419981 031862 CERT
CERTIFICATE OF DELIVERY AND PAYMENT
I, SCOTT A. RUSSELL, the duly elected, qualified and acting Supervisor of the
Issuer hereinafter named, HEREBY CERTIFY that on the 29th day of May, 2008, I delivered or
caused to be delivered to Roosevelt & Cross, Inc., and Associates, New York, New York, the
purchaser thereof, $8,850,000 aggregate principal amount of Public Improvement Serial Bonds-
2008 (the "Bonds") of the Town of Southold, in the County of Suffolk, a municipal corporation
of the State of New York and herein referred to as the "Issuer", each duly and completely
executed by or on behalf of the Issuer and all as described and set forth in Schedule X annexed
hereto and by this reference made a part hereof, and that at or before the time of such delivery of
said Bonds, I received from said purchaser the following amounts:
Received prior to such delivery ..................................................... $ 177,000.00
Received at time of such delivery ...................................................... $8,687,064.32
Total amount received ........................................................................ $8,864,064.32
being full payment for said Bonds in accordance with the contract of sale thereof, computed as
follows:
Contract Price ..................................................................................... $8,850,049.75
Interest on said Bonds accrued to the date of delivery ..................... 14,014.57
Total .................................................................................................. $8,864,064.32
1 FURTHER CERTIFY that at the time of such delivery of said Bonds, a written
opinion was rendered by the law firm of Hawkins Delafield & Wood LLP, dated as of the date of
such delivery, as to the validity of said Bonds, said opinion (except as to omission of the date of
such delivery) having been printed on each of said Bonds.
1N WITNESS WHEREOF, I have hereunto set my hand as of the 29th day of
May, 2008.
L/ Super~,ism7
541998.1 031862 CERT
SCHEDULE X
Bonds of the TOWN OF SOUTHOLD, NEW YORK, substantially in form, and
offered for sale and sold, as provided by the Certificate of Determination executed by the
Supervisor as of May 2, 2008 and to be delivered thereunder in the aggregate principal amount
of $8,850,000.
Number of Issues:
Amount and Title:
Dated:
Denominations,
Numbers and Letters:
Place of Payment of
Principal and Interest:
Maturities, Interest
Rates and Payment Dates:
1
$8,850,000 Public Improvement Serial Bonds-2008
May 15, 2008
In the form of registered Bonds without coupons in
denominations of $5,000 or integral multiples
thereof, registered in the name of Cede & Co, as
nominee of The Depository Trust Company, New
York, New York, numbered separately and
consecutively upward xvith the letter "R" prefixed
thereto
The office of the Town Clerk, Town of Southold,
Town Hall, 53095 Main Road, Southold, New York
(the "Fiscal Agent") Interest payable by wire
transfer or in clearinghouse funds by the Town or
its agent on each interest payment date to the person
in whose name the bond is registered at the address
shown on the registration book maintained by the
Fiscal Agent as of the close of business on the last
day of the month preceding each such interest
payment date
Mature on May 15 in the principal amounts in each
of the following years and bear interest at the
respective rates per annum, payable November 15,
2008 and semiannually thereafter on May 15 and
November 15 in each year until maturity, as set
forth below:
541998 1 (/M862 CERT
Year of Principal Interest Year of Principal Interest
Maturity Amount Rate Maturity Amount Rate
2009 $325,000 400% 2020
2010 325,000 4 00 2021
2011 325,000 400 2022
2012 350,000 400 2023
2013 350,000 4.00 2024
2014 350,000 4 00 2025
2015 375,000 4.00 2026
2016 375,000 400 2027
2017 375,000 4.00 2028
2018 400,000 400 2029
2019 400,000 400 2030
$4OO
425
425
425
45O
000 4 00%
000 400
000 4 00
000 4.00
000 400
450 000 4-I/8
450 000 4.25
450 000 425
475 000 425
475 000 425
475,000 4.25
The Bonds maturing on or before May 15, 2018 will not be subject to redemption
prior to maturity The Bonds maturing on or after May 15, 2019 will be subject to redemption
prior to maturity, at the option of the Town, on May 15, 2018 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 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 dates 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
541998 1 031862 CERI
ARBITRAGE AND USE OF PROCEEDS CERTIFICATE
1, SCOTT A RUSSELL, Supervisor of the Town of Southold (the "Issuer"), in
the County of Suffolk, New York, HEREBY CERTIFY with respect to the Issuer's $8,850,000
aggregate principal amount Public Improvement Serial Bonds-2008 (the "Bonds"), dated May
15, 2008 and issued on May 29, 2008, as follows:
Unless the context clearly requires otherwise, all capitalized terms not otherwise
defined herein shall have the meanings set forth in Exhibit A attached hereto or in the
Resolutions, the Code or the Regulations (each as defined in Exhibit A):
ARTICLE I
General
1 1 Authority of Signat~2X. I am an officer of the Issuer charged with the
responsibility for the execution, delivery, and issuance of the Bonds and am acting for and on
behalf of the Issuer in signing this Arbitrage and Use of Proceeds Certificate (the "Certificate").
12 Description of Bonds. The Issuer represents that the Bonds are sold at the
aggregate Issue Price and are further described as set forth on the cover of the Official Statement.
1 3 Purpose of Certificate. This Certificate is made for the purpose of
establishing evidence of the expectations of the Issuer as of the date hereof as to future events
regarding the amount and use of proceeds of the Bonds It is intended and may be relied upon
for purposes of Sections t03 and 141 through 150 of the Internal Revenue Code of 1986, as
amended (the "Code"), and as a certification described in Section 1.148-2(b)(2) of the Treasury
Regulations This Certificate is executed and delivered as part of the record of proceedings in
connection with the issuance of the Bonds The provisions of this Certificate constitute a
contractual obligation of the Issuer in consideration for the purchase of and payment for the
Bonds by the purchaser(s) thereof'
14 No Hedge Bonds The Issuer reasonably expects that 85% of the
Spendable Proceeds of the Bonds will be expended for governmental purposes within 3 years of
the date hereof In addition, not more than 50% of the proceeds of the Bonds are being invested
in investments not acquired to canTf out the governmental purposes of the issue at a guaranteed
yield for 4 years or more
15 Reasonable Expectations This Certificate sets forth the facts, estimates
and circumstances now in existence which form the basis for the Issuer's expectation that the
proceeds of the Bonds will not be used in a manner that would cause the Bonds to be arbitrage
bonds under Section 148 of the Code or private activity bonds under Sections 103 and 14I of the
Code. To the best of my knowledge and belief, such expectation is reasonable and there are no
other facts, estimates or circumstances that would materially change that expectation
5:11998 I 031862 CERI
1.6 No Composite Issue No other tax-exempt governmental obligations have
been sold fewer than 15 days prior to, or will be sold fewer than 15 days after, the sale date of
the Bonds, pursuant to the same plan of financing which are expected to be paid from
substantially the same source of funds as the Bonds
1.7 Registration The Bonds will be issued in registered form
18 No Federal Guarantee The Issuer represents and covenants that, except
for the gross proceeds of the Bonds which are: (a) invested during the temporary period referred
to in Article III, (b) held in any refunding escroxv or (c) invested in obligations of the United
States Treasury or in obligations issued pursuant to Section 2lB(d)(3) of the Federal Home Loan
Bank Act, as amended by Section 51 l(a) of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, or any successor provision to Section 2lB(d)(3) of the Federal Home
Loan Bank Act, as amended:
(i)
No portion of the payment of principal or interest with respect to the
Bonds is or will be guaranteed directly or indirectly by the United States
or any agency or instrumentality thereof (herein "federally guaranteed");
and
(ii)
No portion of the gross proceeds of the Bonds in excess of five percent of
such gross proceeds is or will be (A) used in making loans the payment of
principal or interest with respect to which is to be federally guaranteed, or
(B) invested directly or indirectly in federally insured deposits or
accounts
1.9 Tax Representation The Issuer expects to be able to and will comply xvith
all the procedures and provisions set forth herein, and will do and perform all acts and things
necessary and desirable within its reasonable control in order to assure that interest paid on the
Bonds shall be excluded from gr6ss income of the owners thereof for the purpose of federal
income taxation
110 Nonco~npliance The Issuer shall perform each of the obligations
undertaken by it in this Certificate unless, in the written opinion of Bond Counsel,
noncompliance therewith will not cause interest on the Bonds to be included in gross income for
purposes of Federal income taxation
1 I 1 Reliance by Bond Counsel The representations of the Issuer expressed in
this Certificate may be relied upon by Bond Counsel in connection with the rendering of any
opinion ~vith respect to the Bonds
1 12 IRS Form 8038-G The Issuer shall file 1RS Form 8038-G, set tbrth as
part of the record of proceedings for the Bonds, by the 15th day of the second month alter the
calendar quarter in which the Bonds are issued
5419981 031862 CERT
ARTICLE II
Use of Project and Proceeds
21 Authorization. The Bonds are authorized to be issued pursuant to
applicable provisions of the laws of the State of New York and two bond resolutions duly
adopted by the Town Board on their respective dates, (the "Resolutions" or "Resolution"), as
referred to in the Certificate of Determination relating to the Bonds, executed by the Supervisor
as of May 2, 2008 (the "Certificate").
2.2 Purpose of Issue The proceeds from the sale of the Bonds ~vill be used to
provide financing for various projects in and for the Town (the "Projects"), as further described
in the Resolutions For purposes of this Article II the term "proceeds" means the net amount
(after payment of all costs and expenses associated with issuing the Bonds) received by the
Issuer from the sale of the Bonds excluding accrued interest
2.3 Use of Proceeds The proceeds of sale of the Bonds ~vill be used to
provide original funds for the Projects For purposes of the Code, the Bonds shall constitute
Construction Bonds as defined herein
24 Ownershi~v/Lease/Sale The Projects will be owned by the Issuer and will
not be leased to any person who is not a state or local governmental unit It will not be sold or
otherwise disposed of, in whole or in part, except for incidental sales of surplus items the
proceeds of which will not constitute net operating profits or net capital profits to the Issuer,
prior to the inaturity date of the Bonds
25 Private Loans. Not more than the lesser of 5 percent
proceeds of the Bonds will be used directly or indirectly to make loans to
governmental unit
or $5,000,000 of the
persons other than a
26 Private Use The aggregate amount of proceeds of the Bonds used directly
or indirectly in a trade or business carried on by a person other than a state or IocaI
governmental unit ("Private Use"), will not exceed 10% of such proceeds in the event that more
than 10% of the principal or 10% of the interest due on the Bonds during the term thereof is,
under the terms of the Bonds or any underlying arrangement, directly or indirectly, secured by
any interest in property used or to be used for a Private Use or in payments in respect of property
used or to be used for a Private Use or is to be derived from payments, whether or not to the
Issuer, in respect of property or borrowed money used or to be used for a Private Use
27 Unrelated/Related Disproportionate Use None of the proceeds of the
Bonds will be used directly or indirectly in the trade or business of a person other than a
governmental unit that is unrelated or related and disproportionate to the governmental use of the
property being financed, including any private loan financing described in Section 2.5 which
meets this test For purposes of this Certificate, proceeds of the Bonds are allocable to an
unrelated Private Use if such use is neither directly nor operationally related to a governmental
use and proceeds of the Bonds are allocable to a disproportionate related Private Use to the
extent that the proceeds of the Bonds which are to be used to finance property used by a
541998.1 031862 C[:RT
nongovernmental person in a trade or business which is related to the governmental use of the
property referred to in Section 26 above, exceeds the proceeds of the Bonds which are to be
used for the governmental use to which such Private Use relates
28 Private Use Defined. For purposes of Section 26 and 2 7, unless
otherwise provided in this Certificate, a Private Use consists of any contract or other
arrangement including, without limitation, leases, management contracts, guarantee contracts,
take or pay contracts, or put or pay contracts, which provides for a use of the Project by a person
or persons who are not State or Iocal governments on a basis different than the general public
However, the Issuer may enter into a safe-harbor management contract which meets the
requirements of Rev. Proc 97-13
(i)
if the Issuer leases any portion of the facilities to an organization that is
qualified under Code section 501(c)(3) or to any other entity which is not
a State or a local governmental unit, it will abide by the limitations set
forth in this Article Il. If the issuer enters into management contracts with
respect to any areas included in the facilities to be financed or refinanced
with the proceeds of the Bonds, including, without limitation, service
areas, if any, it will follow the guidelines set forth in this Article li
29 Reimbursement Gross proceeds used to reimburse the Issuer for amounts
expended in anticipation of the issuance of the Bonds are considered expended on the date of the
reimbursement allocation made in accordance with Treas Reg §1 150-2, if prior to or within 60
days after the date of such expenditure (except for certain preliminary expenditures described in
Treas. Reg § 1. 150-2(0(2)), a declaration of intent to reimburse such expenditure is made and the
reimbursement allocation is made within 18 months of the later of the placed in service date of
the Projects or the date of the expenditure (but in no event more than three years after the
original expenditure was paid) The expenditures to be reimbursed are capitaI expenditures as
defined in Treas. Reg Section 1. 150- l(b) No reimbursement proceeds will be used for purposes
that would prevent the allocation from being treated as an expenditure pursuant to Treas Reg
Section 1 150-2 or prior law as applicable
ARTICLE III
Arbitrage/Rebate
3 1 Issue Pric~ The initial offering price to the public of the Bonds is the
Issue Price of the Bonds and at which price a substantial amount of each maturity of the Bonds
was sold, as evidenced by the certificate of the representative of the underwriters, included as
part of the record of proceedings tbr the Bonds
3 2 TemlTprarv Period. With respect to the Bonds:
(a) The Issuer has entered into or will enter into within six months from the
date of this Certificate, binding commitment(s) for the acquisition, construction or
accomplishment of the Projects, and the amount of such commitment(s) with respect to such
541998 ] 031862 CI'~RT
Projects will or do exceed the amount equal to 5% of $8,850,000, being the aggregate amount of
obligations to be issued for such Projects.
(b) In the event the Projects have not been completed, work on the
acquisition, construction or accomplishment of such Projects will proceed or is proceeding with
due diligence to completion and the final sales proceeds will be allocated to expenditures with
due diligence
(c) It is reasonably expected that at least 85 percent of the net sale proceeds of
such Bonds will be expended within three years from the date of this Certificate. Accordingly,
the sale proceeds and investment proceeds of the Bonds may be invested without restriction as to
yield for a temporary period of 3 years from the date hereof, subject to the rebate requirements
set forth in Article IV of this Certificate.
3.3 No Excess Proceeds The total proceeds of sale of do not exceed the total
cost of the Projects
34 Source of Repayment Funds. The Bonds will be paid from taxes and other
revenues of the Issuer
3.5 Debt Service Fund The taxes used to pay principal and interest on the
Bonds, whether or not deposited in a debt service fund, will be expended within 13 months of the
date of deposit in such fund, or the date of their accumulation, in the payment of debt service on
the Bonds. Any amounts received from the investment of such deposit or accumulation will be
expended within one year of receipt The debt service fund, if any, will be used to achieve a
proper matching of revenues and debt service and will be depleted at least annually except for a
reasonable carryover amount which will not exceed the greater of the earnings on such fund for
the immediately preceding bond year or one-twelt'th of the debt service on the Bonds for the
immediately preceding bond year.
36 Sinking__F_u_nds Except for the debt service fund described herein the
Issuer has not created or established, and does not expect to create or establish, any sinking fund
or other similar fund which the Issuer reasonably expects to use to pay principal or interest on
the Bonds
37 Universal Cap On each Valuation Date, the issuer shall value the
Universal Cap and the Nonpurpose Investments allocable to the Bonds thereunder. Nonpurpose
Investments in a bona fide debt service fund such as the Bona Fide Debt Service Fund do not
reduce the aggregate value of Nonpurpose Investments that may be allocated to the Bonds under
the Universal Cap. Nonpurpose Investments cease to be allocated to the Bonds to the extent
such Nonpurpose Investments have been expended for the governmental purpose of the issue, or
to the extent the value thereof exceeds the value permitted to be allocated to the issue under the
Universal Cap To the extent Nonpurpose Investments cease to be allocated to an issue and the
value of the Universal Cap exceeds the value of the remaining Nonpurpose Investment allocated
to such issue, other Nonpurpose Investments may become allocated to the issue, provided that
such Nonpurpose Investments are not already properly allocated to another issue and provided
541998 I 031862 CERI
that such allocation does not cause the value of Nonpurpose Investments allocated to the Bonds
to exceed the Universal Cap
Generally, if Gross Proceeds of the Bonds invested in Nonpurpose Investments
exceed the Universal Cap on a Valuation Date, such Nonpurpose Investments cease to be
allocated to the Bonds in the following order:
(i) a~nounts allocable to Replacement Proceeds,
(ii) amounts allocable to Transferred Proceeds,
(iii) amounts allocable to Sale Proceeds and Investment Proceeds of the Bonds
Where a Nonpurpose Investment ceases to be allocated to the Bonds, such
Nonpurpose investment is susceptible of re-allocation under the Universal Cap calculated with
respect to another bond issue. A Nonpurpose Investment which is reallocated to another bond
issue ~nay be valued under the same valuation method pursuant to which it was valued for
purposes of applying the Universal Cap with respect to the Bonds.
Notwithstanding anything herein to the contrary, the failure to perform the
determination of Nonpurpose Investments allocable to the Bonds as of a Valuation Date shall not
be considered a violation of this provision if' the value of Nonpurpose Investments allocated to
the Bonds did not exceed the value of the Bonds outstanding on such date
3 8 Yield. When used in this Certificate, the term Yield is computed as
described in Exhibit A and in connection with the Bonds, refers to the yield computed by the
actuarial or present worth method using a 360-day year and semiannual compounding, and
means that discount rate which, when used in computing the present worth of all payments of
principal and interest to be paid on an obligation, produces an amount equal to the Issue Price
thereo£ The Yield on the Bonds is as shown in Form 8038-G
39 Yield Reduction Payments The Issuer may make yield reduction
payments, as such term is defined in the Regulations, to reduce the yield on investments under
certain circumstances. The Issuer will consult with Bond Counsel prior to making any such
payments
3 10 No Replacement Proceeds The weighted average maturity of the Bonds,
as set forth in the Form 8038-G, does not exceed 120 percent of the average reasonably expected
useful life of the Projects
3 11 No Prohibited Payments The Issuer has not entered into and will not
enter into any transaction to reduce the yield on the investment of the proceeds of the Bonds in
such a manner that the amount to be rebated to the federal government is less than it xvould have
been had the transaction been at arm's length and the yield on the issue not been relevant to
either party
3.12 Rebate Options. With respect to the investment of the proceeds of the
Bonds, the Issuer will
5419981 011862 CER'I
(a) invest all gross proceeds at all times from the date hereof until expended
in invest~nents not constituting investment property for purposes of Section 148 of the
Code such as obligations of a state or of a political subdivision of a state, the interest on
which is excluded from gross income for purposes of Federal income taxation under
Section 103 of the Code and is not a preference item for purposes of the alternative
minimum tax imposed by Section 55 of the Code,
(b) invest all gross proceeds in obligations having a yield that does not exceed
the yield on the Bonds, or
(c) comply with the provisions regarding rebate described in Article IV
below
ARTICLE IV
Rebate
4.1 Rebate Compliance The Issuer understands that the continued non-
inclusion of interest on the Bonds for purposes of federal income taxation depends, in part, upon
compliance with the arbitrage limitations imposed by Section 148 of the Code, including the
rebate requirements described in Section 4 2 hereof with respect to the Bonds.
4 2 Rebate Requirement for the Bonds Section 148(f) of the Code requires
the payment to the United States of the excess of the amount earned on the investment of Gross
Proceeds in Nonpurpose Investments over the amount that xvould have been earned had the
amount so invested been invested at a rate equal to the Yield on the Bonds, together with any
income attributable to such excess Except as provided below, all Gross Proceeds of the Bonds
are subject to this requirement In order to meet the rebate requirement of the Code the Issuer
must take the following actions:
(a) Record of Investments The Issuer will record the date of receipt, amount
and source of any Gross Proceeds, eg, proceeds from the sale of the Bonds, loan
repayments, investment earnings. For each Nonpurpose Investment acquired with or
allocated to Gross Proceeds of the Issue, the Issuer will record the purchase date or
allocation date of such investment, its purchase price (excluding any broker or dealer's
commission or discount), or, if not acquired directly with Gross Proceeds, its Value on
the date the Nonpurpose Investment is allocated to Gross Proceeds, accrued interest due
on its purchase date or allocation date, its face amount, its coupon rate, its Yield, the
frequency of its interest payment, its disposition price (excluding any broker or dealer's
commission or discount), the accrued interest due on its disposition date and its
disposition date In addition, the Issuer will record the date and amount of all
expenditures of Bond proceeds, including expenditures for rebate, other than
expenditures to acquire investments
(b) Computation of Rebate Amount Subject to the special rules set forth in
paragraphs (c), (d), (e) and (f) of this Section, the Issuer will determine the Rebate
Amonnt on each Computation Date The Rebate Amount as of any Computation Date is
541998 1 031862 CI,;RI'
the excess of the Future Value of all receipts with respect to Nonpurpose Investments
over the Future Value of all payments with respect to the purchase of Nonpurpose
Investments or the allocation of such investments to the proceeds of the Bonds,
determined as of each Computation Date. To the extent amounts received from
investments are reinvested, these amounts may be netted against each other and not taken
into account in the Computation of Rebate Amount The Issuer shall determine the
nonpurpose receipts and nonpurpose payments as described below
(i) Receipts Receipts with respect to Nonpurpose Investments
include (i) actual receipts, amounts actually or constructively received with
respect to an investment, reduced by Qualified Administrative Expenses (ii)
disposition receipts, the Fair Market Value of investments deemed to be sold on
the date the investment ceases to be allocated to the issue, (except that Present
Value may be substituted for Fair Market Value with respect to fixed yield
investments, investments required to be yield restricted, and investments
transferring by virtue of the universal cap or transferred proceeds rules) and (iii)
Computation Date receipts, the Market Value (Present Value, in the case of
guaranteed investment contracts and fixed rate investments) of all Nonpurpose
Investments allocated to the issue at the close of business on a Computation Date;
and (iv) rebate receipts, any recovery of an overpayment of rebate
(ii) Payments Payments with respect to Nonpurpose Investments
include (i) direct payments, the amount of Gross Proceeds of the issue directly
used to purchase the investment, including Qualified Administrative Costs;
(ii) constructive payments, the Value of an investment allocated to (but not
directly purchased with) Gross Proceeds on the date so allocated; (iii) Nonpurpose
Investments allocated to an issue at the end of the preceding Computation Period,
at the value of the investments at the beginning of the computation period;
(iv) rebate payments, payments of rebate amounts ~vhen due and yield reduction
payments on Nonpurpose Investments and (v) the Computation Date Credit
(c) Exception for Gross Proceeds Entirely__Spent Within Six Months
Notwithstanding anything in this Section 4 2 to the contrary, if all of the Gross Proceeds
of the Bonds (other than amounts on deposit in the Debt Service Fund or a reserve fund),
including investment earnings received with respect to all Funds and Accounts
comprising such issue except the Debt Se~wice Fund, have been expended for the
governmental purpose of the issue within six months after the date of issue, then the only
Nonpurpose Investments to be taken into account in the calculation of the Rebate
Amount with respect to the Non-Construction Bonds are Nonpurpose Investments
acquired with or allocated to Gross Proceeds held in the Reserve Fund, and to any gross
proceeds arising after such six months which xvere not reasonably anticipated as of the
date of issuance The existence of sinking fund or pledged fund proceeds or the
expectation that such proceeds will arise within six months of the issue date will make
the six-month expenditure exception to rebate inapplicable For purposes of this
exception, Gross Proceeds used to pay principal of bonds are not treated as expended on
the governmental purpose of the issue
541998 ] 031862 CERT
(d) Exception for Gross Proceeds Entirely Spent Within Eighteen Months.
Notwithstanding anything in this Section 42 to the contrary, if all of the Gross Proceeds
of the Bonds (other than amounts on deposit in the Debt Service Fund or a reserve fund),
including investment earnings received with respect to all Funds and Accounts
comprising such issue except the Debt Service Fund, have been expended for the
governmental purpose of the issue in accordance with the following schedule after the
date of issue: 15% within 6 months, 60% within 12 months and 100% within 18 months,
then the only Nonpurpose Investments to be taken into account in the calculation of the
Rebate Amount with respect to the Non-Construction Bonds are Nonpurpose Investments
acquired xvith or allocated to Gross Proceeds held in the Reserve Fund, and to any gross
proceeds arising after such eighteen months xvhich were not reasonably anticipated as of
the date of issuance The existence of sinking fund or pledged fund proceeds or the
expectation that such proceeds will arise within eighteen months of the issue date will
make the eighteen-month expenditure exception to rebate inapplicable For purposes of
this exception, Gross Proceeds used to pay principal of bonds are not treated as expended
on the govermnental purpose of the issue However, an issue does not fail to satisfy the
spending requirement for the third spending period referenced above in this paragraph as
a result of a reasonable retainage, as defined in Treas Reg 1 148-7(d)(2), if the
reasonable retainage is allocated to expenditures within 30 months of the date of issue
(e) Exception for Gross Proceeds Entirely Spent Within Txventy-Four
Months Notwithstanding anything in this Section 42 to the contrary, for Construction
Bonds, if all of the Gross Proceeds of the Bonds (other than amounts on deposit in the
Debt Service Fund or a reserve fund), including investment earnings received with
respect to ali funds and accounts comprising such issue except the Debt Service Fund,
have been expended for the governmental purpose of the issue in accordance with the
following schedule after the date of issue: 10% within 6 months, 45% within 12 months,
75% within 18 months and 100% within 24 months, then the only Nonpurpose
Investments to be taken into account in the calculation of the Rebate Amount with respect
to the Non-Construction Bonds are Nonpurpose Investments acquired with or allocated to
Gross Proceeds held in the Reserve Fund, and to any gross proceeds arising after such
twenty-four months which were not reasonably anticipated as of the date of issuance
'['he existence of sinking fund or pledged fund proceeds or the expectation that such
proceeds will arise within twenty-four ~nonths of the issue date will make the twenty-tbur
expenditure exception to rebate inapplicable For purposes of this exception, Gross
Proceeds used to pay principal of bonds are not treated as expended on the governmental
purpose of the issue However, an issue does not fail to satisfy the spending requirement
for the third spending period referenced above in this paragraph as a result of a
reasonable retainage, as defined in Treas Reg 1 148-7(d)(2), if the reasonable retainage
is allocated to expenditures within 30 months of the date of issue.
(f) $100,000 Debt Service Fund Gross Earnings Exception. Notwithstanding
anything in this Section 42 to the contrary, if the gross earnings fiom the investments
held in a debt se~,ice fund for the Bond Year in question, as determined under paragraph
(c), are less than $100,000 then any amount earned on such debt service fund shall not be
taken into account in determining the Rebate Amount In this regard, the $100,000
5419981 031862 CER'I
earnings limitation is deemed satisfied if the annual debt service on the issue does not
exceed $2,500,000. For purposes of this paragraph (f), the term "gross earnings" means
the aggregate amount earned on the Nonpurpose Investment in which the Gross Proceeds
deposited to the debt service fund are invested, including amounts earned on such
amounts if allocated to the debt service fund
(g) Debt Service Fund Exception If the average maturity of the Bonds is at
least 5 years and the rates of interest do not vary during the term of the issue, then any
amount earned on a debt service fund (other than amounts representing accrued interest
or capitalized interest) shall not be taken into account in determining the Rebate Amount.
4.3 Payment to United States
(a) Unless the Bonds are redeemed prior to such time, the Issuer will pay to
the United States, not later than 60 days after each Installment Computation Date, an
amount which, when added to previous rebate payments made with respect to the Bonds,
is equal to not less than 90 percent of the Rebate Amount, less the Computation Date
Credit. The Issuer will pay to the United States, not later than 60 days after the Bonds are
fully paid or redeemed, 100 percent of the Rebate Amount, less the Computation Date
Credit. If the final rebate payment is made within 60 days after the Final Computation
Date, interest on the Rebate Amount will be deemed to accrue at the underpayment rate
under Section 6201 of the Code, beginning on the date the Rebate Amount is due and
ending on the date 10 days before it is paid
(b) The Issuer will mail each payment to the Internal Revenue Service Center,
Philadelphia, Pennsylvania 19255. Each payment shall be accompanied by the copy of
the Form 8038-T and the Form 8038-G or 8038-GC filed with respect to the Bond issue
and a statement identifying the issuer and the issue, including the CUSIP number for the
Bond with the latest maturity for which there is a CUSIP number
4 4 Recordkeeping In connection with rebate requirement the Issuer will
maintain the following records:
(a) The Issuer will retain records of the determinations made pursuant to
Section 4 2 until six years after the retirement of the last obligation of the issue.
(b) The Issuer will record all amounts paid to the United States pursuant to
Section 4 3
541998 I 031862 CERT
45 Fair Market Value. The Issuer will not acquire Nonpurpose Investments
at other than an arm's length, Fair Market Value price unless regulations addressing imputed
receipts have been promulgated by the Treasury
(SEAL)
IN WITNESS WHEREOF,
I have hereunto set my hand and affixed the
corporate seal of Town of Southold, as of the 29th
day ~~ of May, 2008
Supervisor
541998 t 031862
_Exhibit A
Definitions
(This exhibit includes definitions of certain terms which may not be used in the issuer's
Arbitrage and Use of Proceeds Certificate)
"Available Construction Proceeds" means the Issue Price of the Construction
Bonds (i) plus earnings on the Issue Price and on amounts in any reserve fund not funded from
bond proceeds, and earnings on such earnings and (ii) less the amount of the Issue Price
representing a reasonably required reserve or replacement fund and costs of issuance funded with
proceeds received from the sale of the Bonds For purposes of this definition earnings include
earnings on any tax-exempt bond If only a portion of the Bonds constitute Construction Bonds,
a pro-rata portion of the above-described amount will constitute available construction proceeds
Pre-issuance accrued interest and earnings thereon may be disregarded
"Bona Fide Debt Service Fund" means a fund, which may include proceeds of
an issue, that is used primarily to achieve a proper matching of revenues with principal and
interest payments within each Bond Year and is depleted at least once each Bond Year except for
a reasonable carry over amount (not in excess of the earnings on the fund for the immediately
preceding Bond Year or one-twelfth of the principal and interest payments on the issue for the
immediately preceding Bond Year).
"Bond Counsel" means any nationally recognized attorney or firm of attorneys,
knowledgeable in the requirements of the Code, and the Regulations, and retained by the Issuer
"Bond Year" means each one-year period (or shorter period) from the date of
issue that ends at the close of business on the day in the calendar year selected by the Issuer
which day is no later than the last day within one year of the issue date of the Bonds
"Bonds" means the $8,850,000 Public Improvement Serial Bonds-2008
"Capital Project" means ail capital expenditures, plus related working capital
expenditures to which the de mini~nis rule under Treas Reg Section 1 148-6(d)(3)(ii)(A)
applies, that cany out the governmental purposes of an issue
"Code" means the Internal Revenue Code of 1986, as amended.
"Computation Date" means any Installment Computation Date or the Final
Computation Date
"Computation Date Credit" means, for any issue of obligations, an amount
equal to the Future Value orS1,000 for each Bond Year during which there are gross proceeds of
the Bonds on a Computation Date other than the Final Computation Date, and $1,000 on the
Final Computation Date
541998 } 031862 GERT
"Computation Period" means the period beginning on the day following a
Computation Date (or in the case of the first period, the date of issuance of the Bonds) and
ending on the next succeeding Computation Date
"Construction Bonds" means an issue in which all of the bonds are either (i)
Governmental Bonds; (ii) Qualified 501(c)(31 bonds or (iii) Private Activity Bonds to finance
property owned by a governmental unit or a 50 l(c)(3) organization, if at least 75 percent of the
available construction proceeds of the issue are to be used, or are expected to be used for
expenditures for construction, reconstruction and rehabilitation of property which is owned by a
governmental entity or a 501(c)(31 organization
"Construction Expenditures" means capital expenditures (as defined in Treas
Reg §1 150-11 (i.e., amounts used for construction, reconstruction or rehabilitation of buildings
or other inherently permanent structures, including items that are structural components of such
buildings or structures, and architectural and engineering fees, site survey fees, legal expenses,
insurance premiums and development fees to the extent such fees and expenses directly relate to
other construction costs)
"Controlled Group" means a group of entities controlled directly or indirectly
by the same entity or group of entities In general, "direct control" exists while a controlling
entity possesses either of the following rights or powers and such rights or powers are
discretionary and non-ministerial: The right or power (i) both to approve and to remove without
cause a controlling portion of the governing body of the controlled entity, or (ii) to require the
use of funds or assets of the controlled entity for any purpose of the controlling entity If one
entity (the "Controlling Entity") directly controls another (the "Controlled Entity"), then the
Controlling Entity indirectly controls any entity controlled directly or indirectly by such
Controlled Entity However, an entity is not a Controlled Entity if it possesses substantial taxing,
eminent domain and police powers
"Extraordinary Working Capital Item" means expenditures for extraordinary,
nonrecurring items that are not customarily payable from current revenues, such as casualty
losses or extraordinary legal judgments in amounts in excess of reasonable insurance coverage
"Fair Market Value" of an Investment shall have the following meanings:
(a) In General Except as elsewhere specifically stated below, the Fair Market
Value of an Investment is the price at which a xvilling buyer would purchase the Investment from
a willing seller in a bona fide, arm's -length transaction
(b) United States Treasury Obligation The Fair Market Value of a United States
Treasury Obligation that is purchased directly from the United States Treasury is its purchase
price
(c) Certificate of Deposit The Fair Market Value of a certificate of
deposit with a fixed interest rate, a fixed payment schedule, and a substantial penalty for
early withdrawal is its purchase price provided, the yield on the certificate of deposit is
not less than (i) the yield on reasonably comparable direct obligations of the United
5419981 031862 CERT
States and (ii) the highest yield published by the provider and currently available from the
provider on reasonably comparable certificates of deposit offered to the public
(d) Guaranteed Investment Contracts The Fair Market Value of a
guaranteed investment contract is its purchase price, provided (i) the Issuer makes a bona
fide solicitation for such contract and receives at least three bona fide bids from providers
with no material interest in the issue; (ii) the Issuer purchases the highest-yielding
guaranteed investment contract for which a qualifying bid is made (determined net of
broker's fees); (iii) the yield on such contract (determined net of broker's fees) is not less
than the yield then available from the provider on reasonably comparable investment
contracts, if any, offered to other persons from a source of funds other than gross
proceeds of tax-exempt bonds; (iv) the determination of the terms of a guaranteed
investment contract takes into account as a significant factor the Issuer's reasonably
expected drawdo~vn schedule for amounts to be invested, exclusive of float and reserves,
(v) the terms of the contract, including collateral security requirements are reasonable,
and (vi) the obligor certifies the administrative costs it is paying to third parties in
connection with the contract. To the extent that a broker's commission does not exceed
the lesser of reasonable amount based on ~vhat would be charged for the same or
comparable investment acquired with a source of funds other than gross proceeds of tax-
exempt bonds to the present value of annual payments equal to 05 percent of the amount
expected to be invested per year, it may be taken into account in determining yield, with
the effect that it will increase the payments for, or decrease the receipts from,
Investments
"Final Computation Date" means the day the last Bond that is part of the Bonds
is discharged.
"Future Value" or "FV" of a payment or receipt means the amount, determined
by using the economic accrual method (the method of comp~ting yield based on the
compounding of interest at the end of each compounding period), equal to the value of such
payment or receipt at the time it is paid or received (or treated as paid or received), plus interest
assumed to be earned and compounded over the period at a rate equal to the yield on the issue,
using the same compounding interval and financial conventions used to compute yield
"Governmental Bonds" means bonds which are not Private Activity Bonds
"Gross Proceeds" means Sale Proceeds, Transferred Proceeds, Investment
Proceeds and Replacement Proceeds
"Issue Price" when used in connection with an issue of publicly offered
obligations (determined separately fbr obligations included in the issue that are not substantially
identical) is the first price at which at least ten percent of each maturity of each series of the
obligations are sold to the public Bond house, brokers, or similar persons or organizations
acting in the capacity of underwriters or wholesalers are not included in the definition of'
"public" tbr purposes of the preceding sentence If the obligations are privately placed, the Issue
Price is the price paid for them by the first buyer The Issue Price of obligations that are publicly
541998 I 031862 C[iRT
offered in a bona fide public offering is determined on the basis of actual facts and reasonable
circumstances existing on the sale date unadjusted for subsequent occurrences.
"Installment Computation Date" means the last day of the fifth Bond Year and
the last day of each succeeding fifth Bond Year (until and excluding the Final Computation
Date) and, if the Issuer so elects, the last day of any Bond Year.
"Investment" means (i) any security (within the meaning of Section 165(g)(2)(A)
or (B), (ii) any obligation (other than tax-exempt obligations which are not "specified private
activity bonds" within the meaning of Section 57(a)(5)(C) of the Code), (iii) any annuity contract
within the meaning of Section 72 of the Code, (iv) any residential real property for family units
not located within the jurisdiction of the Issuer and which is not required to implement a court-
ordered or approved housing desegregation plan or (v) any investment-type property that is held
as a passive vehicle for the production of income, including any prepayment for property or
services ifa principal purpose of prepayment is to receive an investment return from the time the
prepayment is made untiI the time payment would otherwise have been made
"Investment Proceeds" means any amounts actually or constructively received
from investing proceeds of the Bonds.
"Issuer" means the Town of Southold, New York
"Multipurpose Issue" means an issue the proceeds of which are used for two or
more separate purposes determined in accordance with Section 1 148-9(h) of the Regulations
"Net Sale Proceeds" means sale proceeds less the portion of those sale proceeds
invested in a reasonably required reserve or replacement fund or as part ora minor portion.
"Nonpurpose Investment" means any Investment in which Gross Proceeds are
invested and xvhich is not acquired to carry out the governmental purpose of the issue
"Official Statement" means the Official Statement of the Issuer relating to the
Bonds
"Persou" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof
"Plain Par Bond" means a qualified tender bond or a bond that (i) is issued with
original issue discount equal to not more than 2 percent of the stated redemption price at maturity
plus the amount of original issue premium attributable exclusively to unde:wvriters'
compensation, (ii) is issued for a price that does not include Pre-Issuance Accrued Interest,
(iii) bears interest from the issue date at a single stated fixed rate or is a variable rate obligation
under Section 1275 of the Code, in either case, that pays interest unconditionally payable at least
annually, and (iv)has a lowest stated redemption price not less than its outstanding stated
principal amount
541998 I 031862 CERT
"Plain Par Investment" means an investment that is an obligation that (i)is
issued with original issue discount (or if acquired on a date other than the issue date, acquired
with market discount or premium) equal to not more than 2 percent of the stated redemption
price at maturity, (ii) is issued for a price that does not include Pre-Issuance Accrued Interest,
(iii) bears interest from the issue date at a single stated fixed rate or is a variable rate obligation
under Section 1275 of the Code that pays interest unconditionally payable at least annually, and
(iv) has a lowest stated redemption price not less than its outstanding stated principal amount
"Present Value" or "PV" means the amount determined by using the following
formula:
PV- FV
n
(l+i)
~vhere i equals the discount rate divided by the number of compounding intervals in a year and n
equals the sum of(i) the number of whole compounding inte~,als for the period beginning on the
date as of which Present Value is computed and ending on the date the amount is to be received
or paid or on a Computation Date and (ii) a fraction the numerator of which is the length of any
short compounding interval during such period and the denominator of ~vhich is the length of a
whole compounding interval
"Private Activity Bonds" means bonds which meet the definition contained in
Section 141 (a) of the Code and that are not "qualified bonds" as defined in Section 141 (e) of the
Code
"Project" means the project referred to in the Resolutions, which is being
financed by the Bonds
"Qualified 501(c)(3) Bonds" means bonds which meet the definition contained
in Section 145 of the Code
"Qualified Administrative Costs" mean
(a) In General All reasonable, direct administrative costs, other than carrying
costs, such as separately stated brokerage or selling commissions, but not legal and
accounting fees, record keeping, custody, and similar costs. General overhead costs and
similar indirect costs of the lssuer such as employee salaries and office expenses and
costs associated with computing the Rebate Amount are not qualified administrative
costs In general, administrative costs are not reasonable unless they are comparable to
administrative costs that would be charged for the same investment or a reasonably
comparable investment if acquired with a source of f~nds other than gross proceeds of
tax-exempt bonds
(b) Regulated Investment Companies and External Commingled_ Funds For
publicly offered regulated investment companies (as defined in section 67(c) (2) (B)) and
541998 I 031862 CERT
commingled funds in which the Issuer and any Controlled Entity do not oxvn more than
10 percent of the beneficial interest in the fund, Qualified Administrative Costs are all
reasonable administrative costs, without regard to the limitation on indirect costs
described in the preceding paragraph
(c) GICs For a guaranteed investment contract, a broker's commission paid
on behalf of either an issuer or the provider is a Qualified Administrative Cost to the
extent that it does not exceed the lesser of reasonable amount based on what would be
charged for the same or comparable investment acquired with a source of funds other
than gross proceeds of tax-exempt bonds to the present value of annual payments equal to
five one-hundredths of one percent (0.05%) of the amount reasonably expected to be
invested per year
(d) Purpose Investments Qualified Administrative Costs include costs or
expenses paid, directly or indirectly, to purchase, carry, sell, or retire the investment;
costs of issuing, carrying, or repaying the issue, and any underwriters' discount, which
are paid by the conduit borrower, even if such payments merely reimburse the Issuer, but
only to the extent the present value of those payments does not exceed the present value
of the reasonable administrative costs paid by the Issuer using the yield on the Bonds as
the discount rate
(e) P_~ram investments Qualified Administrative Costs include only costs
of issuing, carrying, or repaying the issue, and any underwriters' discount, subject to the
limitation contained in the preceding paragraph.
"Qualified Guarantee" means, with respect to a bond, an unconditional transfer, in
any form, of substantially ail of the credit risk for all or part of the payments, such as payments
for principal and interest, redemption prices or tender prices, on the guaranteed bonds The
guarantor must not expect to make any payments other than those pursuant to a direct-pay letter
of credit or similar arrangement for Which the guarantor will be immediately reimbursed
Reasonable procedural or administrative requirements or, in the case of a guarantee against
failure to remarket a qualified tender bond, commercially reasonable limitations based on credit
risk, xvill not cause the guarantee to be conditional The guarantor may not be a co-obligor, nor
may the obligor and any related parties combined use more than 10 percent of proceeds of the
guaranteed portion of the bonds The guarantee fee must not exceed a reasonable arm's-length
charge solely for the transfer of the credit risk A guarantee will not be qualified unless, as of the
date the guarantee is obtained, the issuer reasonably expects that the present value of all fees for
the guarantee will be less than the present value of the expected interest savings on the issue as a
result of the guarantee For this purpose, present value is computed using the yield on the issue,
determined with regard to the guarantee fees, as the discount rate
"Qualified Hedge" means, with respect to the Bonds, a contract between the Issuer,
and any unrelated party which is entered into primarily to reduce the Issuer's risk of interest rate
changes with respect to the Bonds that meets the requirements of Regulation Section 1 148-41h)
The contract may be an interest rate swap, an interest rate cap, a futures contract, a forward
5419981 1)31862 CERI
contract, an option or may take another form A contract will not be a Qualified Hedge if it
contains any significant investment element (i~, an expected return)
"Rebate Amount" means with respect to the Bonds, the amount computed as
described in Section 4.2(c)
"Regulations" means the Income Tax Regulations promulgated under Section
148 of the Code by the Department of the Treasury from time to time including the Regulations
published on June 18, 1993 in the Federal Register, as they may be amended from time to time.
"Replacement Proceeds" means amounts with a sufficiently direct nexus to the
Bonds or Project to conclude that such amounts would have been used for the Project if the
proceeds of the Bonds were not so used to the extent held by or derived from the Issuer or a
controlled entity of the Issuer, including sinking funds, pledged funds (including negative
pledges), certain other amounts if the term of the issue is longer than necessary for the
governmental purposes of the issue, and a bond-funded working capital reserve unless the issue
qualifies for the TRAN deemed 6-month expenditure exception or the under $5,000,000 small
issuer exception.
"Resolutions" means the bond resolutions of the ,Issuer, as referred to in
paragraph 2 1 hereof
"Restricted Working Capital Expenditures" means working capital
expenditures subject to the Gross-Proceeds-spent-last rule in Treas Reg Section I 148-6(d)(3)(i)
that are, ineligible for any exception to that role
"Sale Proceeds" means any amounts actually or constructively received fi-om the
sale of an issue, including amounts used to pay underwriters' discount or compensation, accrued
interest other than Pre-Issuance Accrued Interest, or derived from the sale of a right associated
with a bond as further described in Treas. Reg Section I 148-4(b)(4)
"SLG" means a U S Treasury Book Entry Security, State and Local Government
Series.
"Spendable Proceeds" means sale proceeds, less the portion of those sale
proceeds invested in a reasonably required reserve or replacement fund under section 148(d) of
the Code and as part ora minor portion undcr section 148(e) of the Code
"Trausferred Proceeds" means unexpended original or investment proceeds of a
refunded issue which transfer and become proceeds of the refunding issue when proceeds of the
refunding issue are applied to pay principal of the refunded issue
"Treasury" means the United States Department of Treasury
"Universal Cap" means the maximum value of Nonpurpose Investments which
may be allocated to the Bonds and is determined by reference to the Value of all outstanding
541~)98 1 031862 CERT
Bonds of the issue Nonpurpose Investments shall be taken into account as Nonpurpose Receipts
at their Value on a Valuation Date
"Valnation Date" means the date on which the value of the Universal Cap and
the Nonpurpose Investments allocable to the Bonds thereunder are determined With respect to
new money issues, the first Valuation Date shall be the second year anniversary date of the date
of issuance of the Bonds; thereafter, the first day of each Bond Year shall constitute a Valuation
Date With respect to a refunding issue, each date on which proceeds of the refunded issue
would become transferred proceeds of the refunding issue, e.g each date on which principal of
the refunded issue is paid with proceeds of the refunding bonds, shall constitute a Valuation
Date in addition, the first date of each Bond Year shall also be a Valuation Date
"Value" means, in the case ora Bond, the Value of a Bond and in the case of an
Investment, the VaLue of an Investment
"Value of a Bond" means, in the case ora Plain Par Bond, its outstanding stated
principal amount, plus accrued unpaid interest or in the case of a Plain Par Bond actually
redeemed, or treated as redeemed, its stated redemption price on the redemption date plus
accrued unpaid interest In the case ora bond other than a Plain Par Bond, the value on a date of
such a bond is its Present Value on that date, using the yield on the issue of which the bonds are
a part as the discount factor In determining the Present Value ora variable rate bond, the initial
interest rate on the bond established by the index or other rate setting mechanism is used to
determine the interest payments on that bond
"Value of an Investment" means, as of any date, unless the Investment is
required invested as a restricted yield, for any Investment, Fair Market Value as of that date; for
any fixed rate investment, Present Value on that date; and for any Plain Par investment, the
outstanding stated principal amount, plus accrued unpaid interest, as of that date. Yield
restricted investments must be valued at Present Value, amounts allocated or that cease to be
allocated to an issue must be allocated at Fair Market Value, except in cases in which such
Nonpurpose Investments are allocated as a result of the Universal Cap or Transferred Proceeds
roles in which case they may be valued at Present Value, and amounts allocated to Transferred
Proceeds may not be valued in excess of the value used for arbitrage restrictions applicable to the
Refunded Issue
"Working Capital Expenditure" means any cost of a type that does not
constitute a Capital Expenditure
"Yield" means, as of any Computation Date, that discount rate that, when used in
computing the Present Value of(i) all unconditionally payable payments of principal and interest
of or on the bonds included in such fixed yield issue, (ii) all unconditionally payable fees for
Qualified Guarantees and Qualified Hedges on such bonds and (iii) all fees expected to be paid
for Qualified Guarantees and Qualified Hedges, produces an amount equal to the sum of the
Present Value of the aggregate Issue Prices of the bonds comprising the issue (determined using
the same discount rate used to determine the Present Value of payments for principal, interest
and Qualified Hedges and Qualified Guarantees) The Yield is computed as of the issue date of
541998 1 031862 CERT
the fixed yield issue by treating each bond included in the issue that is either subject to
mandatory or contingent early redemption or to certain optional redemption provisions as being
redeemed on its expected early redemption date for an amount equal to its Value on that date If
a fixed yield bond (i) is subject to optional redemptions within 5 years of its issue date and the
Yield not taking into account the optional redemption is more than 1/8 of 1% above its Yield
assuming the early redemption, (ii) is issued at an Issue Price that exceeds the stated redemption
price at maturity by more than 1/4 of 1% multiplied by the product of the stated redemption price
to maturity and the number of complete years to the first optionaI redemption date for the bond,
or (iii) bears interest at increasing interest rates, the Yield on the issue including such fixed yield
bond is computed by treating the fixed yield bond as redeemed at its stated redemption price on
the optional redemption date that produces the lowest Yield on the issue. No adjustment will be
made on any Computation Date to the Yield on a fixed yield issue as computed on its issue date
unless redemption rights are subsequently transferred to a third party or termination payments
are received with respect to Qualified Hedges The Yield on a fixed yield bond is calculated in
the same manner as Yield on a fixed yield issue
541998 I 031862 CERT
CERTIFICATE OF THE SUPERVISOR WITH RESPECT TO
THE OFFICIAL STATEMENT OF THE TOWN OF
SOUTHOLD, NEW YORK, DATED MAY 2, 2008,
DISTRIBUTED IN CONNECTION WITH TIlE SALE OF THE
$8,850,000 PUBLIC IMPROVEMENT SERIAL BONDS-2008
I, SCOTT A. RUSSELL, Supervisor of the Town of Southold, in the County of
Suffblk, Nexv York (the "Town"), HEREBY CERTIFY that as of May 2, 2008, the date of the
Official Statement of the Town prepared and distributed in connection ~vith the sale of the
$8,850,000 Public Improvement Serial Bonds-2008 (the "Bonds"), and at all times subsequent
thereto, up to and including the date of the delivery of the Bonds on May 29, 2008, the attached
Official Statement did not and does not contain any untrue statement ora material fact or omit to
state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading
Insofar as any statements made in said Official Statement involve matters of
opinion, estimates or statements as to matters not contained in or derived from the official
records of the Town, whether or not expressly stated, they are set forth as such and not as
representations of fact by the Town, and no representation is made that any of the estimates or
anticipated events will be realized. The said Official Statement is not to be construed as a
contract or agreement with the beneficial owners of the Bonds
I HEREBY FURTHER CERTIFY that there has been no adverse material change
in the financial condition of the Town since the date of said Official Statement to the time of the
delivery of the Bonds on May 29, 2008.
(SEAL)
IN WITNESS WHEREOF,
I have hereunto set my hand and affixed the
corporate seal of the Town as of the 29th day of
May, 2008.
Supervisor
541998 1 031862 CERT
NEW ISSUE - SERIAl, BONDS MOODY'S INVESTORS SERVICE - "Aaa"*
Sec "Bond Ratings", herein
$8,850,000
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
(the "Town")
Dated:May 15, 2008
PUBLIC IMPROVEMENT SERIAL BONDS - 2008
[BOOK-ENTRY-ONLY BONDS]
Principal Due:
Interest Duc:
BOND MATURITY SCHEDULE
May 15, 200%2030, inclusive
November 15, 2008 and semi-annually thereafter
in each year until maturity.
Amount Matur ty Rate Yield Amount Maturity Rate Yield Amount Maturity Rate Yield
$325,000 2009 4.00% 1.85% $375,000 2017 4.00% 3.45% $450,000 2024 4.00% 4A0%
325,000 2010 4.00 2.25 400,000 2018 4.00 3.60 450,000 2025 4-1/8 4.15
325,000 201I 4.00 2.55 400,000 2019 4.00 3.70 450,000 2026 4.25 4.20
350,000 2012 400 2.75 400,000 2020 4.00 3.80 450,000 2027 4.25 4.25
350,000 2013 4.00 2.90 425,000 2021 4.00 3.90 475,000 2028 4.25 430
350,000 2014 4.00 3.00 425,000 2022 4.00 4.00 475,000 2029 4.25 4.35
375,000 2015 400 3.15 425,000 2023 4.00 4.05 475,000 2030 4.25 4-3/8
375,000 2016 4.00 3.30
*The ,B, unds maturino in the years 2009 throm, h 2018 inclusive, are NOT insured by Financial Security Assurance (defined below) and
arc rated "Aa3 by Moody's ~vestors Service,, Inc. T~e scheduled payment of principal of and interest on the Bonds maturing in the years 2019
through 2030, inclusive, (the 'qnsured Bonds ') when due WILL ttE guaranteed under an insurance policy to be issued concurrently with the
dclivelT of the Bonds by FINANCIAI, SECURITY ASSURANCE INC. (See Appendix C "Bond Insurance", herein. Also see "Bond Rafing",
herein0
P FSA
Security andSources of Payment. The Bonds will constitute general obligations of the Town and will contain a pledge of its faith and
credit for the punctual payment of the.principal of and interest on the Bonds, and allthe taxable real properly within the '[own will be subject to
the levy of ad valorem taxes, without [imitat~on as to rate or amount, for such purpose.
Prior Redemplion- The Bonds maturing on or afl. er May 15, 2019 will be sub ect to redemption prior to maturity at the option of the
town, on May 15, 2018 on any date and thereafter, tn whole or m part at par m accordance w~th the terms described hereto. See Optmnal
Redemption" under "The Bonds," herein. - - -
borm and Denomination: The Bonds will be issued as re,,istered bonds, and, when issued, will be?gistered in the name of Cede & Co.
as nominee of The Depository Trust Company ("DTC'), New ~%rk, New York~ which will act as the Securities Depository for the Bonds.
Individual purchases of the Bonds ma), be made only in book-entry form in denominations of $5,000 or integral multiples thereof. Bondholders
v,l rtfi asr r e n w h~ ~ eet h as S e"B kErr, ' .....
'i l not receive ce t' c'te. epes nti gtheiro nets 'p'nt r ssmt eBondspurch ed. ~e oo- at 5.-OnlySystem under TheBonds,
herein.
Payment. Payment of the principal of and interest on the Bonds will be made by the Town to DTC which will in turn remit such payment
tn its Participants for subsequent distribution to the Beneficial Owners of the Bonds tn accordance with standing inst~ctions and,,customary
practices, as is now the case with municipal securities held for the accounts of customers in bearer form or registered in ' street name. Payment
to the Beneficial Owners will be the responsibility of the DTC Participant or Indirect Participant and not o,f DTC or the Town,,subject to any
statutory and regulatory requirements as may be in effect from time to time. See "Book-Entry-Only System' under "The Bonds, ' herein.
Hawkins Delafield & Wood LLP has not participated in the preparation of this Official Statement nor verified the accuracy completeness
or fairness of the nformat on contained here n, and, accord ng y, expresses no op n on w th respect thereto.
The Bond~ are off~red xubject to the final .a. pprovinq opinion of Hawkins Delafield & Wood LLP, New York, Neu Fork, Bond Couns'el.
and terrain other conditions. It ia' expected that dehvery of t~e Bonds in book-entry form will be made through theJ~cih'ties olD T£' an or about
May 29 2008 in New York, New York
This revised cover, dated Ma,/ 13 2008, supplements the Official Statement of the Town, May 2, 2008, relating to the obligations
described therein and herein including'certain,, ~ informhhon omitted fro, m such Official Statement in accordance with Securities and Exchange
Commission Rule 15c2-12 (the Rule ), and shall constitute the Town s final Official Statement within the meaning of the Rule. Other than as
set forth on this revised coy& page the table of contents the section entitled "Bond Rating" and the addition of"Appendix C - Bond Insurance',
there have been no other revisions to the Offic a Statement. For a dcscr ption of the Town's agreement to prowde continuing disclosnre as
described in the Rule, see "Disclosure Undertaking" herein.
ROOSEVELT & CROSS, INC. AND ASSOCIATES
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
Town Hall
53095 Main Road
Southold, NY 11971
Telejphone: (631) 765-4333
Fax: (631 ) 765-1366
TOWN BOARD
Scott A. Russell, Supervisor
I,ouisa P. Evans
Albert J. Krupski, Jr.
Vincent M. Orlando
William P. Ruland
Thomas H. Wickhum
Elizabeth A. Neville, Town Clerk
Peter W. Harris, Superintendent of }ligbways
John A. Cushman 11, Town Comptroller
Patricia A. Finnegan, Esq., Town Attorney
George Sullivan, Receiver of Taxes
BOND COUNSEL
lla~kins 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¢~/mun s at corn
x,¥cbs e. http. ,:,,aw mn s at.corn
No dealer, broker salesman or other person has been authorized by the Town to give any infonna[ion or to make any
representations, other than those contained m this Official Statement and f ~iven or made such otne- nfbrmation or
representations must uot be relied upon as having been authorized by the Town 'I'h s Official Statement does m)t constitute an
offer to sell or the solicitatkm of an offer to buy~ nor sha there be a~?y sa e of the Bonds by any person in any iur sd ctJon in which
it is unlawful for such person to make such offer solicitation or sale. The informat on set forth herein has bec obtained by
Town from sources which are beIieved to be reliable )ut it is not guaranteed as to accur~acy or complctcness. The infnrm[ttion
and expressions of opinion herein are subject to change witho t not ce and neither the de ye 'y of th s Official State uent *r any
sgle made hereunder shall, under any circumstances, create any implication that there has been no chang~ in the affairs of the
since the date hereof. - '
TABLE OF CONTENTS
Page
THE BONDS
Optional Redempt on I
Book-entry-onlySystem ....... iiiii .... iiiiiiZiiiiiiiZiiZiiiiiiiZiiiiZiiiiiiZiiiiiiiiiiiiII
Certificated Bonds ...................... 3
Authorization and Purpose ................................... : ..... :J::Z:Ji:.::::Ziii::::i: 3
Security and Source of Payment ..........
Remedies Upon Default .......................... iiiiiiiiiiiiiiiiiiiiiiiiiiiiii ~
THE TOWN
Government
............................................................................ 4
Employees ........................................................................... 5
ECONOM1C AND DEMOGRAPHIC INFORMATION .
......................................... 5
Population Characteristics ............................................................ 5
Med an Income of Faro es
......... 5
Unemployment Rate statisti[:s' 2 Z i i l Z Z i i i i i i i l Z Z i i i i i i i i i i l Z S . i 'i iii.i.iiii...iiiii. 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
Trenit of Town Indebtedness ............................................................... 8
Details of Short-Term Indebtedness Outstanding ............................................... 9
Debt Service Requirements - Outstanding Bonds ............................. 9
Calculation oF Estimated Overlapping ancl Underlying Indebtedness ............................. I0
Authorized But Un ssued terns ............................................................ 10
Capital Program ...................................................................... 10
Landfi Closure and Postclosure Care Costs .................................................. 11
FINANCES OF THE TOWN · I 1
Financial Statements and A~t'i~'iSr~l~i:ds'Ziiiiiiiiiiill Z iiii. i Z ii iiii i i Zii iiii i ZZiii ii i 11
Fund Structure and Accounts ........................................................ 11
Basis of Accounting ............................................................... 11
Investment Policy .................................................................... 1 l
Budgetary Procedures .......................................... 12
F nanc aI Operations .................................................................. 12
Revenues
State Aia ...................................... 13
Expenditures ........................................................... 13
Pension Systems .... ................................................................. 13
Contr buttons to the Ret rement Systems ..................................................... 14
Other Post Employment Benefits ........................................................... 14
REAL PROPERTY TAX INFORMATION .................................................... 15
Real Properly Taxes ..................................................................... 15
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 ........................................................................... 17
Opinion of Bond Counsel ................................................................ 17
~enain Ongoing Federal Tax Requirements and Certifications ................................... 17
Certain Couateral Federal Tax Consequences ................................................. 17
OriginaI Issue Discount ................................................................. 17
Bond Premium ......................................................................... 18
Information Reporting and Backup Withholding ............................................... 18
Miscellaneous ........................................................................ 18
DOCUMENTS ACCOMPANYING DELIVERY OF THE BONDS ................................. 19
Absence of Litigation .................................................................... 19
Legal M.a. tters .......................................................................... 19
Closing Certificates .................................................................... 19
DISCLOSURE UNDERTAKING ............................................................ 20
BOND RATING ........................................................................... 20
FINANCIAL ADVISOR .................................................................... 21
ADDITIONAL INFORMATION ............................................ · ................. 21
APPENDIX A: FINANCIAL INFORMATION
APPENDIX B: FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
APPENDIX C: BOND INSURANCE
ii
OFFICIAL STATEMENT
$8,850,000
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
PUBLIC IMPROVEMENT SERIAL BONDS - 2008
[BOOK-ENTRY-ONLY BONDSt
This Official Statement and the appendices hereto prese,n? certa,!~n, inform,a, tion ,r, elatin~, to the Town of
Southold, in the County of Suffolk in the State of N,e,w York (the Town, County ~nd S!,a, te respectively) in
comection with the sale of $8,850,000 Public hnpro,,ement Serial Bonds - 2008 (title Bonds ) of the Town.
All quotations from and summaries and explanations of provisions of the Constitut on and Laws of the State
and acts and i~roceedings of the Town contained herein do not purport to be comp ete and are qua ified n their
entirety by re~erence to the official compilation 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 May 15, 2008, and will mature on May 15, in each of the years 2009 to 2030,
inclusive, in the principal amounts as set forth on the cover page hereof.
Th~ Bonds will be issu.ed itl fully registered form and when issued wil,! be registered in the name o,f Cede &
go. as.nominee of The Depository Trust Company, New York, New York ( DTC ). DTC will act as Securities
I).epos~tory for the Bonds. Individual purchases of the Bonds ~nay 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 oll the Bonds will be payable Novcmber 15 2008 and semi-annually thereafter on May 15 and
November 15, in each vear until matur~tv. Principal and interest will be paid bv the Town to the Securities
Depository, which will ih turn remit such [~rincipal and interest to its Participants, for'subsequent distribution to lhe
Beneficial Owners of the Bonds, as described herein. The Bon~s may be transferred in the manner described on thc
Bonds and as referenced in certain proceedings of the 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 May 15, 2018 will not be subject to redemption prior to maturity. The
Bonds maturing on or after May 15, 2019 will be subject to redemption prior to maturity', at the option of the Town,
on May 15, 20i8 and thereafter on any date, in whole or in part, and ifm part, in any order of tie r 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 upou thcgiving of notice which idcnlifies the Bonds to be
redeemed, by mailing such notice to tile registered holders thereoffat their respective addresses as shown upon the
registration books of tile Fiscal Agent at least 30 days prior to tile date sel for any such redemption. If' notice of
reclemption shall have been given as aforesaid, the Bonds so callcd for redemption shall become duc and payable at
the applicable redemption price on the redemption date designated in such notice, and interest on the Bonds shall
cease to accrue from and after such redemption date.
Book-entry-only System
DFC will act as sec fit'es (epos'tory fo' lie Bends (t e 'Be ~ds") Thc Bonds ~Gll bc issued as
registered Bonds registered in the name of Cede & Co. (DT( 's )artncrsbip n~minec) or such o~hcr ti~mc asmav I~e
reqt ested ]vt 1 ;t thor~zed' replesentative' of DTC. One t'ully-rc~istered. ~ Bond certilicale, ~xill. be ss ~c( for ~ach
maturity of'ibc Bonds, each in the aggregate principal amount o~ such inalur~t5. and x~l~l oe deposited with D['£
DTC, the world's largest depository is a limited-purpose trust company organized under t~e New' York
Banking Law a bankino orom-fization willfin tile meaning of the Nexv York BankingI aw a member ut the I'cdera[
Reserve Syslem a '~clearum corporatxon v, lthm the meaning of the New York Umform Commerc a ('ode a ~d a
cleanng agency r,-gtstereffpursuant to the provisions of Section t 7A ofthe Securities Exchan=e Act ut ~ 934. DTC
holds and provides asset serxicing fi)r over 2 million issues nf ILS. and non-U.S, eouitv is'2ues, cor~norate and
municipal debt issues, and monex market instrmnents from over 85 countries that D'FC~s narticinan{s ("Direct
Participa its"'} lepos t w t ~ DTC. DTC also facihtates the post-trade settlement ammm D rect Pattie nants of sales
and other securitms transactions in deposited securities through electrouic coml~uteri'2ed book-entrv'trankf;ers and
pledges between Direct Participants~accounts. This eliminates the need for'physical movemen't of securities
cerfitlcates. 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 bv a humber of Direct'Participantiof DTC and
Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation,, MBS
Clearing Corporat!h)?., and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC. and EMCC, also
subsidiaries of DTuC), as well as by' the New York Stock Exchange, ln,c., the American Stock Exchange [,LC7 and
the National Association of Securities Dealers, lnc. Access to the DTC s) stem is also ava able to others such as both
U.S. andnon-lJ.S, securitiesbrokersanddealers banks trustcompanies andclearingcorporationsthatclearthrouzh
or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Particivants%.
DTC has Standard & Poor's highest rating: AAA. The D'IC Rules applicab'le to its Parti~:i~ants are on file x¥ith th'e
Secnrities and Exchange Commission. More mlbrmation 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 lhe Direct and Indirect Participants' records. Beneficial Owners will
not receive written confirmation from DTC of their vurcbase Beneficial Owners are however exvected to receive
written confirmations providing details of the transa~ction, as'well as periodic statements of their hbldings, from the
Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers otownership
nterests iii the Bonds are to be accomphshed by entries made on the books of D~rect and Indirect Pamcmants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests
in Bonds, except iii the event that usc of the book-entry system for the Bonds is discontinued.
To facilitate subs%tuent transit:rs, ali 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
representhtive of DTC. "['he deposit ut~ Bonds with DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not ,effect an;, change in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Bonds; DTC s recor~ reflect only the identity of the Direct Participants to wlSose accounts such Bonds
are crec~!t~d,.which may or may np[ b~ }hq ~eneficial Owners. The Direct and Indirect Participants will remain
responstt~le tot keeping account el their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them 'subject to any gtatutory or regnlatory requirements as may be in effect from time to tim&
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 snch issue to be
redeemed.
Payments on the Bonds will be made to Cede & Co., or such other nominee as may be recluested by an
authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of
funds and corresponding detail information from the 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 st'anding
instruclions a, pd customary, practices ai is the c,4se with bonds held for the accounts of custon~ers in bearer form o?
registered in street name and will f~e the responsibiliw of such Participant and not of DTC nor its nominee or the
Town, snbject to any statutory or regulatory re' quiremen'ts as may be in effect from time to time. Payments to Cede
& Co. (or such ethel' nom ine~as may be re~uesied by an authorized representative of DTC) is the r[sponsibility of
the Town, disbursement of such payments to Direct Participants wilt be the responsibility of DTC= and disbursement
of such payments to the BeneficialOwners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving
reasonable notice to the Town. Under such circumstances, in the event that a successor depository is not obtained,
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). Ill that event, Bond certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system has been obtained from
sources that the Town believes to be reliable, but the Town takes no responsibility tor the accuracy thereof.
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 1NDIRECT PARTICIPANT; (I1)
THE PAYMENTS BY DTC OR ANY PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH
RESPECT TO THE PRINCIPAL OF, OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS; (II1) ANY
2
NOTICE WttlCH IS PERMITTED OR REQUIRED 'FO BE GIVEN TO BONDHOLDERS; (IV) THE SELECTION
BY DTC OR ANY PARTICIPANT OR INDIRECT PARTICIPANT OF AN Y PERSON TORECEIVE PAYMENT
IN THE EVENT OF A PARTIAL REDEMPTION OF THE BONDS; OR (V) ANY CONSENT GIVEN OR OTHER
ACTION TAKEN BY DTC AS BONDOWNER.
Certificated Bonds
_ DT~J may cJiscgntinue prpv. i(Jij~g it§ services with respect to the Bonds at any time by giving notice to the
fown and discharging its re~ons~bdm~s with respect thereto under apphcab e a~v, or the I ow ~ ~ Iv terminate its
participation in the system oFbook-entr3-only transfers through DTC at an,,' ti ne I ~ t ~e e~cnt that s 6h book-entry-
only system is discontinued, thc following provisions *viii apply: ft~e Bouds will be in reg stered form m
denominations 9f ~5,000, or integral multiple? thereof. Principal of ,and iuterest on the Bonds when due will be
~p,ayable at the principal corporate trust office of a bank or trust compan3 to be named by the Town as the fiscal agent.
Certificated Bonds may be transferred or exchanged at no cost to the owner of such Bonds at any time prior to
maturity at the corporate trust office of the fiscal agent for Bonds of thc same or any other author zet] denomination
or denominations in the same aggregate principa[amount upon the terms set forth n the cert ficate of the Town
Law.Superx isor authorizing the sale oFtheq3onds andfixing the details thereof and In' accordance w~th' the Local Finance
Authorization and Purpose
The Bonds are being issued pursua, u.t to the Constitution and. statutes of the State of New York, including
among others, the Town Law, GeneralMumc~pal La'~ and the Local Finance Laxv, and various bond reso t t o is du y
adopted by the Town Board on their respective dates, authorizing the issuance ofseria bonds for two capital projects
in and for the Tov, n.
Such projects, and the respective principal amounts of Bonds to be issued for each, are as follows:
Date Amount to
Authorized Purpose be issued
02-27-07 Open Space Preservation ................... $ 7.500,000
02-26-08 Land Acquisition and Building Improvements ..................... 1~350,000
Total ................................ $ 8,850,000
The proceeds of the Bonds will provide original funds for the above referenced projects.
For further !,n. formation 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 owner 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 the principal thereof and the interest thereon. For the payment of such principal and
interest, the Town has the power and statutory authority to levy ad valorem taxes on all the taxable real property
within the Town without limitation as to rate or amount. Under Article VIII of the State Constitution, the Towu is
required to pledge its faith and credit for the payment of the principal of and interest on the Bonds and the State
Legislature is specifically precluded from restricting the power of the Town to levy taxes on taxable real estate
thereof.
Remedies Upon Default
Under current law, provision is made for contract creditors (including the Bondholders) of the Town to
enforce payme ts upon such contracts, ~fnecessary, through court action, although the present statute hmlts interest
on the amount adjudged due to creditors to nine per centum per annum from the date due to the date of payment. As
a general rule, property and funds ora municipal corporation serving the public welfare and interest have not been
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
bonds and notes, although any permanent repeal by statute or constitutional amendment of a Bondholder's remedial
right to judicial enforcement of the contract should, in the opinion of Bond Counsel, be held uncoustitutional.
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 anyprovision of the laws of the United States, now or hereafter in effect, for the
composition or adjustment ofmunicipaI indebtedness. Subject to such consent, under the United States Constitution,
Congress has jnrisdiction over such matters and has enacted amendments to the existing federal bankruptcy statute,
geuerally to the effect and with the purpose of affording municipal corporations, under certain circumstances, with
easier access to judicially approved adjustment of debts, includingj udicial 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 Official Statement a brief description of the Town, together with certain information
concerning its economy and governmental organization, its indebtedness, current major revenue sources and
expenditures and general and specific 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 app?ximately twelve miles east of the mainland. Fishers
Island is accessiblc only by water or air with ferry servtce operating between the Island and New London,
Connecticut.
The To~u i sprimarily a rural resort area with substantial shopping facilities available at Greenport, at varions
shop. ping centers witlfin the Town, and at Riverheadjust to the west. Some commercial services are available within
the Fown in the hamlets of Southold, Cutchogue and Mattiluck.
Agriculture has been a major industry in the Town since its origins. In recent years, farm crops have
gradually evolved from 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 Island and Block Island Sounds.
Th~ main highways in the Town are New York State Route 25 and the North Road. Rail transportation is
provided b~ the Long Island Rail Road with stations at Mattituck, Southold and Greenport. Ferry sen, ice is also
available between Orient Point, east of Greenport, and New Londonl Connecticut as well as from Greenport to Shelter
Island.
Electric service is provided by' the Long Island Power Authority; gas service is provided by Keyspan Energy
Corporation. Fire protection is the responsibih'ty of volunteer fire and fire protection districts. The To,w, ln provides
its own police protection. In the Village of Greenport, electric service and fire protection are provided b5 the Village.
Government
Subject tn the provisions of the State Constitution, the Town operates pursuant to the Town Law, the General
Municipal Laxv, thc Local Finance Laxv, other laws generally applicable to the Town, and any special laws specificaly
applicable to the Towo. Under such laws, there is no authority for the Town to have a charter, but pursuant to tile
Town Law and other laws generally applicable to hom,,e 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 'fown Board, which consists of five members, elected for
a term of four years, and the Supervisor, who is the chief executive officer of the Town, elected fbr a term of two
years; efl'ective with the term commencing January 1, 2008, the term of office of the Supervisor will be four years.
Such terms are staggered such that 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.
Six independently governed school districts are located wholly or partially within the Town, which rely on
their own taxing powers granted by Ihe State to raise rcvenncs. The schooldistricls use tile To,art's assessmen(roll
as their basis for taxation of property Incated within the Toxvn.
4
Employees
The Town provides services through approximately 216 full-time and 69 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.
Name of Union
Civil Service Employees Assoc ........
Police Benevolent Assoc ....... ii ...... i
~p?roximate Date Contract
mbership Expires
168 12-31-10
47 12-31-09
ECONOMIC AND DEMOGRAPHIC INFORMATION
Population Characteristics
The Town has had a population trend, as compared to the County and the State, as indicated below:
Town of Suffolk New York
Year Southold County State
1970 ..................................... 16,804 1,127,030
1980 ..................................... 19,172 1,284,231
1990 ..................................... 19,836 1,321,977
2000 ..................................... 20,599 1,419,369
2007 ..................................... 22,852 1,504,947
Source: U.S. Bureau of the Census, Long Island Power Authority, New York State Department of Labor.
Median Income of Families
18,241,391
17,557,288
17,990,455
18,976,457
19,297,729
1980 1990 2000
Town $21,013 $43,082 $61,108
County 24,194 53,247 72,112
State 20,180 39,741 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
State 7,496 16,501 23,389
Source: U.S Department of Commerce, Bureau of the Census.
Unemployment Rate Statistics
Unelnployment statistics are oot available for the Town as such. The smallest area for ~vhich such statistics
are available (which includes the ]'own) is the County of Suffolk. The i~?forE~ation set forth belgw with respect ~:o
such County is included for information purposes only. It should pot be Implied f?om the inclusion of such data in
t lis Statement that the Town is necessardy representative of the County or vice versa.
Almual Averages:
2003 ............................
2004 .............................
2005 .............................
2006 ............................
2007 .............................
2008 (2months) ....................
Suffolk New York
County State
4.3% 6.2%
4.5 5.9
4.2 5.0
3.9 4.5
3.8 4.5
4.8 5.3
Source: Department of Labor, STate of New York
Selected Listing of Larger Employers
Name
Approx. No.
Type of Employees
Public School 385
Hospital 350
U.S. Govt. Facility 300
Local Government 285
Life Care Community 204
Public School 175
Nursing Home 154
Public School 108
Mattituck-Cutchogue UFSD .......................
Eastern Long Island Hospital .......................
Plum Island ADC ................................
Town of Southold ...............................
Peconic Landing .................................
Southold UFSD .................................
San Simeon by the Sound .........................
Greenport UFSD ................................
INDEBTEDNESS OF THE TOWN
Constitutional Requirements
The State Const ti lion limits the power of the Town (as well as other municipalities and school districts of
the State) to issue obligations and contract indebtedness. Such constitutional limitations include the fo ow ng, n
summary form, and are generally applicable to the Town and the Bonds:
Purpose and Pledge. Subject to certain exceptions, the Town shall not give or loan any money or property
to or in aid of any individual or private corporation or private undertaking or give or loan its credit to or in aid 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
tobepaidwith nthreefiscalyearperiods, ndebtednessshallbepaid inannualinstallmentscommencingnolaterthan
two years after the date such ndebtedness shal have been contracted and ending no later than the expiration of the
period of probable usefulness of the object or purpose determined by statute or, in the alternative, the weilghted
average period of probable usefulness o]'the several objects or purposes for which it is contracted. No instahment
may be more tha ~ fifty per centum in excess of the smallest prior installment, unless the Town Board provides for
substantially level or declining debt service in the manner prescribed bY the State Legisla. tu(e. The Town is r,e~luir,ed
to prov de an annual appropriation for the payment of interest due durin~the year on ~ts indebtedness ann ~or the
amounts required in such year for the amortization and redemption of itsoonds and notes.
Debt Limit. Pursuaut to the Local Finance Law, the Town has the Power to contract indebtedness for any
Town purpose author zed by the Legislature of the State provided the aggregate principal amount thereof shall not
exceedseven percentum of the average five-year fu valuat on of the taxable real estate located in the Town and
subject to certa n enumerated exclusions and deductions such as debt contracted to provide water, self-liquidating
facilities and cash or appropriations for current debt service The Constitutional method for determining full valuation
consists of dividin the total assessed valuation of taxable real estate for a ~articular assessment roll by the final
equalization rat o ~stab shed for such assessment roll by the State Office of~eal Property Services (the "ORPS").
The State Legislature is required to prescribe the manner by which such ratio shall be determined. Average full
valuation is determined by taking the sum of the fall valuations of the lasl five completed assessment rolls and
dividing such sum by five.
Statutory Prucednre
In eeneral tile State Legislature has authorized the powe~ and procedure for the Town lo borrow aud incur
indebtedne'~s bx the c tact ~e it o~'t lc [ocal Finance Law subject, of course, to the constitutional provisious set l'ortb
above. Thc pox'ver to spend moncy, ]~ox~ ever. generally derives t?,~m other law, including the Tuwn i.aw and General
Municipal I~aw of' thc State.
Pursuant Ia thc Local Finance Law, thc Town authorizes the incurrence of indebtedness, including bonds and
bond anticipalion notes issued in anticipation of such bollds, bt' the adoption of a resolution, approved by at least two-
thirds of the members of the Town Board, which is the finance board of the Town. Certain bond resolutions may be
subject to permissive referendum or may' be submitted to the Town voters at the discretion of the Town Boar& If
the resolutmn is submitted to the Town voters, only a tl~ree-fifths vote of the Town Board is requ red.
The I,ocal Finance I.aw also provides a twenty-day statute of limitations after publication of a bond
resolution, which in effect, estops thereafter legal challenges to the validi .ty of obligations authorized bt' sach bond
resolution except for alleged constitutional violations.
Each bond resolution usually authorizes the construction, acquisition or installation of the ob ect or purpose
to be financed, sets fortb the plan of financing and specifies the maximum maturity of the bo'nds subject to tl~e ~egal
(Coustitution, Local Finauce Law and case law) restrictions relating to tile period o~'probable usefulness witb respect
thereto.
Each bond resolution also autborizes tbe issuance of bond anticipation notes prior to the sale of'serial bonds.
Start tory law in New York permits notes to be r.e, newed each year provided annual ?riucipal reductions are made
and provided that such renewals generally do not extend five years beyond the originaldate ofbprro,Mug. Hgwev,e.r,
ores issued in anticipation of thc sale of serial bunds for assessable unprovements are uot sablect to such tl~e year
limit and nay be re ~ewed subject to annual principal reductions ~br the enlire period of probtible uscfl~lness of the
purpose Jbr'x~bich such notes were originally ~ssued. (Sec "Pawnent and Maturity" under "Constitutional
Requirements." and "Details of Short-Term lnd[btedness Outstanding.")
ltl general, the [~ocal Finance.k:aw coma ns similar provisions providing the Town with power to issne
general ob ~gatmn revenue and tax anttc~pat~on notes and general obligation budget and capital holes.
7
Computation of Debt Limit and Calculation of Net Debt Contracting Margin
(As of May 2, 2008)
Fiscal Year State
Ending Assessed Equalization
December 31: Valuation Rate
2004 ............................... $101,872,561
2005 ............................... 104,228,885
2006 ............................... 105,502,965
2007 ............................... 106,950,027
2008 ............................... 108,292,749
Full
Valuation
1.49% $ 6,837,084,630
1.25 8,338,310,800
1.13 9,336,545,575
1.04 10,283,656,442
0.95 11,399,236,736
Total Five Year Full Valuation ................................................ $46,194,834,183
Average Five Year Full Valuation .............................................
Debt Limit - 7% of Average Full Valuation ......................................
Inclusions:
Outstanding Bonds:
General-Purposes .....................................................
Other ...........................................................
Sub-Total ...........................................................
Bond Anticipation Notes ....................................................
Total Inclusions ........................................................
9,238,966,836
646,727,678
23,540,000
23,540,000
5,979,300
29,519,300
Exclusions:
Appropriations ......................................................... 870.000
Other Exclusions ........................................................ -0-
Total Exclusions ........................................................ 870,000
Total Net Indebtedness Before Issuing the Bonds ................................. 28,649,300
The Bonds .... : . . .: .......... . ........................................ 8,850,000
Less: BANs to be paid t?om bond proceeds ...................................... -0-
Net Effect of Issuing Bonds ..................................................
Total Net Indebtedness After Issuing the Bonds ..................................
Net Debt Contracting Margin After Issuing the Bonds .............................
Perceut of Debt Limit Exhausted ...............................................
8,850,O00
37,499,300
$609,228,378
5.80%
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:
2003 2004 2005 2006 2007
Debt Outstanding End of Year:
Bonds ..................
Bond Anticipation Notes ...
$6,950,000 $6,515,000 $12,299,098 $11,349,098 $25,020,000
14,768,302 12,625,600 11,720,000 8,244,000 6,224,000
Total Outstanding Debt ........ $21,718,302.
$19,140,600 $24,019,098 $19,593,098 $31,244,000
Details of Short-Term Indebtedness Outstanding
Bond Anticipation Notes
Maturity Purpose
06-06-08 Fishers Island Ferry District ..................................
09-05-08 Various Capital Projects ..................................
04-17-09 Various Capital Projects .....................................
Total ................................................
a. To be funded ii'om the proceeds of renewal notes and from available funds.
Debt Service Requirements - Outstanding Bondsa
Fiscal Year
Ending ~
December ) 1:
Amounta
2008
2009 .......................
2010 .......................
2011 .......................
2012 .......................
2013 .......................
2014 .......................
2015 .......................
2016 .......................
2017 .......................
2018 .......................
2019 .......................
2020 ......................
2021 .......................
2022 .......................
2023 .......................
2024 .......................
2025 .......................
2026 ......................
2027 .......................
2028 .......................
2029 .......................
2030 .......................
$1,500,000
3,680,000
799,300
5,979,300
Principal Interest Total
$ 950,559
888,645
827,441
769,388
709,851
654,788
600,927
545,816
492,883
439,412
384,118
335,739
296,631
260,344
223,656
193,906
163,094
I32,281
lo5; 88
81,813
58,438
35,063
11,688
$9,161,669
....................... $1,695,000
1,750,000
1,575,000
1,600,000
1,540,000
1,425,000
1,440,000
1,435,000
1,360,000
1,420,000
1,435,000
995 000
875 000
875 000
675 000
725 000
725 000
725 000
550 000
550 000
550 000
550 000
550,000
Totals ................... $25,020,000
a. Exclusive of the Bonds.
$2,645,559
2,638,645
2,402,441
2,369,388
2,249,851
2,079,788
2,040,927
1,980,816
1,852,883
1,859,412
1,819,118
1,330,739
1,171,631
1,135,344
898,656
918,906
888,094
857,281
655,188
631,813
608,438
585,063
561,688
$34,181,669
9
Calculation of Estimated Overlapping and Underlying Indebtedness
Overlapping Date of Percentage
Units '_Report A~2plicab3e
Applicable Applicable
Fotal Net
Indebtedness Indebtedness
County of Suffblk .................... !0-23-07 3.71% $34,381,249
Villag'e of Grcenporl ................... 05-31-07 100.00 12,132,000
Scho6' Districts.
Fishers Island ............. 06-30-07 100.00 405,000
Greenport ................. 06-30-07 100.00 135,000
MattJtuck-Cutffhogue ...... 12-27-07 98.49 43,424,241
New Suffolk Common ...... 06-30-07 100.00
Oyster Ponds .............. 06-30-07 I00.00
Southold ................. 11-30-07 100.00
Fire Districts (Est.) .................... Various 100.00
SOUFCeS;
$29,783,231
11,398,000
405,000
122,000
39,973,151
150,000 150,000
10,090,681 10,090,681
2,750,000 2,750,000
$ 90,627,490 $81,831,38~
Annual Financial Reports on file with thc Office of the State Comptroller, or more recently published Official
Authorized But Unissued Items
Tim fbllowing Bonds are authorized but unissued:
Date
Authorized P t~[rf2~s_e
Amount
02-25-03
02-2%07
08-28-07
02-26-08
04-22~08
Mattituck Inlet Shore Erosion Study ................................. $ 82,750
Open Space Preservation: Non-Agricultural Land ...................... 22,500,000a
O )en Space Preservation: Agricultural Lands ......................... 4~000,000
Acqn sit on of l,and and Building (Peconic School Property) .............. 11350,000a
Tax Collection Software .......................................... 75,000
Total .................................
$28,007,750
a. nfo be thnded in whole or in part by the issuance of the Bonds.
Capital Program
The Town annually adopts a Capital Budget. Projects may be funded by State .and Federal aid, reseyves,
proceeds of obligations, property taxes or a combination thereof. A summaD of the Capital Budget for 2008 ts set
forth below:
Department 2008
General Towo .................................... $6,727,928
Highway Dept .................................... 110,000
Solid Waste District ............................... 689,000
Wastewater Disposal District ....................... ~00,000
Total ...........................................
Sources
Appropriations ...................................
Grants .......................................
Town Debt .................................
Total ...........................................
$ 9,026,928
$ 186,100
8,840,02~
$ 9,026,828
10
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 Landfil!i The Town ceased accepting waste at its Cntchogue Landfill as of October 8, 1993. Placement
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 To~n to perform certain
maintenance and monitoring functions at the site for up to thirty years. The Town has and bill continue to comply
with said requirements. The ongoing post closure costs are estimated to be between $25,000 and $30,000 per year
from 2008 through 2010. The Town paid $26,390 for such costs in 2007 and will continue to pay these costs in the
future.
Actual costs associated with the cappiug totaled $7,681,720. Financing for closure activities was provided
in part through a grant from 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 w~ll be covered by charges to
future users of the collection facility' and site and future tax revenue.
FINANCES OF THE TOWN
Financial Statements and Accounting Procedures
The 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 available for public inspection covers the fiscal year ended December 31, 2006. In addition,
the financial affhirs of the Town are subject to periodic compliance review by the Office of thc 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 Management's Discussions and Analysis for State and Local Governments". GASB
required the Town to implement this standard for the fiscal year ending December 31, 2003 and the Town has
complied with such requirements. This Statement established new financial reporting requirements for state and local
governments throughout the United States. It 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 was affected.
Fund Structure and A ceo un ts
The Town utilizes fund accounting to record and report its various service activities. A fund represents both
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 funds that account for operations ora commercial nature; and, (3) fiduciary funds
that account for assets held in a trustee 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.
TheTownpresentlymaintainsthe followinggovernmentalfunds: General Fund, Highway Fundand Special
Districts Funds, and the Capital Projects Fund. Fiduciary funds consist ora Trust and Agency Fund. There 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 ac.counting. Under the
modified accrual basis, revenues are recognized when they become susceptible to accrual - that is. when they become
"measurab e" 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 accouuting, that is when the
related fund 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 per n tied to deposit moneys in banks or trust companies located and authorized to do business in the
State. All such deposits, including special time deposit accounts and certificates of deposit, in excess of the amount
insured under the Federal Deposit Insurance Act, are required to be secured in accordance with the provisions of and
subject to the limitations of Section 10 of the GML.
11
The Town may also temporarily invest moneys in: (1) obligations of the United States of America; (2)
obligations ~guaranteed by agencies of the United States of America where the payment of principal and interest are
guaranteed oy the Un ited State s of America; (3) obligations of the State of New York; (4) with the approval of the
New York State Comptroller, in tax anticipation notes or revenue anticipation notes issued by any municipal ty,
school district, or district corporation other than those notes issued by the Town, tself; (5) certificates of
I~articipation issued in connection with installment purchase agreements entered into by political subdivisions of the
~5tate pursuant to Section 109-b(10) of the GML; (6)obligations of a New York public benefit corporation which are
made lawful investments for municipalities pursuant to the enabling statute of such public benefit corporation; or (7)
in the case of moneys held in certain reserve funds established by the Town pursuant to law, in obligations of the
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 were provided
and, in the case or obligations purchased with the proceeds of bonds or notes, shall be payable or redeemab e in any
event, at the option of the owner, within two years of the date of purchase. Unless registered or inscribed in the name
of the Town, such instruments and investments must be purchased through, deliveredto and he d in custody ora 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 ol~the Town are made
in accordance with such policy.
Budgetary Procedures
The head of each administrative unit of the Town is recruited to file detailed estimates of revenues (other than
real property taxes) and expenditures for the next fiscal year w~th the budget officer (Supervisor) on or before August
154. Estimates for each fire district situated within the Town must also ~e filed with the budget officer by this dl~te.
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
file,d with the Town C~¢rk not later than the 30th of September. Subsequently, the Town Clerk presents the tentative
bunget 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
in the Town's official newspaper, on the preliminary budget is generally required to be held on the Thursday
immediately following thc general election. At such hearing, any person may express his opinion concerning the
[areliminary budget; however, there is no requirement or provision that the preliminary budget or any portion thereof
t~e voted on by members of the public. After the j~ublic hearing, the Town Board may further change and revise the
preliminary budget. The Town Board, by resohmon, adopts the preliminary budget as submitted or amended no later
than November 20th, at which time, the preliminary budget becomes the annualbudget of the Town for the ensuing
fiscal year. Budgetary control during the 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 2007 and 2008 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, the Supervisor is responsible for the Town's accounting and financial reporting activities. In addition, the
Supe ~sor ~s also the Town s budget officer and must therefore prepare the annual tentative budget for submission
to the Town Board. Pursuant to Section 30 of the Local Finance Law, the Supervisor has been authorized to issue
or renew certain specific types of notes. As required by law, the Supervisor must execute an authorizing certificate
which than becomes a matter of public record.
The Town Board as a whole serves as the finance board of the Town and is responsible for authorizing by
reso ut on, all material financial transactions such as operating and capital budgets and bonded debt.
Town finances are o~erated primarily through the General and Special Revenue Funds. The General Fund
receivesmostofitsrevenuetromrea[propertytaxand Stateaid. Currentoperatingexpendituresarel~aid fromthese
funds subject to available appropriations. The Town also has refuse, sewer an~t wastewater distr~cts, which are
accounted fur within separate funds. The primary sources of income for these districts comes from special
assessments levied against district properties 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 I)ecember 31) tier operating an0 reporting purposes.
12
Revenues
The Town receives most of its revenues from a real properly 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 Property Taxes
See "Real Property Tax Information", herein.
State A id
The Town receives 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
appropriation for State Aid to municipalities will continue, either pursuant to existing formulas or n any form
whatsoever and, in any event, if appropriated and apportioned to the Town payment can be made only fsuch monies
are available therefore. The State ~s not constitutionally obliged to maintain or continue such aid. See Appendix A.
Expenditures
The maj~or categories of expenditure for the Town are General Government Support, Public Safety.
Transportation, [conom~c Assistance and Opportunity Home and Community Services, Culture and Recreation
Employee Benefits and Debt Serv ce. A summary of the expenditures for the five most recent y 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 Employees'
Retirement System ("ERS") or the New York State an,d Local Police and Fire Retirement System ("PFRS"). (Both
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 emp oyees
to contribute and t,h,e benefits to employees ,a, re governed by the New York State Ret rement System antiSocial
Security Law (the Retirement System Law' ). The Retirement Systems offer a wide range of plans and benefits
which are related to years of service and final average salary, vesting of retirement benefits, death and disabi ty
benefits and optional methods of benefit paxments. All benefits generally vest after fiveyears of credited service.
The Retirement System Law generally provides that all l~articioatin~ eml~lovers in each retirement s stem are 'oint]
and se. verally liable for any unfundi~dinvestments. Such a'moufi'ts are collected through annu~'l bill ng~J to a~
}~artlclpating employers. Generally, all emp]oyces~except certain part-time employees,participate in the Retirement
~ystems. The Retirement Systems are non-coutrit~utory with respect to members hiredpr or to Ju y 27, 976. A I
employees who 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.
A pension reform bdl was s~gned by the Governor ~nto Law as Chapter 49 of the Laws of ~003 which
changed the cycle of billing to match 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 xvill be based on the value of the pension fund on the prior April 1 instead of the
following April I so that the Town will be able to more accurately include thc cost of the contribution into its budget.
Chapter 49 requires the Town to make a minimum contribution of 4.5% of navroll ever,/' vear nc ud n~ years n
h ch the nvestment performance of the fund wou d make a ower contribution possible.
On July 20, 2004 the New York State Legislature passed a bill amending the General Municipal Law, Local
Finance Law and the Retirement and Social Security Law. On July 30 2004) the Governor signed the new retirement
system legislation into Law as Chapter 260 of the Laws of 2004. The bill ~ives the emnlover the ontion to move the
annual payment date for contributions from December 15t~ to February 1 ,t, e~ffective Dec'em~ber 15 2'004. It iucreases
from five to ten years, the maximum amortization period of the portion of employer contributions that exceeds 7%
of payroll for the 2004-2005 fiscal year of the Retirement System (April I - March 31)
For tile payment due December 15, 2008, it is estimated that the contribution will be approximately I 1.5%
ofpayrolI.
The ~ own paid its retirement obligation in full on December 15, 2007 and has included its total obligation
for the 2008 fiscal year in its current budget. The Town does not plan to amortize its relirement syslem obligfitions.
Whi!e tile Towll is aware oFthe pl)tential negative impact on its budget anti will take the appropriate steps
to hudt,.ct accordin¢lv fi~r the increase lherc call be no assurance that its fin,Sncial pusition will not be nc~mti,/clv
impact~cd as a restl~ ;>t'the potcnli:d in'crease itl such cn;~i~ibutions. ' ' ~ '
13
Contributions to the Retirement Systems
Fiscal Year Amount
Ending of
December 31: Contributiou
2003 ..................................... $ 684~617
2004 ..................................... 1,670, 102
2005 .................................... 2,085,137
2006 .................................... 1,837,992
2007 ..................................... 1,947,914
2008 (Budget) ................................ 2,033,160
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 accom~ing rule
that will require governmental entities, such as the Town, to acco,u, nt 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 ~:~llowing dates, based on the size of government measurcdby annual
revenue:
Annual Revenue
Effective for Fiscal Year Ending After:
Greater than $ t 00 million
Between $10 million and $100 million
i,ess than $10 million
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 reducingretiree health benefits or increasing health care cSntributions
received or paid by retirees below the level of beuet'its or contribution s affnrded to or rerL.uired from active employees
since the implementation of Chapter 729 of the Laws of 1994. This protection from umlateral reduction of benefits
has been ,~xtended anuually and continued through May 15, 2009 pursuant to Chapter 43 of the Laws of 2008.
[ egislatix e attempts to provide similar protection to retirees of other local units of.government in the State have not
succeeded 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-emplo[ment benefits," meaning other than pension
benefits disability benefits and OPEB consist primarily of health car~ benefits ~nd may include other benefits s~lch
as disability benefits and life insurance. Until now these benefits have generall5 been administered on a pay-as-5 ou-
go basis ai{d have not been reported as a iability on governmenta financ a statements.
GASB 45 will require municipalities and school districts to account for OPEB liabilities much like they
alrcadv account for pension liabilities, generally adopting the actuarial methodologies used for pensions, witl~
adjust[nents for thc different characteristics of OPEB and the fact that most municipalities and school districts have
not set aside an), funds against this liability. Unlike GASB 27 which covers accotmting for pensions, GASB 45 does
not require municipalities or school districts to report a net OPEB ob gat on 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 [~resent value
of future benefits being earued by current employees) plus (b) amortization of the unfunded accrued l iabtlity (benefits
ah'ead¥ earned by current and former employees but notyet provided for), using an amortization period of not more
than 3D years. Ifa municipality or school district contri~0utes 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.
The actuarial studv is in !he process of being completed and is expected to be submitted to thc Toxw~ in the
next several months. The~Town s ARC is estimated to be approx0nately $4.5 million and its unfunded actuarial
accrued liability is estimated to be approximately $43 million. 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.
Actuarial Valuation will be required every 2 years for OPEB plans with more than 200 members~ ever5' 3
years if there are less than 200 members.
14
REAL PROPERTY TAX INFORMATION
Real Property Taxes
The Toxin derives a significant portion of its annual revenue through a direct real property tax.
The fohuwmg table nrcsents lhe total tax lew. by purpose, with ad}ustments and collection perlbrntancc for
each (¥the last five fiscalydars. ~ ' ~
Tax Levy and Collection Record
Fiscal Year Ending December 3 I:
2004 2005 2006 2007 2008
Total Tax Levy ................ $79.909.681 $89, 34,66~ $103,216,661
Amount Collected ............. 7715951985 86,628,595 60,650,000a
Returned to County
Amount .................... 2,313,696 2,138,597 3,106,068 2,928,091 42,566.661a
Percentage .................. 2.90% 2.39% 3.45% 3.0 / ¢% 41.24%a
Uncollected at End of Year
of Levy ................... None None None None NA
a As of April 21, 2008
$89,495~573 $97,216,091
83356}976 94,288,000
Tax Collection Procedure
Property taxes for the Town are collected by the Town tax receiver. Such taxes are due and !0ayable in equal
installmems on December 1 and May 10 but may be paid without penalty by January 10 and May 31 respectively.
The penalty' added to dehnquent taxes is one-twelfth the rate of ~nterest detennmed-by the State Commtss~oner ot
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 tbe qtiarter-yt:ar ending on the immediately preceding June 3D.' The
rate is effective for a twelve month period commencing August 1 eaclff 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 5'ear. 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:
2004 2005 2006 ~007 2008
$136.65 $139.73 $140.37 $151.02 $160.22
4.53 5.43 4.90 3.99 7.84
31.12 38.37 40.68 39.63 41.74
General - Townwide ................
General - Outside Village ............
HigMvay ......................
Laree Taxable Properties
20°08 Assessment P~olla
Name
Peconic Landingat Southold .......................
LILC?,,, EIPA, ~arketspan, Keyspan .................
Village of Greenport-Power Plant ....................
Fishers Island Dev. Corp ...........................
Robins Island ltolding LLC .........................
Alan Cardinale ..................................
North Fork Bank .................................
Damianos, Herodotus ..............................
New York Telephone .............................
Levin Family Ltmited Partnership ....................
Anderson, Bradley & Francesca .....................
Norris Susan ....................................
Laure L nks & Country Club .......................
Kimogenor Pt Co .................................
Driftwood Cove .................................
Assessed
· 'vpe Valuation
Commercial $ 1,707,704
Uti!ity 1,559.020
Utifity 5851000
Residential Development 363,200
Private Lands 330,500
Shopping Center 285,500
Bank Budding 268,531
Vineyard 234,000
Utility 218,496
Motel& Restaurant 163,950
Farmland & Private Lands t21,400
Various Properties l 11,800
Country Club 96,300
~o-Op' 94,600
Co-Op 90,000
$6,230.001b
a. Assessment Roll established in 2007 for levy m~d collection of taxes during 2008 kiscal Year
b. Represents approximatel? 5.75 '/o of thc total taxable assessed valuation of thc To 'n Ior 2008.
15
LITIGATION
The Town is subject to a number of lawsuits in the ordinary conduct of its affairs. For the most part any
potential adverse decisions in such suits, either individually or in the aggregate, are uot likely to have a material
adverse effect on the Town.
There are certain matters worthy of special mention:
Stanton. at al. v. Town of Southold - This is an action in iuverse condemnation and nuisance by forty-two
propert3~s,~l~ in the form of erosion caused by a Town-owned jetty. The Town is
engaged in studies to determine the issues surrounding the alleged erosioh, 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 extensive expert testimony. Tile nature and extent of damages, if' any, are unknown at this point.
Insurance coverage may be available fo?otential liability for alleged compensatory damages. The Town has denied
an),' wrongdoing and intends vigoronsl3 to defend any f~rther prosecution of this action.
Quad Enterprises, et al. v. 'Fo~vn of Southold - This action arises from the ~,own Board of the Town of
Southold's alleged refusal to approve a change of zone applicatiou filed by plaintiffs, x~ hich sought substantially to
iucrease the zoning density of a parcel of landowned by a developer plaint'iff. Plaintiffs assert claims under the Fair
Housing Act, Americans with Disabilities Act, State and Town Law, alleging housing discrimination against senior,
handicapped and disablcd residents, who are also named as "Jane Doe" plaintiffs. Plaintiffs seek declaratory relief
granting their desired zoning, as well as compensatory and punitive damages in the-amount of $60 million ( $5
million for each of the six federal causes of ac~,t?on). Insurance coverage may be available for potential liability fbr
alleged compensatory damages. Fact and expert discovery is proceeding. ]'he Town has denied all wrongdoin~ and
intends vigorously to contest these claims.
Notices of Claim - One oossible noteworthy Notice of Claim has been filed against thc Town relatiug to
police m~-l~-t~ice of C'laim, the plaintiff demands $5 million ill damages lbr physical, emotional and c~vil
righls injnrics rc]a,cd to an alleged incidenl, beliex ed to be an arrest by Town police officers on or about February
~ 1,2007 and prior arrests. Due to the vague nature o~'the allegations, the To,,~ n is uot aware of any details of this
put ~orted claim, and intends vigorously to'contest it both prior to and after tile institution cfa lawsuit. As of the date
of t ~ s Offic a Statemeut, no awsu t ~as been scrvcd upon tm Town.
BONDHOLDER RISKS AND MARKET FACTORS AFFECTING FINANCINGS
OF THE STATE AND MUNICIPALITIES OF THE STATE
There are certain poteutial risks associated with an investment in the Bonds, and investors should be
thoroughly ,f]miliar with this Official Statement, iuch?no its appendices, in order to make an informed investment
decisiou, ln'~estors should consider, ill particular, the fol]'~wing factors:
Thc Iown's credit rating could be affected by circumstauces beyond the Town's control. Ecouomic
conditions such as the rate of unemplownent and inflation, temfination of commercial operations by corporate
taxpayers and employers, as well as na6.1ral catastrophes, c6uld adversely affect the asses]ed valuation of Town
prqpcrty and its ability to maintain fund balances anti other statistical indices commensurate with its current credit
rating. Accordingly, a decline iu the Towu'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
call be no assurance that a market shall have been established, maintained and be in existence for the purchasc and
sale of any Bonds. The price or principal value of the Bonds is depende~lt on the prevailing level of interest rates.
If interest rates should increase, Ihe price cfa bond or note may dechne causing the bond or notcholder to potentially
incur a capital loss if su'ch bond or uote is sold prior to its matnri .ty.
The financial condition of the Town as well as tile market for tile Bonds could be affected by' a variety of
fhctors, some of which are beyoud thc Town's control. There call be no assurance that adverse eveuts in thc State,
including, for example, the seeking by a municipality of remedies pursuant to the Federal Bankruptcy Act or
otherwise, ;vill not occur which might affect the market price of and the market for the Bonds. Ifa sign ificaut defau It
or other financial crisis should occur in the affairs of the State or any of its agencies or political subdivisions thereby
further impairing the acceptability of obligations issued by borrowers witlnn tile State, both the ability of the Town
to arrange for additional borrowings and the market for and market value of outstanding debt obligations, including
thc Bonds, could be adversely affected.
Future alneudmcnts to applicable statutes affecting the treatment nf interest paid on municipal bomls,
including the Berets, For income taxation purposes cotlld have ao adverse effect on the market value of the Bonds
(see "1 ax Ma~icrs' hcrciu)
16
TAX MATTERS
Opinion of Bond Counsel
In the opinion of Hawkins Delafield & Wood LLP, Bond Counse to t re Town, under existing statutes and
court decisions and assuming continuing compliance w th certain tax cert fications described herein, ti) interest on
the Bonds is excluded from gross income,,for F,e, deral income tax purposes pursuaut to Section 103 of the Internal
Revenue Code of 1986 as amended (the Code ), and ( ) interest on the Bonds is not treated a,s a preference item
n calculating the a temative minimum tax imposed on individuals and corporations under the Code; such interest,
however, is included in the adjusted current earn ngs of certain corporations for purvoses of calculatin~ the
alteruative minimum tax imposed on such corporations. The Arb tra~e and Usc of Proceeds Certificate of th
(the "Tax Certificate"). which will be delivered concurrent y with th~ de very of the Bonds wi I conta n pr~o~iTs(i)~n~
and procedures relating to compliance with applicable requ rements of the Code. In rendering ts opinion, Bond
Counsel has relied on certain representations, certifications of fact, and statements of reasonable expectations made
by the Town in connection withthe Bonds, and Bond Counsel has assumed comp ance by the Town with certain
provisions and procedures set forth in the Tax Certificate relat ng to compliance w~th applicable requirements of the
Code to assure the exclusion of interest on the Bonds from gross income under Section 103 of the Code.
lu addition in the opinion orB )nd Counsel to the Town, under existing statutes, interest on the Bonds is
exeinpt f~co~ [~ersonal inco,,me taxes of New York State and its political subdiwsions, inc ud ng The City of New
York. ~ee ~vtiscellaneous below for a discussion ofcerta n litigation that may relate to this New York State tax
cxcmptmn.
Bond Counsel to the Town expresses no opinion regarding any other Federal or stale tax consequences with
respect to the Bonds. Bond Counsel renders its opinion tinder existing statutes and court decisions as of the issue
date, and assumes no obligation to update its opin or after the iss? date to reflect any future act on, fact or
circmnstance, or .change in law or interpretation, or otherw se Bond Counsel expresses no dp n o r on the effect o '
any action hereafter taken or not taken in reliance upo 1 an opin on of other counsel on the exclus on from gross
income for Federa ncome tax purposes of interest oil the Bonds, or on the exemption from state and local tax law
of interest on the Bonds.
Certain Ongoing Federal Tax Requirements and Certifications
]'he Code establishes certain significant ougoing requirements that must be met subsequent to the issuance
and ~teliv'cry of the ~onds in order that interest on such Bonds be and remain excluded from gross income tnder
Section 103 of the Code. These requirements include, but are not limited to requirements relatiog to use and
expendi!,ure of gross proceeds oftheBoods, yield and other restrictions on investments of gross proceeds, and the
arbitrage rebate reqmrement that certain excess earnings on gross proceeds be rebated t > the Federal governmel t.
Noncompliance with such requirements may cause interest on the Bonds to become included in gross income for
Federal income tax purposes retroactive to their issue date rrespectivc of the date on which such noncompliance
occurs or is discovered. Tile Towu ill executing the Tax Cert ficate, w cert fy to the effect that the Town 'Mil
cnmplv with the provisions and procedures set forth therein and that it will dc', and perfbrm a acts and things
}~,~Cdeess"ary or desirable to assure tire exclusion of interest on the Bonds fi'om gross income under Section 103 of'the
Certain Collateral Federal Tax Consequences
The following is a briefd iscussion of certain collateral Federal income tax matters with respect to the Bonds.
It does not purport to address all aspects of Federal taxation that may be re ex, ant to a part cr ar owner ora Bond.
Prospective investors, l~articularlv those who may be subject to spec ru es are adv scd lo consult their nw 1 ax
advisors regarding the Federal ta~ consequences of owning and disposing of thc Bonds.
Prospective owners of the Bonds ?odd be aware t~at tm oxvnersh p of such obligations may result in
collateral Federal income tax consequences to various categories of perso is such as corpnrations (including S
corporations and fbrei~n corporations) financial institutions, property a id cast a ty and life insurauce compan cs,
!ndlvidual recipients o~Social Security and railroad retirement benefits, ndividuals otherwise eligible tbr lhe earned
raceme tax credit, and taxpayers deemed to have incurred or cent nucd Idcbtedness to pt rchasc or carry obligatious
the interest on which is excluded from gross income for Federal income tax purposes, hlterest on the Bonds may bc
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 Disconnt
Original issue disconnt" ("OLD") is the excess (>['tile sum of all amounts payahlc al die stated maturitx eta
Boud (excluding certain ~'qualificd stated iutercst" that is nnconditio[~ ~ 3' p(vuhlc at lez~st annt f y at pres(r bed
niles) oxer Iht issnc price ufthat maturit3. In general, thc qssue price ' o~ a mhturily mca s t e 5 'st price at which
a subslant~a[ amount of thc Bonds c),f that malurity was sold (cxcludiug sales lo bo ~d tot ses. b c kers t r sim I ir
pcrfiOllS :toting m thc capacity as underwriters, placcmenl ugents, or xvho[csulcrs). In gCllCl al, lhe issuc pr/ce fi,r each
17
maturity of the Bonds is expected tu be the initial public offering p,~'!~e set forth in,!his Official Statement. Bond
Counsel fi rt ~er s of thc opinion that. for any Bondhaving dID (a l)lscotmt Bond ), OlD that has accrued al~d is
~PnrOl~erly allocable to tile ox~ners of the Discount Bond under Section 1288 of the Code is excludable f?otn gross
c6tne for Federal income tax purposes to the same extent as other interest on the Bonds.
In ge ]era, u ]der Sect o ~. 1288 of the C de O[1) on a Discount Bond accrues under a constant Geld method,
based on periodic Compounding of interest over prescrib, ed accrual periods using a compounding rate deternfined by
reference to the yield on that D~scounl Bond. An owner s adjusted basis in a Discount Bond is increased by' accrued
dID for purposes ofdetermin ng ga n or loss on sale, exchange, or other disposition of such Discount Bond. Accrued
OlD may be taken into account as an increase in the amount of tax-exempt income received or deemed to have been
receivedfor purposes of determining various other tax consequences of owning a Discount Bond even though there
will not be a corresponding cash payment.
Owners of D scount Bonds should consult their own tax advisors with respect to the treatment of ori[ginal
ssue d scount for Federal income tax purposes, including various special rules relating thereto, and the state and mcal
tax consequences of acquiring, holding, and d sposing of Discount Bonds.
Bond Premium
In general, if an owner acquires a Bond for a purchase price (excluding accrued interest) or otherwise at a
tax basis that reft?ts aprem t m over th,e, st m of all amounts payable on the Bond after the acquisition date
(excludingcerlan qualified stated interest thatisunconditionallypa[ableatleastannuallyatprescribedrates),that
prem um constitutes "bond premium" on that Bond (a "Premium Bond"). In general, under Section.171 ofth,e ,Codei
an owner of a Premium Bond mt st amortize the bond prem um over the remaining term of the Premium Bona, based
on the owner's yield over the rema n ]g tern] of the Premium Bond determined based on constant yieldprinciples
(itl certa ] cases ~vo v ]g a Premium Bond callable prior to ts stated maturity date, the amortization period and yield
may be required to be determined on the basis of an earlier call date that results in the lowest yield on such Prem um
Bond). An owner ora Premimn Bond must amortize th,e bond premium by offsetting the qgalified stat,ed lute[est
allocable to each interest accrual period under the owner s regular method of accounting against the bond premtum
allocable to that period. In the case of a tax-exempt Premium Bond if the bond premium allocable to an accrual
period exceeds t le qualified stated interest a locable to that accrual period the excess is a nondeductible loss. Under
certain c rcumstances, the owner of a Prem um Bond may realize a taxable gain upon disposition of the Premium
Bond even though it is sold or redeemed for an amount less than or equal to the owner s anginal acqms~t~on cos.
Owners of any Premium Bonds should consult their own tax advisors regarding the treatment of bond premium
Federa income tax l~urposes, lc ud ng various special rules relating thereto, and state and local tax consequences,
in connection with the acquisition, ownership, amortization of bond premium on, sale, exchange, or other disposition
of Premium Bonds.
Information Reporting and Backup Withholding
ldformation reporting requ rements apply to interest on tax-exempt obligations, including the Bonds. In
,g, eueral, such requ rements are sat stied if the interest reS:~ ent co,?_pletes, and provides thee payor wtth. a Form W-9,
' Request for Taxpayer Identification Number and Certittcation, or unless the recipient is one of a limited class of
exem t reci lents including corporations. A recil~ient not otherwise exempt from reformation reporfing who fails
to sat~fy th~Pin format on report ng requirements w 1 be subject to "backup withholding "whicl] means that the p, ayor
is required to deduct and w th,hold a,t, ax from the interest payment calculated in the manner set forth in tile Code.
For the foregoing purpose, a payor generally refers to the,person or entity from whom a recipient receives its
pas. ments of interest or who collects such payments on behalf of the recipient.
If an owner purchasing a Bond through a brokerage account has executed a Form W-9 in connection with
the establishment of such account, as genera ly can be expected, no backup withholding should occur. In any event,
backup withholding does not affect the excludability of the interest on the Bonds from gross income for Federal
ncome tax purposes. Any amounts withhe d pursuant to backup withholding would be allowed as a refund or a credit
against the owner's Federal income tax once the required information is furnished to the Internal Revere e Service.
Miscellaneous
Tax legislation, administrative action taken by tax authorities, and court decisions whether at the federal or
state level, may adversely affect the tax-exempt status of interest on the Bonds under Federal or state law and could
affect the market price or marketability of the Bonds.
Prospective purchasers of the Bonds should be aware that the United States Supreme Court is in the process
of rev ex~ingDavis v. Dep't of Revenue oftheFinanceandAdmin Cabinet, 197 S.W. 3d 557 (Ky. App. 2006), cert.
granted 1275.ct.2451 (2007)(mem.) a decision of a Kentucky appellate court, which held that provisi~)ns of
~entucky tax law that provided more favorable income tax treatment for holders of bo.n, ds issued b}, Kentucky
municipal bond issuers that] for holders of non-Kentucky mu tic pal bonds violated the Commerce C~ause of the
United States Const tut on New York statutes provide more favorable New York income tax treatment for holders
of bonds issued by the New York State and its political subdivisions, inc ud ng the Bonds, than for bonds issued by
18
other states and their political subdivisions~, If the United States Supreme Court were to affirm the holding of the
Kentucky appellate court subsequent New York judicial decisions or legislation des gned to ensure the
constitutionality of New York tax law could, among other alternatives, adversely affect the New York State tax
exemption of outstanding bonds, including the Bonds to the extent constitutionally permissible, or resu t ~ thc
exemption from [?ersonal income taxes imposed by the New York State and its political subdivisions, including The
City of New YorK, of interest on certain bonds issued by other states and their political subdivisions either ofw ~ c ~
actl'ons could affect the market price or marketability' of the Bonds. -
Prospective purchasers of the Bonds should consult their own tax advisors regarding the foregoing matters.
DOCUMENTS ACCOMPANYING DELIVERY OF THE BONDS
Absence of Litigation
Upon delivery of the Bonds, the Town sha furn sh a cert ficate of the Town Attorney dated thc date of
delivery of the Bonds, to the effect that there is no controversy or litigation of any nature pend[r~g or threatened to
restrain or enjoin the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the
validity of the Bonds or any of the proceedings taken w ith respect to the issuance and sale thereof or the application
of moneys to the payment of the Bonds, and further stating that there is no controversy or litigation of any nature now
pending or threatened by or against the Town wherein an adverse judgment or ruling could have a material adverse
impact on the financial condition of the Town or adversely affect t-he power of the T~wn to levy, collect and enforce
the collection of taxes or other revenues for the payment of the Bonds, which has not been disclosed in this Official
Statement.
Legal Matters
Legal matters incident to the authorization issuance and sale of the Bonds will be subject to the final
approving opinion of Hawkins Delafield & Wood LLP, Bond Counsel. Such opinion will be avmlable at the time
of delivery of the Bonds and ':,,ill 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 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. Said opinion shall also contain further statements to the effect
that (a) the enforceability ofrigh, ts or remedies with respect to such Bonds may be limited by bankruptcy insol','ency,
or other laws affecting creditors rights or remedies heretofore or hereafter enacted, and (b) said law firm has not been
requested to examine or review and has 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 be furnished or disclosed to
purchasers of the Bonds, and expresses no opinion with respect to such financial or other information, or the 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 Town Supervisor to the effect tha{ as of the date of this Official Statement mid at all times subsequent thereto.
up to and including the time of delivery of the Bonds, this Official Statement did not and does not contmn any untrue
statement ora material fact or omit to state a material fact necessary to make the statements herein, in the light of
the circumstances under which they were made, not misleading and further stating that there has been no adverse
material change in the financial condition of the Town since the date of this Official Statement up to and including
the time of delivery of the Bonds, and having attached thereto a cop3~ of this Official Statement (ii) a Certificate
signed by the Town Supervisor evidencing payment for the Bonds (iii) a Signature Certificate evidencing the due
execution of the Bonds, including statelnents that (a) no litigation of any nature ispending or threatened, restraining
or enjoining the issuance and delivery of the Bonds or the levy and collection of taxes to pay the p,rincipal of anc]
interest thereon, nor in any manner questioning theproceedings and authority under which the Bonds v, ere authorized
or affecting the validity 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 authority or proceedings
for the issuance of the Bonds have bedn repealed, revoked or rescinded; and (iv) an Arbitrage andUse of Proceeds
Certificate executed by the Town Supervisor, as described under "Tax Matters".
19
DISCLOSURE UNDERTAKING
C, . Tjfis Official Statement is in a form "deemed final" by the Town for t ~e purposes of Securities and Exchange
omm~sslon Rule 15c2-12. At the time of the delivery of the Bonds, the Town will rovide
Undertaking to Provide Continuing Disc osure" (the "Undertakine,,) Said Un dertP~k in c, ~l e~c.u.[.e.~l, c °PY q.f.~ts
agreement or contract of the Town for the benefit of ho ders of and~o%ners of bene~-c'-i~'i~' nt-~:e~t~sni~l~ee~on~V(~sn, ~g
provide, or cause to be provided:
(l) during any succeeding fiscal year of the Town in wh c,h, the Bonds are outstanding, to (a) each nationally
recognized municipal securities informat on repository (NRMSIR") and (b) the New York State lnformatioh
Depository, if created, ("SID"), (i) certa n annual financial information, in a form generally co,¢sistent wi!,h
the information contained or cross referenced in this Official Statement
· - .... ,,un,t,!er the headings: The,,T,o, wn
'Economic and Demographic Information , Indebtedness of the Town Finances of tfi '
Pro, p%rty Tax Information", and "Litigation"; and in A~oendix A on or vr~or to the I gOth clTvTc~°~2~';. R~e~l
en~?,or?ch fisca, l year, including(ii) the audited financial statement, ii'any for th~¢~'~'~i~7~'~'22;g.,~
ox me,)o,w~n, um~ss such audited financial statement, if any, shall not theft'be availaVble in
unaumteo nnanmal statement ?hall be providegl and an audited financial statement shall be
i~eRMSIR and to the SID within 30 days after ~t becomes available and in no ex;~t later than 360 ~3~s° ae~
end of each fiscal year;
(2) to (a) each NRMSIR, or to the Mu ficipal 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:
(i) principal and interest payment del nquencies;(ii) non-payment related defaults; ( ) unschedt ed draws
on debt service reserves reflecting financia d fficu ties; (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
of Bondholders; (viii) bond calls; (ix) def'easances; (x) re ease substitution, or sale of property securine
repayment oftheBonds and (x) rating changes.
The Town may provide notice of the occurrence of certain other events, in addition to those listed above, if
it determines that any such other event s material with respect to the Bonds; but the Town does not undertake to
commit to provide any such notice of the occurrence of any material event except those events listed above; and
(3) to (a) each NRMSIR~ or to the MSRB, and to (b) the SID, n a timely manner, notice ora failure to provide
the annual financial reformation by the date specified.
The Town's Undertaking shull rema'n Jn full t%rce and effect unti such time as the principal of, redemption
premiums, if any and interest on the Bonds shall have been paid in full. The sole and exclusive remedy for breach
or default under the Undertaking is an action to compe spec fic performance of the undertakings of the Town, and
no person or entity, including a ho der of the Bonds, shah be entitled to recover monetary damages thereunder Under
any circumstances. Any failure by the Town to comply with the Undertaking will not constitute a defanlt with respect
to the Bonds.
The Town reserves the right to amend or modify the Undertaking under certain circumstances set forth
therein provided that any such amendment or lnodification will be done in a manner consistent *vith Rule 15c2-12
as then m effect.
The Town is in compliance with all previous undertakings made pursuant to Rule 15c2-12.
BOND RATING
The Bonds maturing in the years 2009 through 2018, inclusive are rated "AaY' by Moody's Investors
Service. The Bonds maturing in the years 2009 through 2018, inc us ye, are NOT insnred by Financial Security
Assurance Inc.
Year .,~M, ~oo. dy's lpv~t.o~rs. Se,rvi~e ln~c.., will assign its n/unlcipal bond rating of "Aaa", the Bonds maturin~ in the
s zwv mrougn zulu, mc~uswe v, th the understanding that upon delivery of the Bonds. a policy insu~ng the
payment when due of the principal of and nterest on the Bonds maturing n the years 2019 thi'ou h 2(530 inclusive
w il/be issued b3 Financial Security Assurance Inc. - g
Such ratings reflect only the views of such rating agency, and any desired explanation of the significance of
such ratings shou~-d be obtained fron suc~ rating agency. Generally. a rating agency bases its ratin~,s on I]c
information and materials furnished it and o ~ nvestigat on, stud es and'assumptions by the rat g agencyY There is
no assnrance that a particular rating w app y for any ~iven period of time or that Jt wiII not be lowered or v, ithdrawn
entirely iff in the judgment of the agenc'~ originalTy establishing the r~t ne, circumstances so warrant. I'he
underwriter has undertaken n~), respons b !!ty to bring to t ~e ~ttentlon of the ~olders of the Bonds any Crooosed
revisions or withdrawals. Any .townwznd rcvisions )r w ~drawals of such rathws, could have an' arJverse cft~ct on
the market pr!ce oI the Bonds. Such ratings should not be taken as a recommen~alion to buy or hold the Bonds
20
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
Additional information may be obtained upon request from the office of the Town Comptroller, Town of
Southold, Town Hall, P.O. Box l 179, Southold New York 11971, telephone number 631/765-4333, or from the
office of Mun stat 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_oDin ion or estimates, whether or not expressly
so stated, are intended as such and not as representations of fact. No 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 SOUTHOI,D, NEW YORK
May 13, 2008
By: s/s SCOTT A. RUSSELL
Town Supervisor and Chief Fiscal Officer
21
2005
ASSETS
Cash and luvestments $ 9,292,437
Cash - Restricted 0
Taxes Receivable 0
Accounts Receivable 24,533
Due From Other Funds 176,390
Due From Trust Funds 68
State and Federal Aid Receivables 8 f,849
Due From Other Governments 1,867,136
Supply Inventory. 1,204
Prepaid Expenscs 498,344
Deposit 0
'Fotal Assets $ 11,94 ! ,961
Balance Sheet
General Fund
Fiscal Year Ending December 31:
2006
8,339,472
0
0
22,346
190,208
0
110,153
2,075,955
2,099
426,200
0
2007
$ 21,437,689
0
(1
17,263
74,500
0
62,377
826,834
1,275
460,951
0
$ 22,880,889
LIABILITIES AND FUND EQUITY
Accounts Payable $ 627,049
Due to Other Funds 1,888,241
Due to Other Governments 393,570
Due to Trust Funds 7,044
Due to Compnent Units 0
Deferred Revenues 3,018,595
701,018
1,205,516
243,292
0
3,619,307
$ 830.531
2,974,237
8,925,786
0
0
5,066,541
Total Idabilities 5,934,499 5,781,734 17,797,095
4,009 13,284 193,041
1,105,879 513,329 588,614
i,204 2,099 0
498,344 426,200 0
2,657,200 2,185,000 1,816.000
1,740,826 2,244,787 2,486.139
Fund Balances - Reserved:
Encumbrances
lnsurat~ce claims
Supply Inventory
Prcpaid Expenses
Fund Balauces - Unreserved:
Designated - Ensuing Year's Budget
Undesignated
5,384,699
Total Fund Eqaity 6,007,462
Total Liabilities and Fund Equity $ I 1,941,96I $ 11,166,433
Sources: Audited Financial Rcports of the Fown (2005 and 2006) and Annual Financial Repor~ (2007)
Fable itself NO I audited.
unaudited.
5,083,794
$ 22,880,889
Statement of Revenues, Expenditures and Changes in Fund Balance
General Fund Town Wide
Fiscal Year Ending December 31:
2003 2994 2005 2006 2007
Real Property Taxes $ 13,247,572 $ 13,962,268 $ 14,608,674 $ 14,872,736 $ 16,205,91I
Other Real Property Tax Items 51,311 65,720 68,807 85,808 92,606
Non-Property Tax Items 401,035 415,071 415,071 616,670 683,873
Departmental Income 315,289 344,217 345,956 477,849 411,790
Intergovernmental Charges 202,917 296,050 252,558 316,049 329,202
Use of Money & Property 201,702 254,142 489,796 684,166 764,912
Licenses & Permits 188,480 214,461 249,178 258,794 253,494
Fines & Forlbitures 107,084 107,315 140,192 171,763 155.477
Sale of Propert> & Comp. ~br Loss 56,893 405,077 93,290 95,057 148,283
Miscellaneous Local Sources 133,346 128,027 432,269 146,260 185,945
State A id 2,225,401 2,974,027 2,637,870 2,725,177 2,412,869
FcderalAid 146,574 160,337 174,348 _ _ 2~28.491 145,568
17,277,604 19,326,712 19,908,009 20,678,820 21,789,930
Expenditures:
General Gox eminent Sopport 3,751,,~69
Public Salbty 6.033,207
Public llcalth 32,988
Transportation 398,358
I3conomic Assistance & Opportunity 833,501
Culture & Recreation 317,769
Home & Community Services 228,578
Employee Benefits 2,617,783
I)ebt Service Principal & Interest 1,007,318
4,395,571 4,641,568 5,177,745 5,234,683
6,254,365 7,177,145 7,371,280 7,816,643
33,288 33,288 32,988 35,238
401,866 446,877 452,050 550,906
931,566 901,139 949,740 1,064,905
304,071 354,768 384,983 345,540
341,764 315,273 530,270 417,654
4,8681116 5,857,963 5~811,868 6,172.279
2,104,202 1,560,055 1,313~234 !,192,497
Total Expenditures 15,220,971
19~634,809 21,288,076 22,024,158 22,830,345
Excess (l)cficienc3) of Revenues O~er
Expenditures
_ _ _ _2,056,633 (308,097) (1,380,067) (1,345,3381 (I,040,415)
Operating [ranslk:rs In
Operating Transfers Out
1,392,850 2,932,574 2,642,859 2,253,9~4 2,738,349
(1710,7811 (I,304,1951 (I,895,0231 (1,531,3691 (1,998,8411
'I'otal Other Financing Sources (Uses) (517,93_11 1,628.379 747,836 722.575 739,5(t8
Excess (Deficiency) of Revenues and Olher
Sources O~,er Expenditures and Othcr Uses
1,538,7(12 1,320,282
(632,2311 (622,703) 000,)07)
I:und Balance Beginning of Year
3,780,709 5,319,41 I 6,639,693 6,007,462 5,384,699
lund Balance End of'Year
'qourccs: Audited I hlarlcin[ Rcptn'ts of thc Tov, n (2003-2006) and Anmml I inmlcia] Report 20(17~ ut~auditcd
able itself NO 1 ~tkidJtcd
A-2
Revenues:
Real Property Taxes
Other Real Property 'Fax Items
Non-Property Tax items
lntergovermnental Charges
Use of Money & Property
Licenses & Permits
Sale of Property & Comp. for Loss
Miscellaneous Local Sources
lnterfund Revenues
State Aid
Federal Aid
Expenditures:
l'ransportatioo
Employee Benefits
Debt Service
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures
Residual Equity Transfer
Operating Transfers In
Operating Transfers Out
Total Other Financing Sources (Uses)
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses
Fund Balance Beginning of Year
Fund Balance End of Year
Statement of Re'*enues, Expenditures and Fund Balance
Highway Fund
Fiscal Year Ended December 31:
200~ 200~4_ 2005 2006 200~7
$ 3,513,902 $ 3,520,332 $ 3,805,032 $ 4,095,347 $ 4,027,695
6,428 3,679 9,046 12,689 12,722
0 0 0 0
15,573 0 0 0 0
18,520 23,884 77.817 140,578 142,501
8,231 4,937 11,126 9,484 10,362
4,033 2,960 2,796 7,521 29,213
0 16 155,054 0 0
0 0 0 0 0
458,686 228,337 188,147 276,337 296,263
67,699 0 0 0 0
4,093,07? 3,784,?,5. 4,249,018 .... 4,541,956 4,5_18,7~6
2,733,518 2,638,121 2,913,768 3,028,076 3,437,1'86
976,406 415,102 500,343 515,106 510,185
15,128 _ 22,219 ...... 1.78,371 283,652 ___25~,001
3,725,052 ..... 3,075,442 3~:522,482 3,8 2_6,_~) ~,. _,I,) 9_7,~372
368,020 708,703 656,536 715,122 321,384
0
0 0 0 212
(690,390) (520,085) _ (452,648) (561,696)
(60,9~0) (690,390)
(520,085) (452,648) (561,484)
308,020
594,064
18,313 136,451 262,474 (240,199)
902,084 920,397 1,056,848 1,319,322
$ 902,084 $ 920,397 $ 1,056,848 $ 1,319,322 $ 1,079,222
Sources: Audited Financial Reports of the Town (2003-2006) and Annual Financial Report (2007) unaudited.
Table itself NOT audited.
A-3
Statement of Revenues, Expenditures and Changes in Fund Balance
Non-Major Governmental Funds (1)
Real Property Faxes
Other Real Properly Tax Items
Non-Property Tax Items
Use of Money & Property
Licenses & Permits
Fines and Forfeitures
Sale of Property & Comp. lbr Loss
State Aid
Federal Aid
Fiscal year Ending December 31: .
200; 2004 2005 2006 2007
2,197,525 $ 2,506,945 $ 2,381,335 $ 2,741,362 $ 3,345.811
874 3,105 2,516 4,489 5,278
117,449 336.139 213,786 229,346 234,091
2,339,227 2,517,584 2,504,880 2,275,935 2,197,288
1,614 1,013 1~013 1,809 905
18,147 21,365 64,092 95,272 130,926
139,620 199,849 165,965 163,780 169,338
49,000 0 0 0 0
44,450 76,069 109,137 135,662 247,014
230 5,025 153,591 6,652 73,265
161,393 72,651 75,374 127,278 93,135
111,299 166,368 224,136 41,163 210,175
5,180,828 5,906,113 5,895,825 5,822,748 6,707,226
Expenditures:
General Government Support
Public SafEty
Public Health
Home & Community Services
Employee Benefits
Debt Service
I34,969 92,514 99,895 103,654 87,969
749,904 739,198 807,474 869,154 948,267
6,408 6,664 6,864 7,104 7,370
3,230,201 3,225,586 3,102,639 3,363,781 3,797,322
874,049 371,038 444,858 470,377 468,988
117,562 88,803 671,720 822,590 1,089,449
Total Expenditares
5,113,093 4,523,803 5,133,450 5,636,660 6,399,365
Excess (Deficiency) of Revenues Over
Expenditures
67,735 1,382,310 762,375 186,088 307,861
Operating Transfers In
Operating Transfers Out
0 0 0 0 0
_ (483,500) (1,081,441) ..... (504,7~0) (429,145) (~34,804)
(483,500) (1,081,441) (504,720) (429,145) (534,804)
(415,765) 300,869 257,655 (243,057) (226,943)
1,261,339 ..... 845,574 1,146,444 1,446,849 (2) 1,807,§.?
Total Other Financing Sources (Uses)
Excess (Deficieucy) of Revenues and Other
Sources Over Expenditures and Other Uses
Fund Balance Beginning of Year
Fund Balance End of Year
$ 845,574 $ 1,146,443 $ 1,404,099 $ 1,203,792 $ 1,580,867
(1) Includes the following funds: General Fund Part Town, Special Grant Fund, East-West Fire Protection Fund, Southold
District, Fishers Island Sewer District and Solid Waste Management District.
(2) Diflkrence due to Prior Year Accounting Adjustment
Wastewaler
Sources: Audited Financial Reports of the Town (2003-2006) and Annual Financial Report (2007) unaudited.
Table itself NOT attdited.
A-4
BUDGET SUMMARY
Fund
Fiscal Year Ending December 31, 2007
Appropriations Less: Less:
and Provisions Estimated Unexpended
for Other Uses Revenues Balance
Amount to be
Raised by
Tax
General $ 22,951,102
General-Outside Village 1,869,139
Highway-Townwide 0
Highway-Outside Village 4,938,330
Community Development 136,000
Risk Retention Fund 1,015,000
Community Preservation Fund 10,697,328
Employees Health Plan 2,662,000
Total-Town $ 44,268,899
$ 4,810,191 $ 1,935,000 $ 16,205,911
1,002,600 459,000 407,539
600 16,900 (17,500)
406,635 486,500 4,045,195
136,000 0 0
1,015,000 0 0
5,350,000 5,347,328 0
2,412,000 250,000 0
$ 15,133,026 $ 8,494,728 $ _20,6~1,~45
East-West Fire Protection District 509,828
Fishers Island Ferry District 3,038,000
Solid Waste Management District 4,058,562
Southold Wastewater District 128,316
Fishers Island Sewer District 20,000
F.1. Refuse & Garbage District 512,300
Orient Mosquito District 82,235
Subtotal-Special Districts $ 8,349,241
4,600 6,228 499,000
2,448,000 0 590,000
2,151,500 0 1,907,062
10,020 100,000 18,296
17,700 2,300 0
0 0 512,300
0 0 82,235
$ 4,6~1.,~2~ $ !08,528 $ 3,608,893
Orient-East Marion Park District 30,695
Southold Park District 315,000
Cutchogue-New Suflblk Park Dist. 145,000
Mattituck Park District 540,027
Subtotal-Park Districts $ 1,030,722
0 0 30,695
0 0 315,000
0 0 145,000
22,500 50,000 467,527
$ 22,500 $ 50.000 $ 958,222
Fishers Island Fire District
Orient Fire District
East Marion Fire Districl
Southold Fire District
Cutchogue Fire District
Mattituck Fire District
Subtotal-Fire Districts
357,300 3,300 0 354,000
401,040 2,000 0 399,040
490,600 12,200 0 478,400
1,512,875 3.3,540 0 1,479,335
1,412,500 1,400 0 1,411,100
1,857,967 . 0 0 1,857,967
$ 6,032,282 $ 52,440 $ 0 $ 5,979,842
Total-All Districts
15,412,245 4,706,760 158,528 10,546,957
Grand Total
$ 59,681.144 $ 19,839~78~ $ 8,653.256
Source: Adnpted Budget of the Town.
A-5
BUDGET SUMMARY
Fund
Fiscal Year Ending December 31, 2008
Appropriations Less: Less:
and Provisions Estimated Unexpended
for Other Uses Revenues Balance
Amount to be
Raised by
Tax
General $ 24,413,069 $ 5,205,781 $ 1,816,000
General-Outside Village 2,246,677 1,I 19,700 317,000
Highway Fund 5,198,627 396,032 491,000
Community Development 136,000 136,000 0
Risk Retention Fund 765,000 765,000 0
Community Preservation Fund 5,200,000 5,200,000 0
Employees ttealth Plan 2,892,500 2,692,500 20_0,000
Total-Town $ 99,851,873 $ 15,515,013 $ 2,824,000
$ 17,391,288
809,977
4,311,595
0
0
0
0
$ 22,512,860
Orient Road Improvement District 4,500
East-West Fire Protection District 552,863
Fishers Island Ferry District 3,220,775
Solid Waste Management District 4,224,695
Southold Wastewater District 102,265
Fishers Island Sewer District a0,:)50
F.I. Refuse & Garbage District 563,800
Orient Mosquito District 86,900
S ubtotal-Special Districts $ 8,786,748
0
5,000
2,630,775
2,640,350
9,020
30,700
0
0
5,315,845
0
6,400
0
77,400
90,000
250
0
0
$ 174,050
541,463
590,000
1,506,945
3,245
0
563,800
86,900
$ 3,292,353
Orient-East Marion Park District 34,780
Southold Park District 315,000
Cutchogue-New Suffolk Park Dist. 145,000
Mattituck Park District 560,229
Subtotal-Park Districts $ [.,_0~ 5,009
Fishers Island Fire District
Orient Fire District
East Marion Fire District
Southold Fire District
Cutchogue Fire District
Mattituck Fire District
Subtotal-Fire Districts
359,700
483,940
536,380
1,631,025
1,412,000
1,978,770
$ 6,401,815
0
0
0
29,000
3,300
45,272
13,200
33,000
20,000
0
$ 114,~7_72
0
0
0
50,000
$ 50,000
0
0
0
0
0
0
0
34,780
315,000
145,000
481,229
$ ~76,009
356,400
438,668
5~a,180
1,598,025
1,392,000
1,978,770
$ 6,287,O43
Total-All Districts
(;rand Total
16,243,572
$ 57,095,445
5,459,617
$ ~0,974,6a0
224,050
$ 3 048,0050
10,555,405
$ 33,06~,~6~
Soarce: Adopted Budget of the Town.
A-6
TOWN OF SOUTHOLD
APPENDIX B
FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
NOTE: SUCH FINANCIAL REPORT AND OPINIONS WERE PREPARED AS OF THE
DATE THEREOF AND }lAVE NOT BEEN REVIEWED AND/OR UPDAI'ED IN
CONNECTION WITH THE PREPARATION AND DISSEMINATION OF THIS
OFFICIAL STATEMENT. CONSENT OF TIlE AUDITORS HAS NOT BEEN
REQUESTED OR OBTAINED.
FINANCIAL SECTION
Independent Auditors' Report ................................................................................................................. 1-2
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discuss on and Ana vs s ................................... 3-11
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Assets .......................
12
Statement of Activities ................................................................................................................ 1 3
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 Financia! Statements
Statement of Fiduciary Net Assets ......................................................................................... 18
Notes to Financial Statements ............................................................................................................ 19-34
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANGEMENT DISCUSSION AND ANALYSIS
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
General Fund ........................................................................................................ 35
way Fund .................................................................................................. 36
OTHER SUPPLEMENTARY INFORMATION
COMBINING FUND STATEMEN rS:
Non-major Governmental Funds Combining Balance Sheet ........................................................................................
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................
37
38
DISCRETLY PRESENTED COMPONENT UNITS
Discretely Presented Component Units:
Combining Sta ~,ment of Ne~ Asse,s 39
Combining Statement of Activities 40
CER'FIFiED PUBLIC ACCOUNTANTS, BU$1NE$$ ADVISORS AND CONSULTANTS
2.¢, ~u{~;;/k Cour~, Hauppauge, New Yc;r~' ]I788
~3].434.9500 · F~r ~31.434.9518
INDEPENDENT AUDITORS' REPORT
Honorable Supervisor and Town Board
Town of Southold
Southold, 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, 2006, 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 responsibility 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. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
matedal 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 Ferry District were audited by
other auditors whose report thereon have been 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 been 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, 2006, and the
results of its operations for the year then ended in conformity with accounting principles generally
accepted in the United States of Amedca.
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 measurement and presentation of the
supplementary information. However, we did not audit the information and express no opinion on it.
-1-
ALBRECHT, VIOOIANO, ZURECK ~ CoMPaNY, F~C.
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 pad 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.
Hauppauge, New York
September 11,2007
REQUIRED SUPPLEMENT.ARY INFORMATION
Management's Discussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
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, 2006. 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 operations 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 trustee agent for the benefit of those outside of the government.
Reportin.q the Town as a Whole
The Statement of Net Assets and the Statement of Activities
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 afl assets and liabilities using the accrual basis of accounting, which is similar to the
accounting 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 self-financing through fees and grants. All of the current year's revenues and expenses are 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 deteriorating. 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, drainage
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 seven 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. Complete
financial statements of the individual component units can be obtained from their respective
administrative offices (Note A).
-3-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
Reportin.q the Town's Most Siqnificant Funds
Fund Financial 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 repoded 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 ali other financial
assets that can readily be conveded 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 dan 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
governmenta! funds in a reconciliation that follows these fund financial statements.
The Town as Trustee
Reporting the Town's Fiduciary Responsibilities
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, 2006 and 2005
Assets
Current and other assets
Capital assets
Total assets
Liabilities
Current and other liabilities
Long-term liabilities
Total liabilities
Net assets
Invested in capital assets,
net of related debt
Unrestricted
Total net assets $
2006 2005
$ 23,769,534 $ 26,265,665
100,557,312 90,294,079
124,326,846 116,559,744
15,552,211 16,289,370
14,773,434 14,916,051
30,325,645 31,205,421
92,063,214 81,044,981
1,937,987 4,309.342
94,001,201 $ 85,354,323
-4-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Total assets in the Town as of December 31, 2006 were $124.3 million, an increase of 7.8 million. Tota!
liabilities as of December 31, 2006 were $30.3 million, which represents a decrease of $800,000 from
December 31, 2005. This results in a net asset balance of $94 million, an increase of $8.6 million. Of the
Town's net asset balance $92 million were invested in capital assets, net of related debt; while $1.9 million was
unrestricted.
Changes in Net Assets
Governmental Activities
for the years ended December 31, 2006 and 2005
Program Revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General Revenues Real property taxes
Other rea[ property tax items
Non-property tax items
Interest earnings
State aid - unrestricted
Other
Total Revenues
Program Expenses
General 9ovemment suppod
Public safety
Public health
Transporlation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Expenses
Increase in Net Assets $
2006 2005
$ 9,231,396 $ 10,723,686
713,597 859,484
4,834,716 3,502,247
14,779,709 15.085,417
21,709,445 20,795,041
102,986 80,369
846,016 628,857
1,233,122 766,413
2,610,189 2,527,110
463,671 709,352
26,965,429 25,507,142
41,745,138 40,592,559
6,843,661 6,621,408
11,421,283 11,342,991
43,499 43,559
7,298,698 6,627,876
1,354,610 1,208,467
713,164 356,167
4,912,384 4,961,051
553,713 501,452
33,141,012 31,662,971
8,604,126 $ 8,929,588
-5-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLF (continued)
Net Cost of Services
Governmental Activities
for the year ended December 31, 2006
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Cost
of Services
$ 6,843,661
11,421,283
43,499
7,298,698
1,354,610
713,164
4,912,384
553,713
$ 33,141,012
Net Cost of Services
Governmental Activities
for the year ended December 31,2006
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and communib/services
Interest on debt
Total Cost Program Net Cost
of Services Revenues of Se~ices
$ 6,843,661 $ 319,565 $ 6,524,096
11,421,283 674,617 10,746,666
43,499 10,185 33,314
7,298,698 340,659 6,958,039
1,354,610 415,263 939,347
7!3,164 208,376 504,788
4,912,384 12,811,044 (7,898,660
553,7t3 553,713
$ 33,141,012 $ 14,779,709 $18,361,303
The cost of all governmental activities this year was $33.1 million. The net cost of these services, however,
after subsidized by program revenues including charges for services and program grants, was $18.4 million.
The Town's change in net assets after general revenues of $27 million was an increase of $8.6 mi!!ion.
-6-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31 2006
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
Expenses and Program Revenues
Governmental Activities
I IProgram Revenues
Real
property
taxes
Revenue by Source
Governmental Activities
For the year ended December 31, 2006
Real property taxes $ 21,709,445
State aid - unrestricted 2,610,189
Charges for services 9,231,396
Other general revenues 2,645,795
Operating grants and contributions 713,597
Capital grants and contributions 4,834,716
$ 41,745,138
-7-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
THE TOWN'S FUNDS
The general fund balance nas decreased by approximately $600,000 due primarily to actual expenditures in
excess of revenues.
The following schedule presents a summary of the governmental funds - (general, spedal revenue, and
capital projects) revenues and expenditures for the year ended December 31, 2006, and the amount of
change and percentage of total in relation to the prior year.
Increase %
2006 2005 (Decrease) Change
REVENUES
Real property taxes $ 21,709,445 $ 20,795,041 $ 914,404 4.2%
Other rea[ propert3, tax items 102,986 80,369 22,617 22.0%
Non-property tax items 846,016 628,857 217,159 25.7%
Departmental income 2,753,784 2,850,836 (97,052) -3.5%
Intergovernmental charges 6,142,177 7,453,845 (1,311,668) -21.4%
Use of money and property 1,376,729 906,664 470,065 34, t%
Licenses and permits 432,058 426,269 5,789 1.3%
Fines and forfeitures 171,763 140,192 31,571 18.4%
Sale of property and compensation for loss 238,240 205,223 33,017 13.9%
Miscellaneous local sources 303,912 1,292,371 (988,459) -325.2%
State aid 7,108,866 3,946,391 3,162,475 44,5%
Federal aid 595,604 1,909,023 (1,313,419) -220.5%
Total Governmental Fund Revenues $ 41,781,580 $ 40,635,081 $ 1.146,499 2.7%
EXPENDITURES
Generalgovernment support $ 5,281,399 $ 4,741,463 $ 539,936 10.2%
Public safety 8,240,434 7,984,619 255,815 3.1%
Public health 40,092 40,152 (60) -0.1%
Transportation 3,480,126 3,360,645 419,481 3.4%
Economic assistance and opportunity 949,740 901,139 48,601 5.1%
Culture and recreation 3,748,764 3,457,407 291,357 7.8%
Home and community services 530,270 315,273 214,997 40.5%
Employee benefits 6,797,351 6,803,164 ',5,813) ~0,1%
Capital 13,324,188 12,788,366 535,822 ,~.0%
Debt service principal and interest 2,504,007 2,439,675 64,332 2.6%
TotaIGovernmental Fund Expenditures $ 44,896,371 $ 42,831,903 $ 2.064,468 4.6%
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 appropriations were approved for this purpose,
-8-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2006
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2006 the Town had $100.5 million in net capital assets including land, buildings,
improvements, machinery and equipment, and infrastructure. The Town's component units had $8.4 million in
net capital assets including land, buildings, improvements, machinery and equipment, and sewer mains.
Capital Assets at December 31,
Primary qovernment
Land
Construction in progress
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets
Less accumulated depreciation
Primary government - Total net capital assets
Component units Land
Construction in progress
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets
Less accumulated depreciation
Component units - Total net capital assets
2006 2005
$ 58,341,517 $ 47,772,278
220,114 1,608,081
8,307,223 4,574,513
13,618,159 13,498,954
9,916,143 9,522,815
70,694,655 70,038,525
161,097,811 147,015,166
60,540,499 56,721,087
$ 100,557,312 $ 90,294,079
2,213,759 $ 2,213,759
12,947,081 i 3, i 74,567
3,566,885 3,540,111
3,220,732 2,575,589
3,320,899 3,200,728
2,145,280 2,138,386
27,414,636 26,843,140
6.074,572 5,639,830
$ 21,340,064 $ 21,203,310
-9-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2006
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 probable usefulness of the purpose of expenditure. The following sets forth a summary
of the Town's capital program.
(Dollars in thousands):
Equipment 2007
General Fund $ 540,467
Highway Fund 488,000
Special Districts 305,000
Total Equipment $ 1,333,467
Improvements
General Fund $ 2,786,96!
Highway Fund 300,000
Special Districts 160,000
Total Improvements $ 3,246,961
Total Program $ 4.580.427
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 Investors Services was A1 as of December 31, 2006.
Subsequent to the year end the Town's credit rating was upgraded to Aa2,
Debt Limit - The Town has the power to contract indebtedness for any Town purpose so long as the principal
amount thereof, subject to cedain limited exceptions, shall not exceed seven percent of the average full
valuation of taxable real estate of the Town, and subject to cedain enumerated exclusions and deductions
such as water and cedain sewer facilities and cash or appropriations for current debt service.
The constitutional 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 Legislature 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, 2006 was 335%.
At December 31, 2006, the Town had approximately $8.5 million in long term general obligation bonds
outstanding, of which $8 miIlion was for general Town purposes. Also outstanding at year-end were bond
anticipation notes in the amount of $7.7 million of which $6 million was for general Town purposes.
Additional information on the Town's debt activity can be found in Note C4 to the financial statements.
-10-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Propertv Tax
The Town has adopted a budget for the 2006 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2006 budget
includes an overall increase in real properly tax revenues from the prior year of approximately 4.26% for the
general Town governmental activities.
State Aid and Local Assistance
The Town receives financial assistance from New York State and from Suffolk County. During 2006, financial
assistance included state aid consisting of mortgage tax of $2.6 million, consolidated highway aid of $276
thousand, and community preservation aid of approximately $2.475 million. State aid per capita was $90.4
thousand and County local government assistance was $296.4 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 state aid. The State is not constitutionally obligated to maintain or
continue state aid to the Town The Town's 2006 budget included similar amounts for this financial assistance.
Retirement System
In 2003 the Town of Southold adopted the New York State Early Retirement Incentive Program as authorized
by Chapter 69 of the Laws of 2002. The option to retire early 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 fifty (50)
years of age and being vested in the New York State Retirement System. The Town funds it retirement billing
currently.
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 ~,~,~,,~, Hnfil death o, ~he ..... ee.
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 repod or need additional financial information, contact the Town of Southo~d, Office of the
Town Comptroller, Southold, New York.
-11-
BASIC FINANCIAL
STATEMENTS
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF NET ASSETS
December 31, 2006
ASSETS
Current Assets:
Cash and investments
Accounts receivable, net of allowances
Due from fiduciary funds
Due from other governments
Due from primary 9overnment
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 payabie
Due to other governments
Due to fiduciary funds
Unearned revenue
Non-current liabilities due within one year
General obligation bonds payable
Due to Employees Retirement System
Claims and judgments payable
Estimated liability for landfill closure
and postclosure care costs
Total Current Liabilities
Non-Current Liabilities:
General obligation bonds payable
Compensated absences
Claims and judgments payable
Estimated liability for landfiII closure
and postclosure care costs
Total Non-Current Liabilities
Total Liabilities
NET ASSETS
Investment in capital assets, net of re!ated debt
Unrestricted
Total Net Assets
Primary
Governmental Component
Activities Units
$ 19,073,290 $ 1,236,451
205,234 15,167
2,541,813
801,197
997,151
2,099
360,178
237,056
39,171
23,620,784 1,888,023
148,750
58,561,631 15,160,840
41,995,681 6,179,224
100,706,062 21,340,064
124,326,846 23,228,087
1,320,029 369,893
261,058 69,176
7,729,000 2,185,000
243,292 2,431
12,601
5,147,779 366,282
779,098 200,000
48,804
50,000
10,550
15~552,211 3,242,782
7715,000 2,655,000
6,475,661
150,000
582,773
14,773,434 2,805,000
30,325,645 6,047,782
92,063,214 15,579,033
1,937,987 1,601,272
$ 94,001,201 $ 17,180,305
See notes to the financial statements
-12-
TOWN OF SOUTHOLD
GOVERNMENT WiDE FINANCIAL STATEMENT
STATEMENT OF ACTIVITIES
Year ended December 31, 2006
COMPONENT UNITS
General governmen~ support
Pu blic heaflh
Net Expenses (Revenues) and
Change in Net Assets
6,843,681 $ 229,092 $ 90473 $ 6,524,096
1%421,283 534,811 139806 19,746,666
43,499 10,185 33,314
7,298,698 9,484 25,838 $ 302 337 6,958,039
1,354,610 169,983 245,280 939,847
713,164 208,376 504788
4 912,384 8,079,650 199,015 4,532,379 (7 898,660)
553,713 553,713
Total Componont Ur~its S
130.910
86,977
8,751,284 $ 2,013,785
837.563
473,074 32,938
258.382
4530,190 8 2,048,723 $
$ 810846
86,977
(73,147)
837,563
440,136
250382
0 $ 810646 $ 1672,821
GENERALREVENUES
Other real prooerty ~x i em s 102,986 1,124
Non-p o~e~y tax items 846,016
Interest earnings 1,233,122 155,484
Net Assets at End of Yea~ $ 94,001,201 $ 17,180,305
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2006
ASSETS
Cash and Investments
Accounts Receivable
Due from Other Funds
Due from 'Trust Funds
State and Federal Aid Receivable
Due from Other Governments
Supply Inve nton/
Prepaids
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable
Retained Percentages
Bond Anticipation Notes Payable
Due to Other Funds
Due to Trust Funds
Due to Other Governments
Deferred Revenue
Total Liabilities
FUND BALANCE
Fund Balances - Reserved:
Encumbrances
Supply Inventor'
Prepaids
Insurance Claims
Fund Balance - Unreserved:
Designated - Ensuing Year's Budget
Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
MAJOR GOVERNMENTALFUNDS
Non-Major
Capital Governmental
General Highway Projects Funds Totals
$ 8,339,472 $ 1,574,794 $ 7,806,802 $ 1,352,222 $ 19,073,290
22,346 60 182,828 205,234
190,208 461,241 234,970 475,547 1,361,966
110,153 276,337 325,950 88,757 80i ,197
2,075,955 465,858 2,541,813
2,099 2,099
426,200 57,894 53,559 537,653
$ 11,166,433 $ 2,370,266 $ 8,833,640 $ 2,152,913 $ 24,523,252
$ 701,018 $ 101,474 $ 189,921 $ 320,656 $ 1,313,069
6,960 6,960
7,729,000 ~,729,000
i ,205,516 49,290 106,987 173 1,361,968
12,601 12,601
243,292 243,292
3,619,307 900,180 628,292 5,147,779
5,781,734 1,050,944 8,032,868 949,121 15,814,667
13,284 129,285 142,569
2,O99 2,O99
426,20O 25,599 45t ,799
613,329 513,329
16,900 16,900
2, 185,000 486,500 470.228 3,141,728
2.244,787 686,637 800,772 707,965 4,440,161
5,384,699 1,319,322 800,772 1.203,792 8,708,585
$ 11,166,433 $ 2,370,266 $ 8,833,640 $ 2,152,913 $ 24,523,252
See notes to the financial statements.
-14-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET i'O THE
STATEMENT OF NET ASSETS
December 31, 2006
rotal 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 Jn the Statement of Net Assets:
Capital assets - non-depreciable
Capita} assets - depreciable
Accumulated depreciation
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
Estimated liability for landfill closure
and postclosure care casts
Prepaid items included in the Statement of Net Assets
Deferred 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
58,561,631
102,536,180
(60,540,499)
(8~494,098)
(48,804)
(6,475,661)
(593,323)
8,708,585
100,557,312
(15,611,886)
459,498
148,750
(261,058)
$ 94,001,201
See notes to financial statements.
TOWN OF SOUTHOLD
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMEN I-AL FUNDS
For the year ended December 31, 2006
MAJOR GOVERNMENTAL FUNDS
General
Capital
Highway Projects
$4,095,347
12,689
REVENUES
Real Property Taxes $14,872,736
Other Real Property Tax Items 85,808
Non Property tax Items 616,670
Departmental Income 477,849
Intergovernmental Charges 316,049
Use of Money and properly 684,166
Licenses and Permits 258,794
Fines and Forfeitures 171,763
Sale of Property and Compensation for Lose 95,057
Miscellaneous Local Sources 146,260
State Aid 2,725,177
Federal Aid 228,491
Total Revenues 20,678,820
EXPENDITURES
Current
General Government Support 5,177,745
Public Safety 7,371,280
Public Hea[fl~ 32.988
Transportation 452,050
Economic Assistance and Oppodunity 949,740
Home and Community Ser¢ices 384,983
Culture and Recreation 530,270
Employee Benefits 5,811,868
Capital Outlay
Principal and Interest
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures (1,345,338)
Other Financing Sources (Uses)
BANs Redeemed From Appropriations
Transfers In 2,253,944
Transfers Out (1,531,369)
Total Other Financing Sources (Uses) 722,575
Excess (Deficiency) of Revenues arid Other
Sources Over Expenditures and Other Uses (622,763)
Fund Balances at Beginning of Year 6,007,462
$ 5,824,319
140,578 456,713
9,484
7,521
151,000
276,337 3,980,074
325,95O
Non Major
Governmental
Funds Totals
$2,741,362 $ 21,709,445
4,489 102,986
229,346 846,016
2,275,935 2,753,784
1,809 6,142,177
95,272 1,376,729
163,780 432,058
171,763
135,662 238,240
6,652 303,912
127,278 7,108,866
41,163 595,604
4,541,956 10,738,056 5,822,748 41,781,580
103,654 5,281,399
869,154 8r240,434
7,104 40,092
3,028,076 3,480,126
949,740
3,363,781 3,748,764
530,270
515,105 470,377 6,797,351
13,324,188 13,324,188
1,313,234 283,652 84,531 822,590 2,504,007
22,024,158 3,826,834 13,408,719 5,636,660 44,895,371
715,122 (2,870,663) 186,088 (3,114,791)
1,228,735 1,228,735
159,218 2,413,162
(452,648) (429,145) (2,413,162)
(452,848) 1,387,953 (429,24_5~ 1,228,735
262,474 (1.282,710) (243,057) (1,886,056)
1,056,848 2,083,482 1,446,849 10,594,641
Fund Balances at End of Year $ 5,384,699 $1,319,322 $ 800,772 $1,203,792 $ 8,708,585
See notes to the financial statements.
-16-
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 3% 2006
Net Change in Fund Balance
Governmental funds repod capital outlays as expenditures. However, in
the Statement of Activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense. The amount
by which capital outlay exceeds depreciation in the current period is:
Capital outlay
Depreciation expense
Loss on dispositions
15,722,766
(3,987,397)
(1,472,136)
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
Repayment of bond principal
Due to Employees Retirement System
Compensated absences
Claims and judgments payable
Estimated liability for landfill closure
and postclosure care costs
Accrued interest payable
$ (1,886,056)
I0,263,233
(61,786)
(2t,250)
755,000
45,189
(695,835)
220,000
19,072
(33,441)
Change in Net Assets of Governmental Activities
$ 8,604,126
See notes to financial statements.
-17-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2006
ASSETS
Cash and investments
Other receivables
Due from other funds
LIABIL1TI£S
Due to other funds
Other liabilities
Deposits held
Total Assets
Total Liabilities
Fishers Island
Town Ferry District Totals
$ 9,262,983 $ 56,490 $ 9,319,473
59,504 59,504
12,601 12,601
$ 9,275,584 $ 115,994 $ 9,391,578
$ 8,152,880 $ 115,994 $ 8,268,874
307 307
1,122,397 1,122,397
$ 9,275,584 $ 115,994 $ 9,391,578
See notes to financial statements.
-18-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Southold (the "Town"), 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 th, e 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 Pubtic Works whose terms are fixed by Town
Law. The Town Clerk, Receiver of Taxes, Superintendent of Highways, Justices and ]'own Trustees are
all elected and serve for four years, respectively. The Town provides a full range of municipal services,
including public safety, transportation, home and community services, public 'works and road
maintenance, recreation and parks, and general and administrative services.
The financial statements of the Town of Southold have been prepared in conformit'y with accounting
principles generally accepted in the United States of America (GAAP) as applied to gc,vernmental units.
The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for
establishing governmental accounting and financial reporting principles.
The more significant of the government's accounting policies are described below.
1. REPORTING ENTITY
The financial reporting entity consists of: (a) the primary government, which is the Town of
Southold; (b) organizations for which the primary government is financially accountable; and (c)
other organizations for which the nature and significance of their relationship with the primary
government are such that exclusion would cause the repoding entity's financial statements to be
misleading or incomplete as set forth in GASB Statement No. 14.
The decision to include a potential component unit in the Town of Southold reporting entity is based
on several criteria set forth in GASB Statement No. 14 including legal standing, ,dependency and
financial accountability. Based on the application of these criteria, the following is a summary 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 separately elected boards. Special districts cannot issue bonded
debt without the approval and the backing of the full faith 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 districts. Accordingly, these special districts
have been determined to be component units of the Town and are presented discretely in a
separate column in the combined financial statements to emphasize that they are: legally separate
from the primary government.
2. BASIS OF PRESENTATION
The Town's basic financial statements include both government-wide (repoding 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 com portent units.
In the government-wide Statement of Net Assets, the Town's governmental activities are
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 obligations.
The Town's net assets are reported in three parts--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, 2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. BASIS OF PRESENTATION (continued)
The government-wide Statement of Activities reports both the 9ross and net cost of each of the
Town's functional categories (public safety, transpodation, home and community services, etc,),
which are otherwise supported by general government revenues (property, sales and use taxes,
certain intergovernmental revenues, fines, permits and charges, etc.). The Statement of
Activities reduces gross expenses (including depreciation), by related program revenues and
operating and capital grants, to produce the net cost of each program. Program revenues
incIude (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 capitat) grants while the capital grants column reflects capital-
specific grants. The net costs (by function) are normally covered by general revenue (property,
taxes, intergovernmental revenues, interest income, etc). As a genera] ru~e the effect of
interfund activity has been eliminated in genera] purpose financial stater~ents.
This government-wide focus is more on the sustainability 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 financia! statements are similar to the financial statements presented in the previous
modei. The new emphasis is on the major funds in the fund financial statements. Non-major funds
are summarized into a single column.
The accounts of the Town are organized on the basis of funds, each of which is considered a
separate accounting entity. The operations of each fund are accounted for with a separate set of
se!f-balancing accounts that comprise its assets, liabilities, fund balances, revenues, and
expenditures, which are segregated for the purpose of carrying on specific activities or attaining
certain objectives in accordance with special regulations, restrictions or limitations. The various
funds are presented by type in the fund financial statements. Accordingly, the Town maintains the
following fund types:
Governmental Funds - Governmental funds are those through which most governmentai
functions are financed. The acquisition, use and balances of expendable financial resources and
the related liabilities are accounted for through governmental funds, The measurement focus of
the 9ovemmental funds is upon determination of financial position and changes in financial
position. Governmental funds are further classified as major and non-major funds.
The Town reports the following major governmental funds:
Gener~l 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.
Hiqhway Funds - To account for the maintenance and operation of highways,
Capital Proiects Fund used to account for financial resources to be used for the acquisition
or construction of major capital facilities (other than those financed by special assessment
funds and trust funds).
- 20 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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 Greenport.
Special Grant Fund - Segregate and account for projects funded by Community
Development revenue.
Special District 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 the Town in a trustee
or custodial capacity.
Agency Fund - is for money (and/or properly) received and held in the capacity of trustee,
custodian or agent.
Discretely Presented Component Units
Certain special districts that have separately elected boards provide transportation, park, mosquito
control, and sanitation services to residents and businesses within these districts, and follow
government fund accounting principles. These districts, which are accounted for as discretely
presented component units, are as follows:
The Fishers Island Ferry District, established in 1947
Orient Mosquito District, established in 1916
Fishers island Garbage and Refuse District, established in 1952
Cutchogue-New Suffolk Park District, established in 1953
Orient:East Marion Park District, established in 1969
Southold Park District, established in 1907
Mattituck Park District, 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
Cutchogue-New Suffolk
Park District
P.O. Box 311
Cutchogue, NY 11935
Southotd Park D¢sfn'ct
P.O. Box 959
Southoid, NY 11971
Fishers Island Ferry District
P.O Box1179
Southold, NY 11971
Fishers Island Garbage
& Refuse District
Fishers Island, NY 06390
Orient-East Marion
Park District
P.O. Box 12
Orient, NY 11957
Ma~tifuck Park O!stnc~
P.O. Box 1413
Mattituck, NY 11952
-21 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. BASIS OF ACCOUNTING/MEASUREMENT FOCUS
Measurement focus refers to what is being measured whereas the basis of accounting refers to
when revenues and expenditures are 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 government-wide statements, governmental 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, gains, losses, assets,
and liabilities resulting from exchange and exchangeqike transactions are recognized when the
exchange takes place.
In the funds statements, governmental 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 susceptible to accrual (measurable and
available to finance current operations). "Measurable" means the amount of the transaction can be
determined and "available'r 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, franchise fees, and charges for services,
intergovernmental revenues and operating transfers. Permits, fees, and other simitar revenues are
not susceptible to accrual because generally they are not measurable until they are received in
cash. In those instances where expenditures are the prime factor in determining eligibility for state
and federal grants, revenues are recognized when the expenditure is incurred. In the Capital
Projects Fund, Ion§-term debt is recognized as revenue upon receipt of the proceeds.
Expenditures are recorded on the acoruai 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, are charged as expenditures when paid.
Encumbrance accounting, under which purchase orders, contracts and other commitments a,'e
recorded for budgetary control purposes in order to reserve that podion of the applicable
appropriation, is employed in the governmental funds. Appropriations for ail governmental funds
except the capital projects fund lapse at year-end. However, encumbrances reserved against fund
balances are re-appropriated in the ensuing year. Encumbrances are reported as reservations 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 from Federal, State, and other governments or entities for
services provided by the Town, Receivables are recorded and revenues recognized as earned or
as specific program expenditures are incurred,
INVENTORY - MATERIALS AN D SUPPLIES
Inventory in the general and special revenue funds is valued at cost. Inventory in these funds is
accounted for under the consumption method.
- 22 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES AND FUND EQUITY (continued)
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 significantiy
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 slraight-
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 buildings including roads,
curbs, sidewalks, bridges, street lighting are capitalized along with other capital assets.
In the fund financial statements, capital assets are recorded as capital outlay expenditures in the
9ovemmental fund upon acquisition.
DEFERRED REVENUE/UNEARNEDINCOME
Deferred revenues/unearned income are those where asset recognition criteria have been met, but
which revenue recognition criteria have not been met. Such amounts include collections
advance, unearned income and amounts that have been deemed to be "measurable" but not
"avaiiable" to finance current expenses pursuant to generally accepted accounting principles.
PREPAIDS
Prepaids record payments to venders that benefit future recording periods and are 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 OBLIGATIONS
The liabilities for long-term obligations consisting of general obligation bonds, compensated
absences, due to employee retirement system, judgments, claims and liability for landfill closure
and post closure costs are recognized in the government-wide financial statements.
In the 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
tn Suffolk County, the assessment and lien of real property for taxation is done by the County
Department of Assessment. Real property taxes become a lien on December 1 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 Districts, as well as by the County and by Special Districts of the County and
the Town.
- 23 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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 Special Districts and School Districts. These taxes are levied on December 1, and
are due in two installments, 50% on December 1 and 50% on May 10, payable without penalty to
January 10 and May 31, respectively. Penalties are imposed thereafter at the rate of one-twelfth of
the rate of interest determined by the State Commissioner of Taxation and Finance, after which
taxes are payable to the County Treasurer. The Town retains the total amount of Town, Highway
and Town Special 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 t00% collection of real property taxes.
School District property taxes are also levied on December 1, and are also payable in two
installments. School properly taxes are due in two installments, 50% on December 1 and 50% on
May 10 payable without penalty to January 10 and May 3'~, respectively. The County is also
responsible for uncoilected school taxes.
INTERFUND TRANSACTIONS
Inteffund transactions have been eliminated from the government-wide financial statements. In
the funds statements inteffund transactions include:
a) Interfund Revenues
Interfund revenues, quasi-external transactions, in the general fund represent amounts
charged for services or facilities provided by the general fund. The amounts paid by the fund
receiving the benefit of the service or facilities are reflected as an expenditure of that fund.
b)
Transfers
Transfers represent payments to the debt service, general fund and capital projects funds
from the other funds for their appropriate share of the debt service, general fund or capita~
project costs.
COMPENSATED ABSENCES
The liability for vested or accumulated vacation or sick leave (compensated absences) is
recorded as current and noncurrent 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 expendable available financial resources is
incurred.
The amount that is expected to be liquidated with expendable available financial resources is
repoded as expenditures and a liability in the funds statement in the respective fund that will pay it.
6. EQUITY CLASSIFICATIONS
In the Government-wide Statements, equity is classified as net assets and displayed in three
components:
a) invested in capital assets, net of related debt--Consists of capital assets including
restricted capital assets, net of accumulated depreciation and reduced by the outstanding
balances of any bonds, notes, or other borrowings that are attributable to the acquisition,
construction, or improvement of those assets
- 24 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
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 "'nvested ~n 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 fund equity are segregated for future 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 are required to
be segregated in accordance with state law or GAAP. Designations of fund balances in
governmental funds indicate the utilization of these resources in the subsequent year's budget or
tentative plans for future use.
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
1. BUDGETARY DATA
Budgets are adopted annually on a basis consistent with generally accepted accounting
principles. Appropriations authorized for the current year are increased by the amount of
encumbrances carried forward from the prior year.
Budgetary controls for special revenue funds are established in accordance with the applicable
grant agreement, which may cover a period other than the Town's fiscal year, Appropriate
budgetary adjustments have been made to reflect these grant agreements during the Town's
fiscal year.
The Town follows the procedures enumerated be[ow in establishing the budgetary data reflected in
the financial statements:
a)
No later than October 1, he Superv sor submits a tentative budget to the Town Board for
the flscar year commencing the following 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 ali modifications of the budget. However, the Supervisor
is authorized to transfer certain budgeted amounts within departments.
In order to show the full legal level 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 SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued)
2. FUND BALANCES
DESIGNATION OF FUND BALANCE
Portions of the unreserved balances at December 31, 2006 were designated for the subsequent
year's operating budgets as follows:
Fund Balance
Unreserved and
Designated
Total for Subsequent Fund Balance
Fund Balance Year's Unreserved
Fund Unreserved Budget Undesignated
Non-Major Funds:
Town Outside Village
Special Grant
East West Fire Protection District
Southold Wastewater District
Fishers island Sewer District
Solid Waste Management District
$ 908,193 $ 484,599 $ 423,594
5,000 5,000
19,648 6,228 13,420
223,779 223,779
40,948 40,948
6,224 6,224
Total $ 1,203,792 $ 495,827 $ 707,965
DETAILED NOTES ON ALL FUNDS
1. CASH ANDINVESTMENTS
Cash consists of funds deposited in demand accounts, time deposit accounts, and certificates of
deposit with maturities of less than three months.
The Town's investments are governed 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 certificates of deposit. Permissible
investments include obligations of the U.S, Treasury, U.S. Agencies and investments made by
the Cooperative 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 Agreement made pursuant to New York General Municipal Law,
Article 3A and 5-G.
Collateral is required for demand deposits and time deposits accounts at 105% of all deposits not
covered by federal deposit insurance. Obligations that may be pledged as collateral include
obligations of the United States and its agencies and obligations of the State and its municipalities
and school districts. The Town's collateral agreements are based on the Town's available balance.
- 26 ~
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
DETAILED NOTES ON ALL FUNDS (continued)
1. CASH AND INVESTMENTS (continued)
Custodial Credit Risk - Deposits/Investments - Custodial credit risk for deposits exists when, in
the event of the failure of a depository financial institution, a government may be unable to
recover deposits, or recover collateral securities that are in possession of an outside agency,
Custodial credit risk for investments exists when, in the event of the failure of the counterparty, a
government will not be able to recover the value of its investments or collateral securities that
are in possession of an outside pady,
Governmental Accounting Standards Board Statement No. 40 directs that deposits be disclosed
as exposed to custodial credit risk if they are not covered by depository insurance, and the
deposits are either:
· Uncollateratized
· Collateralized with securities held by the pledging financial institution, or
· Cotlateralized with securities he~d by the pledging financial institutfon's trust department or
agent but not in the Town's name
At December 31, 2006 the Town's cash book balance was approximately $29,624,000. This
amount is inclusive of Fiduciary fund deposits of approximately $9,300,000 but exclusive of petty
cash of approximately $2,200. The available bank balance was approximately $32,500,000. Of the
bank balance, $1,100,000 was covered by Federal deposit insurance, and approximately
$40,706,000 was covered by collateral held by the Town's agent, a third-party financial institution, in
the Town's name.
2. INTERFUND RECEIVABLES AND PAYABLES
Interfund receivables and payables for the primary government at December 31, 2006 were as
follows:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Part Town
Special Grant
East-West Fire District
Southold Wastewater District
Fishers Island Sewer Distdct
Solid Waste Management District
Amount Amount
Receivable Payable
$ 190,208 $ 1,171,758
461,241 49,290
234,970 140,745
115,236
5,000
56,488
2,146 173
9,806
286,871
$ 1.361.966 $ 1.3~61_ ,96~6
Interfund receivable and payable balances for the primary government at December 31, 2006
are expected to be paid currently.
- 27 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
DETAILED NOTES ON ALL FUNDS (continued)
3. CAPITAL ASSETS
Primary government
Capital assets not being depreciated
Land
Construction in progress
Total capital assets not being depreciated
Depreciable capital assets
Buildings
improvements other than buiJdings
Machinery and equipment
infrastructure
Total depreciable capital assets
Less accumulated depreciation
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total net depreciable capital assets
Total net capital assets
Balance Balance
I/1/06 Additions Deletions 12/31/06
$ 47,772,278 $ 10,569,239 $ -0- $ 58,341,517
1,608,081 18,264 1,406,231 220,114
49,380,359 10,587,503 1,406,231 58,561,631
4,574,513 3,732,710 8,307,223
13,498,954 119,205 13,618,159
9,522,815 627,218 233,890 9,916,143
70,038,525 656,130 70,694,655
97,634,807 5,135,263 233,890 102,536,180
2,068,530 137,736 2,206,266
3,542,084 390,004 3,932,088
6,041,374 724,481 167,985 6,597,870
45,069,099 2,735,176 47,804,275
$ 56,721,087 $ 3,987,397 $ !67,985 60,540,499
41,995,681
$100,557,312
Depreciation expense was charged to governmental functions as follows:
General government support
Public safety
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
$ 249,268
169,011
2,949,839
37,610
62,609
519,060
$ 3,987,397
28-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
DETAILED NOTES ON ALL FUNDS (continued)
3. CAPITAL ASSETS (continued)
Discretely presented component units
Capitat assets not being depreciated
Land $
Construction in progress
Total capital assets not being depreciated
Depreciable capital assets
Buirdings
Improvements other than buiJdings
Machinery and equipment
infrastructure
Total depreciable capital assets
Less accumulated depreciation
Buildings
Improvements other than buildin§s
Machinery and equipment
Infrastructure
Totalaccumulated depreciation $
Total net depreciable capital assets
Total net capital assets
Balance Balance
1/1/06 Additions Deletions 12/31/06
2,213,759 $ 2,213,759
13,174,567 $ 324,71f $ 552,197 12,947,081
15,388,326 324,711 552,197 15,160,840
3,540,111 26,774 3,566,885
2,575,589 645,143 3,220,732
3,200,728 120,171 3,320,899
2,138,386 8,894 2,145,280
11,454,814 798,982 12,253,796
1,289,733 83,842 f,373,575
1,061,574 117,672 1,179,246
2,132,657 151,754 2,284,411
1,155,866 81,474 1,237,340
5,639,830 $ 434,742 6,074,572
6,179,224
$ 21,340,064
4. INDEBTEDNESS
SHORTTERM DEBT
Bond Anticipation Notes (BANs) - Bond anticipation notes (BANs) are used as a temporary
means of financin9 capital expenditures in the capital projects fund, State law requires that BANs
issued for capital purposes be conveded to long-term obligations within five years after the original
issue date. The notes or renewal thereof may not extend more than two years beyond the original
date of issue unless a portion is redeemed within two years and within each 12 month period
thereafter. Liabilities for BANs are 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 varfous rates from 3~66% to 3,76% and are due at various dates through
2007.
When BANs are not redeemed with the proceeds of bond issues, but instead paid from budgetary
appropriations, the principal amount paid is recorded as an expenditure in the operating fund and a
financir:¢ source is recorded in the capital projects fund.
-29-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2006
DETAILED NOTES ON ALL FUNDS (continued)
INDEBTEDNESS (continued)
SHORT TERM DEBT (continued)
These notes are summarized as follows:
Interest
Description Amount Rate
Various Purposes $ 6,619,000 3.66%
Va rious Purposes 1,110,000 3.73%
New London Wharf 1,625,000 3.70%
Fishers Island Garbage 560,000 3.76%
Total $ 9.914.000
Of the $9,914,000 in bond anticipation notes, $7,729,000 relates to the primary government and the
remaining $2,185,000 relates to the component units.
LONG TERM DEBT
Summaw of changes in tong-term debt transactions for the year ended December 31, 2006 is as
follows:
Non-current
Balance Balance liabilities due
1/1t06 Increases Reduc0ons 12/31/06 within one year
Primary Government:
Genemlobligation bonds $ 9,249,098
Due to Employees Retirement System 93,993
Compensated absences 5,779,826
Claims and judgments 220,000
Estimated liability for landfill cfosL~re
and posbclosum care costs 612,395
695,835
liabilities
$ 755,000 $ 81494,098$ 779,098 $ 7,715,000
45,189 48,804 48,804 -0-
6,475,661 6,475,661
220,000 -0- -0-
19,072 593,323 10,550 582,773
Component Units:
General obligation bonds 3,050,000 195,000 2,855,000 200,000
Claims and judgmenls -0- 200,000 200,000 50,000
2,655,000
150,000
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 backed by the full faith and credit of the Town, bear interest at various rates
from 3.14% to 6.375% and have maturity dates in 2009 through 2021.
Future principal and interest payments to maturi~ for both the primary government and the
componentunits are as ~llows:
Year Ending Principal Interest
2007 $ 979,098 $ 376,466
2008 995,000 345,307
2009 1,025,000 312,347
2010 1,000,000 277,956
2011 1,025,000 242,981
2042-2016 4,100,000 765,577
2017-2021 2,225,000 167,650
Totals $ 111349.09~ ~
-30 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
DETAILED NOTES ON ALL FUNDS (contirlued)
4. INDEBTEDNESS (continued)
LONG TERM DEBT (continued)
Other long-term liabilities for claims and judgments, compensated absences, retirement system
and the estimated liability for landfill closure and post closure costs are to be paid by the fund
that gave rise to the liability.
PRIOR YEAR DEFEASANCE OF DEBT
In prior years, the Town defeased certain bonds by placing the proceeds of new bonds in an
irrevocable trust with an escrow agent to provide for all future debt service payments on the old
bonds. Accordingly, the trust account assets and liability for the defeased bonds are not including
in the Town's financial statements. At December 31, 2006, $1,950,000 of these.bonds outstanding
are considered defeased
5. RETIREMENT SYSTEM
Plan Description
The Town of Southold participates in the New York State and Local Employees' Retirement System
(ERS) and Local Police and Fire Retirement System (PFRS). This is a cost sharing multiple-
employer retirement system. The System provides retirement benefits as well as death and
disability benefits
Obligation of employers and employees to contribute and benefits to employees are governed by
the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the
NYSRSSL, the Comptroller of the State of New York (Comptroller) sen'es as sole trustee and
administrative head of the System. The Comptroller shall adopt and may amend rules and
regulations for the administration and transaction of the business of the System and for the custody
and control of their funds.
A publicly available annual report containing financial statements and required supplemental
information for the Employees' Retirement System may be obtained by writing to the New York
State Retirement System, Governor Smith State Building, Albany, NY 12244.
Fundin~q Policy
The System is noncontributory except for employees who joined the New York State and Local
Employees' Retirement System after July 27, 1976 and who have less than ten 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 I, 2000, all employees who ioined the System after July 27, 1976 we'e required to
contribute 3% of their salary. Under the authority of the NYSRSSL, the Comptroller shall certify
annually the rates expressed as proportions of payroll of members, which shall be used in
computing the contributions required to be made by employers to the pension accumulation fund.
The Town is required to contribute at an actuarially determined rate. The actual contributions were
equal to the actuarially required amounts and also include additional contributions to fund various
early retirement incentives made available to the Town employees. The credits and miscellaneous
adjustments represent modification made by the ERS for prior year's contributions.
The required contributions, for the Primary government, for the current year and two preceding
ERS PFRS
years were:
2006 $ 1,096,547 $ 741,445
2005 $ 1,068,200 $ t,016,937
2004 $ 992,023 $ 679,079
The Town's contribution to the system was 100% of the contributions required each year.
- 31 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
C. DETAILED NOTES ON ALL FUNDS (continued)
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. Substantialry all of the Town's employees may
become eligible for these benefits if they reach normal retirement age while working for the Town.
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 with New York State Health
Insurance Rules and Regulations (administered by the New York State Department of Civil Service)
through the New York State Empire Plan (the "Empire Plan'~) whose premiums are based on the
benefits paid throughout the State during 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 e!igible enrollees with benefit coverage under
either the self-funded plan or the Empire Pian. Under the provisions 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. During the 2006 year,
$3,261,660 was paid on behalf of 93 retirees and 223 active employees and is recorded as an
expenditure in the General Fund.
7. COMPENSATED ABSENCES
Town employees are granted vacation and sick ieave and earn compensatory absences in
varying amounts. In the event of termination or upon retirement, an employee is entitled to
payment for accumulated vacation and sick leave and unused compensatory absences at
various rates subiect to certain maximum limitations.
Estimated vacation, sick leave and compensatory absences accumulated by governmental fund
type employees have been recorded in 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, management 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, 2006, the value of the accumulated vacation time and sick leave was
$6,475,661 for the primary government.
D. COMMITMENTS AND CONTINGENCIES
Risk Management
The Town is self-insured for both medical insurance and general liability insurance. The amount of
medical claims, outstanding at December 31, 2006 is $'~6~976. This amount has been reserved
against fund balance in the General Fund.
In common with other municipalities, the Town receives numerous notices of claims. Prior to 2005,
coverage for bodily injury and property damage was 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 2006 the Town self-insured for bodily injury and
property damage up to a maximum of $50,000 per claim. The $50,000 limitation was the minimum
retention amount available to the Town. Claims in excess of $50,000 are covered by excess liability
policies providing coverage for $10,000,000 per occurrence and in the aggregate. Although the
eventual outcome of these 2006 claims cannot presently be determined, the Town's third party
administrator has estimated unsett',ed claims at December :31, 2006 to be $83,863. These amounts
have been reserved against fund balance in the General Fund. The Town is of the opinion that the
urtima!e settlement of the outstanding c!aims will not result in a material adverse effect on the Town's
financial position.
Sit,ce 2005, there have been no significant reductions in insurance coverage as compared to tile prior
year; in addition there were no settlements on excess of insurance coverage over the last three years.
The Town is also se!f-insured for unemployment benefits paid.
- 32 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2006
COMMITMENTS AND CONTINGENCIES (continued)
Landfill Closure and Post-Closure Care Costs
State and federal laws and regulations require the Town to place a final cover on its landfill sites and to
pedorm 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
stipulation of settlement with the New York State Department of Environmental Conservation in
October of 1994 in which all charges of operational violations at the Cutchogue landfill were dropped.
Under the stipulation, 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 presently require
the Town to perform cedain maintenanca and monitoring functions at the site for up to thidy years.
Accordingly, as of December 31, 2006 the Town has recorded a liability of $593,323 which represents the
provision to be made in future budgets for post-closure landfil[ costs. Actual costs may vary 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 Facilities Corporation. Costs associated with post closure care will be
covered by charges to future landfill users and future tax revenue.
Lease Commitments and Leased Assets
The Town leases property and equipment under operating leases. Total rental expenditures on such
leases for the year ended December 31, 2006 were approximately $191,773 Future obligations over
the primary terms of the Town's leases as of December 31,2006 are as follows:
2007 $ 109,824
2008 109,028
2009 107,348o
2010 86,9O9
2011 andtherea~er 563,901
Total ~ .... 977.010
CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS
The following represents condensed financial statements for the discretely presented component units as
of and for the year ended December 31,2006:
Condensed Statemer~t of Net ~sets:
Due from Capital Assets Other
Current Priman/ Net of Current Long-Term
Assets Government Depreciation Liabilities Liabilities
Fishers Island Ferry District $ 489,288
Fishers Island Refuse and Garbage 607,760
Cutchogue-New Suffolk Park Distdcr 108.649
Southold Park District 43,842
Orient-East Marion Park District 5,496
Maltituck Park District 255,998
O~ent Mosquito DislrJc[ 16,812
182,783 $ 15,672,653 $ 2,367,007 $ 2,700,000
59,613 3,146,256 621,736
16,414 123,200 16,414
35,659 696,598 37,930
3,475 432,985 14,602
52,925 1,242,272 166,858 I05,000
9,309 25,900 1~,235
Assets
231,849
738,169
427,354
1,279,337
33,786
1,527,845 $ 360,178 $ 21,340,064 $ 3,242.782 $ 2,805,000 $ 17, 80305
- 33 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December' 31,2006
CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS (continued)
Condensed Stalement of AclivitJes:
Net Exgense properly
Expenses Revenue (Revenue) Tax Olher Change 1!!~6 12/31/06
$ 3,061,265 $ 2,0!3,785 $ 1,047,480 $ 400,000 $ 854,443 $ (206,963) $ 11,070,954 $ 11,277,917
938,458 32,938 505,520 563,506 70,888 t~28,868) 3,063,025 3,191,693
100,014 160,014 141,000 917 18,097 249,946 23!,849
287,960 267,960 315,000 43,691 (70,731) 667,438 738,169
27,063 27,063 27,617 76 (630) 426,724 427,35~
368,453 366r453 426,110 37,511 (95,168) 1,184,169 1,2791337
F;shers Island Fer~ 0istr~t
Fishers Isrand Refuse and Garbage
Cutchngue-New Suffolk Park D~stnct
S0uth01d Park District
0hant-East Mar~en Par~ Distdct
Matt6uck Park Oistdd
$ 4,530,190 $ 2,046,723 $ 2,463,467 $ 1,949,512 $ 1,009,938 $ (475,983) $ 16,704,322 $ 17,!80,305
SUBSEQUENT EVENTS
On April 15, 2007, the Town issued Serial Bonds for public improvements in the amount of
$14,650,000. These public improvements bonds are allocated as follows: $9,987,900 for open space
preservation, $1,200,000 for land acquisition, $3,000,000 for a solid waste management transfer
station, $315,000 for a settlement with New York State and $147,100 for equipment. The interest rate
on these bonds range from 4% during the initial year to 4.25% for the final 20 years. The bonds final
maturity date is 2030.
NEW PRONOUNCEMENTS
The Governmental Accounting Standards Board (GASB) approved new accounting standards
applicable to "other post-employment benefits" (OPEB's) and "termination benefits", which are non-
pension benefits provided after a person leaves employment, including retiree health care. Until now,
these benefits have generaliy been administered by municipalities on a pay-as-you-go basis and have
not been reported as a liability on financial statements.
GASB 45 and 47 requires municipalities which adhere to GAAP (Generally Accepted Accounting
Principles) to account for OPEB and termination liabilities on an accrual basis much like they already
account for pension liabilities, generally adopting the actuarial methodologies used for pensions, with
adjustments for the different characteristics of OPEB and termination benefits and the fact that most
municipalities have not set aside any funds against this liability,
Under GASB 45 and 47, based on actuarial valuation, an annual required contribution ("ARC") will be
determined for each municipality and then be periodically updated depending on the number of
members within the plan.
The Town, as well as its component units are required to implement GASB 45 and 47 for the year
ended December 31,2007.
- 34 -
REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN
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, 2006
Original Final
Budget Budget
REVENUES
Real Property Taxes $14,872,736
Other Real Properly Tax Items 68,500
Non-Property Tax Items 616,000
Departmental Income 342,100
intergovernmental Charges 386,616
Use of Money and Property 460,000
Licenses and Permits 223,100
Fines and Forfeitures 112,000
Sale of Properly and Compensation for Loss 74,050
Miscellaneous Local Sources 47,420
State Aid 2,434,897
Federal Aid
Total Revenues
Actual
Variance with
Final Budget
Positive/(Negative)
$14,872,736 $14,872,736
68,500 85,808 $ 17,308
616,000 616,670 670
585,100 477,849 (107,251)
297,379 316,049 18,670
460,000 684,166 224,166
223,691 258,794 35,103
112,000 171,763 59,763
77,505 95,057 17,552
109,669 146,260 36,591
2,561,687 2,725,177 163,490
238,737 228,491 ___ (10,246)
19,637,419 20,223,004 20,678,820 455,816
EXPENDITURES
General Government Support 6,116,403
Public Safety 7,2~7,F,33
Public Health 33,300
Transportation 442,710
Economic Assistance and Opportunity 1,030,920
Culture and Recreation 395,3!4
Home and Community Services 362,224
Employee Benefits 6,257,400
Debl Service - Principal and Interest 1,559,500
Total Expenditures
Deficiency of Revenues
Over Expenditures
Other Financing Sources (Uses)
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
6,175,733 5,177,745 997,988
7,392,386 7,37!,280 71,10R
33,300 32,988 312
472,1'73 452,050 20,123
1,022,324 949,740 72,584
396,830 384,983 11,847
660,814 530,270 130,544
6,690,613 5,8il,868 878,745
1,434,500 1,313,234 121,266
23,495,304 24,278,673 22,024,158 2,254,515
(3,857,885) (4,055,669) (1,345,338) 2,710,331
6,038,180 6,308,189 2,253,944 (4,054,245)
(2,180,295) (2,252,520).__ (1,531,369) 721,151
3,857,885 4,055,669 722,575 (3,333,094)
-0- $ -0- (622,763) $ (622,763)
6,007,462
$ 5,384,699
,.gee notes to the financial statements.
~35~
TOWN OF SOUTNOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Year ended December 31, 2006
Original Final
REVENUES Budget Budget
Actual
Real Property Taxes $ 4,095,347 $ 4,095,347 $ 4,095,347
Other Real Property Tax Items 8,500 8,500 12,689
Use of Money and Property 72,t00 72,100 140,578
Licenses and Permits 6,500 6,500 9,484
Sate of Property and Compensation
for Loss 7,521
State Aid 231,332 306,719 276,337
Total Revenues
EXPENDITURES
Transportation
Employee Benefits
Debt Service - Principal and interest
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
Variance with
Final Budget
Positive/(Negative)
4,189
68,478
2,984
7,521
(30,382)
4,413,779 4,489,166 4,541,956 52,790
3,485,358 3,551,971 3,028,076 523,895
543,162 543,162 515,106 28,056
294,785 294,785 283,652 11,133
4,323,305 4,389,918 3,826,834 563,084
90,474 99,248 715,122 615,874
Other Financing Uses
Operating Transfers in 355,900 355,900
Transfers Out (446,374) (
455,148
Total Other Financing Uses (90,474) (99,248)
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
(355,900)
(452,648) 2,500
452,648} ..... (353,400)
$ -0- $ 0- 262,474 $ 262,474
1,056,848
$ 1,319,322
See aotes to the financial statements.
-36-
OTHER SUPPLEMENTARY
INFORMATION
TOWN OF SOUTHOLD
COMBINING BALANCE SHEET
NON MAJOR GOVERNMENTAL FUNDS
December 31, 2006
East-West Fire Southold Fishers Solid Waste
General Fund Special Prolection Wastewater Island Sewer Managemenl
Part Town Grant District Distnct District District Totals
ASSETS
Dash and Jnvestn~ents $ 821,446 $ 86,470 S 225,862 $ 29,959 $ 188,485 $ 1,352,222
Ac(:o~nts receivable, net of allowance 58,401 1,259 123,168 182,828
Due trorq other funds 115,236 S 5,000 56,488 2,146 9,806 286,871 475,547
Due fronl other governments 9,150 79,607 88,757
Prei)aid expenditures 25,599 27,960 53,559
LIABILITIES AND FUND EQUITY
Acco~Jnt~ payable
Due to Other funds
Deferred revenue
FUND EQuI f~(
Fund balance - reserved:
Prepaid expenses
Designated - ensuing year's budget
Undesignated
TotalAssets $1,020,682 $ 14,150 $ 142,958 $ 228,008 $ 41,024 $ 706,091 $2,152,913
21,800 $ 9.150 $ 12,656 $ 76 $ 276,974 $ 320,656
$ 173 173
90,689 110,654 4,056 422,893 628,292
Totar Liabildies 112,489 9,160 123,310 4,229 76 699,867 949.121
25,599 25,599
459,000 5,000 6,228 470,228
423,594 13,420 223,779 40,948 6,224 707,965
Total Fund Equity 908,193 5,300 19,648 223,779 40,948 6,224 1,203,792
Total Liabilities and Fund Equity $1,020,682 $ 14150 $ 142,958 $ 228,008 $ 41,024 $ 706,091 $ 2.152,913
-37
TOWN OF SOUT~OLD
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS
Year ended December 31, 2006
East-West Fire Southold Eishers Solid Waste
General Fund Special Protection Wastewater Island Sewer Management
Part Town Grant District District District Distdct Totals
REVENUES
Real pro0edy taxes $ 492,996 $ 458,043 $ 22,790 $ 1,767.533 $ 2,741,362
Ot6er real properly tax items 1,523 604 30 $ 2 2,330 4,489
NoN r~operty tax items 229,346 229,346
DepaF~mental incol'qe 656,644 17,060 29,117 1,573,114 2,275,935
Intorgovermrnen acha ges
1,809 1,809
Use of money and properly 47,074 5,594 9,677 1,689 31,238 95.272
Licenses and permits 7,232
~ ~ 156,548 163,780
Sak. ~, property and compensabon for loss 6,738 128,924 135,662
Miscellaneous local sources 7 $ 6,000 1,645 6,652
State aid 47,671 79,607 127,278
Federal aid 41,163 41.163
EXPENDITURES
General government support
Public safety
Public health
Home and community services
Employee benefits
Debt service - pnncipa] and interest
Total Revenues
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Uses:
Total Other Financing Uses
Fund Balances at Beginning of Year
1,489,231_ 46,163 464,241 49,557 30,808 3,742,748 5,822,748
103.654 103,654
409,449 459,705 869,154
7,104 7,104
523,926 41,163 22,406 2,776,286 3,363,781
214,993 255,384 470,377
2,435 820,155 822,590
1,259,126 41,163 459,705 2,435 22,406 3,851,825 5,636,660
230 105 5,000 4,536 47,122 8,402 (109,077) 186,088
(209,971) (219,174) (429,145)
(209,971~ (219,1741 (429,145/
20,134 5,000 4,536 47,122 8,402 (328,251) (243,057)
888,059 15,112 176,657 32,546 334,475 1,446,849
$ 908,19~3 $ 5,000 $ 1~9,64~8 $ 223,779 $ 40,948 $ 8,224 $ 1,203,792
DISCRETELY PRESENTED COMPONENT UNITS
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONEN} UN[TS
8 215,455 $ 591364 $ 108,649
11646 3,371
182,783 89 613 16,414
237,056
Southald Orient East Mattituck Orient
Park Marion Park Park Mosquito
District District District District
~_~audited )__ (~U nau~dited~. (Unaudited) __{Unaudited)
43,842 S 5,496 3 254,833
150
35659 3.475 52,925
%015
. 6__/2=07~1 __ 66%373 125,0,5'~3 __ 79,50~1
10874,636 2 607,599 101,1~8 588,847
4,798.217 53665~ __ 22,0}2~ __ 107,751
18 344 9__74~ __~3,813,629~ 248,263 776,099
$ 16.812
$ 1,236,451
15,167
9,309 360,178
237,056
8,971 308,923_ __ 20,121~ __1,888023
432,985 855,575 15,160,840
___~8.__6,697__ ~5,90~0 6,179,22%
4419__55~' 1.551.19~v 52,021 23.228,08~__
343,215 3,743
67,959
130,833 57,993
1.625,000 560,000
150000
50,000
2271
16,414 35,659
2,367 p0~7 _____~6~ 1,73~ ..... 16,4 ~4__ 37930
2550.000
150000
51187007 821 736 16,4'4 37,930
1!,127 !%808 369,893
1,217 69176
160 2,431
3,475 103673 18,235 366,282
2,185,000
50,000 200,000
50,000_
14,602_ 166858 18,235 3,242,782
105,000 2,655,000
150,000
14,602 271,858 18,235 6,047,782
!I,347.853 2,503,025 640.883
(_~:~36~ 688868 231,8~9 97,286
427,354
$ 11277,917 $ 3,191,593 $ 231,849 $ 736,189 8 427,35,1 S 1,279.337
1,067,272 15,579,033
192065. 33,786 1,601272_
$ 33,?86 S 17 180~3~5
39-
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONEN] UNITS
COMBINING STATEMENT OF ACTIV~TIES
Year ended December 31, 2006
REVENUES
Total Revenues
Fishers Island Cutchogue- Southold Orient East Mattituck Orient
Fishers Refuse and New Suffolk Park Marion Park Park Mosquito
Island Ferry Garbage District Park District District District District District
District (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Totals
$ 2,013,785 $ 32,938 $ 2,046,723
400,000 563,500 8 i41,000 $ 315,000 $ 27,617 $ 426,110 $ 76,285 1,949,512
527 35 562 1,124
21,506 70,888 917 41,591 41 18,879 1,662 155484
810,646 810,646
21,764 2,100 18,070 750 42,684
3,268,228 667.326 141,917 358,691 27,693 463,621 78,697 5,006,173
130,910 130,910
86,977 86,977
2,751,284 2,751,284
160,014 287,960 27,063 362,526 837,563
18602 454,472 473,074
160 469 83,986 5,927 250,382
3,061,265 538458 160,014 287,960 27,063 368,453 86,977 4,530,190
Changes m Net Assets 206,963 128,868 (18,097)
Net Assets at Beginning of Year 11,070,954 3063,025 249,946
Net Assets at End of Year 8!1,277,917 $ 3191,893 $ 231,849
70731 630 95,168 (8,280) 475,983
667,438 426,724 1,184,169 42,066 16,704,322
$ 738169 $ 427,354 $ 1,279,337 $ 33,786 $17,180,305
-40.
BOND INSURANCE
Other than with respect to information concerning Financial Security Assurance Inc. ("Financial Security")
contained herein under the caption "Bond Insurance" and specimen "Municipal Bond Insurance Policy", none of the
information in this Official Statemeut has been supplied or verified by Financial Security and Financial Security
makes no representation or warranty, express or implied, as to (i) the accuracy or completeness of such information;
(ii) the validlty of the Bonds; or (iii) the tax exempt status of the interest on the Bonds.
Bond Insurance Policy
Concurrently with the issuance of tile Bonds maturing in the years 2019 through 2030, inclusive (the "Insured
Bonds"), Financial Security Assurance Inc. ("Financial Security") will issue its Municipal Bond Insurance Policy
for the Insured Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on
the Insured Bonds when due as set forth in the form of the Policy included as au appendix to this Official Statement.
The Policy is not covered by any insurance security or guaranty fund established under New York, California,
Connecticut or Florida insurance law.
Financial Security Assurance Inc.
Financial Security is a New York domiciled financial guaranty insurance company and a wholly owned subsidiary
of Financial Security Assurance Holdings Ltd. ("ltoldings"). Holdings is an indirect subsidiary of Dexia, S.A., a
publicly held Belgian corporation, and of Dexia Credit Local, a direct wholly-owned subsidiary of Dexia, S.A.
Dexia, S.A., through its bank subsidiaries, is primarily engaged in the business of public finance, banking and asset
management in France, Belgium and other European countries. No shareholder of Holdings or Financial Security
is liable For the obligations of Financial Security.
At March 31, 2008, Financial Security's consolidated policyholders' surplus and contingency reserves were
approximately $3,012,872,486 and its total net unearned premium reserve was approximately $2,419,501,630 in
accordance with statutory accounting principles. At March 31,2008, Financial Security's consolidated shareholder's
equity was approximately $3,053,752,7ll and its total net unearned premium reserve was approximately
$1,882,057,335 in accordance with generally accepted accounting principles.
The consolidated financial statements of Financial Security included in, or as exhibits to, the annual and quarterly
reports filed after December 31, 2007 by Holdings with the Securities and Exchange Commission are hereby
incorporated by reference into this Official Statement. All financial statements of Financial Security included in, or
as exhibits to, documents filed by Holdings pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 after the date of this Official Statement and before the termination of the offcring of the Insured Bonds
shall be deemed incorporated by reference into this Official Statement. Copies of materials incorporated by refereuce
will be provided upon request to Financial Security Assurance Inc.: 31 West 52"d Street, New York, New York
10019, Attention: Cmnmunications Department (telephone (212) 826-0100).
The Policy does not protect investors against changes in market value of the Fnsured Bonds, which market value may
be impaired as a resu It of changes in prevailing interest rates, changes in applicable ratings or other causes. Financial
Security makes no representation regarding the Insured Bonds or the advisability of investiug in tile Insured Bonds.
Financial Security makes no representation regarding the Official Statement, uor has it participated in the preparation
thereof, except that Financial Security has provided to the Issuer the infbrmatior~ presented under this caption for
inclusion ill tile Officia! Statement.
FINANCIAL.
SECURITY
ASSURANCE®
MUNICIPAL
INSURANCE
FINANCIAL- SECURITY
h~reb~/ UNCONOmONAELY AND
J~aying agent ith0 "Paying Agent'') (~s'set forth
nds).~ for the Bonds.
to each
, for;Paym~e~,t ~Ut.,shall.be ur
Upon flisbursement: in
n~ 'any appurtenant cgupo~ to
oh the Bond and shall be fully
receive payments unc~er the Borid,
~ ~Or~'th~*,laJ'e~"d,f tt~e' day c
B. usine.
Non
prin
rDi~
t~
r.edpm
f the ..... : ....
~n[shall t ,-,*. ~'~;t
· it Will ' *
Fin~n'b'ia'l~' ',' '~'~:.,~
P~m~nt~by Finanbial Sesuri~y !o the
!~.,, t~ th~.. e~ent, thereof, discharge.. . ~ the
semeqt h~reto; th? following ,t?ms,shall have
381ic~. '"Bu~iq~ Da~' ~e~ns'any~day other than
ba~kthg rn~titbtidn~ in th~JState;of New'York o~ the InsufeCs
)rder to,re~ain clo~ed~r "Due'[or. Raymen~'
Bond payab?,on th¢,,s~ted matud~ date thereof pr thC
d~ly~lled f0~ m~d~to~ sinking ~nd re~empti~ ~n~doe~
dd~ ~y r~-~oM O(ea~ f6r rede~p~ian (Ot66~th~n' by
Financial
~ther ¢ith
payr;ne_nt pr. inter~st: ~"Non@aym, en,f', .me,an.s~jn ,¢especbof;;a: Bond,~the:,failu?e gf ,~he
ed'sufficient~fuhd~'t9 t~'~'r~stee or, if th~rb is~no Tru~t~e~ to the Paying Agent for
prihclpai'~rhd in~erest that is DUe 'for P~y~n~nt ~ s'uch Bond. "Nonpayrhcfnt`' shall
,~ih; i-.es~ect,of a,Bond, ~hy I~a~yrrtent~ of principa! or :iht.creSt that is. Due forPayment ; , ·
Page 2 of 2
PoIicy No. -F
made..to an Owr~r by (~: on behalf of the Issuer which has. been
tl~e' Ur~itdd' Stat~ Barik~uptc~)' Code by' a trustee in bankruptcy in
ordeCof.a Cou~ having
subsequeqtly~confirmed in a s~
the' TruStee or th~ P~yih~ Ag~
~aking ~he claim, b) the. Policy Number, (c) the claimed
be~am~'D~e roy ~ay~ent, "~' ne~' m~ans~*in respect
Nd~pa~nt, g ehtitled' under th'e terms of sdch Bond
include the Issuer or any person or epti~ .wh
Finan¢ial~S~o~r~ ~ay appoint ~
by gMng ~riEen' ~otiO~ [6 [h~ T~u~te~
I~s~r~:~s~J '~ent7 ' F~o~' ~
~gent;
8ecurlty. to',a?oid -~ .-
· ; of th s Po. licy,~
311 not be.motile, ed, altered or..
~ or amendment, thereto Except
lSaid ih resp~[ bf this;Policy~
.prevlsioo beingj'nade~fqrpayment, of ,
Or re~,oked. ' THIS POLICY IS NOT ' ·
I.TY~JzUIqD SPECIFIED IN g~RTICLE 76 .
u~ed tb~ Po cy to be executedr' ~
F N~C}AL ¢~CU~I~ ASSU~ANC~ INC,
' ~ ~ By '~" ~:"'~ k',~ - '" . ~ ~ "
~,, . ~ ~' Author~edOffic~r , - .
DISCLOSURE, NO DEFAULT AND TAX CERTIFICATE OF
FINANCIAL SECURITY ASSURANCE INC.
The undersigned hereby certifies on behalf of Financial Security Assurance Inc. ("Financial Security"), in connection with the issuance by Financial
Security of its Policy No. 210455-N (the "Policy") in respect of the $5,300,000 in aggregate principal amount of Town of Southold, Suffolk County,
New York Public Improvement Serial Bonds - 2008 maturing May 15 in the years 2019 through 2030, inclusive (the "Bonds") that:
(i) The information contained in Appendix C set forth under the caption "BOND INSURANCE - Financial Security Assurance Inc." in the official
statement dated May 13, 2008, relating to the Bonds is true and correct, except as set forth in (ii) below.
(ii)
At March 31, 2008, Financial Security's consolidated policyholders' surplus and contingency reserves were approximately $3,012,872,486
and its total net unearned premium reserve was approximately $2,419,501,630 in accordance with statutory accounting principles. At March
31, 2008, Financial Security's consolidated shareholder's equity was approximately $3,053,752,711 and its total net unearned premium
reserve was approximately $1,882,057,335 in accordance with generally accepted accounting principles.
(iii) Financial Security is not currently in default nor has Financial Security ever been in default under any policy or obligation guaranteeing the
payment of principal of or inlerest on an obligation,
(iv) the Policy is an unconditional and recourse obligation of Financial Security (enforceable by or on behalf of the holders of the Bonds) to pay
the scheduled principal of and interest on the Bonds in the event of Nonpayment by the Issuer (as set forth in the Policy),
(v) the insurance premium of $50,500.00 (the "Premium") is a charge for the transfer of credit risk and was determined in arm's length
negotiations and is required to be paid to Financial Security as a condition to the issuance of the Policy,
(vi)
no portion of such Premium represents an indirect payment of costs of issuance, including rating agency fees, other than fees paid by
Financial Security to maintain its ratings, which, together with all other overhead expenses of Financial Security, are taken into account in the
formulation of its rate structure, or for the provision of additional services by us, nor the direct or indirect payment for a cost, risk or other
element that is not customarily borne by insurers of tax-exempt bonds (in transactions in which the guarantor has no involvement other than
as a guarantor),
(vii)
Financial Security is not providing any services in connection with the Bonds other than providing the Policy, and except for the Premium,
Financial Security will not use any portion of the Bond proceeds; provided, however, that Financial Security or its affiliates may independently
provide a guaranteed investment contract for the investment of all or a portion of the proceeds of the Bonds,
(viii) except for payments under the Policy in the case of Nonpayment by the Issuer, there is no obligation to pay any amount of principal or
interest on the Bonds by Financial Security,
(ix) Financial Security does not expect that a claim will be made on the Policy,
(x)
(xi)
the Issuer is not entitled to a refund of the premium for the Policy in the event a Bond is retired before the final maturity date, and
for Bonds which are secured by a debt service reserve, Financial Security would not have issued the Policy unless the authorizing or security
agreement for the Bonds provided for a debt service reserve account or fund funded and maintained in an amount at least equal to, as of any
particular date of computation, the reserve requirement as set forth in such agreement.
Financial Security makes no representation as to the nature of the interest to be paid on the Bonds or the treatment of the Policy under Section
1.148-4(0 of the Income Tax Regulations.
Dated: May 29, 2008
FINANCIAL SECURITY ASSURANCE INC.
By:
Authorized Officer
PFSA
4 D,'zb~ tT>~mp(~l9'
May 29, 2008
Municipal Bond Insurance Policy No. 210455-N
with Respect to
$5.300.000 in Aqqreqate Principal Amount of
Town of Southold, Suffolk County, New York
Public Improvement Serial Bonds - 2008 maturinq May 15 in the years 2019 throuqh 2030, inclusive
Ladies and Gentlemen:
I am Associate General Counsel of Financial Security Assurance Inc., a New York stock insurance company
("Financial Security"). You have requested my opinion in such capacity as to the matters set forth below in
connection with the issuance by Financial Security of its above-referenced policy (the "Policy"). In that regard, and for
purposes of this opinion, I have examined such corporate records, documents and proceedings as I have deemed
necessary and appropriate.
Based upon the foregoing, I am of the opinion that:
1. Financial Secudty is a stock insurance company duly organized and validly existing under
the laws of the State of New York and authorized to transact financial guaranty insurance
business therein.
2. The Policy has been duly authorized, executed and delivered by Financial Security.
3. The Policy constitutes the valid and binding obligation of Financial Security, enforceable in
accordance with its terms, subject, as to the enforcement of remedies, to bankruptcy,
insolvency, reorganization, rehabilitation, moratorium and other similar laws affecting the
enforceability of creditors' dghts generally applicable in the event of the bankruptcy or
insolvency of Financial Security and to the application of general principles of equity.
In addition, please be advised that I have reviewed the description of the Policy contained in Appendix C under
the caption "BOND INSURANCE - Bond Insurance Policy" in the official statement relating to the above-referenced
Bonds dated May 13, 2008 (the "Official Statement"). There has not come to my attention any information which
would cause me to believe that the description of the Policy referred to above, as of the date of the Official Statement
or as of the date of this opinion, contains any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading. Please be advised that I express no opinion with respect to any information contained in, referred to or
omitted from under the caption "BOND INSURANCE - Financial Security Assurance Inc." as set fodh in Appendix C
of the Official Statement.
I am a member of the Bar of the State of New York, and do not express any opinion as to any law other than
the laws of the State of New York.
Very truly yours,
Associate General Counsel
Town of Southold,
53095 Main Road,
Southold, NewYork 11971.
Roosevelt & Cross, Inc. and Associates,
as Representative of the Underwriters,
55 Broadway, 22nd Floor,
NewYork, NewYork 10006.
NOTICE OF CLAIM AND CERTIFICATF
Financial Security Assurance Inc.
31 West 52nd Street
NewYork, NY 10019
The undersigned, a duly authorized officer of [FULL NAME OF TRUSTEE or PAYING AGENT] (the
"Trustee/Paying Agent"), hereby certifies to Financial Security Assurance Inc. ("Financial Security"), with reference to
Municipal Bond Insurance Policy No. 210455-N dated May 29, 2008 (the "Policy") issued by Financial Security in
respect of the Town of Southold, Suffolk County, New York Public Improvement Serial Bonds - 2008 maturing May 15
in the years 2019 through 2030, inclusive (the "Bonds"), that:
(i) The Trustee/Paying Agent is the Trustee/Paying Agent under the document
authorizing the issuance of the Bonds (the "Indenture") for the Holders.
(ii) The sum of all amounts on deposit (or scheduled to be on deposit) in the [RELEVANT
ACCOUNTS] and available for distribution to the Holders pursuant to the Indenture will be $
(the "Shortfall") less than the aggregate amount of principal and interest Due for Payment on
_("Scheduled Payments").
(iii) The Trustee/Paying Agent is making a claim under the Policy for the Shortfall to be
applied to the payment of Scheduled Payments.
(iv) The Trustee/Paying Agent agrees that, following receipt of funds from Financial
Security, it shall (a) hold such amounts in trust and apply the same directly to the payment of
Scheduled Payments on the Bonds when due; (b) not apply such funds for any other purpose; (c)
not commingle such funds with other funds held by the Trustee/Paying Agent and (d) maintain an
accurate record of such payments with respect to each Bond and the corresponding claim on the
Policy and proceeds thereof, and, if the Bond is required to be [SURRENDERED/PRESENTED] for
such payment, shall stamp on each such Bond the legend $"[insert applicable amount] paid by
Financial Secudty and the balance hereof has been canceled and reissued" and then shall deliver
such Bond to Financial Security.
(v) The Trustee/Paying Agent, on behalf of the Holders, hereby assigns to Financial
Security the rights of the Holders with respect to the Bonds to the extent of any payments under the
Policy, including, without limitation, any amounts due to the Holders in respect of securities law
violations arising from the offer and sale of the Bonds. The foregoing assignment is in addition to,
and not in limitation of, rights of subrogation otherwise available to Financial Security in respect of
such payments. Payments to Financial Security in respect of the foregoing assignment shall in all
cases be subject to and subordinate to the rights of the Holders to receive all Scheduled Payments
in respect of the Bonds. The Trustee/Paying Agent shall take such action and deliver such
instruments as may be reasonably requested or required by Financial Security to effectuate the
purpose or provisions of this clause (v),
(vi) The Trustee/Paying Agent, on its behalf and on behalf of the Holders, hereby appoints
Financial Security as agent and attorney-in-fact for the Trustee/Paying Agent and each such Holder
in any legal proceeding with respect to the Bonds. The Trustee/Paying Agent hereby agrees that,
so long as Financial Security shall not be in default in its payment obligations under the Policy,
Financial Security may at any time during the continuation of any proceeding by or against the
Issuer under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding") direct all matters relating to
such Insolvency Proceeding, including without limitation, (A) all matters relating to any claim in
connection with an Insolvency Proceeding seeking the avoidance as a preferential transfer of any
payment made with respect to the Bonds (a "Preference Claim"), (B) the direction of any appeal of
any order relating to any Preference Claim at the expense of Financial Secudty but subject to
reimbursement as provided in the Indenture and (C) the posting of any surety, supersedeas or
performance bond pending any such appeal. In addition, the Trustee/Paying Agent hereby agrees
that Financial Security shall be subrogated to, and the Trustee/Paying Agent on its behalf and on
behalf of each Holder, hereby delegates and assigns, to the fullest extent permitted by law, the
rights of the Trustee/Paying Agent and each Holder in the conduct of any Insolvency Proceeding,
including, without limitation, all rights of any party to an adversary proceeding or action with respect
to any court order issued in connection with any such Insolvency Proceeding.
(vii) Payment should be made by wire transfer directed to [SPECIFY INSURANCE
ACCOUNT].
Unless the context otherwise requires, capitalized terms used in this Notice of Claim and Certificate and not
defined herein shall have the meanings provided in the Policy.
IN WITNESS WHEREOF, the Trustee/Paying Agent has executed and delivered this Notice of Claim and
Certificate as of the day of
By
Title
For Financial Security or
Fiscal Agent Use Only
Wire transfer sent on By
Confirmation Number
-2-
PROCEDURES FOR PREMIUM PAYMENT TO
FINANCIAL SECURITY ASSURANCE INC.
Financial Security's issuance of its municipal bond insurance policy at bond closing is
contingent upon payment and receipt of the premium. NO POLICY MAY BE RELEASED UNTIL
PAYMENT OF SUCH AMOUNT HAS BEEN CONFIRMED. Set forth below are the procedures
to be followed for confirming the amount of the premium to be paid and for paying such amount:
Confirmation of
Amount to be Paid:
Upon determination of the final debt service
schedule, fax such schedule to Financial Security
Attention: James Mann, Vice President
Phone No.: (212) 339-3467
Fax No.: (212) 857-0448
Confirm with the individual in our underwriting department that you are in agreement
with respect to par and premium on the transaction prior to the closing date.
Payment Date:
Date of Delivery of the insured bonds.
Method of Payment:
Wire transfer of Federal Funds.
Wire Transfer Instructions:
Bank:
ABA#:
Acct. Name:
Account No.:
Policy No.:
The Bank of New York
021 000 018
FinancialSecurity Assurancelnc.
8900297263
210455-N
CONFIRMATION OF PREMIUM WIRE NUMBER AT CLOSING
Financial Security will accept as confirmation of the premium payment a wire transfer number and the name of the
sending bank, to be communicated on the closing date to Lillie Santana, Assistant Vice President Documentation and
Closing Supervisor, (212) 339-3537.
FINANCIAL
SECURITY
ASSURANCE®
MUNICIPAL BOND
INSURANCE POLICY
ISSUER:
BONDS:
~}wn et Soulhtd, Sulfolk County, New York
S5,300,000 in aggregate principal amounl of
Public Improvemer)t Serial Bonds ~ 2008
maturing May 15 in tire years 2019 through
2030, inclusive
Policy No: 210455-N
Effective Date: May29. 2008
Premium: $50,500.00
FINANCIAL SECURITY ASSURANCE INC. ("Financial Security*) for consideraticm received.
hereby UNCONDITIONAl IY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee~) or pay,lg
agent (the "Paying Agent") (as set fodh in tho documentation providing for the issoance of and securing
the Bonds) lot Ihe Bonds, for the benefil of the Owners or, at the election of Financial Security, direclly to
each Owner, subiect only to the leo'ns of this Policy (which includes each endorsement hereto), that
podion el the principal of and inlerest on the Bonds that shall become Due for Payment but shall be
unpaid by reason of Nor~payme¢4 by the Issuer,
On the later of the (Jay on which such principal and interest becomes Due for Payment or the
Business Day next Iollowing the Business Day on which Financial Security shall have received Notice of
Nonpaymer]t. Financial Security will disburse 1o or for the benefit of each Owner of a Bond the face
amount of principal of and interest on Ihe Bond that is then Due for Payment but is then unpaid by reason
of Noopayment by the issuer, but only upon receipt by Financial Security, in a form reasonably
satisfactory to it, of (ar ovideece of the Owner's right to receive payment of the principal or interest then
Due for Payment and (bt evidence, including ar~y appropriate tnstrumenls of assignment, that all of the
Ownei~s rights with respect to payment of such principal or interest that is Due for Paymenl shall
thereupon vest In Financial Security. A Notice of Nonpayment wilt be deemed received ena given
Business Day if il is ieceived prior to 1:00 pm. (New York time) on such Business Day; oiherwise, il will
be deemed received on the nexl Business Day. It any Notice of Nonpayment received by Fiaancial
Security is incomplete, il shall be deemed not Io have bee¢~ received by Financial Security lot purposes of
the preceding sentence and Financial Security shall promptly so advise the Truslee, Paying Agent o~
Owner. as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursemenl in
respect of a Bond, Financial Securily shall become the owner of tho Bond, any appurtenant or>upon to Ihe
Bond or right to receipt of payment of principal of or interesl on the Bond and shall be fully subrogated to
the rights of the Owner, including the Owner's right to receive paymenls under the Bond, lo the extent of
any payment by Firlancial Security hereunder Payment by Financial Secority lo the Trustee or Paying
Agent tar lhe benefil of the Owners shall, to the extent thereof, discharge the obligalion el Financial
Sectmity uoder this Policy.
Excepi to the extent expressly modified by an endorsement hereto, the Iollowin9 terms shall
have the meanings specified for all purposes of this Policy. "Businese Day" means any day olher than (ar
a Saturday or Sunday or (bt a day on which banking institutions in the State of New York or the Insurer's
Fiscal Agent afc authorized or required by law or executive order to remain closed. "Due for Paymenr'
means (ar when referring to Ihe principal of a Bond, payable on the slated matority date thereof or the
dale on which the same shall have been duly called lot mandatory sinking fund redemption and does not
refer to any earlier date on which payment is duo by reason et call for redemption (other than by
mandatory sinking fund redemption), acceleration or other advancement of maturity tJnless Financial
Security shall elect, ill its sole discretion, Io pay such principal due upon seeh acceleration togelher with
any accrued interest to the (late of acceleration and (bt when referring to interest on a Bond, payable on
~ho stated date for paymenl of interest. 'Nonpayment" means, in respecl of a Bond, lhe failure of the
Issuer to have provided sufficient funds to the ]rustee or, if there is no Trustee. to the Paying Agent for
payment in fait of ail principal and interest that is Due for Payment on such Bond ~Nonpayment" shall
also include, in respect of a Bond. any payment of principal or interest that is Due for Payment made to
an Owner by or on behalf of the Issuer which has been recovered from such Owner pursuant Io the
Page 2 of 2
Policy No. 210455-N
United States Bankruplcy Code by a Irusleo in bankruptcy in accordance with a final, nonappealah~e
order of a (~oLJd having competent jurisdiction, "Notice" means telephonic or telecopied nolice,
subsequenlly confirmed in a signed wrilJng, or wdtten notice by regislered or certified mail, from an
Owner, the Truslee or tl*,e Paying Agent to Financial Security which notice shall specify (a) the person or
entity making the claim, (bi the Policy Number, (c) the claimed amoual and {d) the date such claimed
amoum became Due for Paymenl "Owner" means, in respect o! a Bond. Ihe person or entily who, at the
time of Nonpayment, is entitled under the terms of such Bond to payment fhoreol, excep~ thai 'Owner"
shall not include Ihe ~ssuer Or al'~y person or entity whose direct or indirect ol;,ligalion constitutes tho
underlying secuuly lot the G(~nds~
Financial Securily may appoint a fiscat agent (the "Insurers Fiscal Agent") for purposes of lhis
Policy by giving written notice to the Trustee armd the Paying Agent specifying tile nante and nolice
,~ddress of the h~surer's Fiscal Agent. From and after fha date of receipt of such notice hy lhe Trustee
and the Paying AgenL (a) copies of all helices required to be delivered to Financial Secunty pursuant lc,
this Policy shall be simultaneously delivered to lhe Insureds Fiscal Agenl and to Financial Security and
shall act be deemed received until received by both and (bi all payments required to be made by
Financial Security under this Policy may be made directly by Financial Security or by the Insurer's Fiscal
Agent on behalf of Financial Security. Tho Insurer's Fiscal Agent is the agent of Financial Secur~ty only
and lbo Insurer's Fiscal Agenl shall in no ew?.nt be liable Io any Owoer for any act of lhe Insurer's Fiscal
Agent or any failure of Financial Security to deposit or cause to be deposited sufficient funds to make
payments duo endor Ibis Policy.
70 tho lullest extort[ permitted by applicable law, Financial Secudty agrees r~ol to assed, and
hereby waives, ordy for the benefit of each Owner. all rights (whether by counterclaim, setotf er otherwise)
and defenses (including, without limitalion, tile defense of fraud), whetho~ acquired by subrogation,
assignment or otherwise, to the extent lhat such dghts and defenses may be available Io Financial
Security 1o avoid payment of its obligations under this Policy in accordance with lhe express provisions of
this Policy.
This Policy sets [odh in full the undedaking of Financial Security, and shall not be modified.
altered or affecled by any other agreement or instrument, including any modificalioa or amendment
thereto, Except to [ho extent expressly modified by an endorseraent hereto, (a) any premium paid in
respect of Ihis Policy is nonrefundable for any reasoa whatsoever, including paymenl. Or provision being
made for paymenl, of Ihe Bonds prior to maturily and (bi this Policy may not be canceled or revoked
I'ttlS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURI'ry FUND
SPECIFIED IN ARTICLE 76 OF IHE NEW YORK INSURANCE LAW,
In witness whereof. FINANCIAL SECURIYY ASSURANCE INC. has caused this Policy to be
executed on ils behalf by ils Authorized Officer
FINANCIAL SECURITY ASSURANCE INC.
A subsidiary of Financial Secudty Assurance Holdings Ltd.
31 West 52nd StreeL New York. N.Y. ~0019
Form 500NY (5/90)
Authorized Officer
(212) 826-0t 00
Moody's Investors Service'
7 World Trade Center at 250 Greenwich Street,
New York, New York 10007
May 28, 2008
Financial Security Assurance, Inc
31 West 52nd Street
New York, NY 10019
To Whom It May Concern:
Moody's Investors Service has assigned the rating of Aaa to the $$,300,000.00, Town
of Southold, Suffolk County, New York - Public Improvement Serial Bonds-2008
maturing May 15 in the years 20'19 through 2050, inclusive, dated May 15, 2008
which sold on May 13, 2008, insured by Financial Security Assurance, Inc (Policy No.
210455-N). The rating is the highest of (i) the guarantor's financial strength rating, (ii)
any published underlying rating on the security, or (iii) any published enhanced rating
based on a state credit enhancement program.
Should you have any questions regarding the above, please do not hesitate to contact
Vincent Guadagno Jr. at (212) 553-2948.
Sincerely yours,
Joann Hempel
Vice President / Senior Credit Officer
JH/TM