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TRANSCRIPT OF PROCEEDINGS
TOWN OF SOUTHOLD, NEW YORK
$2,125,000 Refunding Serial Bonds-2009 ("Bonds")
Closing Date: May 4, 2009
Jndex
Refunding Bond Resolution adopted by the Town Board of the Town of Southold, in thc
Comity of Suffolk, New York (the "Town") on February 24, 2009, together with affidavit
of publication of estoppel notice.
Preliminary Official Statement, dated April 6, 2009.
Certificate of Determination execuled by the Town Supervisor of the Town as of April 7,
2009, relative to thc attthorization, sale and issuance of the $2,125,000 Refunding Serial
Bonds-2009.
Bond Purchase Agreement dated April 7, 2009 between the Town and Roosevelt &
Cross, Incorporated
Final Official Statement, dated April 7, 2009, with Certificate with Respect to the Official
Statement prefixed thereto.
Final Refunding Financial Plan.
Verification Report of Causey Dcmgen & Moore, Inc., the verification agent.
Subscription Forms lbr Purchase and Issue of U.S. Treasury Securities (SLGS).
Certificate of the Chief Fiscal Officer delivered pursuant to Section 90.10(g) of the New
York Local Finance Law, executed by the Town Supervisor, along with State
Comptroller's approval.
Terms and Conditions Letter of the Town Supervisor, including State Comptroller's
approval.
Closing Certificates consisting of: (a) Certificate as to Signatures and Litigation executed
by the Town Supervisor and the Town Clerk; and (b) Certificate of Delivery and Payment
executed by the Town Sapervisor.
Certificate of the Town Supervisor of the Town in the form prescribed by Exhibit B to
the Bond Purchase Agreement,
Certificato of the Assistant Town Attorney in the form prescribed by Exhibit C to the
Bond Purchase Agreement.
560789.1 032681 CERT
(14) Certificate of the To,~ Clerk.
(15) Agreement to Provide Continuing Disclosure.
(16) Arbitrage and Use of Procceds Certificate.
(17) Internal Revenue Service Form 8038-G.
(I 8) Underwriter's Letter Regarding Pnblic Offering of the Bonds.
(19) Escrow Contract between the Town and Thc Bank of New York Mellon ("Escrow
Holder"), along with Certificates of the Escrow Holder.
(20) Letter from Standard & Poor's regarding the investment rating of the Bonds, together
witb rating report.
(21) List of CUSIP numbers for the Bonds.
(22) DTC Salbkeeping Agreement for the Bonds, with photocopy of entire first numbered
Bond and thc first page of all Bonds.
(23) Closing Memorandum, together with Wire Instructions with confirmation evidencing
payment of the bonds.
(24) Final Approving Opinion of Hawkins Delafield & Wood LLP, together with Reliance
Letter addressed to the State Comptroller and Roosevelt & Cross, Incorporated; and
Supplemental Opi~tion of Bond Counsel in the form prescribed by Exhibit A to tire Bond
Purchase Agreement, addressed to Roosevelt & Cross, Incorporated.
560789.1 032681 CERT
EXTRACT OF MINUTES
Meeting of the Town Board of the Town of Southold,
in the County of Suffolk, New York
February 24, 2009
A regular meeting of the Town Board of the Town of Southold, in the
County of Suffolk, New ,York, was held at the Town Hall, 53095 Main Road, Southold,
New York, on February 24, 2009.
There were present:
Board Members:
Scott A. Russell, Supervisor; and
Councilman Albert Krupski, Jr
Councilman Vincent Orlando
Councilman William Ruland
Councilman Thomas Wickham
Justice Louisa Evans
There were absent: None
Also present: Elizabeth A. Neville, Town Clerk
Councihnan Vincent Orlando offered the following resolution and moved its
adoption:
REFUNDING BOND
OF SOUTHOLD,
FEBRUARY 24,
RESOLUTION OF THE TOWN
NEW ;YORK, ADOPTED
2009, AUTHORIZING THE
REFUNDING OF CERTAIN OUTSTANDING SERIAL
BONDS OF SAID TOWN, STATING THE PLAN OF
REFUNDING, APPROPRIATING AN AMOUNT NOT
TO EXCEED $3,000,000 FOR SUCH PURPOSE,
AUTHORIZING THE ISSUANCE OF NOT TO
EXCEED $3,000,000 REFUNDING BONDS TO
FINANCE SAID APPROPRIATION, AND MAK1NG
CERTAIN OTHER DETERMINATIONS RELATIVE
THERETO.
Recitals
WHEREAS, the Town of Southold, in the County of Suffolk, New York
(herein called the "Town"), has heretofore issued on May 19, 1.998 its $2,000,000
Agricultural Land Preservation Serial Bonds-1998 (the "1998 Bonds"), which are
cui'rently outstanding in the principal amount of $1,120,000 (the "Outstanding 1998
Bonds"), which shall mature on May 1 in each of the years and in the principal amounts
and bear interest payable semiannually on May I and November 1 in each year to
maturity, as follows:
Year of Principal Interest
Maturity Amount Rale
2009 $100,000 4.85%
2010 100,000 4.85
2011 110,000 4.85
2012 110,000 4.85
2013 1 I0,000 4.85
2014 110.000 4-7/8
2015 120,000 4-7/8
2016 120,000 4-7/8
2017 $120.000 4-7/8%
2018 120,000 4-7/8
WHEREAS, the 1998 Bonds maturing on or after May 1, 2009 are subject
to redemption prior to maturity, at the option of the Town. on May I, 2008 and thereafter
on any date. in whole or in part, in inverse order or maturity or in equal proportionate
amounts (selected by lot within a maturity), at the following redcmption prices, plus
accrued interest to the date of redemption:
Redemption Dates
(all dates inclusive)
Redemption Prices
(Percentages of Principal Amount)
May 1, 2008 to April 30, 2009
May 1. 2009 to April 30, 2010
May 1, 2010 and thereafter
102%
I01
100
WHEREAS, on May 18, 1999 the Town issued its $1,900,000. Open Space
Preservation Serial Bonds-1999 (the "1999 Bonds"), which are currently outstanding in
the principal amount of $1,160,000 (the "Outstanding 1999 Bonds" and together with the
1998 Outstanding Bonds, the "Outstanding Bonds"), which shall mature on May 1 in
each of the years and in the principal amounts and bear interest payable semiannually on
May 1 and November 1 in each year to maturity, as follows:
Year of Principal Interest
M~urity Amount R~e
2009 $ 90,000 4.70%
2010 90.000 4.70
2011 100,000 4.70
2012 100.000 4.70
2013 100;000 4.70
2014 110,000 4.70
2015 110,000 4.70
2016 110,000 4.70
2017 110,000 4.70
2018 120,000 4.70
Year of Principal Interest
Maturity Amount Rate
2019 120,000 4.70
WHEREAS. the 1999 Bonds maturing on or after May 1. 2010 are subject
to redemption prior to maturity, at the option of the Town, on May 1, 2009 and thereafter
on any date, in whole or in part, and if in pan, in reverse order of maturity or in equal
proportionate amounts (selected by lot within a maturity), at the following redemption
prices, plus accrued interest to the date of redemption, as follows:
Redemption Dates
(Both Dates Inclusive)
May 1, 2009 to April 30, 2010
May 1,2011 to April 30, 2011
May 1, 2012 and thereafter
Redemption Prices
(Percentages of Principal Amount)
102%
101
100
WHEREAS, Section 90.10 of the Local Finance Law, constituting Chapter
33-a of the Consolidated Laws of the State of New York (herein called the "Law"),
permits the Town to refund all or a portion of the outstanding unredeemed maturities of
thc 1998 Bonds and the 1999 Bonds by the issuance of new bonds, the issuance of which
will result in present value debt service savings tbr the Town, and the Town Board has
deterxnined that it may be advantageous to refund all or a portion of the Outstanding
Bonds;
NOW, THEREFORE, be it
RESOLVED BY THE TOWN BOARD OF THE TOWN OF
SOUTHOLD, NEW YORK (by thc favorable vote of at least two-thirds of all the
members of said Town Board), AS FOLLOWS:
Section 1. In this resolution, the following definitions apply, unless a
different meaning clearly appears from the context:
(a) "Bond To Be Refunded" or "Bonds To Be Refunded" means all or a
portion of the aggregate Outstanding Bonds, as shall be determined in
accordance with Section 8 hereof.
(b)
"Escrow Contract" means the contract to be entered into by and
between the Town and the Escrow HOlder pursuant to Section 10
hereof.
(c) "Escrow Holder" means the bank or trust company designated as such
pursuant to Section l 0 hereof.
(d)
"Present Value Sayings" means the dollar savings which result from
the issuance of the Refunding Bonds computed by discounting the
principal and interest payments on both the Refunding Bonds and the
Bonds To Be Refunded from the respective maturities thereof to the
date of issue of the Refunding Bonds at a rate equal to the effective
interest cost of the Refunding Bonds. The effective interest cost of the
Refunding Bonds shall be that rate which is arrived at by doubling the
semi-annual interest rate (compounded semi-annually) necessary to
discount the debt service payments on the Refnnding Bonds from the
maturity dates thereof to the date of issue of the Refunding Bonds and
to the agreed upon price including estimated accrued interest.
(e)
"Redemption Date" means May 1, 2008, or any date thereafter, with
respect to the 1998 Bonds and May 1, 2009 with respect to the 1999
Bonds.
(I') "Refunding Bond" or "Refunding Bonds" means all or a portion of the
$3,000,000 Refunding Serial Bonds-2009 of the Town of Southold,
authorized to be issued pursuant to Section 2 hereof.
(g)
"Refunding Bond Amount Limitation" means an amount of Refunding
Bonds which does not exceed the principal amount of Bonds To Be
Refunded plus the aggregate amount of unmatured interest payable on
such Bonds To Be Refunded, to and including the applicable
Redemption Date, plus redemption premiums payable on such Bonds
To Be Refunded as of such Redemption Date, as hereinabove referred
to in the Recitals hereof, plus costs and expenses incidental to the
issuance of the Refunding Bonds including the development of the
refunding financial plan. and of executing and peribrming the terms
and conditions of the Escrow Contract and all fees and charges of the
Escrow Holder as referred to in Section 10 hereof
Section 2. The Town Board of the Town (herein called the "Town
Board"), hereby authorizes the refunding of the Bonds To Be Refunded, and appropriates
m~ amount not to exceed $3,000,000 to accomplish such refunding. The plan of financing
said appropriation includes the issuance of not to exceed $3,000,000 Refunding Bonds
and the levy and collection of a tax upon all the taxable real property within the Town to
pay the principal of and interest on said Refunding Bonds as the same shall become due
and payable. Bonds of the Town in the maximum principal amount of $3,000,000 and
substantially designated as "REFUNDING SERIAL BONDS-2009", are hereby
authorized to be issued pursuant to the provisions of the Law. The proposed financial
plan for ~the refunding in the form attached hereto as Exhibit A (the "refunding financial
plan") prepared for the Town by Roosevelt & Cross, Incorporated, New York, New
York, and hereby accepted and approved, includes the deposit of all the proceeds of said
Refunding Bonds with an Escrow Holder pursuant to an Escrow Contract as authorized in
Section 10 hereof, the payment of all costs incurred by the Town in connection with said
refunding from such proceeds and the investment of a portion of such proceeds by the
Escrow Holder in certain obligations. The principal of and interest on such investments,
together with the balance of such proceeds to be held uninvested, if any, shall be
sul~cient to pay (i) the principal of and interest on the Bonds To Be Refunded becoming
due and payable on and prior to each applicable Redemption Date and (ii) the principal of
and premium on the Bonds To Be Refunded which are to be called for redemption prior
to maturity on any such Redemption Date.
Section 3. The Bonds To Be Refunded referred to in Section 1 hereof are
all or a portion of the Outstanding Bonds issued pursuant to the bond resolutions duly
adopted on their respective dates, authorizing the issuance of bonds of the Town for open
space and agricultural land preservation. In accordance with the refunding financial plan,
the Refunding Bonds authorized in the aggregate principal amount of not to exceed
$3,000,000 shall mature in amounts and at dates to be determined. The Supervisor, the
chief fiscal officer of the Town, is hereby authorized to approve all details of the
refunding financial plan not contained herein.
Section 4. The issuance of the Refunding Bonds will not exceed the
Refunding Bond Amount Limitation. The Refunding Bonds shall mature not later than
the maximum period of probable usefulness ("PPU") permitted by law at the time of
original issuance of the Bonds to be Refunded. The maximum period of probable
usefulness ("PPU") of the Bonds to be Refunded is thirty (30) years.
Section 5. The aggregate amount of estimated 'Present Value Savings is
set forth in the proposed refunding financial plan attached hereto as Exhibit A, computed
in accordance with subdivision two of paragraph b of Section 90.10 of the Law. Said
refunding financial plan has been prepared based upon the assumption that the Refunding
Bonds will be issued in the aggregate principal amount, and will mature, be of such terms
and bear such interest as set forth therein. The Town Board recognizes that the principal
amount of the Refunding Bonds, the maturities, terms and interest rates, the provisions, if
any, for the redemption thereof prior to maturity, and whether or not any or all of the
Refunding Bonds will be insured, and the resulting present value savings, may vary fi'om
such assumptions and that the refunding financial plan may vary from that attached
hereto as Exhibit A.
Section 6. The Refunding Bonds may be sold at public or private sale and
the Supervisor, the chief fiscal officer of the Town, is hereby authorized to execute a
purchase contract on behalf of the Town for the sale of said Refunding Bonds, provided
that the terms and conditions of such sale shall be approved by the State Comptroller, and
further providing that prior to the issuance of the Refunding Bonds the Supervisor shall
have filed with the Town Board a certificate approved by the State Comptroller setting
forth the Present Value Savings to t-he Town resulting from the issuance of the Refunding
Bonds. In connection with such sale, the Town authorizes the preparation of an Official
Statement .and approves its use in connection with such sale, and further consents to the
distribution of a Preliminary Official Statement prior to the date said Official Statement is
distributed. In the event that the Refunding Bonds are sold at public sale pursuant to
Section 57.00 of the Law, the President of the Board of Education is hereby authorized
and direct to prepare or have prepared a Notice of Sale, a summary of which shall be
published at least once in (a) "THE BOND BUYER", published in the City of New York
and (b) the official newspaper(s) of the Town having general circulation within said
Town, not less than five (5) nor more than thirty (30) days prior to the date of said sale.
A copy of such notice shall be sent not less than eight (8) nor more than thirty (30) days
prior to the date of said sale to (1) the State Comptroller. Albany, New York 12236; (2) at
least two banks or trust companies having a place of business in the county in which the
Town is located, or. if only one bank is located in such County, then to such bank and to
al least two banks or trust companies having a place of business in an adjoining county;
(3) "THE BOND BUYER", 1 State Street Plaza, New York, New York 10004: and (4) at
least 10 bond dealers. The Supervisor is hereby further authorized and directed to take
any and all actions necessary to accomplish said refunding, and to execute any contracts
and agreements for the purchase of and payment for services rendered or to be rendered
to the Town in connection with said refunding, including the preparation of the refunding
financial plan referred to in Section 2 hereof.
Section 7. Each of the Refunding Bonds authorized by this resolution
shall contain the recital of validity prescribed by Section 52.00 of the Law and said
Refunding Bonds shall be general obligations of the Town, payable as to both principal
and interest by a general tax upon all the taxable real property within the Town without
limitation as to rate or amount. The faith and credit of the Town are hereby irrevocably
pledged to the punctual payment of the principal of and interest on said Refunding Bonds
and provision shall be made annually in the budget of the Town for (a) the amorlization
and redemption of the Refunding Bonds to mature in such year and (b) the payment of
interest to be due and payable in such year.
Section 8. Subject to the provisions of this resolution and of the Law, and
pursuant to the provisions of Section 21.00 of the Law with respect to thc issuance of
bonds having substantially level or declining annual debt service, and Sections 50.00,
56.00 to 60.00, 90.10 and 168.00 of the Law, the powers and duties of the Town Board
relative to determining the amount of Bonds To Be Refunded, prescribing the terms, form
and contents and as to the sale and issuance of the Refunding Bonds, and executing any
arbitrage certification relative thereto, and as to executing the Escrow Contract described
in Section 10, the Official Statement referred to in Section 6 and any contracts for credit
enhancements in connection with the issuance of the Refunding Bonds and any other
certificates and agreements, and as to making elections to call in and redeem all or a
portion of the Bonds to be Refunded, are hereby delegated to the Supervisor, the chief
fiscal officer of the Town.
Section 9. The validity of the Refunding Bonds authorized by this
resolution may be contested only if:
(a) such obligations are authorized for an object or purpose for which
the Town is not authorized to expend money, or
(b)
the provisions of law which should be complied with at the date of
the publication of such resolution, or a summary thereof, are not
substantially complied with,
and an action, suit or proceeding contesting such validity is commenced within twenty
days after the date of such publication, or
(c) such obligations are authorized in violation of the provisions of the
constitution.
Section 10. Prior'to the issuance of the Refunding Bonds. the Town shall
contract with a bank or trust cmnpany located and authorized to do business in New York
State, for the purpose of having such bank or trust company act as the Escrow Holder of
the proceeds, inclusive of any premium from the sale of the Refimding Bonds, together
with all income derived from the investment of such proceeds. Such Escrow Contract
shall contain such terms and conditions as shall be necessary in order to accomplish the
refunding financial plan, including provisions authorizing the Escrow Holder, without
further authorization or direction from the Town. except as otherwise provided therein,
(a) to make all required payments of principal, interest and redemption premiums to the
appropriate paying agent with respect to the Bonds To Be Refunded, (b) to pay costs and
expenses incidental to the issuance of the Refunding Bonds, including the development
of the refunding financial plan, and costs and expenses relating to the execution and
performance of the terms and conditions of the Escrow Contract and all of its fees and
charges as the Escrow Holder, (c) at the appropriate time or times to cause to be given on
behalf of the Town the notice of redemption authorized to be given pursuant to Section
13 hereof, and (d) to invest the monies held by it consistent with the provisions of the
refunding financial plan. The Escrow Contract shall be irrevocable and shall constitute a
covenant with the holders of the Refunding Bonds.
Section 11. The proceeds, inclusive of any premium, from the sale of the
Refunding Bonds, ilnmediately upon receipt shall be placed in escrow by the Town with
the Escrow Holder in accordance with the Escrow Contract. All moneys held by the
Escrow Holder shall be invested only in direct obligations of the United States of
America or in obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America, which obligations shall mature or be subject
to redemption at the option of the holder thereof not later than the respective dates when
such moneys will be required to make payments in accordance with the refunding
financial plan. Any such moneys remaining in the custody of the Escro~v Holder after the
full execution of the Escrow Contract shall be returned to the Town and shall be applied
by the Town only to the payment of the principal of or interest on the Refunding Bonds
then outstanding.
Section 12. That portion of such proceeds from the sale of the Refunding
Bonds, together with interest earned thereon, which shall be required for the payment of
the principal of and interest on the Bonds To Be Refunded, including any redemption
premiums, in accordance with the refunding financial plan, shall be irrevocably
committed and pledged to such purpose and the holders of the Bonds To Be Refunded
shall have a lien upon such moneys and the investments thereof held by the Escrow
Holder. All interest earned from the investment of such moneys which is not required for
such payment of principal of and interest on the Bonds To Be Refunded shall be
irrevocably committed and pledged to the payment of the principal of and interest on the
Refunding Bonds, or such portion or series thereof as shall be required by the refunding
financial plan, and, the holders of. such Refunding Bonds shall have a lien upon such
moneys held by the Escrow Holder. The pledges and liens provided for herein shall
become valid and binding upon the issuance of the Refunding Bonds and the moneys and
investments held by the Escrow Holder shall immediately be subject thereto without any
further act. Such pledges and liens shall be valid and binding against all parties having
claims of any kind in tort, contract or otherwise against the Town irrespective of whether
such parties have notice thereof. Neither this resolution, the Escrow Contract, nor any
other instrument relating to such pledges and liens, need be filed or recorded.
Section 13. In accordance with the provisions of Section 53.00 and of
paragraph h of Section 90.10 of the Law, the Town Board hereby elects to call in and
redeem all or a portion of the Bonds To Be Refunded Which are subject to prior
redemption according to their terms on the Redemption Date, as shall be determined by
the Supervisor in accordance with Section 8 hereof. The sum to be paid therefor on the
applicable Redemption Date shall be the par value thereof, the accrued interest to such
Redemption Date and the redemption premiums, if any. The Escrow Holder is hereby
authorized and directed to cause a notice of such call for redemption to be given in the
name of the Town by mailing such notice at least thirty days prior to such Redemption
Date, and in accordance with the terms appearing in 'the Bonds to be Refunded, to the
registered holders of the Bonds To Be Refunded which are to be called in and redeemed.
Upon the issuance of thc Refunding Bonds, the election to call in and redeem the Bonds
To Be Re!'unded which are to be called in and redeemed in accordance herewith'and the
direction to the Escrow Holder to cause notice thereof to be given as provided in this
Section shall become irrevocable and the provisions of this Section shall constitute a
covenant with the holders, from time to time, of the Refunding Bonds, provided that this
Section may be amended from time to time as may be necessary to comply with the
publication requirements of paragraph a of Section 53.00 of the Law, as the same may be
amended from time to time.
Section 14. This bond resolution shall take effect immediately, and the
Town Clerk is hereby authorized and directed to publish the foregoing resolution, in
summary, together with a Notice attached in substantially the form prescribed by Section
81.00 of the Law in the "The Suffolk Times," a newspaper having general circulation in
the Town and hereby designated the official newspaper of said Town for such
publication.
The adoption of the foregoing resolution was seconded by Councilman
Albert Krupski, Jr. and duly put to a vote on roll call, which resulted as follows:
AYES: Scott A. Russell, Supervisor
Councilman Albert Krupski, Jr
Councilman Vincent Orlando
Councilman William Ruland
Councilman Thomas Wickham
Justice Louisa Evans
NOES: None
The resolution was declared 'adopted.
Dated Date
3/4/2009
Refunding Par Amount
Bond Arbitrage Yield
Escrow Yield
Refunded Bonds Par Amount
Average Coupon of Refunded Bonds
2,335,000
2.455716%
0.232195%
2,280,000
4,778313%
Net PV Savings
Percentage of PV Savings
113.090.35
4.960103%
Aggregate Budgetary Savings
Annual Budgetary
Fiscal Year 2009
Fiscal Year 2010
Fiscal Year 2011
Fiscal Year 2012
Fiscal Year 2013
Fiscal Year 2014
Fiscal Year 2015
Fiscai Year 2016
Fiscal Year 2017
Fiscal Year 2018
Fiscal Year 2019
Savings (DEC 31)
122,701.25
14,792.50
10,767.50
10,841,25
10,812.50
10,671.25
10,281.25
11,480.00
14 360.00
12 140.00
11 035.00
5,520.00
ROOSEVELT & CROSS
2/'1112009
SOURCES AND USES OFFUNDS
Town of Southold, New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (5/1/09-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Dated Date 03/04/2009
Delivery Date 03/04/2009
Sources:
Bond Proceeds:
Par Amount 2,335, DO0.00
Net Premium 123,056.75
2,458,056.75
Uses:
Refunding Escrow Deposits:
Cash Deposit 20.54
SLGS Purchases 2;373,395.00
Delivery Date Expenses:
Cost of Issuance
Underwriter's Discount
2,373,415.54
60,000.00
20,000.00
80,000.00
Other Uses of Funds:
Additional Proceeds 4,641.21
2.458,056.75
Feb 11,2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page I
SOURCESAND USES OFFUNDS
Town of Southold, New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (5/1/09-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Dated Date 03/04/2009
Delivery Date 03/04/2009
REFUNDING REFUNDING
Sources: BONDS BONDS Total
Bond Proceeds:
Par Amount 1,148,000.00 1,187,000.00 2,335,000,00
Premium 59,161.91 63,894.84 123 056.75
1,207,161.91 1,250 ~94.84 2.458 056.75
REFUNDING REFUNDING
Uses: BONDS BONDS Total
Refunding Escrow Deposits:
Cash Deposit 10.12 10.42 20.54
SLGS Purchases 1,165,17'7.00 1,208,218.00 2,373,395.00
1,165,187,12 1,208,228.42 2,373,415.54
Deliver Date Expenses:
Cost of issuance
Underwriter's Discount
29,498.93 30.501.07 60,000.00
9,832.98 10,167.02 20,000.00
39.331,91 40,668,09 80,000.00
Other Uses of Funds:
Additional Proceeds 2.642.88 1,998.33 4,641.21
1,207,161.91 1,250,894.84 2,458,056.75
Feb 11,2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6,009 nys:R29899) Page 2
SUMMARY OF REFUNDING RESULTS
Town of Southold, New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (511/09-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Dated Date
Delivery Date
Arbitrage yield
Escrow yield
Bond Par Amount
True nterest Cost
Net Interest Cost
Ail-In TIC
Average Coupon
Average Life
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
PV of prior debt to 03/04/2009 (~ 2.455716%
Net PV Savings
Percentage savings of refunded bones
Percentage savings of refunding bonds
03/04/2009
03/04~009
2.455716%
0.232195%
2,335,000.00
2.637296%
2.752008%
3,196107%
3.646620%
4.933
2,280,000.00
4.778313%
5.145
2,566,505.89
113,090.35
4.960103%
4.843270%
Feb 11,2009 10:49 am Prepared by Roosevelt & Cross Inc. (c) (Finance 6.009 nys:R29899) Page 3
Date
SAVINGS
Town of Southold New York
Refunding 'Bonds
REFUNDING OF 1998 BONDS (511/09-18)
REFUNDING OF 1999 BONDS (5/1/09-19)
(UNENHANCED}; (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Present Value
Prior Refunding Annual to 03/04/2009
Debt Service Debt Service Savings Savings @ 2.4557162%
05/01/2009
11/01/2009
12/31/2009
05/01/2010
11/01/2010
12/31/2010
05/01/2011
11/01/2011
12/31/2011
05/01/2012
11/01/2012
12/31/2012
05/01/2013
11/01/2013
12/31/2013
05/01/2014
11/01/2014
- 2/31/2014
05/01/2015
11/01/2015
12/31/2015
05/01/2016
11/01/2016
12/31/2016
05/01/2017
11/01/2017
12/31/2017
05/01/2018
11/01/2018
12/31/2018
05/01/2019
12/31/2019
244.493.75 246 305.00 -1.811.25 -1 804.26
49.953.75 33350.00 16.803.75 1633909
14,792.50
239,953.75 243 350.00 -3,396.25 -3,301.58
45,413.75 31 250.00 14,163.75 13,601.91
10,767.50
255.413.75 256.250.00 -836.25 -793.34
40,396.25 28,718.75 11.677.50 10,943.88
10,841.25
250,396.25 248.718.75 1.677.50 1.553.04
35,378.75 26,243.75 9,135.00 8,354.68
10,812.50
245,378.75 241.243.75 4.135.00 3,735.91
30.361,25 23,825.00 6.536,25 5,833.78
10,671,25
250361.25 243,825.00 6,536.25 5,763.02
25 095.00 21,350.00 3.745.00 3,261.92
10.281.25
255 095.00 246.350.00 8,745.00 7,524.56
19.585.00 16,850.00 2,735.00 2,324.76
11 480.00
249 585.00 238,850,00 12,735,00 10,693.50
14 075.00 12,450,00 1,625,00 1,347.95
14.360.00
244 075.00 232,450.00 11,625.00 9,526.07
8 565.00 8,050.00 515.00 416.90
12.140.00
248 565.00 238,050.00 10,515,00 8,408.72
2 820.00 2,300.00 520,00 410.79
11 035.00
122.620.00 117.300.00 5,520.00 4,307.84
5520.00
2,877,781.25 2,755,080.00 122,701.25 122 701.25 108,449.14
Savings Summary
PV of savings from cash flow
Plus: Refunding funds on hand
Net PV Savings
108,449.14
4,641.21
113,090.35
Feb 11 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page 4
BOND PRICING
Town of Southold, New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF'1999 BONDS (5/1/09-19)
(UNENHAi'4CED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Bond Component
Serial Bonds:
Maturity.
Date Amount Rate
Yield Price
05/01/2009 235,000 2.000%
05/01/2010 210,000 2.000%
05/01/2011 225,000 2.250%
05/01/2012 220,000 2,250%
05/01/2013 215,000 2.250%
05/01/2014 220,000 2.250%
05/01/2015 225,000 4.000%
05/01/2016 220,000 4.000%
05/01/2017 220,000 4.000%
05/01/2018 230,000 5.000%
05/01/2019 115,000 4.000%
1.000% 100.157
1.150% 100.974
1.550% 101.479
1.690% 101.714
1.860% 101.552
2.130% 100.581
2.310% 109.646
2,490% 109.841
2.720% 109.305
2.960% 116.256
3.220% 106.709
2,335,000
Dated Date
Delivery Date
First Coupon
ParAmount
Premium
Production
Underwriter's Discount
Purchase Price
Accrued Interest
Net Proceeds
03/04/2009
O3/O4/2OO9
05/01/2009
2,335,000.00
123,056.75
2,458,056.75 -20000.00
2,438,056.75
2.438,056.75
105.270096%
-0.856531%
104.413565%
Feb 11. 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page 5
Pedod
Ending
BOND DEBT SERVICE
Town of Southold, New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (5/1109-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Annual
Principal Coupon Interest Debt Service Debt Service
05/01/2009
11/01/2009
12/31/2009
05/01/2010
11/01/2010
12/31/2010
05/01/2011
11/01/2011
12/31/2011
05/01/2012
11/01/2012
12/31/2012
05/01/2013
11/01/2013
12/31/2013
05/01/2014
11/01/2014
12/31/2014
05/01/201.5
11/01/2015
12/31/2015
05/01/2016
11/01/2016
12/31/2016
05/01/2017
11/01/2017
12/31/2017
05/01/2018
1110112018
12/31/2018
05/01/2019
12/31/2019
235 000 2,000% 11,305.00 246 305.00
33,350.00 33,350.00
279,655.00
210 000 2,000% 33,350.00 243,350.00
31,250.00 31.250.00
274,600.00
225.000 2,250% 31 250.00 256,250.00
28,718.75 28,718.75
284,96875
220,000 2.250% 28, 718.75 248,718.75
26,243.75 26,243.75
274,962.50
215,000 2.250% 26.243.75 241,243.75
23,825.00 23,825,00
265,068.75
220,000 2.250% 23.825.00 243,825.00
21,350.00 21,350,00
265.175.00
225,000 4.000% 21.350.00 246.350.00
16,850.00 16.850,00
263 200.00
220,000 4,000% 16,850.00 236,850.00
12,450.00 12,450.00
249 300.00
220,000 4,000% 12,450.00 232 450,00
8,050,00 8,050.00
24C 500.00
230,000 5.000% 8,050.00 238 050.00
2,300.00 2,300.00
240 350.00
115,000 4.000% 2,300.00 117,300.00
117.300.00
2,335.000 420,080,00 2,755,080.00 2.755,080.00
Feb 11,2009 10:49 am Prepared by Roosevelt & Cross. Inc. (c) (Finance 6.009 nys:R29899) Page 6
Bond
SUMMARY OF BONDS REFUNDED
Town of Southold, New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (5/1/09-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Maturity Interest Par Call
Date Rate Amount Date
Call
Price
Agricultural Land Preservation Serial
SERIALS 05/01/2009
05/01/2010
05/01/2011
05/01/2012
05/01/2013
05/01/2014
05/01/2015
05/01/2016
05/01/2017
05/01/2018
Bonds
1998, 1998:
4.850% 100,000.00 04/03/2009
4.850% 100,000.00 04/03/2009
4.850% 110,000.00 04/03/2009
4.850% 110,000.00 04/03/2009
4.850% 110,000.00 04/03/2009
4.875% 110,000.00 04/03/2009
4.875% 120,000.00 04/03/2009
4.875% 120,000.00 04/03/2009
4.875% 120.000.00 04/03/2009
4.875% 120,000.00 04/03/2009
1.120 000.00
Open Space Preservation Serial Bonds 1999. 1999:
SERIALS
05/01/2009 4,700% 90,000,00
05/01/2010 4.700% 90.000.00
05/0112011 4.700% 100 000.00
05/01/2012 4.700% 100,000.00
05/01/2013 4.700% 100.000.00
05/01/2014 4.700% 110.000.00
05/01/2015 4.700% 110.000.00
05/01/2016 4.700% 110.000.00
05/01/2017 4,700% 110,000.00
05/01/2018 4.700% 120.000,00
05/01/2019 4.700% 120,000,00
1,160.000.00
2.280.000.00
102.000
102.000
102.000
102.000
102.000
102.000
102.000
102.000
102.000
102.000
05/01/2009 102.000
05/01/2009 102. 000
05/01/2009 102.000
05/01/2009 102.000
05/01/2009 102.000
05/01/2009 102.000
05/01/2009 102.000
05/01/2009 102.000
05/01/2009 102.000
05/01/2009 102.000
Feb 11 2009 10:49 am Prepared by Roosevelt & Cross. Inc. (c) (Finance 6.009 nys:R29899) Page 7
ESCROW REQUIREMENTS
Town of Southold, New York
· Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (5/1/09-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Period Principal Redemption
Ending Princi pal Interest Redeemed Premium Total
04/0312009 22.997.39 1,120,000.00 22,400,00 1,165,397.39
05/01/2009 90,000,00 27.260.00 1,070,000.00 21,400.00 1.208,660.00
90,000.00 50,257.39 2,190,000.00 43,800.00 2.374,057.39
Feb 11, 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page 8
ESCROW DESCRIPTIONS
Town of Southold. New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (5/1/09-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Type of Type of Maturity First Int Par Max
Security' SLGS Date Pmt Date Amount Rate Rate
Mar 4, 2009:
SLGS Certificate 04/03/2009 04/03/2009 1,165,177 0.230% 0.230%
SLGS Certificate 05/01/2009 05/01/2009 1.208,218 0.230% 0.230%
2,373,395
SLGS Summary
SLGS Rates File
Total Certificates of Indebtedness
11FEB09
2,373,395.00
Feb 11 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6,009 nys:R29899) Page 9
ESCROW SUFFICIENCY
Town of Southold, New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (5/1/09-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Escrow Net Escrow Excess Excess
Date Requirement Receipts Receipts Balance
03/04/2009 20.54 20,54 20.54
04/03/2009 1,165,397.39 1,165,397.27 -0.12 20.42
05/01/2009 1,208,660.00 1,208,659.58 -0.42 20.00
2,374,057.39 2,374 077.39 20.00
Feb 11 2009 10:49 am Prepared by Roosevelt & Cross. Inc. (c) (Finance 6.009 nys:R29899) Page 10
ESCROW STATISTICS
Town of Southold, New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (5tlt~9-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Modified Yield to Yield to Perfect Value of
Total Duration Rebeipt Disbursement Escrow Negative Cost of
Escrow Escrow Cost (years) Date Date Cost Arbitrage Dead Time
REFUNDING BONDS, Global Proceeds Escrow:
1,165,187.12 0.080 0.234791% 0.234791% 1,163,118.25 2.068.85 0.02
1,208,228.42 0.158 0.230921% 0.230921% 1,204,008.06 4.220.32 0.04
2,373,415.54 2,367,126.31 6.289.17 0.06
Delivery date 03/04/2009
Arbitrage yield 2.455716%
Feb 11, 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page 11
Period
Ending
PRIOR BOND DEBT SERVICE
Town of Southold, New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (5/1109-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Annual
Principal Coupon Inleresl Debt Service Debt Service
05/01/2009 190,000 ** 54,493.75 244,493.75
11/01/2009 49,953,75 49,953.75
12/31/2009 294.447.50
05/01/2010 190.000 ** 49.953.75 239 953.75
11/01/2010 45.413.75 45.413.75
12/31/2010 285 367,50
05/01/2011 210,000 ** 45 413.75 255 413.75
11/01/2011 40,396.25 40,396.25
12/31/2011 295 810. O0
05/01/2012 210.000 ** 40.396.25 250,396.25
11/01/2012 35,378.75 35,378.75
12/31/2012 285,775.00
05/01/2013 210000 ** 35,378.75 245,378.75
11/01/2013 30,361.25 30,361.25
12/31/2013 275,740.00
05/01/2014 220,000 ** 30,361.25 250,361.25
11/01/2014 25,095.00 25,095.00
12/31/2014 275,456.25
05/01/2015 230,000 ** 25,095.00 255,095.00
11/01/2015 19,585.00 19,585.00
12/31/2015 274,680.00
05/01/2016 230,000 ** 19,585.00 249,585.00
11/01/2016 14,075.00 14,075.00
12/31/2016 263.660.00
05/01/2017 230,000 ** 14,075,00 244,075.00
11/01/2017 8,565.00 8,565.00
12/31/2017 252,640.00
05/01/2018 240,000 ** 8,565.00 248,565.00
11/01/2018 2,820.00 2,820.00
12/31/2018 251,385.00
05/01/2019 120,000 4.700% 2,820.00 122 820.00
12/31/2019 122.820.00
2,280,000 597.781.25 2,877.781.25 2,877,781.25
Feb 11, 2009 10:49 am Prepared by Roosevelt & Cross. Inc. (c) (Finance 6,009 nys:R29899) Page 12
BOND SUMMARY STATISTICS
Town of Southold, New York
Refunding Bonds
REFUNDING OF 1998 BONDS (5/1/09-18)
REFUNDING OF 1999 BONDS (5/1/09-19)
(UNENHANCED); (NOT BANK QUALIFIED); (NON-CALLABLE)
Aa3 UNDERLYING
Dated Date 03/04/2009
Delivery Date 03/04/2009
Last Maturity 05/01/2019
Arbitrage Yield 2.455716%
True Interest Cost (TIC) 2.637296%
Net Interest Cost INIC) 2.752008%
Ail-In TIC 3.196107%
Average Coupon 3.646620%
Average Life ('years) 4.933
Duration of Issue (years) 4.549
Par Amount
Bond Proceeds
Total Interest
Net Interest
Total Debt Service
Ma×imum Annual Debt Service
Average Ann.ual Debt Service
2,335,000.00
2.458,056.75
420.080,00
317,023.25
2,755,080.00
284,968.75
271.213.78
Underwriter's Fees (per $1000)
Average Takedown
Other Fee
8.565310
Total Underwriter's Discount
8.565310
Bid Price 104.413565
Par Average Average
Bond Component Value Price Coupon Life
Serial Bonds 2,335.000.00 105,270 3.647% 4.933
2,335,000.00 4.933
Ail-In Arbitrage
TIC TIC Yield
Par Value 2,335,000,00 2,335,000,00 2,335,000.00
+ Accrued Interest
+ Premium (Discount) 123,056.75 123,056,75 123,056.75
- Underwriter's Discount -20,000.00 -20,000,00
- Cost of Issuance Expense -60,000.00
- Other Amounts
Target Value 2 438,056.75 2,378,056.75 2,458,056.75
Target Date 03/04/2009 03/04/2009 03/04/2009
Yield 2.637296% 3.196107% 2.455716%
Feb 11. 2009 10:49 am Prepared by Roosevelt & Cross Inc. (c) (Finance 6.009 nys:R29899) Page 13
SOURCES AND USES OFFUNDS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2009- 2018)
Dated Date 03104/2009
Delivery Date 03~04/2009
Sources:
Bond Proceeds:
Par Amount 1.148.000.00
Premium 59.161.91
1,207,161.91
Uses:
Refunding EscroW Deposits:
Cash Deposit 10.12
S LGS Purchases 1,165,177.00
Delivery Date Expenses:
Cost of Issuance
Underwriter's Discount
1,165,187.12
29,498.93
9.832.98
39,331.91
Other Uses of Funds:
Additional Proceeds 2.642.88
1.207.161.91
Feb 11,2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page 14
SUMMARY OF REFUNDING RESULTS
Town of Southold New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2009- 2018)
Dated Date
Delivery Date
Arbitrage yield
Escrow yield
Bond Par Amount
True Interest Cost
Net Interest Cost
Ail-In TIC
Average Coupon
Average Life
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
PV of prior debt to 03/04/2009 @ 2.455716%
Net PV Savings
Percentage savings of refunded bonds
Percentage savings of refunding oonos
03/04~009
03~4~009
2.455716%
0.234791%
1,148,000.00
2.562199%
2.672917%
3.153365%
3.600716%
4.631
1,120.000,00
4.869583%
4.837
1.258.774.66
58 652.46
5.236827%
5.109099%
Feb 11, 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6,009 nys:R29899) Page 15
Date
05/01/2009
11/01/2009
12/31/2009
05/01/2010
11/01/2010
12131/2010
05/01/2011
11/01/2011
12/31/2011
05/01/2012
11/01/2012
12/31/2012
05/01/2013
11/01/2013
12/31/2013
05/01/201,4
11/01/2014
12/31/2014
05/01/2015
11/01/2015
12/31/2015
05/01/2016
11/01/2016
12/31/2016
05/01/2017
11/01/2017
12/31t2017
05/01/2018
12/31/2018
SAVINGS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BQNDS (05/01/2009; 2018)
Prior Refunding
Debt Service Debt Service
Savings
Present Value
Annual to 03/04/2009
Savings ~ 2.4557162%
127,233.75 128,454.19 -1,220.44 -1,215.73
24,808.75 15,993.75 8,815.00 8,674.49
7,594.56
124.808.75 125,993.75 -1,185.00 -1.151.97
22,383,75 14,893.75 7,490.00 7,192.89
6,305.00
132,383.75 134,893.75 -2,510.00 -2,381.20
19,716.25 13.543.75 6,172.50 5,784.72
3.662.50
129,716.25 128 543.75 1,172.50 1,085.51
17,048.75 12,250.00 4.798.75 4,388.84
5,971.25
127,048.75 122,250.00 4,798.75 4,335.60
14,381.25 11 012.50 3,368.75 3,006.70
8,167,50
124,381.25 121,012.50 3.368.75 2,970.23
11 700.00 9,775.00 1,925.00 1,676.69
5,293.75
131,700.00 124,775.00 6,925,00 5,958.55
8,775.00 7.475.00 1,300.00 1,105.01
8,225.00
128,775.00 122 475.00 6,300,00 5,290.07
5,850.00 5,175.00 675.00 559.92
6,975.00
125,850.00 120,175.00 5.675.00 4,650.36
2.925.00 2,875.00 50.00 40.48
5,725.00
122.925.00 117,875,00. 5,050,00 4,038,43
5,050.00
1,402,411.25 1,339,441.69 62,969.56 62,969.56 56,009.58
Savings Summaw.
PV of savings from cash flow
Plus: Refunding funds on hand
Net PV Savings
56,009.58
2,642.88
58,652.46
Feb 11,2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c)
(Finance 6,009 nys:R29899) Page 16
BOND DEBT SERVICE
To~nofSouthold, New York
REFUNDING BONDS
REFUNDING OFO5/O111998BONDS(05~l12009-2018)
Period
Ending
Principal Coupon Interest Debt Service
123,000 2.000% 5,454.19 128,454.19
15,993.75 15,993.75
110,000 2.000% 15,993.75 125,993.75
14,893.75 14,893.75
120,000 2.250% 14,893.75 134.893.75
13,543.75 13,543.75
115,000 2.250% 13.543.75 128,543.75
12.250.00 12,250.00
110 000 2.250% 12 250.00 122.250.00
11 012.50 11,012.50
110 000 2.250% 11,012.50 121,012.50
9,775.00 9.775.00
115 000 4.000% 9,775.00 124,775.00
7,475.00 7,475.00
115,000 4.000% 7,475.00 122,475.00
5,175.00 5,175.00
115,000 4.000% 5,175.00 120,175.00
2,875.00 2,875.00
115,000 5.000% 2.875.00 117,875.00
05/01/2009
11/01/2009
12/31/2009
05/01/2010
11/01/2010
12/31/2010
O5/01/2011
11/01/2011
12131/2011
05/01/2012
11/01/2012
12/31/2012
05/01/2013
11/01/2013
12/31/2013
05/01/2014
11/01/2014
12/31/2014
05/0112015
11/01/2015
12/31/2015
05/01/2016
11/01/2016
12/31/2016
05/01/2017
11/01/2017
12/31/2017
05/01/2018
12/31/2018
Annual
Debt Service
144,447.94
140,887.50
148,437.50
140,793.75
133,262.50
130.787.50
132 250.00
127.650.00
123.050.00
117,875.00
1,148,000 191,441.69 1,339,441.69 1,339,441.69
Feb 11,2009 10:49 am Prepared by Roosevelt & Cross, nc. (c) (Finance 6,009 nys:R29899) Page 17
BOND PRICING
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2009- 2018)
Maturity
Bond Component Date Amount Rate Yield Price
Serial Bonds:
05/01/2009 123.000 2.000% 1.000% 100.157
05/01/2010 110.000 2.000% 1.150% 100.974
05/01/2011 120.000 2.250% 1.550% 101.479
05/01/2012 115,000 2,250% 1.690% 101.714
05/01/2013 110,000 2.250% 1.860% 101.552
05/01/2014 110,000 2.250% 2.130% 100.58,1
05/01/2015 115.000 4,000% 2.310% 109.646
05/0112016 115,000 4.000% 2.490% 109.841
05/01/2017 115.000 4.000% 2.720% 109.305
05/01/2018 115.000 5,000% 2.960% 116.256
1,148.000
Dated Date
Delivery Date
First Coupon
Par Amount
Premium
03/04/2009
03/04/2009
05/01/2009
' I 148,000.00
59,161.91
Production
Underwdter's Discount
1,207,161.91 105.153476%
-9,832.98 -0.856531%
Purchase Price
Accrued Interest
1 197,328,93 104.296945%
Net Proceeds
1,197,328.93
Feb 11,2009 10:49 am Prepared by Roosevelt & Cross. Inc. (c) (Finance 6.009 nys:R29899) Page 18
SUMMARY OF BONDS REFUNDED
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05101/1998 BONDS (05/01/2009 - 2018)
Maturity Interest Par Call Call
Bond Date Rate Amount Date Price
Agricultural Land Preservation Serial Bonds, 1998, 1998:
SERIALS 05/01/2009 4.850% 100,000.00 04/03/2009 102.000
05/01/2010 4.850% 100,000,00 04/03/2009 102.000
05/01/2011 4.850% 110,000,00 04/03/2009 102.000
05/01/2012 4,850% 110,000,00 04/03/2009 102.000
05/01/2013 4.850% 110,000.00 04/03/2009 102.000
05/01/2014 4,875% 110,000.00 04/03/2009 102.000
05/01/2015 4.875% 120,000.00 04/03/2009 102.000
05/01/2016 4.875% 120,000.00 04/03/2009 102,000
05/0112017 4.875% 120,000.00 04/03/2009 102.000
05/0112018 4.875% 120,000.00 04/03/2009 102,000
1.120,000.00
Feb 11 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page 19
Period
Ending
PRIOR BOND DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2009- 2018)
Annual
Principal Coupon Interest Debt Service Debt Service
05/01/2009 100,000 4.850% 27,233.75 127,233.75
11/01/2009 24,808.75 24,808.75
12/31/2009 152,042.50
05/01/2010 100,000 4.850% 24,808.75 124,808.75
11/01/2010 22,383.75 22,383.75
12/31/2010 147,192.50
05/01/2011 110,000 4.850% 22,383.75 132,383.75
11/01/2011 t 9,716.25 19,716.25
12/31/2011 152,100.00
05/01/2012 110,000 4.850% 19,716.25 129.716,25
11/01/2012 17,048.75 17.048,75
12/31/2012 146,765.00
05/01/2013 110,000 4,850% 17 048.75 127,048.75
11/01/2013 14 381.25 t4.381.25
12/31/2013 141,430.00
05/01/2014 110,000 4,875% 14.381,25 124,381.25
11/01/2014 11.700.00 11,700.00
12/31/2014 136.081.25
05/01/2015 120,000 4.875% 11,700.00 131,700.00
11/01/2015 8,775.00 8;775.00
12/31/2015 140.475.00
05/01/2016 120,000 4.875% 8,775.00 128,775.00
11/01/2016 5,850.00 5,850.00
12/31/2016 134.625.00
05/01/2017 120,000 4,875% 5,850.00 125,850.00
11/01/2017 2,925,00 2.925.00
12/31/2017 128 775.00
05/01/2018 120,000 4.875% 2.925.00 122,925.00
12/31/2018 122.925.00
1,120,000 282,411,25 1.402,411.25 1,402,411.25
Feb 11. 2009 10:49 am Prepared by Roosevelt & Cross, Inc (c) (Finance 6.009 nys:R29899) Page 20
Date
AGGREGATE DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/0t/2009- 2018)
REFUNDING REFUNDING
BONDS BONDS Aggregate Aggregate
Principal Interest Principal Interest
Aggregate
Debt Service
05/01/2009 123,000 5,454.19 123,000 5,454.19 128,454.19
11/01/2009 15,993.75 15,993.75 15,993.75
05/01/2010 110,000 15,993.75 110,000 15,993.75 125,993.75
11/0t/2010 14.893.75 14,893.75 14,893.75
05/01/2011 120,000 14,893.75 120,000 14,893.75 134 B93.75
11/01/2011 13,543.75 13,543.75 13,543.75
05/01/2012 115,000 13,543.75 115.000 13,543.75 128,543.75
11/01/2012 12.250.00 12 250.00 12,250,00
05/01/2013 110,000 12,250.00 110.000 12,250.00 122,250.00
11/01/2013 11,012.50 11,012.50 11,012.50
05/01/2014 110,000 11,012.50 110,000 11,012.50 121,012,50
11/01/2014 9,775.00 9,775.00 9,775.00
05/01/2015 115 000 9,775.00 115.000 9,775.00 124,775.00
11/01/2015 7,475.00 7,475.00 7,475.00
05/01/2016 115,000 7,475.00 115,000 7,475.00 122,475.00
11/01/2016 5,175.00 5,175.00 5,175.00
05/01/2017 115 000 5.175.00 115,000 5,175.00 120,175.00
11/01/2017 2,875.00 2,875.00 2,875.00
05/01/2018 115 000 2.875.00 115.000 2,875.00 117,875.00
1,148~000
191.441.69 1,148,000 191.441.69 1,339,441.69
Feb 11 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page 21
SOURCES AND USES OF FUNDS
Town of Southold. New York
REFUNDING BONDS
REFUNDING OF 05/01/1999 BONDS (05/01/2009 - 2019)
Dated Date 03/04/2009
Delivery Date 03/04/2009
Sources:
Bond Proceeds:
Par Amount 1,187,000.00
Premium 63,894.84
1,250,894.84
Uses:
Refunding Escrow De posits:
Cash Deposit 10.42
SLGS Purchases 1.208,218.00
Delivery Date Expenses:
Cost of Issuance
Underwriter's Discount
1,208,228.42
30,501.07
10,167.02
40,668.09
Oiher Uses of Funds:
Additional Proceeds 1 998.33
1,250,894.84
Feb 11. 2009 10:49 am Prepared by Roosevelt & Cross Inc. (c)
(Finance 6.009 nys:R29899) Page 22
SUMMARY OF REFUNDING RESULTS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1999 BONDS (05/01/2009 - 20,19)
Dated Date
Delivery Date
Arbitrage yield
Escrow yield
03/04/2009
03~4/2009
2.455716%
0.230921%
Bond Par Amount
True Interest Cost
Net Interest Cost
Ail-In TIC
Average Coupon
Average Life
1,187,000.00
2.702228%
2.819799%
3.233117%
3.685966%
5.226
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
1,160,000.00
4.700000%
5.443
PV of prior debt to 03/04/2009 @ 2.455716%
Net PV Savings
Percentage savings of refunded bonds
Percentage savings of refunding bonds
1,307,731.23
54.437.89
4.692922%
4.586174%
Feb 11 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page 23
Date
SAVINGS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1999 BONDS (05/01/2009- 2019)
Present Value
Prior Refunding Annual to 03/0412009
Debt Service Debt Service Savings Savings @ 2.4557162%
05/01/2009
11/01/2009
12/31/2009
05/01/2010
11/01/2010
12/31/2010
05/01/2011
11/01/2011
12/31/2011
05/01/2012
11/01/2012
12/31/2012
05/01/2013
11/01/2013
12/31/2013
05/01/2014
11/01/2014
12/31/2014
05/01/2015
11/01/2015
12/31/2015
05/01/2016
11/01/2016
12/31/2016
05/01/2017
11/01/2017
12/31/2017
05/01/2018
11/01/2018
12/31/2018
05101/2019
12/31/2019
117,260.00 117,850.81 -590.81 -588.53
25,145.00 17,356.25 7,788.75 7,664.60
7,197.94
115,145.00 117,356.25 -2,211.25 -2,149.61
23,030.00 16,356.25 6,673.75 6,409.02
4,462.50
123,030.00 121,356.25 1,673.75 1,587.86
20,680.00 15,175.00 5,505.00 5,159.16
7,178.75
120,680.00 120,175.00 505.00 467.53
18,330.00 13,993.75 4 336.25 3,965.84
4,841.25
118.330.00 118,993.75 -663.75 -599.69
15,980.00 12.812.50 3 167.50 2.827.08
2,503.75
125,980.00 122.812.50 3 167.50 2.792.79
13,395.00 11,575.00 1,820.00 1,585.23
4,987.50
123,395.00 121,575.00 1,820.00 1,566.00
10.810.00 9.375.00 1,435.00 1.219.76
3,255.00
120 810.00 114.375.00 6,435.00 5.403.43
8 225.00 7.275.00 950.00 788.03
7,385.00
118 225.00 112.275.00 5,950.00 4.875.71
5. 640.00 5.175.00 465.00 376.42
6,415.00
125 840.00 120.175.00 5.465.00 4370.30
2 820.00 2 300.00 520.00 410.79
5 985.00
122 820.00 117.300.00 5,520.00 4307.84
5.520.00
1,475,370.00 1,415,638.31 59,731.69 59,731.69 52439.56
Savings Summary
PV of savings from cash flow
Plus: Refunding funds on hand
Net PV Savings
52,439.56
1,998.33
54,437.89
Feb 11,2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page 24
Period
Ending
BOND DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1999 BONDS (05/0112009 - 2019)
Annual
Principal Coupon Interest Debt Service Debt Service
05/01/2009 112,000 2.000% 5,850.81 117.850.81
11/01/2009 17,356.25 17.356.25
12/31/2009 135,207.06
05/01/2010 100,000 2,000% 17,356.25 117,356.25
11/01/2010 16,356.25 16,356.25
12/31/2010 133 712.50
05/01/2011 105,000 2.250% 16,356.25 121,356.25
11/01/2011 15,175.00 15,175.00
12/31/2011 136 531.25
05/01/2012 105 000 2,250% 15,175.00 120,175.00
11/01/2012 13,993.75 13,993.75
12/31/2012 134,168.75
05/01/2013 105,000 2.250% 13,993.75 118.993.75
11/01/2013 12 812,50 12,812.50
12/31/2013 131,806.25
05/01/2014 110,000 2,250% 12, 812,50 122,812.50
11/01/2014 11,575.00 11,575.00
12/31/2014 134,387.50
05/01/2015 110,000 4.000% 11,575.00 121,575.00
11/01/2015 9,375,00 9,375.00
12/31/2015 130,950.00
05/01/2016 105,000 4.000% 9,375,00 114.375.00
11/01/2016 7,275.00 7,275.00
12131/2016 121,650.00
05/01/2017 105,000 4,000% 7,275,00 112 275.00
11101/2017 5.175.00 5,175.00
12/31/2017 117,450.00
05/01/2018 115,000 5.000% 5,175.00 120,175.00
11/01/2018 2,300.00 2,300.00
12/31/20;I 8 122,475. O0
05/01/2019 115,000 4.000% 2,300.00 117,300,00
12/31/2019 117,300.00
1,187,000 228,638.31 1,415,638.31 1,415,638.31
Feb 11, 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c)
(Finance 6.009 nys:R29899) Page 25
Bond Component
BOND PRICING
'[own of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1999 BONDS (05/01/2009- 2019)
Maturity
Date Amount Rate Yield Price
Serial Bonds:
05/01/2009 112.000 2.000% 1.000% 100.157
05/01/2010 100,000 2.000% 1.150% 100.974
05/01/2011 105,000 2.250% 1.550% 101.479
05/01/2012 105,000 2.250% 1,690% 101,714
05/01/2013 105,000 2,250% 1,860% 101,552
05/01/2014 110,000 2.250% 2.130% 100.581
05/01/2015 110,000 4,000% 2,310% 109,646
05/01/2016 105,000 4.000% 2,490% 109,841
05/01/2017 105,000 4.000% 2.720% 109.305
05/01/2018 115,000 5.000% 2.960% 116.256
05/01/2019 115,000 4,000% 3.220% 106.709
1.187 000
Dated Date 03/04/2009
Delivery Date 03/04/2009
First Coupon 05/01/2009
Par Amount 1,187,000.00
Premium 63,894.84
Production 1,250,894.84
Underwriter's Discount -10,167.02
Purchase Price 1.240,727.82
Accrued Interest
Net Proceeds 1.240,727.82
105.382885%
-0.856531%
104.528354%
Feb 11, 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6,009 nys:R29899) Page 26
Bond
SUMMARy OFBONDS REFUNDED
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1999 BONDS (05/01/2009- 2019)
Maturity Interest Par Call
Date Rate Amount Date
Call
Price
Open Space Preservation Serial Bonds, 1999, 1999:
SERIALS
05/01/2009 4.700% 90,000.00
05/01/2010 4.700% 90,000.00 05/01/2009 102.000
05/01/2011 4.700% 100,000.00 05/01/2009 102.000
05/01/2012 4.700% 100,000.00 05/01/2009 102.000
05/01/2013 4.700% 100,000.00 05/01/2009 102.000
05/01/2014 4.700% 110,000.00 05/01/2009 102.000
05/01/2015 4.700% 110,000.00 05/01/2009 102.000
05/01/2016 4.700% 110,000.00 05/01/2009 102.000
05/01/2017 4.700% 110.000.00 05/01/2009 102.000
05/01/2018 4.700% 120 000.00 05/01/2009 102.000
05/01/2019 4.700% 120,000.00 05/01/2009 102.000
1,160,000.00
Feb 11, 2009 10:49 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6.009 nys:R29899) Page 27
Period
Ending
PRIOR BOND DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1999 BONDS (05/01/2009- 2019)
Annual
Debt Debt
Principal Coupon Interest Service Service
05/01/2009 90,000 4.700% 27,260 117,260
11/01/2009 25,145 25,145
12/31/2009 142.405
05/01/2010 90,000 4,700% 25,145 115,145
11/01/2010 23,030 23,030
12/31/2010 138,175
06/01/2011 100.000 4.700% 23,030 123,030
11/01/2011 20,680 20,680
12/31/2011 143,710
05/01/2012 100,000 4.700% 20,680 120,880
11/01/2012 18,330 18,330
12/31/2012 139.010
05/01/2013 100,000 4,700% 18,330 118,330
11/01/2013 15.980 15,980
12/31/2013 134,310
05/01/2014 110,000 4.700% 15.980 125.980
11/01/2014 13,395 13,395
12/31/2014 139,375
05/01/2015 110,000 4.700% 13.395 123,395
11/01/2015 ' 10,810 10,810
12/31/2015 134,205
05/01/2016 110,000 4.700% 10,810 120,810
11/01/2016 8,225 8,225
12/31/2018 . 129,035
05/01/2017 110'000 4.700% 8,225 118,225
'~ 1/01/2017 5,640 5,640
12/31/2017 123,865
05/01/2018 120,000 4.700% 5,640 125,640
~ 1/01/2018 2,820 2,820
12/31/2018 128,460
05/01/2019 120,000 4.700% 2,820 122.820
12/31/2019 122,820
1,160,000 315,370 1,475,370 1,475,370
Feb 11, 2009 10:49 am Prepared by Roosevelt & Cross, Inc, (c) (Finance 6:009 nys:R29899) Page 28
Date
AGGREGATE DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1999 BONDS (05101/2009 - 2019)
REFUNDING REFUNDING
BONDS BONDS Aggregate Aggregate Aggregate
Principal Interest Principal Interest Debt Service
05/01/2009 112,000 5,850.81 112,000 5,850.81 117,850.81
11/01/2009 17,356.25 17,356.25 17,356.25
05/01/2010 100,000 17,356.25 100,000 17,356.25 117,356.25
11/01/2010 16.356.25 16,356.25 16.356.25
05/01/2011 105,000 16.356.25 105,000 16,356.25 121 356.25
11/01/2011 15.175.00 15,175.00 15,175.00
05/01/2012 105,000 15 175.00 105, O00 15,175.00 120 175.00
11/01/2012 13,993.75 13.993.75 13 993.75
05/01/2013 105 000 13,993.75 105,000 13,993.75 118.993.75
11/01/2013 12.812.50 12,812.50 12.812.50
05t01/2014 110.000 12,812.50 110,000 12.812.50 122.812.50
11/01/2014 11 575.00 11 575.00 11.575.00
05/01/2015 110,000 11,575.00 110,000 11,575.00 121,575.00
11/01/2015 9,375.00 9,375.00 9,375.00
05/01/2016 105.000 9,375.00 105,000 9,375.00 114,375.00
11/01/2016 7,275.00 7,275,00 7,275.00
05/01/2017 105.000 7,275.00 105,000 7,275.00 112,275.00
11/01/2017 5,175.00 5,175.00 5,175.00
05/01/2018 115,000 5,175.00 115.000 5.175.00 120,175.00
11/01/2018 2.300.00 2.300.00 2.300.00
05/01/2019 115,000 2,300.00 115 000 2 300.00 117,300.00
1.187,000 228,638.31 1.187,000 228 638.31 1,415,638.31
Feb 11,2009 10:49 am Prepared by Roosevelt & Cross Inc. (c) (Finance 6.009 nys:R29899) Page 29
Date
EIC
Cashflow
Present Value
to 03/04/2009
@ 2.4557162%
05/01/2009 246,305.00 245,354.98
11/01/2009 33,350.00 32.,818.40
05/01/2010 243,350.00 236,566.32
11/01/2010 31.250.00 30,010.38
05/01/2014 256.250.00 243,100,21
11/01/2011 28,718.75 26,914.54
05/01/2012 248,718.75 230,266.04
11/01/2012 26,243.75 24,001.99
05/01/2013 241,243.75 217,960.27
11/01/2013 23,825.00 21,264.45
05/01/2014 243,825.00 214.980.67
11/01/2014 21 350.00 18,595.98
05/01/2015 246 350,00 211,969.63
11/01/2015 16,850.00 14,322.57
05/01/2016 236,850.00 198 881.49
11/01/2016 12.450.00 10,327.38
05/01/2017 232 450,00 190 480.46
11/01/2017 8,050.00 6, 516.53
05/01/2018 238 050.00 1.90,365.82
11/01/2018 2.300.00 1.816.97
05/01/2019 117,300.00 91.541.65
2,755,080.00 2,458,056.75
Valuation date
Amount
Target for yield calculation
Summary
03/04/2009
2,458,056.75
2,458,056.75
Feb 11. 2009 10:25 am Prepared by Roosevelt & Cross, Inc. (c) (Finance 6009 ) Page I
LEGAL NOTICE
The resolution, a summary of which is published herewith, has been
adopted on the 24th day of February, 2009 and the validity of the obligations authorized
by such resolution may be hereafter contested only if such obligations were authorized
for an object or purpose for which the Town of Southold, in the County of Suftblk, New
York, is not authorized to expend money or if the provisions of law which should have
been complied with as of the date of publication of this Notice were not substantially
complied with, and an action, suit or proceeding contesting such validity is commenced
within twenty days after the publication of this Notice, or such obligations were
authorized in violation of the provisions of the constitution.
BY ORDER OF THE TOWN BOARD OF THE TOWN OF SOUTHOLD
DATED: February 24, 2009
Southold, New York
Elizabeth A. Neville
Town Clerk
REFUNDING BOND RESOLUTION OF THE TOWN OF
SOUTHOLD, NEW YORK, ADOPTED FEBRUARY 24, 2009,
AUTHORIZING THE REFUNDING OF CERTAIN
OUTSTANDING SERIAL BONDS OF SAID TOWN, STATING
THE PLAN OF REFUNDING, APPROPRIATING AN
AMOUNT NOT TO EXCEED $3,000,000 FOR SUCH
PURPOSE, AUTHORIZING THE ISSUANCE OF NOT TO
EXCEED $3,000,000 REFUNDING BONDS TO FINANCE
SAID APPROPRIATION, AND MAKING CERTAIN OTHER
DETERMINATIONS RELATIVE THERETO.
The object or purpose is to refund of all or a portion of certain outstanding serial bonds of
the Town issued in 1998 and 1999 for open space and agricultural land preservation.
The period of probable usefulness for which the 1998 and 199 bonds were issued is thirty
(30) years, commencing on the date of original issuance of the first bonds or bond
anticipation notes issued for the respective purposes for which the outstanding bonds
were issued.
The amount of obligations to be Issued is not to exceed $3,000,000
A complete copy of the Bond Resolution summarized above shall be available for public
inspection during normal business hours at the office of the Town Clerk, Town Hall,
53095 Main Road, Southold, New York.
BY ORDER OF THE TOWn BOARD
OF THE TOWN OF SOUTHOLD
Dated: February 24, 2009
Southold, New York
ELIZABETH A. NEVILLE
Town Clerk
PLEASE PUBLISH ON March 12, 2009, AND FORWARD THREE (3)
AFFIDAVITS OF PUBLICATION TO ELIZABETH A. NEVILLE, TOWN
CLERK, TOWN HALL, P.O. BOX 1179, SOUTHOLD, NY 11971
Copies to the following:
Suflblk Times
Town Attorney
Bond Council
Town Board Members
Accounting
Town Clerk's Bulletin Board
STATE OF NEW YORK )
SS:
COUNTY OF SUFFOLK)
ELIZABETH A. NEVILLE, Town Clerk of the Town of Southold. New York being
duly sworn, says that on the 3rd day of March ., 2009, she affixed a notice of
which the annexed printed notice is a true copy, in a proper and substantial manner, in a
most public place in the Town of Southold, Suffolk County, New York. to wit: Town
Clerk's Bulletin Board, 53095 Main Road, Southold, New York.
2009 Refunding Bond
dl~izt~beth X. Neville
Southold Town Clerk
Sworn before me this
~'"~ day of PPI~e-h ,2009.
- Notary Public
LYNDA M. BOHN
NOTARY PUBLIC, State of New Ye rk
No. 01BO6020932
Qualified in Suffo k County
Term Expires ~',,4ar~'~h 8, 20
(SEAL)
CERTIFICATE
I, ELIZABETH A. NEVILLE, Town Clerk of the Town of Southold, in
the County of Suffolk, New York, HEREBY CERTIFY that the foregoing annexed
extract of the minutes of a meeting of the Town Board of said Town of Southold duly
called and held on February 24, 2009, has been compared by me with the original
minutes as officially recorded in my G ~ce in the Minute Book of said Town Board and is
a true, complete and correct copy thereof and of the whole of said original minutes so far
as the same relate to the subject matters referred to in said extract.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal of said Town of Southold this
24th day of February, 2009.
Town Clerk
06/04 0O MON 10;03 FAX 631 766 6145 SOUTHOLD TOWN CLERK ~002
#9201
STATE OF NEW YORK)
) ss:
COUNTY OF SUFFOLK)
Karen Kine of Mattituck, in said county, being duly sworn, says that she is
Principal Clerk of THE SUFFOLK TIMES, a weekly newspaper, published at
Mattituck, in the Town of Southold, County of'Suffolk and State of New York, and that
the Notice of which the annexed is a printed copy, has been regularly published i'n
said Newspaper once each week for 1__ week(s), successively, commencing on .the
12th day of March'. 2009.
'Princip.al Clerk
Sworn to before me this
1 -~ _ daY of
~ff ISTI~A VOLINSKI
NOTARY PI. IBLIC-$TAfE OF NEW YORK
No. 01 -vo6105050
QIJOlifled in ,Suffolk county,
My' Commission Expires February 26, 2012
PRELIMINARY OFFICIAL STATEMENT DATED APRIL 6, 2009
NEW ISSUE - REFUNDING SERIAL BONDS MOODY'S INVESTOR SERVICE:
Sec "Bond Rating", herein
Its the opinion of Hawkins Delafield & lVood LLP ~Bond Counsel 1o the ?'own under existing, statutes attd court decisions and assuming
cotstimdng compliance with certain tax certifications describ'ed here#t, (__i) interest on the '~onds is ex¢lud-edfrom gross income for Federa! income tax
put~oses pursuant to Section 103 of the Inte~'nal Revenue Code of. 1986, as amended (lite "Code*'), and (Fi) interest on the Bonds is no! treated as a
prdference item in ealeMating the a[.ternative mi~:im um tax i. mpose[t on #tdivMua[s and corporations under the Code; suclt interest, beware; is included
Os the adjusted current earnl~igs, o_o_oj certain corfl, orations for purposes of calculating lhe alternative mtnitmtm to~x imposed on such corporations. In
addition, in the ophtion of Bond Counsel to the Town, uniler existing statutes, interest on the Bonds is exempt f~'om personat income tn. xes of Nou, York
Stale and tls poltttcal subdi~ tstons, tnchtd,tg The City of New York. See Tar Matters harem.
The Bonds will is be designated by the Town as "qualified tccwexempt obllgations " pura'uant lo the provision of Section 265 of the Code.
$2,120,000'
TOWN OF SOUTHOLD
SUFFOLK COUNTY~ NEW YORK
(the "Town")
REFUNDING SERIAL BONDS ~ 2009
[BOOK-ENTRY-ONLY BONDS]
Dated: Date of DeliveJ3,
Price or
Amount* MaturiW Rate Yield. Amount* Matm'i_ty
2t0,000 2010 $ 220,000 2014
230,000 2011 225,000 20t5
220,000 2012 225,000 2016
220,000 2013
Principal Due: May 1~ 2010 - 2019, inclusive
Interest Due: November I, 2_00~ and_ sgmi-a_nnua, lly
thereafter on May 1 and November I in
each yam' until maturity.
Price or Price or
Rate Yield Amount* Maturity Rate Yield
$220,000 2017
235,000 2018
115,000 2019
Secuc#y. and. Sme'.c. es~ of.Payment: ,The Bonds xyiJl constitut,e goenei~aI obligations of the Town and will contain a
pledge of itsJ~th and credit tbr tl~e ptmctum pay. mcat of tl~c principm ox ann .intorgst on the Bonds, m~d all the tax,bio reql
property within the Town will be sub~ ecl to the levy of ad valorem taxes, without limitation as to rate or amount, I0r such
purpose.
~rior Redemption: The Bonds will not be subject to redemption prior to maturi~.
Form attdDenomination: The Bonds will be issued as registered bonds, ~d, when issued, will be registered in the
~ame of C~e & Co. as ~xominee of The DeEositor2 T~st Company ("DTC"), New York, New York, which will a~t as the
~ezurities Depository Ior the Bond~. h~izidual purchases of the Bonds may be made only in book-entry terra in
~enominations of $5,000 or integral multiEles thereof, Bondholders will not receive ce~ihcates representing tlmir
ownership interest in the Bonds purchased. See "Book-Enh~-Only System" under "The Bonds," herein.
P~ment: Payment oftheprineipal of and interest on the Bonds lo the Beneficial Owners of the Bonds will be made
by DTC Parlieipants and Indirect Partimpants in accordance with standing instructions and customary practices, as is now
t~o case with municiEal seqnritios held f6r the accounts ofc~stomers in bearer form or registered in "street name." Payment
will be the msponsibdi~ of the DTC Participant or ~direct Participant and not of 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 "T~e Bonds~'
herein.
The Bonds are offered subject lo the final approvb~g opinions ofHmvkins DelafieM & Wood LLP, New York, New
York Bond Counsel, on'certain other conditions. I[ is expected that deTive~ of the Bonds fl~ book-ent~yform ~t, ill be made
tl~rough the facil#ies of DTC on or about May d, 2009 m New York, New York.
THiS OFFICIAL STATEMENT IS ~ A FO~ "DEEMED FINAL" BY ~E TOWN FOR T~ PUKPOSE OF SECURITIES
AND EXCHANGE COMMISSION RULE 15c2-12 (THE "RULE") EXCEPT FOR CERTA1N ~FORMATION THAT WILL BE
UPDATED FOLLOWINO THE DATE THEREOF. FOR A DESC~PTION OF THE TO~'S AG~EMENT TO PROVIDE
CONT~U1NG DISCLOSURE FOK THE BONDS, AS DESCRIBED IN THE KULE, SEE "DISCLOSU~ UNDERTAKING"
HE~IN.
ROOSEVELT & CROSS
INCORPORATED
April ~, 2009
*Prelimi'nary, subject to change.
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
Town Hall
53095 Main Road
Southold, NY 11971
Telephone: (631) 765-4333
Fax: (631) 765-1366
TOWN BOARD
Scott A. Russell, Supervisor
Lomsa P. Evans
Albert J. Krupski, Jr.
Vincent M. Orlando
William P. Ruland
Thomas H. Wickham
Elizabeth A. Neville, Town Clerk
Peter W. Harris, Superintendent of Highways
John A. Cushman II, Town Comptroller
Jennifer A. Andaloro, Esq., Assistant Town Attorney
George Sullivan, Receiver of Taxes
BOND COUNSEL
Hawkins Delafield & Wood LLP
New York, New York
FINANCIAL ADVISOR
MUNISTAT SERVICES, INC.
Municipal Finance Advisory Service
12 Roosevelt Avenue
Port Jefferson Station, N.Y. 11776
(631) 331-8888
E-mail: info~munistat.com
Website: http://www.muni stat.corn
No dealer, broker, salesman or other person has been authorized by the District to give any information or to make any
representations, other than those contained in this Official Statement and if given or made, such other information or
representations must not be relied upon as having been authorized by the District. This Official Statement does not constitute an
offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in
which it is unlawful for such person to make such offer, solicitation or sale. The infbrmahon set forth herein has been obtained
by the District from sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness. The
information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official
Statement nor any sale made heretmder shall, under any circmnstances, create any implication that there has been no change in
the affairs of the District since the date hereof.
1N CONNECTION WITH THIS OFFERING THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BOND S AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABLIZING IF COMMENCED, MAY BE DISCONTINUED
AT ANYTIME.
TABLE OF CONTENTS
Page
THE BONDS ............................................................................... 1
Description of the Bonds .................................................................. 1
Optional Redemption ..................................................................... 1
Book-entry-only System .................................................................. 1
Certificated Bonds ....................................................................... 3
Authorization and Purpose ................................................................. 3
Refunding Financial Plan .................................................................. 3
Sources and Uses of Bond Proceeds ......................................................... 4
Security and Source of Payment ............................................................ 4
Remedies Upon Default ................................................................... 4
THE TOWN ............................................................................... 5
General Information ...................................................................... 5
Government ............................................................................ 5
Employees ............................................................................. 5
ECONOMIC AND DEMOGRAPHIC INFORMATION ........................................... 6
Population Characteristics ................................................................. 6
Median Income of Families ................................................................ 6
Unemployment Rate Statistics .............................................................. 6
Selected Listing of Larger Employers ........................................................ 7
INDEBTEDNESS OF THE TOWN ............................................................ 7
Constitutional Requirements ............................................................... 7
Statutory Procedure ...................................................................... 7
Computation of Debt Limit and Calculation of Net Debt Contracting Margin ......................... 8
Trend of Town Indebtedness ............................................................... 9
Details of Short-Term Indebtedness Outstanding ............................................... 9
Debt Service Requirements - Outstanding Bonds and Refunding Bonds ............................. 9
Calculation of Estimated Overlapping and Underlying Indebtedness ............................... 10
Authorized But Unissued Items ............................................................ 10
Capital Program ........................................................................ 10
Community Preservation Fund ............................................................ 11
Landfill Closure and Postclosure Care Costs .................................................. 11
FINANCES OF THE TOWN ................................................................ 11
Financial Statements and Accounting Procedures .............................................. 11
Ftmd Structure and Accounts ......................................................... 11
Basis of Accounting ................................................................ 12
Investment Policy ...................................................................... 12
Budgetary Procedures ................................................................... 12
Financial Operations .................................................................... 13
Revenues ............................................................................. 13
Real Property Taxes ................................................................ 13
State Aid ......................................................................... 13
Expenditures .......................................................................... 13
Pension Systems ....................................................................... 13
Contributions to the Retirement Systems ..................................................... 14
Other Post Employment Benefits ........................................................... 14
TABLE OF CONTENTS
(continued)
Page
REAL PROPERTY TAX INFORMATION .................................................... 15
Real Property Taxes ..................................................................... 15
Tax Lew and Collection Record ........................................................... 15
Tax Collection Procedure ................................................................ 15
Tax Rates ............................................................................. 15
Large Taxable Properties ................................................................. 16
LITIGATION ............................................................................. 16
BONDHOLDER RISKS AND MARKET FACTORS AFFECTING FINANCINGS
OF THE STATE AND MUNICIPALITIES OF THE STATE ..................................... 17
TAX MATTERS ........................................................................... 17
Opinion of Bond Counsel ................................................................ 17
Certain Ongoing Federal Tax Requirements and Certifications ................................... 18
Certain Collateral Federal Tax Consequences ................................................. 18
Original Issue Discount .................................................................. 18
Bond Premium ......................................................................... 18
Information Reporting and Backup Withholding ............................................... 19
Miscellaneous ......................................................................... 19
LEGAL MATTERS ........................................................................ 19
DISCLOSURE UNDERTAKING ............................................................. 19
VERIFICATION OF MATHEMATICAL COMPUTATIONS ..................................... 20
UND ERW~RITING ......................................................................... 20
BOND RATING ........................................................................... 20
FINANCIAL ADVISOR .................................................................... 20
ADDITIONAL INFORMATION ............................................................. 21
APPENDIX A: FINANCIAL INFORMATION
APPENDIX B: FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31,
2007
PRELIMINARY OFFICIAL STATEMENT
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
$2,120,000~
REFUNDING SERIAL BONDS - 2009
[BOOK-ENTRY-ONLY BONDS]
This Official Statement and appendices thereto presents certain information relating to the Town of Southold,
in the Coun .ty of Suffolk, in the State of New York (the "Town," ",~oun~,',' and "State," respectively) in connection
with the sale of $2,120,000' Refunding Serial Bonds - 2009 (the Bonds ).
All quotations from and summaries and explanations of provisions of the Constitution and laws of the State
and acts and proceedings of the Town contained herein do not purport to be complete and are qualified in their entirety
by reference to the official compilations thereof and all references to the Bonds and the proceedings of the Town
relating thereto are qualified in their entirety by reference to the definitive form of the Bonds and such proceedings.
THE BONDS
Description of the Bonds
The Bonds will be dated date of delivery, and will mature in the principal mounts on May 1, in each of the
years 2010 to 2019, inclusive, as set forth on the inside cover page.
The Bonds will be issued in fully registered form and when issued will be registered in the name of Cede &
Co. as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC will act as Securities
Depository for the Bonds. Individualpurchases of~;~ Bonds may be made in book-entry form only, in denominations
of $5,000 or integral multiples thereof. Purchasers ~x ill not receive certificates representing their interest in the Bonds.
Interest on the Bonds will be payable November 1, 2009 and semi-annually thereafter on May 1 and
November 1 in each year until maturity. Principal and interest will be paid by the Town to DTC, which will in turn
remit such principal and interest to its Participants, for subsequent distribution to the Beneficial Owners of the Bonds,
as described herein. The Bonds may be transferred in the manner described on the Bonds and as referenced in certain
proceedings of the Town referred to therein.
The Record Date of the Bonds will be the fifteenth busine ss day of the month preceding each intere st payment
date.
Optional Redemption
The Bonds will not be subject to redemption, prior to maturity.
Book-entry-only System
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered Bonds
registered in the name of Cede & Co. (DTC's parmership nominee) or such other name as may be requested by an
authorized repre sentafive of DTC One fully-registered Bond certifiCate will be issued for each maturity of each series
of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, the worl:,d,'s largest securities d,e, pository, is a limited-purpose trust company organized under the New
York Banking Law, a' banking organization within the meaning of the New York Banking Law, a member of the
Federal Reserve Syste,m,, a "clearing corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.
DTC holds and provides asset servicing for over 3.5 million issues ofU. S. and non-U. S. equity issues, corpo[,a, te and
municipal debt xssues, and money market instruments (from over 100 countries) that DTC's participants ( Direct
Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and
other securities transactions in deposited securities, through electronic computerized book-entry transfers and
*Preliminary, subject to change.
pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities
certitmates. Direct Participants include both U. S. and non-U. S. securities brokers and dealers, banks, trust companies,
clearing corporations, an~,,dT certai,n, other organizations. DTC is a wholly-owned subsidiary of The Depository Trust
& Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation
and Fixedlncome Clearing Corporation, all of which are registered clearing agencies. DTCC is owned bythe users
of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S.
sccurities brokers and dcalcrs, banks, trust companies, and clearing corporatio,,n.s that clear through ,~r maintain a
custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants '). DTC has
Standard & Poor's h~ghest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities
and Exchange Commission. More information about DTCan be found at www.dtcc.com and www.dtc.org.
Purchases of Bonds u~n,der 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 mm to be recorded on the Direct and Indirect Participants' records. Beneficial Owners are, however,
expected to receive written confirmations providing details of the transaction, as well as periodic statements of their
holdings, from thc Direct or Indirect Participant through xvhich the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and
Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Securities, except in the event that use of the book-entry system for the Bonds
is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the
name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other
DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds
are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and_other communications by_DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to uny statutory_ or regulatow requirements as may be in effect from time to time,
, Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed,
DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be
rcdecmed.
Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or
such other n,ommee as may be re,cluested 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 payable
date in accordance with thei5 respective holdings shown on DTC's records. Payments by Participants to Beneficial
Owners will be governed b3 standing instructions a,n,d customaw practices, as is the case with bonds held for the
accounts of customers in bearer form or registered in' street name," and will be the responsibili~ of such Participant
and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requ~ements as may be in effect from time
to time. Payment of redemption proceeds, distributions, and dividend pa3 merits to Cede & Co. (Or such other
nominee as may be requested by an authorized representative of DTC) is the responsibility of the Town, disbursement
of such payments to Direct Participants will be thc responsibility of DTC, and disbursement of such payments to the
Beneficial Owners will be the responsibility of Direct and Indirect Participants.
Payments on the Bonds will be,made to Cede & Co., or such other nom, inee as may be requ,ested 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 payable date in accordance with their respective
holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary,, practices, as is the case with bonds held for the accounts of customers in bearer form or
registered in "street name,' and will be the responsibility of such Participant and not of DTC nor its nominee, or the
Town, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments to Cede
& Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of
the Town, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement
of such payments to the Beneficml Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving
reasonable notice to the 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 system of book-entry transfers through DTC (or a successor
securities depository). In that event, Bond certificates will be printed and delivered to DTC.
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 for the accuracy thereof.
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 To~vn may terminate its
participation in the system of book-entry-only transfers through DTC at any time. In the event that such book-entry-
only system is discontinued, the following provisions will apply: the Bonds will be issued in registered form in
deriominations of $5,000, or integral multiples thereof; principal of and interest on thc Bonds when due will be
payable at the principal corporate trust office ora 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 timeprior 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 anmunt upon the terms set forth in the certificate of the Supervisor
authorizing the sale of the Bonds and fixing the details thereof and in accordance with the Local Finance Law.
Authorization and Purpose
The Bonds are being issued pursuant to the Constitution and statutes of the State of New Yorky~ including
among others, the Town Law and ye Local Finance Law, and a r,e, funding bond resolution duly adopted b3 the Town
Boardon February 24, 2009 (the ' Refunding Bond Resolution ), authorizing the refunding of all or a part of the
following:
Title
Agricultural Land Preservation
Open Space Preservation
Principal Amount
Outstanding
Principal Amount
to be Refunded
Maturities
to be Refunded
The 1998 and 1999 Bonds are referred to herein as the "Refunded Bonds".
The Refunding Bond Resolution authorizes the issuance of the Bonds to provide the funds necessary to effect
the refunding of the Refunded Bonds.
For further information regarding bond authorizations of the Town for capital purposes and other matters
relating thereto see "Indebtedness of the Town".
Refunding Financial Plan
The Refunding Financial Plan will permit the Town to realize, as a result of the issuance of the Bonds,
cumulative dollar and present-value debt service savings.
The net proceeds of the Bonds (after payment of the underwriting fee and other costs of issuance relating to
the Bonds), together with a cash deposit from the Town, will be u,,sed to purchase non-callab,!e, direct obligations of
or obligations guaranteed by the United States of America (the Government Obligations ) which, together with
remainmg cash proceeds from the sale of the Bonds, will be placed i,,n, an irrevocable trust fund (the "Escrow Fund")
to be held by The Bank of New York Mellon, (the "Escrow Holder ) a bank located and anthonzed to do business
in the State, pursuant to the terms of an escrow contract ,b,,y and between the To~vn and the Escrow Holder, dated as
of the delivery date of the Bonds (the "Escrow Contract' ). The Government Obligations so deposited will mature
in amounts which, together with the cash so deposited, will be sufficient to pay the principal of, interest on and
ePlicable redemption premium of the Refunded Bonds on the dates of their redemption. The Refunding Plan requires
Escrow Holder, pursuant to the refundingbond resolution of the Town and Escrow' Contract, to pay the Refunded
Bonds at maturity or at the earliest date on which the Refunded Bonds may be called for redemption prior to maturity.
The holders of the Refunded Bonds will have a first lien on all investment income from, and maturing
[rincipal of the Government Obligations, along with other available monies held in the Escrow Fund. The Escrow
ontract shall terminate upon final payment by the Escrow Holder to the paying agents/fiscal agent for the Refunded
Bonds amounts from the EscrowrFund adequate for the payment, in full, of the Refunded Bonds, including interest
and the redemption premium pa) able with respect thereto.
Under the Refunding Plan, the Refunded Bonds will continue to be general obligations of the Town (although
the Refunded Bonds may be ex?uded in computing the Town's debt limit). However, inasmuch as the Government
Obligations held in the Escrow Fund will be sufficient to meet all required payments of principal, interest and
redemption premium requirements when required in accordance with the Refunding Plan, it is not anticipated that any
other source of payment will be required.
$1,120,000 $1,020,000 2010-2018
1,160,000 1,070,000 2010-2019
Sources and Uses of Bond Proceeds
Sources:
Par Amount of Bonds .............................................. $
Original Issue Premium (Discount) ...................................
Total ......................................................... $
Uses:
Escrow Deposit ................................................... $
Underwriters' Discount .............................................
Allowance for Costs of Issuance and Contingency ........................
Total ......................................................... $
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 pnncipal thereof and the interest thereon. For thc 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 thc 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 (includingthe Bondholders) of the Town to enforce
payments upon such contracts, if necessary, through court action, although the present statute limits interest on the
amount adjudged due to creditors to nine per centum per annum from the date due to the date of payment. As a
general role, property and funds of a municipal corporation serving the public welfme 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 ora 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 mumcipality 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 has jurisdiction over such matters and has enacted amendmcnts to thc existing federal bankruptcy statute,
generally to the effect and with the purpose of affording municipal corporations, under certain circumstances, with
easier access to judicially approved adjustment of debts, including judicial control over identifiable and unidentifiable
creditors.
In recent times, certain events and legislation affecting remedies on default have resulted in litigation. While
courts of final jurisdiction have upheld and sustained the rights of bondholders, such courts might hold that future
events, including financial crises as they may occur in the State and in municipalities of the State, require the exercise
by the State of its emergency police powers to assure the continuation of essential services.
No principal or interest payments on Town indebtedness are past due. The Town has never defaulted in the
payment of the principal of and interest on any indebtedness.
THE TOWN
There follows in this 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 thc north fork of Long
Island. Settlement took place in 1640. The Village of G-reenport is located wholly within the Town. The Town also
includes the area of Fishers Island which is !ocated approximately twelve miles east of the mainland. Fishers Island
is accessible only by water or air, with ferr5 service operating between the Island and New London, Connecticut.
The Town is primarily a rural resort area with substantial shopping facilities available at Greenport, at various
shopping centers within the Town, and at Riverheadjust to the west. Some commercial services are available within
the Town in the hamlets of Southold, Cutchogue and Mattituck.
Agriculture has been a major industry in the Town since its origins. In recent years, farm crops 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 fen3' 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.
The main highways in the Town are New York State Route 25 and the North Road. Rail transportation is
provided by the Long Island Rail Road with stations at Mattituck, Southold and Greenport. Ferry service is also
available between Orient Point, east of Crreenport, and New London, Connecticut as well as from CJreenport 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 responsibility of volunteer fire and fire protection districts. The Town provides
its own police protection. In the Village of Greenport, electric service and fire protection are provided by the Village.
Government
Subject to the provisions of the State Constitution, the Town operates pursuant to the Town Law, the General
MunicipalLaw, the Local Finance Law, other laws generally applicable to theTown, and any special laws specifically
applicable to the Town. Under such laws, there is no authority for the Town to have a charter, but pursuant to the
Town Law and other laws generally applicable to home rule, thc Town may from time to time adopt local laws which
do not conflict with existing laws as enacted by the State.
The legislative power of the Town is vested in the Town Board, which consists of five members, elected for
a term of four years, and the Supervisor, who is the chief executive officer of thc Town, elected for a term of four
years. Such terms am 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 the State to raise revenues. The school districts use the Town's assessment roll as their
basis for taxation &property located within the Town.
Employees
The Town provides services through approximately 211 full-time and 66 part-time employees, some of whom
are represented by organized labor. '
The following table presents the number of employees' represented by organized labor, name of union and
contract expiration dates.
Approximate Date Contract
Name of Union Membership Expires
Civil Service Employees Assoc ........................ 169 12-31-10
Police Benevolent Assoc ............................. 50 12-31-09
ECONOMIC AND DEMOGRAPHIC INFORMATION
Population Characteristics
Thc Town has had a population trend, as compared to thc County and the State, as indicated below:
Year
Town of Suffolk New York
Southold County State
1970 ..................................... 16,804
1980 ..................................... 19,172
1990 ..................................... 19,836
2000 ..................................... 20,599
2007 ..................................... 22,852
1,127,030 18,241,391
1,284,231 17,557,288
1,321,977 17,990,455
1,419,369 18,976,457
1,504,947 19,297,729
U.S. Bureau of the Census, Long Island Power Authority, New York Slate Department of Labor.
Town
County
State
Median Income of Families
1980 1990
$21,013 $43,082
24,194 53,247
20,180 39,741
2000
$61,108
72,112
51,691
Source: U.S. Department of Commerce, Bureau of the Census.
Per Capita Money Income
1980 1990 2000
Town
County
State
$8,258 $19,037 $ 27,619
7,576 18,481 26,577
7,496 16,501 23,389
Source: U.S~ Department of Commerce, Bureau of thc Census.
Unemployment Rate Statistics
Unemployment statistics are not available for the Town as such. The smallest area for which such statistics
are available (which includes the Town) is thc County of Suffolk. The information set forth below with respect to
such County is included for informationpurposes only. It should not be implied from the inclusion of such data in
this Statement that the Town is necessarily representative of the County or vice versa.
Suffolk New York
Court _ty State
Annual Averages:
2004 ............................. 4.5% 5.9%
2005 ............................. 4.2 5.0
2006 ............................. 3.9 4.5
2007 ............................. 3.8 4.5
2008 ............................. 5.0 5.4
Source: Department of Labor, State of New York
6
Selected Listing of Larger Employers
Name
Eastern Long Island Hospital .......................
Plum Island ADC ................................
Mattituck-Cutchogue UFSD .......................
Town of Southold ...............................
Peconic Landing .................................
Southold UFSD .................................
San Simeon by the Sound .........................
Greenport UFSD ................................
Approx. No.
Type of Employees
Hospital 350
U.S. Govt, Facility 310
Public School 295
Local Government 277
Life Care Community 206
Public School 181
Nursing Home 150
Public School 110
INDEBTEDNESS OF THE TOWN
Constitutional Requirements
The State Constitution 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 following, in
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 md of any
of the foregoing or any public corporation.'
Thc Town may contract indebtedness only for a Town purpose and shall pledge its faith and credit for the
payment of principal of and interest thereon.
Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes or
to be paid within three fiscal year periods, indebtedness shall be paid in annual installments commencing no later than
two years after the date sucli indebtedness shall have been contracted and ending no later than the expiration of the
period of probable usefulness of the object or purpose determined by statute or, in the alternative, the weighted
average period of probable usefulness of the several objects or purposes for which it is contracted. No installment
may be more than 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 Legislature. The Town is required
to provide an annual appropriation for the payment of interest due duringthe year on its indebtedness and for the
amounts required in such year for the amortization and redemption of itsbonds and notes.
Debt Limit. Pursuant to the Local Finance Law, the Town has the power to contract indebtedness for any
Town purpose authorized by the Legislature of the State provided the aggregate principal amount thereof shall not
exceedseven percentum of the average five-year full valuation of the taxable real estate located in the Town and
subject to certain 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 dividing the total assessed valuation of taxable real estate for a particular assessment roll by, the final
equalization ratio established for such assessment roll by the State Office of Real 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 full valuations of the last five completed assessment rolls and
dividing such sum by five.
Statutory Procedure
In general, the State Legislature has authorized the power and procedure for the To~vn to borrow and incur
indebtedness by the enactment of the Local Finance Law subject, of course, to the constitutional provisions set forth
above. The power to spend money, however, generally derives from other law, including the Town Law and General
Municipal Law of the State.
Pursuant to the Local Finance Law, the Town authorizes the incurrence of indebtedness, including bonds and
bond anticipation notes issued in anticipation of such bonds, by the adoption 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 Board. If
the resolution is submitted to the Town voters, only a three-fifths vote of the Town Board is required.
The Local Finance Law also provides a twenty-day statute of !imitations after publication of a bond
resolution, which in effect, estops thereafter legal challenges to the validit3 of obligations authorized by such bond
resolution except for alleged constitutional violations. The Town published the notice of estoppel on February 15,
2009.
Each bond resolution usually authorizes the construction, acquisition or installation of the object or purpose
to be financed, sets forth the plan of financing and specifies the maximum maturity of the bonds subject to the legal
(Constitution, Local Finance Law and case law) restrictions relating to the period of probable usefulness with respect
thereto.
Each bond resolution also authorizes the issuance of bond anticipation notes prior to thc sale of serial bonds.
Statutory law in New York permits notes to be renewed each year, provided annual principal reductions are made and
provided that such renewals generally do not extend five years beyond the original date of borrowing. However, notes
issued in anticipation of the sale of serial bonds for assessable improvements are not subject to such five year limit
and may be renewed subject to annual principal reductions for the entire period o£probable usefulness of the purpose
for which such notes were originally issued. (See "Payment and Maturity" under "Constitutional Requirements," and
"Details of Short-Term Indebtedness Outstanding.")
In general, the Local Finance Law contains similar provisions providing the Town with power to issue general
obligation revenue and tax anticipation notes and general obligation budget and capital notes.
Computation of Debt Limit and Calculation of Net Debt Contracting Margin
(As of April 2, 2009)
Fiscal Year State
Ending Assessed Ec~alization Full
December 31: Valuation Kate Valuation
2005 ............................... $104,228,885 1.25%
2006 ............................... 105,502,965 1.13
2007 ............................... 106,950,027 1.04
2008 ............................... 108,292,749 0.95
2009 ............................... 108,991,562 1.05
$ 8,338,310,800
9,336,545,575
10,283,656,442
11,399,236,736
10,380,148,761
Total Five Year Full Valuation
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 ........................................................
Exclusions:
ApprO~rxiations .........................................................
Other _xclusions ........................................................
Total Exclusions ........................................................
Total Net Indebtedness ......................................................
Net Debt Contracting Margin After Issuing the Bonds .............................
Percent of Debt Limit Exhausted ...............................................
................................................ $49,737,898,314
9,947,579,662
696,330,576
36,843,000a
-0-
36,843,000
6,579,100
43,422,100
2,398,300
2,398,300
41,023,800
$655,306,776
5.89%
a. Includes $22,141,600 issued for the preservation of open space. See "Community Preservation Fund" herein.
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:
2004 2005 2006 2007 2008
$6,515,000 $12,299,098 $11,349,098 $25,020,000 $32,175,000
12,625,600 11,720,000 8,244,000 . 6,224,000 6,579,100
$24,019,098 $19,593,09~8 $31,244,000 $38,754.100
Debt Outstanding End of Year:
Bonds ..................
Bond Anticipation Notes ...
Total Outstanding Debt ........ $19,140,600
Details of Short-Term Indebtedness Outstanding
Bond Anticipation Notes
Maturi~ Purpose
04-17-09 Various Capital Projects .....................................
09-04-09 Various Capital Projects
09-04-09 Various Capital Projects .....................................
06-05-09 Fishers Island Ferry District ..................................
P~TIount
$ 799,300~
4,280,000Y
299,800~
1,200,000b
Total ................................................ $ 6,579,100
a. To be redeemed from the proceeds of the Bonds sold on March 10, 2009, Notes to be sold on April 13, 2009 and available funds.
b. To be funded from the proceeds of bonds, renewal notes and from available funds.
Debt Service Requirements - Outstanding Bonds and Refunding Bonds
Net After
Fiscal Year Less: Debt Issuance of
Ending Outstanding Refunding Service to be Refunding
December 31' Debt Service Debt Service Sub-Total Refunded Bonds
2009 ..........
2010 ..........
2011 ..........
2012 ..........
2013 ..........
2014 ..........
2015 ..........
2016 ..........
2017 ..........
2018 ..........
2019 ..........
2020 ..........
2021 ..........
2022 ..........
2023 ..........
2024 ..........
2025 ..........
2026 ..........
2027 ..........
2028 ..........
2029 ..........
2030 ..........
$ 3,317 520
3,5021047
3 443 657
3'338'870
310981657
3,044,396
2 997 185
21856'252
2,849'381
2,8191787
2,311 308
2,136 g00
2,109 213
1,855 325
1,857 775
1.843 463
1;792 381
1,568 863
1,528 063
1 501 113
11458 ~o7
1,409 547
$ 52640 010
5; $ $ $
Calculation of Estimated Overlapping and Underlying Indebtedness
Overlapping
Units
Count5' of Sultblk .....................
Village of CJreenport ...................
School Districts:
Fishers Island .............
Gree.nport .................
Mattituck-Cutchogue .......
New Suffolk Common ......
_~Oy stet Ponds ..............
Southold .................
Fire Districts:
Cutchogqe .................
East Marion ...............
Fishers Island ..............
Mattituck .................
Orient ....................
Southold ..................
Applicable Ap_plicable
Date of Percentage Total Net
Report Applicable Indebtedness Indebtedness
12-11-08 3.71% $41,794,819 $35,265,017
11-24-08 100. O0 9,329,200 8,574,200
06-30-08 100.00 355,000 355,000
06 -30 -08 100. O0 0 0
11-14-08 98.49 32,688,831 29,910,280
06-30-06 100.00 0 0
09-01-08 100.00 0 0
12-22-08 100.00 18,410,681 18,410,681
12-31-07 100.00 0 0
12-31-07 100.00 144,000 144,000
12-31-07 100.00 0 0
12-31-07 100.00 1,766 852 1,766,852
12-31-07 100.00 251000 25,000
12-31-07 100.00 1,400,000 1,400,000
$105,914,383 $ 95 851 030
Sources: Annual Financial Reports on file with the Office of the State Comptroller, or more recently published Official
Statements.
Authorized But Unissued Items
The following Bonds are authorized but unissued:
Date
Authorized Purpose
Amount
02-25-03 Matfituck Inlet Shore Erosion Study ................................. $ 82,750
02-27-07 Open Space Preservation: Non-Agricultural Land ...................... 10,000,000
08-28-07 Open Space Preservation: Agricultural Lands .......................... 4,000,000
Total .................................
$14,q82,750
Capital Program
The Town annually adopts a three year Capital Improvement Plan. Projects may be funded by State and
Federal aid, reserves, proceeds of obligations, property taxes or a combination thereof. A summary o£ the Capital
Budget for 2009-2011 is set £orth below:
Department
General Town ....................................
Hi~h~a7 Dep~ ....................................
Sohd waste ~Jistrict ...............................
Wastewater Disposal District ........................
Sources
Appropriations ...................................
Grants .......................................
Town Debt .................................
Total ...........................................
20O9
$ 234,400
1,280,000
135,000
750,000
$2,399,40~0
2010 2011
$ 508,123 $179,750
$508,123 $179,750
$ 38,400
196,000
2,165,000
$ 160,495 $ 39,750
347,628 !40,000
$508,123 $179~750
10
Community Preservation Fund
In 1998, the voters of the five East End towns (East Hampton, Riverhcad, Shelter Island, Southampton, and
Southold) approved a referendum creating the Community Preservation Fund, (the "Fund") which is a conservation
program to preserve open space and farmland in the five towns. The fund is financed by a 2% tax on real estate sales.
This is a one-time tax that the buyer of real estate is required to pay when purchasing a new or used home or vacant
property. In 2006, the voters in all five towns approved a referendum to extend the collection of the tax through 2030.
The Fund facilitates a voluntary' program whereby landowners can sell their land or the development rights
to the land to the respective towns at fair market value. The towns may issue bonds for purchases to be paid back
through the life of the Fund with the 2% tax revenues. Wh%n a town finances an acquisition through the issuance of
bonds, Section 64e of Town Law requires the preparation oI a report by or on behalf of the Town Supervisor which
demonstrates how such indebtedness will be repmd by the Fund; including an estimate of projected revenues of the
Fund during the period of indebtedness, an accounting of all other indebtedness incurred against the Fund to be repaid
for the same period, and a finding that there will be sufficient revenue to repay such indebtedness in its entirety from
the Fund.
As of the date of this Official Statement, there are $22,141,600 in bonds outstanding, the debt service on
which is expected to be paid by the Fund.
Landfill Closure and Postclosure Care Costs
The Town owns a landfill on a site in the unincorporated area of Cutchogue, commonly known as the
Cutchogue Landfill. The Town ceased accepting waste at its Cutchogue Landfill as of October 8, 1993. 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 Town to perform certain
maintenance and monitoring functions at the site for up to thirty years. The Town has and will 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 $26,610 for such costs in 2008 and will continue to pay these costs in the
future
Actual costs associated with the capping totaled $7,681,720. Financing for closure activities was provided
in part through a grant from the New York State Depamnent of Environmental Conservation in the amount of
$2,000,000. The balance was provided through a State subsidized loan received in July, 2004 from the New York
State Environmental Facilities Corporation. Costs associated with postclosure care will be paid from 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 To~vns
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, 2007. In addition, the
financial affairs of the Town are subject to periodic compliance review by the Office of the State Comptroller to
ascertain whether the Town has complied with the requirements of various State and Federal statutes.
In June, 1999, the Governmental Accounting Standards Board CGASB") issued Statement 34, "Basic
Financial Statements and Management's Discussions and Analy sis for State and Local Governments". GASB required
the Town to implement this standard for thc fiscal year ending December 31, 2003 and the Town has complied with
such requirements. This State~nent 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 Accounts
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 of a commercial nature; and, (3) fiduciary funds that
account for assets held ~n 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.
11
The Town presently maintains the following gove, ~rr~,,,ental funds: General Fund, Highway Fund and Special
Districts Funds, and the Capital Projects Fund. Fiduciar3 funds consist of a Trust and Agency Fund. Them are no
proprietary funds. Account groups are maintained for fixed assets and long-term debt.
Basis of Accounting
The Town's governmental funds are accounted for on a modified accrual basis of accounting. Under the
modified accrual basis, revenues are recognized when they become susceptible to accrual - that is, when they become
"measurable" and "available" to finance expenditures to the current period. Revenues are susceptible to accrual
include real property taxes, intergovernmental revenues (State and Federal aid) and operating transfers.
Expenditures are generally recognized under the modified accrual basis of accounting, that is when the related
fund liability is incurred. An exception to this general role 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 Tmvn
is generally permitted 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 linfitations of Section 10 of the GML.
The Town ~nay 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 by the United States 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 municipality,
school district, or district corporation, other than those notes issued by the Town, itself; (5) certificates of participation
issued in connection with installment purchase agreements entered into by political subdivisions of the State 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 of obhgations purchased with the proceeds of bonds or notes, shall be payable or redeemable in any event,
at the option of the owner, within two years of the date of purchase. Unless registered or inscribed in the name of the
Town, such instruments and investments must be purchased through, delivered to and held in custody of a 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 of the Town are made in
accordance with such policy.
Budgetary Procedures
The head of each administrative unit of the Town is required to file detailed estimates of revenues (other than
real property taxes) and expenditures for the next fiscal year xvith the budget officer (Supervisor) on or before August
15t~. Estimates for each fire district situated within the Town must also be filed with the budget officer by this date.
After reviewing these estimates, the budget officer prepares a tentative budget which includes his recommendations.
A budget message explaining the main features of the budget is also prepared at this time. The tentative budget is
filed with the Town Clerk not later than the 30th of September. Subsequently, the Town Clerk presents the tentative
budget to the Town Board at the regular or special hearing which must be held on or before October 5th. The Town
Board reviews the tentative budget and makes such changes as it deems necessary and that are not inconsistent with
the provisio~ns of the law. Following this review process, the tentative budget and such modifications, if any, as
approved b3 the Board become the preliminary budget. Apublic heating, notice of which must be duly published
in the Town's official newspaper, on the preliminm3r budget is generally required to be held on the Thursday
immediately following the general election. At such hearing, any person may express his opinion concerning the
preliminary budget; however, there is no requirement or provision that the preliminary budget or any portion thereof
be voted on by members of the public. After the public hearing, the Town Board may further change and revise the
preliminary budget. The Town Board, by resolution, adopts the preliminary budget a~ submitted or amended no later
than November 20th, at which time, the preliminary budget becomes the annual budget 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 amaual budget including the transfer of
appropriations among line items must be approved by resolution of the Town Board.
Budget Summaries for the 2008 and 2009 fiscal years may be found in Appendix A.
12
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
Supervisor is 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
resolution, all material financial transactions such as operating and capital budgets and bonded debt.
Town finances are operated primarily through the General and Special Revenue Funds. The General Fund
receives most of its revenue f?om real property tax and State aid. Current operating expenditures are paid from these
funds subject to available appropriations. The Town also has refuse, sewer and wastewater districts, which are
accounted for within separate funds. The primary sources of income for these districts comes from special
assessments levied against district properties at thc same time real estate taxes are levied. Capital projects and
equipment purchases are accounted for in special capital projects funds. The Town observes a calendar year (January
1 through December 31) for operating and reporting purposes.
Revenues
The Town receives most of its revenues from a real property tax on all taxable property situated within the
Town and from State Aid. A summary of such revenues for the five most reeently completed fiscal years may be
found in Appendix A.
Real Proper~y 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 91aerating purposes. There is no assurance, however, that the State
appropriation for State Aid to municipalities will continue, either pursuant to existing formulas or in any form
whatsoever and, in any event, if appropriated and apportioned to the Town, payment can be made only if such monies
are available therefore. The State ~s not constitutionally obliged to maintain or continue such aid. See Appendix A.
Expenditures
The major categories of expenditure for the Town are General Government Support, Public Safety,
Transportation, Economic Assistance and Opportunity, Home and Community Services, Culture and Recreation,
Employee Benefits and Debt Service. A summary of the expenditures for the five most recently completed fiscal
years may be found in Appendix A.
Pension Systems
Substantiall)~., all e,,mployees of the Town are members o1' the New York State and Local Employees'
Retirement System (' ERS ) or the New York State and Local Police and Fire Retirement System ("PFRS"). (Both
Systems are referredto together hereinafter as the "Retirement Systems" where appropriate.) The Retirement Systems
axe cg. st-shari, ng multiple public employer retirement sy_stems. The obligation of employers and employees to
contribute and the benefits to employees aregovemcd by the New York State ~etiremcnt System and Social Security
Law (the "Retirement System Law"). The Retirement Syste~ms offer a wide range of plans and benefits which are
related to years of service and final average salary, vesting o5 retirement benefits, death and disability benefits and
optional methods of benefit payments. All-benefits generally vest after five years of credited service. The Retirement
System Law generally provides that all participathig employers in each retirement system are jointly and severally
liable for any unfunded investments. Such amounts are collected through annual billings to allparticipating
employers. Generally, all employees, except c. ertain part-time employees, participate in the Retirement Systems. The
Retirement Systems are non-contributory with respect to members hired prior to July 27, 1976. All employees who
became members on or after July 27, 1976 must contribute 3% of their gross annual salary towards thc cost of their
retirement program. Chapter 86 of the Laws of 2000 eliminated the 3% t'or Tier 3 and Tie? 4 members with 10 years
of service cred-xt.
A pension reform bill was signed by the Governor into Law as Chapter 49 of the Laws of 2003 which change~
the cycle of billing to match budget cycles of the Town. Under the previous method, the Town was unsure of
much it would have topav to the ~stem until after its budget was implemented. Under the new system the
contxibution for a given fistal year will be based on the value of the pension fund on the prior April 1 instead of the
following April 1 so that the Town will be able to more accurately inc~lude thc cost of the contribution into its budget.
Chapter 49 requires the Town to make a minimum contribution of 4.5% pf payroll every year, including years in
which the investment performance of the fund would make a lower contribution possible.
13
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 ~f 2004. The bill gives the employer the option to move the
ahnual payment date for contributions from December 15~ to February 1st, effective December 15, 2004. It increases,
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 1 - March 31). It also allows employers to
issue bonds to finance their 2005-2006 and 2006-2007 fiscal year contributions in excess of 9.5% and 10.5%,
respectively. This amortization may be made with the Retiremen{ System or the Town could issue a maximum of 10-
year general obligation bonds, the ~nterest on which would be set at prevailing bond market rates on the date of sale
and would be taxable for federal income tax purposes.
The Legislature enacted new pensionprovisions (Chapter 260, Laws of 2004) that enabled local governments
to amortize a portion of their bill. The law allows local governments to amortize required contributions in excess of
10.5 percent for 2006, 9.5 percent for 2005 and 7 percent for 2004 of estimated salaries over a 10-year period.
Employers are required to pay 5 percent interest on any amortized amounts.
Contributions to the Retirement Systems
Fiscal Year Amount
Ending of
December 31: Contribution
2004 ....................................... $1,670,102
2005 ....................................... 2,085,137
2006 ...................................... 1,837,992
2007 ....................................... 1,947,914
2008 ....................................... 1,838,376
2009 (Budge0 ................................ 1,875,500
Other Post Employment Benefits
It should also be noted that the Town provides post-retirement healthcare benefits to various categories of
former employees. These costs may be expected to rise substantially in the future. There is now an accounting rule
that will require governmental entities, such as the Town, to account for post-retirement healthcare benefits as it
accounts for veste,,d pensi,o,n benefits. GASB Statement No. 45 ("GASB 45") of the Governmental Accounting
Standards Board ( GASB ), described below, requires such accounting. Although GASB 45 encourages earlier
adoption, implementation is required by the following dates, based on the size of government measured by annual
revenue:
Annual Revenue
Greater than $100 million
Between $10 million and $100 million
Less than $10 million
Effective for Fiscal Year Ending After:
December 15, 2006
December 15, 2007
December 15, 2008
School Districts and Boards of Cooperative Education Services, unlike other municipal units of government
in the State, have been prohibited from reducing retiree health benefits or increasing health care contributions received
or paid by retirees below the level of benefits or contributions afforded to or required from active employees since
the implementation of Chapter 729 of the Laws of 1994. This protection from unilateral reduction of benefits has
been extended annually and continued through May 15, 2009 pursuant to Chapter 43 of the Laws of 2008. Legislative
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 ofmumcipal units in the State do presently receive
such benefits.
GASB 45 and OPEB. OPEB refers to "other post-employment benefits," meaning other than pension
benefits, disability benefits and OPEB consist primarily of health care benefits, and may include other benefits such
as disability benefits and life insurance. Until now, these benefits have generally been administered on apay-as-you-
go basis m~d have not been reported as a liability on governmental financial statements.
r
GASB 45 will require municipalities and school districts to account for OPEB liabilities much like they
alread3 account for pension liabihties, generally adopting the actuarial methodologies used for pensions, with
adjustments for the different characteristics of OPEB and the fact that most municipahties and school districts have
not set aside any funds against this liability. Unlike GASB 27, which covers accounting for pensions, GASB 45 does
not require municipalities or school districts to report a net OPEB obligation at the start.
Under GASB 45, based on actuarial valuation, an annual required contribution ("ARC") will be determined
for each municipality or school district. The ARC is the sum of (a) the normal cost for the year (the present value of
future benefits being earned by current employees) plus (b) amortization of the unfunded accrued liability (benefits
14
already earned by current and former employees but notyet provided for), using an amortization period of not more
than 30 ycars. Ifa municipality or school district contri0utes an amount less than thc ARC, a net OPEB obligation
will result, which is required to be recorded as a liability on its financial statements.
The actuarial study has been completed by an independent actuarial finn. The Town's ARC is approximately
$4.5 million and its unfunded actuarial accrued liability is approximately $43 million. GASB 45 does notrequire 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, every 3
years if there are less than 200 members.
REAL PROPERTY TAX INFORMATION
Real Property Taxes
The Town derives a significant portion of its annual revenue through a direct real property tax.
The following table presents the total tax levy, by purpose, with adjustments and collection performance for
each of the last five fiscal years.
Tax Levy and Collection Record
Fiscal Year Endin~ December 31:
2005
Total Tax Levy ................ $89,495,573
Amount Collected ............. 83,356,976
Returned to County
Amount .................... 2,138,597
Percentage .................. 2.39%
Uncollected at End of Year
of Levy ................... None
a. As of January 23, 2009.
2006 2007 2008 2009
$89,934,663 $97,216,091 $103,216,661 $108,610,530
86,628,595 94,288,000 1001030,520 58,000,009a
3,106,068 2,928,091 3,186,141 NAa
3.45% 3.01% 3.08% NAt
None None None NA
Tax Collection Procedure
Property taxes for the Town arc collected by the Town tax receiver. Such taxes are due and payable in equal
installments on December 1 and May 10, but may be paid without penalty by January 10 and May 31, respectively.
The penalty added to delinquent taxes is one-twelfth the rate of interest determined by the State Commissioner of
Taxation and Finance. The rate is determined each year by July 15 based on the one-year constant maturity yield
index for United States Treasury securities for the quarter-year ending on the immediately preceding June 30. The
rate is effective for a twelve month period commencing August 1 each year and in no event will be less than ten per
centum per annum.
The Town receives its full levy before the end of its fiscalyear. 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:
2005 2006 2007 2008 2009
General - Townwide ................ $139.73 $140.37 $151.02 $160.22 $184.44
General - Outside Village ............ 5.43 4.90 3.99 7.84 6.87
Highway ...................... 38.37 40.68 39.63 41.74 39.75
15
Large Taxable Properties
2009 Assessment Rolla
Name
Peconic Landing at Southold .......................
LILCO, LIPA, Marketspan, Keyspan .................
Village of Greenport-Power Plant ....................
Fishers Island Dev. Corp ...........................
Robins Island Holding LLC .........................
Alan Cardinale ..................................
North Fork Bank .................................
Damianos, Herodotus ..............................
Ncw York Telephone
LevinFamily Limited P'a~e~l~ip'iiiiiiiiiiiiiiiiiill
Anderson, Bradley & Francesca .....................
Norris, Susan ....................................
Laurel Links & CountD' Club
Kimogenor Pt Co .................................
Driftwood Cove .................................
Type
Commercial
Utility
Utility
Residential Development
Private Lands
Shopping Center
Bank Building
Vineyard
Utility
Motel& Restaurant
Farmland & Private Lands
Various Properties
Country Club
Co-Op
Co-Op
a. Assessment Roll established in 2008 for levyand collection of taxes during 2009 Fiscal Year.
b. Represents approximately 5.69% of the total taxable assessed valuation of the Town for 2009.
Assessed
Valuation
1,707,704
1,515,689
585,000
460,100
330,500
282,600
234,131
234,000
187,936
148,950
121,400
111,800
96,300
94,600
90.000
$6,200,710b
LITIGATION
The To~vn 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 not likely to have a material
adverse effect on thc Town.
There are certain matters worthy of special mention:
Stanton, at al. v. Town of Southold - This is an action in inverse condemnation and nuisance by forty-two
property owners, alleging property damage in the form of erosion caused by a Town-owned jetty. The Town is
engaged in studies to determme the issues surromlding the alleged erosion, its causes, and possible solutions.
Although this case was first filed in 1997, discovery has not been completed. The issues in this case are complex and
will require extensive expert testimony. The nature and extent of dmnages, if any, are unknown at th~spoint.
Insurance coverage may be available for potential liability for alleged compensatory damages. The Town has denied
any wrongdoing and intends vigorously to defend any further prosecution of this action.
Quad Enterprises, et al. v. Town of Southold - This action arises from the Town Board of the Town of
Southold s alleged refusal to approve a change of zone application filed byplaintiffs, which sought substantially to
increase the zoning density of a parcel of land owned by a developer plaintiff. Plaintiffs assert claims under the Fair
Housing Act, Americans with D~sabilities Act, State and Town Law, alleging housing discrimination against senior,
handicapped and disabled residents, who are also named as "Jane Doe" plaintiffs. Plaintiffs seek declaratory relief
granting their desired zoning, as,a ell as compensatory and pnnitive dmnages in the amount of $60 million ( $5 inillion
for each of the six federal causes of action). Insurance coverage may be ava!lable for potential liability for alleged
compensatory damages. Both sides have filed summary judgment on liabilit3 issues only. The Town has deniedall
wrongdoing and intends vigorously to contest these claims.
East End Resources, LLC v. Town of Southold Planning Board, et al - This action arises from a residential
site plan application pending before the Town of,,Southold Planning Board, seeking the approval of a multi-nnit
platmed renrement community (the "Application'). PlaintiflTPetitioner alleges that the Town, and its various
agencies, have systematically delayed and sought to defeat the approval of the Application. In this action,
Plaintiff/Petitioner asserts eight claims, seeking declaratory relief compelling the approva[ofthe Application, as well
as compensatory relief in the amount of $20 million as a result of alleged federal and state constitutional violations.
The Town intends vigorously to defend this action and to contest all asserted claims.
Notices of Claim - One possible noteworthy Notice of Claim has been filed against the Town relating to
police matters. In the Notice of Claim, the plaintiff demands $5 million in damages for physic,a,l, emotional and civil
rights injuries related to an alleged incident, believed to be an arrest by Town police officers on or about February
21, 2007 andprior arrests." Due to the vague nature of the allegations, the Town is not aware of any details of this
purported clmm, and intends vigorously to contest i~ both prior to and after the institution of a lawsuit. As of the date
of this Official Statement, no lawstfit has been sen ed upon the Town.
16
BONDHOLDER RISKS AND MARKET FACTORS AFFECTING FINANCINGS
OF THE STATE AND MUNICIPALITIES OF THE STATE
There are certain potential risks associated with an investment in the Bonds, and investors should be
thoroughly familiar with this Official Statement, including its appendices, in ordcr to make an informed investment
decision. Investors should consider, in particular, the follo~ving factors:
Thc Town's credit rating could bc affected by circumstances beyond thc Town's control. Economic conditions
such as thc rate of unemployment and inflation, termination of commercial operations by corporate taxpayers and
employers, as well as natural catastrophes, could adversely affect thc assessed valuation of Town property and its
ability to maintain fund balances and other statistical indices commensurate with its current credit rating.
Accordingly, a decline in the Town's credit rating could adversely affect the market value of the Bonds.
In addition, if and when a holder of any of thc Bonds should elect to sell a Bond prior to its maturity, there
can bc no assurance that a market shall have been established, maintained and be in existence for the purchase and
sale of any Bonds. Thc price or principal value of thc Bonds is dependent on the prevailing level of interest rates.
If interest rates should increase, the price ora bond or note may decline causing the bond or notcholdcr to potentially
incur a capital loss if such bond or note is sold prior to its maturity.
The financial condition of the Town as well as the market for the Bonds could be affected by a variety of
factors, some of which arc beyond thc Town's control. There can bc no assurance that adverse events in the State,
including, for example, thc seeking by a municipality of remedies pursuant to thc Federal Bankruptcy Act or
otherwise, will not occur which might affect the market price of and thc market for the Bonds. Ifa significant default
or other financial crisis should occur in the affairs of thc State or any of its agencies or political subdivisions thereby
further impairing thc acceptability of obligations issued by borrowers within thc State, both the ability of the Town
to arrange for additional borrowings and thc market for and market value of outstanding debt obligations, including
thc Bonds, could bc adversely affected.
Future amendments to applicable statutes affecting thc treatment o£ interest paid on municipal bonds,
including the Bonds, for income taxation purposes could have an adverse effect on the market value of the Bonds (sec
"Tax Matters" herein).
TAX MATTERS
Opinion of Bond Counsel
In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel to the Town, under existing statutes and
court decisions and assuming continuing compliance with certain tax certifications described herein, (i) interest on
the Bonds is excluded from gross income for F,e,,deral income tax purposes pursuant to Section 103 of the Internal
Revenue Code of 1986, as amended (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 thc Code; such interest,
however, is included in the adjusted current earnings of certain corporations for purposes of calculating the altem,,ative
minimum t,,a,x imposed on such corporations. The Arbitrage and Use of Proceeds Certificate of the Town (the 'Tax
Certificate ), which will be delivered concurrently with the delivery of the Bonds will contain provisions and
procedures relating to compliance with applicable requirements oftheCode. In rendering its opinion, Bond Counsel
has relied on certain representations, certifications of fact, and statements of reasonable expectations made by the
Town in commction with the Bonds, and Bond Counsel has assumed compliance by the Town with certain provisions
and procedures set forth in the Tax 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. The provisions of
the American Recovery and Reinvestment Act of 2009 relating to the treatment of interest on certain tax-exempt
bonds do not apply to the Bonds.
In addition, in the opinion of Bond Counsel to the Town, 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.
Bond Counsel to the Town expresses no opinion regarding any other Federal or state tax consequences with
re spcct to the Bonds. Bond Counsel renders its opinion under existing statutes and court decisions as of the issue date,
andassumes no obligation to update its opinion after the issue date to reflect any future action, fact or circumstance,
or change in law or interpretation, or othenvise. Bond Counsel expresses 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.
17
Certain Ongoing Federal Tax Requirements and Certifications
The Code establishes certain significant ongoing requirements that must be met subsequent to the issuance
and delivery of the Bonds in order that interest on such Bonds be and remain excluded from gross income under
Section 103 of the Code. These requirements include, but are not limited to, requirements relating to use and
expenditure of gross proceeds of the Bonds, yield and other restrictions on investments of grossproceeds, and the
arbitrage rebate requirement that certain excess earnings on gross proceeds be rebated to the Federal government.
Noncompliancc with such requirements may cause interest on thc Bonds to become included in gross income for
Federal income tax purposes retroactive to their issue date, irrespective of the date on which such noncompliance
occurs or is discovered. The Town, in executing the Tax Certificate, will certify 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 the exclusion of interest on the Bonds from gross income under Section 103 of the
Code.
Certain Collateral Federal Tax Consequences
The following is a brief discussion 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 relevant to a particular owner of a Bond.
Prospective investors, particularly those who may be subject to spedial rules, arc advised to consult their own tax
advisors regarding the Federal tax consequences of owning and disposing of the Bonds.
Prospective owners of the Bonds should be aware that the ownership of such obligations may result in
collateral Federal income tax consequences to various categories of persons, such as corporations (including S
corporations and foreign corporations), financial institutions, property and casualty and life insurance companies,
individual recipients of Social Security and railroad retirement benefits, individuals otherwise eligible for the earned
income tax credit, and taxpayers deemed to have incurred or continued indebtedness to purchase or carry obligations
the interest on which is excluded from gross income for Federal income tax purposes. Interest on the Bonds may be
taken into account in determining the tax liability of foreign corporations subject to the branch profits tax imposed
by Section 884 of the Code.
Original Issue Discount
"Original issue discount" ("OLD") is the excess of the stun of all amounts payable at the stated mamri~ of
a Bond (excluding certain "qualified stated interest" that i,s, unconditio,~,mlly payable at least annually at prescribed
rates) over the issue price of that maturity. In general, the issue price of a maturity means the first price at which
a substantial amount of the Bonds of that maturity was sold (excluding sales to bond houses, brokers, or similar
persons acting in the capacity as underwriters, placement agents, or wholesalers). In general, the issue price for each
maturity of the Bonds is expected to be the initial public offering price set forth in this Official Statement. Bond
Counsel further is of the opinion that, for any Bond having OlD (a "Discount Bond"), OlD that has accrued and is
properly allocable to the owners of the Discount Bond under Section 1288 of the Code is excludable from gross
income for Federal income tax purposes to the same extent as other interest on the Bonds.
In general, under Section 1288 of the Code, OlD on a Discount Bond accrues under a constant yield method,
based on periodic compounding of interest over prescribed accrual periods using a compounding rate determined by
reference to the yield on that D~scount Bond. An owner s adjusted basis in a Discount Bond is increased by accrued
OID for purposes of determining gain 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
received for purposes of determining various other tax consequences of owning a Discount Bond even though there
will not be a corresponding cash payment.
Owners of Discount Bonds should consult their own tax advisors with respect to the treatment of original
issue discount for Federal income tax purposes, including various special rules relating thereto, and the state and local
tax consequences of acquiring, holding, and disposing of Discount Bonds.
Bond Premium
In general, if an owner acquires a Bond for a purchase price (excluding accrued interest) or otherwise at a tax
basis th,at reflects a premium over the sum of all amounts payable on the Bond after the acquisition date (excluding
certain 'qualified stated interest" that is unc,o,n~ditionally pay,a,,ble at least annually at prescribed rates), that premium
constitutes "bond premium" on that Bond (a Premium Bond )~ In general, under Section 171 of the Code, an owner
of a Premium Bond must anmrtize the bond premium over the remaining term of the Premium Bond, based on the
owner's yield over the remaining term of the Premium Bond, determined based on constant yield principles (in certain
cases involving a Premium Bond callable prior to its 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 Premium Bond).
An owner ora Premitm~ Bond must amortize the bond premium by offsetting the qualified stated interest allocable
to each interest accrual period under the owner's regular method of accounting agmnst the bond premium allocable
to that period. In the case of a tax-exempt Premium Bond, if the bond premium allocable to an accrual period exceeds
the qualified stated interest allocable to that accrual period, the excess is a nondeductible loss. Under certain
circumstances, the owner ora Premium Bond may realize a taxable gain upon disposition of the Premium Bond even
18
though it is sold or redeemed for an amount less than or equal to the owner's original acquisition cost. Owners of any
Premium Bonds should consult their own tax advisors regarding the treatment of bond premium for Federal income
tax purposes, including various special rules relating thereto, andstate 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
Information reporting requirements apply to interest on tax-exempt obligations, including the Bonds. In
~eneral, such requirements are satisfied if the interest recipient completes, and provides the payor with, a Form W-9,
· Request for Taxpayer Identification Number and Certification," or unless the rccipicnt is one ora limited class of
exempt recipients, including corporations. A recip, ient not other ,w,,, ise exempt from info,,rmation reporting who fails
to satisfy the information reporting requirements will be subject to backup withholding, which means that the payor
is required to deduct and withhold a tax from the interest payment, calculated in the manner set forth in the Code.
For the foregoing purpose, a "payor" generally refers to the person or entity from whom a recipient receives its
payments of interest or who collects such payments on behalf of the recipient.
If an owner purchasing a Bond through a brokerage acconnt has executed a Form W-9 in connection with the
establishment of such account, as generally 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
income tax purposes. Any amounts withheld pursuant to backup withholding would be allowed as a refund or a credit
against thc owner's Federal income tax once thc required information is furnished to the Internal Revenue 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 consult their own tax advisors regarding the foregoing matters.
LEGAL MATTERS
Legal matters incident to the authorization, issuance and sale of the Bonds will be subject to the final
approving opinion of Hawkins Delalield & Wood LLP, Bond Counsel to thc Town. Certain legal matters will be
passed on for the Town by its Assistant Town Attorney.
DISCLOSURE UNDERTAKING
This Official Statement is in a form "deemed final" by the Town for the purposes of Securities and Exchange
Commission Rule 15c2-12. At the time of the delivery of the Bonds, the Town will provide an executed copy of its
"Undertaking to Provide Continuing Disclosure" (the "Undertaking"). Said Undertaking will constitute a written
agreement or contract of the Town for the benefit of holders of and owners of beneficial interests in the Bonds, to
provide, or cause to be provided:
(1)
during any succeeding fiscal year of the Town in which the Bond,s are outstanding, to (a) each nationally
recognized municipal securities information repository CNRMSIR ') and (b) the New York State Information
Depository, if created, ("SID"), (i) certain annual financial information, in a form generally consistent with
thc information contained or cross-referenced in this Official Statement 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, on orprior to the 180th day following the
end of each fiscal year, including (ii) the audited financial statement, if any, for the preceeding fiscal year
of the Town, unless such auditedfinancial statement, if any, shall not then be available in which case the
unaudited financial statement shall be provided and an audited financial statement shall be delivered to each
NRMSIR and to the SID within 30 days after it becomes available and in no extent later than 360 days after
the end of each fiscal year;
(2) to (a) each NRMSIR, or to the Municipal Securities Rulemaking Board CMSRB"), 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 delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws
on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements
reflecting financial difficulties; (v) substitution of credit or hquidity 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) defeasances; (x) release, substitution, or sale of property securing
repayment of the Bonds; and (xi) rating changes.
19
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 is material with respect to flee 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, in a timely manner, notice of a failure to provide
the annual financial information by the date specified.
The Town's Undertaking shall remain in full force and effect until 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 ,b, reach
or default under the Undertaking is an action to compel specffic performance of the tmdertakings of the Tow n, and
no persou or entity, including a holder of the Bonds, shall be entitled to recover monetary damages thereunder under
any circumstances. Any failure by the Town to comply with the Undertaking will not constitute a default with respect
to the Bonds.
The Town reserves the right to amend or modify the Undertaking under certain circumstances set forth therein
provided that any such amendment or modification will be done in a manner consistent with Rule 15c2-12 as then
m effect.
The Town is in compliance with all previous undertakings made pursuant to Rule 15c2-12.
VERIFICATION OF MATHEMATICAL COMPUTATIONS
The accuracy of the mathematical computations (a) regarding the adequacy of the maturing principal of and
interest earned on the Government Obligations together with the uninvested cash, to pay, when due, the principal of
and interest on and redemption premium, if any, with regard to the Refunded Bonds on the applicable payment dates
and (b) relating to the determination by Bond Counsel of compliance with the regulations and rulings promulgated
under Section 148 of the Code, as amended, will be verified by Causey Demgen & Moore Inc. Such verification of
the accuracy of the mathematical computations will be based, in part, upon factual information supplied by the District
and the Underwriter (as defined below).
UNDERWRITING
Roosevelt & Cross, Inc. (the "Underwriter'") has agreed, subject to certain conditions, to purchase the Bonds
from the District. The Underwriter s obligations are subject to certain conditions precedent, and the Underwriter will
be obligated to purchase all the Bonds if any of the Bonds are delivered at a purchase price of $
which represents the aggregate par amount of the Bonds, plus (less) an original premium (discount) of $
less an underwriting d~scount o]~$. . The Bonds may be offered and sold to certain dealers (including
dealers depositing such Bonds into unit investment trusts) at prices lower than the public otTering prices as set forth
on the cover page hereof. The initial public offering prices may be changed from time to time by the Underwriter.
BOND RATING
The Town has applied to Moody's Investors Services for a rating on the Bonds. Such rating reflects only the
view of such rating agency, and any desired explanation of the significance of such rating should be obtained from
such rating agency. Generally, a rating agency bases its ratings on the information and materials furnished to it and
on investigation, studies and assumptions by the rating agency. There is no assurance that a particular rating will
apply for any given period of time or that ~t will not be Iowered or withdrawn entirely if, in the judgment of the
agency originally establishing the rating, circumstances so warrant. Any downward revision or withdrawal of such
ratings could have an adverse affect on the market price of the Bonds or the availability of a secondary market for
such Bonds. Such ratings should not be taken as a recommendation to buy or hold the Bonds.
FINANCIAL ADVISOR
Munistat Services, Inc. has assisted the District as financial advisor in certain matters with respect to the
preparation of this Official Statement.
20
ADDITIONAL INFORMATION
Additional information ma5' be obtained upon request from the office of the Town Comptroller, John A.
Cushman II, Town of Southold, Town Hall, P.O. Box 1179, Southold, New York 11971, telephone number 631/765-
4333, email: john.cushman~town, southold.ny.us or from the office of Munistat Services, Inc., 12 Roosevelt Avenue,
Port Jefferson Station, New York 11776, telephone number 631/331-8888 and website: http ://www.munistat.com
Any statcmcnts in this Official Statement involving matters of opinion or estimates, whether or not expressly
so stated, are intended as such and not as representations of fact. 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 SOUTHOLD, NEW YORK
April ,2009
By:
SCOTT A. RUSSELL
To~vn Supervisor and Chief Fiscal Officer
21
APPENDIX A
FINANCIAL INFORMATION
Balance Sheet
General Fund
2005
ASSETS
Cash and Investments $ 9,292,437
Accounts Receivable 24,533
Duc From Other Funds 176,390
Due From Trast Funds 68
State and Federal Aid Receivables 81,849
Due From Other Governments 1,867,136
Supply Inventory 1,204
Prepaid Expenses 498,344
Total Assets $ 11,941,961
Fiscal Year Ending December 31:
2006
8,339,472
22,346
190,208
110,153
2,075,955
2,099
426,200
$ 11,166,433
2007
21,437,689
17,263
74,500
62,377
826,834
1,275
460,951
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
Deferred Revenues 3,018,595
701,018
1,205,516
243,292
12,601
3,619,307
830,531
2,305,222
9,569,319
25,484
5,066,541
Total Liabilities 5,934,499 5,781,734 17,797,097
Fund Balances - Reserved:
Encumbrances 4,009 13,284 193,041
Insurance claims 1,105,879 513,329 588,614
Supply Inventory 1,204 2,099 1,275
Prepaid Expenses 498,344 426,200 460,951
Fund Balances - Uareserved:
Designated - Ensuing Year's Budget 2,657,200 2,185,000 1,816,000
Undesignated 1,740,826 2,244,787 2,023,911
TotMFund Equity 6,007,462 5,384,699 5,083,792
Total Liabilities and Fund Equity $ 11,941,961
11,166,433
Sources: Audited Financial Reports of the Town (2005 through 2007)
Table itself NOT audited.
22,880,889
A-1
Statement of Revenues, Expenditures and ChanRcs in Fund Balance
General Fund Town Wide
Fiscal Year Ending December 31:
2003 2004 2005 2006 2007
Real Property Taxes $ 13,247,572 $ 13,962,268 S 14,608,674 $ 14,872,736 $ 16,205,911
Other Real Property Tax ltmns 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 & Forfeitures 107,084 107,315 140,192 171,763 155,477
Sale of Property & Comp. for 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 Aid 2,225,401 2,974,027 2,637,870 2,725,177 2,412,869
Federal Aid 146,574 160,337 174,348 228,491 145, 568
17,277,604 19,326,712 19,908,009 20,678,820 21,789,930
Expenditures:
General Government Support
Public Safety
Public Health
Transportation
Economic Assistance & Opportunity
Culture & Recreation
Home & Community Services
Employee Benefits
Debt Service Principal & Interest
3,751,469 4,395,571 4,641,568 5,177,745 5,234,683
6,033,207 6,254,365 7,177,145 7,371,280 7,816,643
32,988 33,288 33,288 32,988 35,238
398,358 401,866 446,877 452,050 550,906
833,501 931,566 901,139 949,740 1,064,905
317,769 304,071 354,768 384,983 345,540
228,578 341,764 315,273 530,270 417,654
2,617,783 4,868,116 5,857,963 5,811,868 6,172,279
1,007,318 2,104,202 1,560,055 1,313,234 787,775
Total Expenditures
15,220,971 19,634,809 21,288,076 22,024,158 22,425,623
2,056,633 (308,097) (l,380,067) (1,345,338) (635,693)
1,392,850 2,932,574 2,642,859 2,253,944 2,73K349
(1,910,781) (1,304,195) (1,895,023) (1,531,369) (2,403,563)
(517,931) 1,628,379 747,836 722,575 334,786
1,538,702 1,320,282 (632,231) (622,763) (300,907)
Excess (Deficiency) of Revenues Over
Expenditures
Operating Transfers In
Operating Transfers Out
Total Other Finmlcing Sources (Uses)
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures m~d Other Uses
Fund Balance Beginning of Year
3,780,709 5,319,411 6,639,693 6,007,462 5,384,699
Fund Balance End of Year $ 5,319,411 $ 6,639,693 $ 6,007,462~ $ 5,384,699 $ 5,083,792
Sources: Audited Financial Reports of the Town (2003-2007)
Table itself NOT audited.
A-2
Statement of Revenues, Expenditures and Fund Balance
Highway Fund
Revenues:
Real Property Taxes
Other Real Property Tax Items
Intergovernmc'ntal Charges
Use of Money & Property
Licenses & Permits
Sale of Property & Comp, tbr Loss
Miscellaneous Local Sources
State Aid
Federal Aid
Fiscal Year Ended December 31:
2003 2004 2005 2006 2007
$ 3,513,902 $ 3,520,332 $ 3,805,032
6,428 3,679 9,046
15,573
18,520
8,231
4,033
458,686
67,699
$ 4,095,347 $ 4,027,695
12,689 12,722
23,884 77,817 140,578 142,501
4,937 11,126 9,484 10,362
2,960 2,796 7,521 29~13
16 155,054
228,337 188,147 276,337 296,263
4,093,072 3,784,145 4~49,018 4,541,956 4,518,756
Expenditures:
Transportation
Employee Benefits
Debt Service
2,733,518 2,638,121 2,913,768 3,028,076 3,437,186
976,406 415,102 500,343 515,106 510,185
15,128 22,219 178,371 283,652 17,001
Total Expenditures
3,725,052 3,075,442 3,592,482 3,826,834 3,964,372
Excess (Deficiency) of Revenues Over
Expenditures
368,020 708,703 656,536 715,122 554,384
Operating Transfers In
Operating Transfers Out
211
(60,000) (690,390) (520,085) (452,648) (794,696)
Total Other Financing Sources (Uses)
(60,000) (690,390) (520,085) (452,648) (794,485)
Excess (Deficiency) of Revenues and Other
So urces Over Expenditures and Other Uses
308,020 18,313 136,451 262,474 (240,101)
Fund Balance Beginning of Year
594,064 902,084 920,397 1,056,848 1,319,322
Fund Balance End of Year
$ 902,084 $ 920,~397 $ 1,056,848 $ 1,319,322 $ 1~079,22~1
Sources: Audited Financial Reports of lhe Town (2003-2007)
Table itself NOT audited.
A-3
Statement of Revenues, Expenditures and Changes in Fund Balance
Non-Major Governmental Funds (1)
Fiscal Year Ending December 31:
2003 2004 2005 2006 2007
Revellues:
RcalProperty Taxes $ 2,197,525 $ 2,506,945 $ 2,381,335 $ 2,741,362 $ 2,831,897
Other Real Property Tax Items 874 3,105 2,516 47489 4,581
Non-Property Tax Items 117,449 336,139 213,786 229,346 234,091
Departmental Income 2,339,227 2,517,584 2,504,880 2,275,935 2,147,502
Intergovernmental Charges 1,614 1,013 1,013 1,809 905
Use of Money & Property 18,147 21,365 64,092 95,272 94,361
Licenses & Permits 139,620 199,849 165,965 163,780 169,338
Fines and Forfeitures 49,000
Sale of Proper~ & Comp. ibr Loss 44,450 76,069 109,137 135,662 216,437
Miscellaneous Local Sources 230 5,025 153,591 6,652 13,283
State Aid 161,393 72,651 75,374 127,278 93,135
Federal Aid 111,299 166,368 224,136 41,163 210,175
5,180,828 5,906,113 5,895,825 5,822,748 6,015,705
Expenditures:
General Government Support
Public Safety
Public Health
Home & Community Services
Employee Benefits
Debt Service
134,969 92,514 99,895 103,654 87,970
749,904 739,198 807,474 869,154 948,311
6,408 6,664 6,864 7,104 7,370
3,230,201 3,225,586 3,102,639 3,363,781 3,173,114
874,049 371,038 444,858 470,377 468,989
117,562 88,803 671,720 822,590 530~796
Total Expenditures
5,113,093 4,523,803 5,133,450 5,636,660 5,216~550
Excess (Deficiency) of Revenues Over
Expenditures
67,735 1,382,310 762,375 186,088 799,155
(483,500) (1,081,441) (504,720) (429,145) (874,115)
(483,500) (1,081,441) (504,720) (429,145) (874,115)
Operating Transfers In
Operating Transfers Out
Total Other Financing Sources (Uses)
Excess (Deficiency} of Revenues and Other
Soumes Over Expenditures and Other Uses
(415,765) 300,869 257,655 (243,057) (74,960)
Fund Balance Beginning of Year
Fund Balance End of Year
1,261,339 845,574 1,146,444 1,446,849 (2) 1,203,792
$ 845,574 $ 1,146,443 $ 1,404,099 $ 1,203,792 $ 1,128,832
(1) Includes thc following funds: Gencral Fund Part Town, Special Grant Fund, East-West Fire Protccfion Fund, Southold Wastewatcr
District, Fishers Island Sewer District and Solid Waste Management District.
(2) Difference duc to Prior Year Accounting Adjustment
Soumes: Audited Financial Reports of the Town (2003-2007)
Iable itself NOT audited.
A-4
Fund
General $
General-Outside Village
Highway-Townwide
Communily Development
Risk Retention Fund
Community Preservation Fund
Employees Health Plan
Total-Town $
Orient Road Improvement District
East-West Fire Protection District
Fishers Island Ferry District
Solid Waste Management District
Southold Wastewater District
Fishers Island Sewer District
F.I. Refuse & Garbage District
Orient Mosquito District
Subtotal-Special Districts
Orient-East Marion Park District
Southold Park District
Cutchogue-New Suftblk Park Dist.
Mattituck Park District
Subtotal-Park Districts
Fishers Island Fire District
Orient Fire District
East Marion Fire District
Southold Fire District
Cutchoguc Firc District
Mattituck Fire District
Subtotal-Fire Districts
Total-All Disthcts
Grand Total
Source: Adopted Budget of the Town.
BUDGET SUMMARY
Fiscal Year Ending December 31, 2009
Appropriations Less: Less: Amount to bc
and Provisions Estimated Unexpended Raised by
for Other Uses Revenues Balance Tax
25,749,632 $ 4,321,679 $ 1,262,000 $ 20,165,953
2,231,278 1,225,350 292,000 713,928
4,935,705 421,519 381,000 4,133,186
130,000 130,000 0 0
674,500 674,500 0 0
3,997,500 3,997,500 0 0
4,098,872 4,098,872 0 0
41,817,487 $ 14,869,420 $ 1,935,000 $ 25,013,067
4,580 0 20 4,560
597,863 3,000 5,700 589,163
3,412,000 2,822,000 0 590,000
3,997,640 2,490,100 0 1,507,540
87,500 8,000 75,000 4,500
30,705 30,705 0 0
549,800 50,000 100,000 399,800
70,000 0 0 70,000
8,750,088 $ 5,403,805 $ 180,720 $ 3,165,563
35,583 0 0 35,583
315,000 0 0 315,000
145,000 0 0 145,000
608,928 31,750 100,000 477,178
1,104,511 $ 31,750 $ 100,000 $ 972,761
359,700 3,300 0 356,400
525,240 60,724 0 464,516
541,716 2,000 18,750 520,966
1,738,238 44,200 0 1,694,038
1,150,350 20,000 246,750 883,600
1,881,871 0 0 1,881,871
6,197,115 $ 130,224 $ 265,500 $ 5,801,391
16,051,714 5,565,779 546,220 9,939,715
57,869,201 $ 20,435,199 $ 2,481,220 $ 34,952,782
A~5
Fund
General $
General-Outside Village
Highway Fund
Community Development
Risk Retention Fund
Community Preservation Fund
Employees Health Plan
Total-Town $
Orient Road Improvement District
East-West Fire Protection District
Fishers Island Ferry District
Solid Waste Management District
Southold Wastewater District
Fishers Island Sewer District
F.I. Refuse & Garbage District
Orient Mosquito District
Subtotal-Special Districts
Orient-East Marion Park District
Southold Park District
Cutchogue-New Suffolk Park Dist.
Mattituck Park District
Subtotal-Park Districts
BUDGET SUMMARY
Fiscal Year Ending December 31, 2008
Appropriations Less: Less:
and Provisions Estimated Unexpendcd
for Other Uscs Revenues Balance
24,413,069 $ 5,205,781
2,246,677 1,119,700
5,198,627 396,032
136,000 136,000
765,000 765,000
5,200,000 5,200,000
2,892,500 2,692,500
$ 1,816,000
317,000
491,000
0
0
0
200,000
Amount to be
Raised by
Tax
$ 17,391,288
809,977
4,311,595
0
0
0
0
40,851,873 $ 15,515,013 $ 2,824,000 $ 22,512,860
4,500 0 0
552,863 5,000 6,400 541,463
3,220,775 2,630,775 0 590,000
4,224,695 2,640,350 77,400 1,506,945
102,265 9,020 90,000 3,245
30,950 30,700 250 0
563,800 0 0 563,800
86,900 0 0 86,900
8,786,748 $ 5,315,845
$ 174,050
34,780 0 0
315,000 0 0
145,000 0 0
560,229 29,000 50,000
$ 1,055,009 $ 29,000 $ 50,000
Fishers Island Fire District 359,700 3,300 0
Orient Fire District 483,940 45,272 0
East Marion Fire District 536,380 13,200 0
Southold Fire District 1,631,025 33,000 0
C utchogue Fire District 1,412,000 20,000 0
Mattituck Fire District 1,978,770 0 0
Subtotal-Fire Districts $ 6,401,815 $ 114,772 $ 0
3,292,353
34,780
315,000
145,000
481,229
976,009
356,400
438,668
523,180
1,598,025
1,392,000
1,978,770
6,287,043
Total-All Districts 16,243,572 5,459,617 224,050 10,555,405
Grand Total $ 57,095,445 $ 20,974,630 $ 3,048,050 $
Source: Adopted Budget of the Town.
33,068,265
A-6
TOWN OF SOUTHOLD
APPENDIX B
FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
NOTE: SUCH FiNANCIAL REPORT AND OPINIONS WERE PREPARED AS OF THE
DATE THEREOF AND HAVE NOT BEEN REVIEWED AND/OR UPDATED IN
CONNECTION WITH THE PREPARATION AND DISSEMiNATION OF THIS
OFFICIAL STATEMENT. CONSENT OF THE AUDITORS HAS NOT BEEN
REQUESTED OR OBTAINED.
FINANCIAL SECTION
Independent Auditors' Report .................................................................................................................... 1-2
I
REQUIRED SUPPLEMENTARY INFORMATION. J
Management's Discussion and Analysis ..................................................................................................
3-11
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Assets .........................................................................................................................
Statement of Activities ............................................................................................................................
Fund Financial Statements
Governmental Fund Financial Statement~
Balance Sheet and Reconciliation of the Governmental Funds Balance Sheet to
The Statement of Net Assets ............................................................................................................
Statement of Revenues, Expenditures, and Changes in Fund Balances and'
Rec6nciliation of the Governmental Funds Statement of Revenues, Expenditures,
And Changes in Fund Balances to the Statement of Activities .......................................................
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Assets .........................................................................................................
Notes to Financial Statements ..................................................................................................................
12
13
t4-15
16-17
18
19-36
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND
ANALYSIS
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
General Fund ....................................................................................................................................... 37
Highway Fund ...................................................................................................................................... 38
OTHER SUPPLEMENTARY INFORMATION
COMBINING FUND STATEMENTS:
Non-major Governmental Funds
Combining Balance Sheet .................................................................. ~....: ...........................................
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................
DISCRETELY PRESENTED COMPONENT UNITS I
Discretely Presented Component Units:
Combining Statement of Net Assets ......................................................................................................
Combining Statement of Activities ..........................................................................................................
39
41
42
FINANCIAL
SECTION
7CERTIFIED PUBLIC ACCOUNTAI, IT$, BUSINESS. AD, VISORS ANO CONSULTANTS
25 $~j~olk Court, _~a[zp£auge, ~ Yo~'~ 1~ 7~
631.434. ~500 · F~ 631.~3~.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, 2007, 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 l~inancial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit jn 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
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disctosures in the financial statements. An audit also includes assessing the accounting principles
used and signilicant 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 of the Town of Southold's discretely presented component units wilh 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. The discretely
presented component units represent 29.5%, 34.8% and 35.4%, respectively, of the assets, net assets
and revenues of the aggregate 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 lhe 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 matedal
respects, the respective financial position of the governmental activities, the aggregate discretely
presented component units, each major fund and the aggregate remaining fund information of the Town
of Southold, Now York, as of December 31, 2007, and the respective changes in financial position for the
year then ended in conformity with accounting principles generally accepted in the United States of
America.
The Management's Discussion and Analysis and the budgetary information are not a required part of the
basic financial statements but are supplementary information required by accounting principles generally
accepted in the United States of America. We have applied cedain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentalion of the
supplementary information. However, we did not audi[ the information and express no opinion on it.
ALBRECHT~ VI(3GIANOr ZURECK ~. COHPANY, P.C.
_.~_
Our audit was conducted for the purpose of forming an opinion on the financial statements Ihat
collectively compdse the Town of Southoid, New York's .basic financial statements. The combining and
individual fund financial statements are presented for purposes of additiona~ analysis and are not a
required part of the 5asic financial statements. The combining and individual fund financial statements
have been subjected to the auditing procedures apptied in the audit of the basic financial statements of
the Town or Souf~old, New York, and, in our opinion, is fairly presented in all material respects in relatior~
to the basic financial statements taken as a whole.
Hauppauge, New York
October 2, 2008
-2-
REQUIRED SUPPLEMENTARY INFORMATION
Management's DiScussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 3'~, 2007
The followir~g is a discussion and analysis of the Town of Southold's financial performance, providing an overview
of lhe Town's financial activities for the year ended December 31,2007. 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.tonger-
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 significanl 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.
Reporting th.e. 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 Sta[ement of Net Assets and the Stalement of Activities
report information about the Town as a whofe and about its activities in a way that helps answer this question.
These statements include alt assets and liabilities using the accrual basis of accounting, which is slmilar 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)kevenue. 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. Alt 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 assels and their respective changes. You can think of the Town's
net assets--the difference between assets and liabilities--as one way to measure tho 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 hetp it
cover the cost of certain services it provides.
Component units - Tho Town includes seven separate legal entities in its report (one ferry district, one
sanitation district, one mosquito district and four park districts). Although togally 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 Al.
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2007
Reporting the Town's Most Si,clnifica,,n,,,t 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 reported in governmental, funds, which focus on how money flows into and out
of lhose funds and the balbnces left at year-end [hat are available for spending, These funds are reported
using an accounting method called modified accrual accounting, which measures cash and all other financial
assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term
view of the Town's general government operations and the basic services it provides. Governmental fund
information helps you determine whether there are mere or fewer financial resources that can be spent in the
near future to finance the Town's programs. We describe the relationship (or differences) between
governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and
governmental funds in a reconciliation that follows these fund financial statements.
The Town as Trustee
Rep¢rtin~q lhe Town's Fiduciarv Responsibilities
All of the Town's fiduciary activities are repealed 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 be[ow focuses on the net assets and changes in net assets of the Town's governmental activities.
Condensed Statement of Net Assets
Primary Governmental Activities
December 31,2007 and 2006
2007 2006
Assets
Currentand other assets $ 43,347,669 $ 23,769,534
Capital assets 109,728,421 100,557,312
Total assets 153,076,090 124,326,846
Liabilities
Current and other liabilities 24,314,029 15,552,211
Long-term liabilities 28,413,510 14,773,434
Total liabilities 52,727,539 30,325,645
Net assets
Invested in capital assets,
net of related debt 83,294,421 84,334,214
Restricted:
Land acquisition t 3,909,980 6,864,987
Debt service 79,339 t7,572
Unrestricted 3,064,811 2,784,428
Total net assets $ 100,348,551 $ 94,001,201
"4-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Total assets in the Town as of December 31, 2007 were $153 million, an increase ct $28.7 million. Total
liabilities as of December 31, 2007 were $52.7 million, which represents an increase of $22.4 million from
December 3t', 2006. This results in a net'asset balance of $100.3 million, an increase of $6.3 million. Of the
Town's net asset balance $83.2 million were invested in capital assets, net of related debt; $14 million was
restricted for future land acquisition and payments on debt service while $3 million was unrestricted.
Changes.in Net Assets
Primary Governmental Activities
for the years ended December 31, 2007 and 2006
Program Revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General Revenues Real property taxes
Other real property tax items
Non-property tax items
Interest earnings
State aid - unrestricted
Other
Total Revenues
Program Expenses
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Expenses
Increase in Net Assets $
2007
$ 3,260,873
842,604
2,121,558
6,225,035
23,O65,503
109,909
6,989,400
1,502,349
2,293,295
930,666
34,891,t22
41,116,157
7,020,895
12,358,296
46,146
6,980,032
1,506,488
629,444
5,390,045
837,461
34,768,807
6,347,350
20O6
$ 3,407,682
713,597
4,834,716
8,955,995
21,709,445
102,986
6,669,730
1,233,122
2,610,189
463,671
32,789,143
41,745,138
6,843,661
11,42t,283
43,499
7,298,698
1,354,610
713,164
4,912,384
553,713
33,14t,012
$ 8,604,126
-5-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Total Cost of Services
Primary' Governmental Activities
for the year ended December 31, 2007
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
$ 7,020,895
12,358,296
46,146
6,980,O32
1,506,488
629,444
5,390,045
837,461
$ 34,768,807
Net Cost of SerVices
Primary Governmental Activities
for the year ended December 31, 2007
General government support
Public safety
Public heat[h
Transpodation
Economic assistance and opportunity
Culture and recreation
Home and community ,services
Interest on debt
Total Cost Program Net Cost
of Services Revenues of Services
$ 7,020,895 $ 322,350 $ 6,698,545
12,358,296 675,103 11,683,193
46,146 10,316 35,830
6,980,032 355,337 6,624.695
1,506,488 438,810 1,067,678
629,444 185,682 443,762
5,390,045 4,237,437 1,152,608
837,461 837,461
$ 34,768,807 $ 6,225,035 $28,543,772
The cost of all governmental activities this year was $34.8 million. The net cost of these services, however,
after subsidized by program revenues including charges for services and program grants, was $28.5 million.
The Town's change in net assets after general revenues of $28.8 million was an overall increase of $6.3
million.
TOWN OF SOUTHOLD
MANAGEMENT'S DSC. USSION AND ANALYSIS
December 3I, 2007
FINANCIAL ANALYSL~ OF THE TOWN AS A WHOLE (continued)
$14,000,000
$12,000,0DD
$10,000,009
$o,oo0,0o0
$4,000,000
$2,000,000
Expenses and Program Revenues
Governmental Activities
Expenses
=~ Program RevenuesI
sup~
Public safe~ Publlc heal~
Tran~port~'on
Economic Cullum and Horns ar.:l
and re~'eal~,o~ cc, mn~ ntt'./
op,oortu ~ily servlces
~nlere~l o~ deb!
Operating Capltal grants
grants and and
¢orlb4butlons ¢onlribu§or',.s
2% t2%
Revenue by Source
Governmental Activities
for the year ended December 3t, 2007
Real property taxes
State aid - unrestricted
Charges for services
Other general revenues
Operating grants and contributions
Capital grants and contributions
$ 23,065,503
2,293,295
3,260,873
9,532,324
842,604
2,12t,558
$ 41,116,157
-7-
TOWN OF Sou'rHOL;D
MANAGEMF_.NT'S DISCUSSION AND ANALYSIS
December 31, 2007
~INANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
THE TOWN'S FUNDS
The general fund balance has decreased by approximalely $300,000 due primarily to actual expenditures in
excess of revenues.
The following schedule presents a summary of the governmental funds - (general, special revenue, and
capital projects) revenues and expenditures for the year ended December 31, 2007, and the amount of
change and percenlage of total in relation to the prior year.
Increase %
2007 2006 (Decrease.). Change
REVENUES
Real property taxes
Other real property tax items
Non-property tax items
Depadmenlal income
Intergovernmental charges
Use of money and properly
Licenses and permits
Fines and forfeitures
' Sale of properly and compensation for loss
Miscellaneous local sources
State aid
Federal aid
Total Governmental Fund Revenues
EXPENDITURES
General government support
Public safety
Public health
Transportation
Economic assislance and opportunity
Home and community services
Culture and recreation
Employee benefits
Capital
Debt service principal and interest
Total Governmental Fund Expenditures
$ 23,065,503 $ 21,709,041 $ 1,356,462 5.9%
109,909 102,986 6,923 6.3%
917,964 846,016 7t,948 7.8%
2,559,292 2,753,784 (194,492) -7.6%
6,401,543 6,142,t77 259,366 4. t%
1,650,001 t ,376,729 273,272 16.6%
433,194 432,058 '1,t36 0.3%
155,477 I71,763 (t6,286) -'10.5%
393,933 238,240 155,693 39.5%
487,582 303,912 183,670 37.7%
3,696,346 7,108,866 (3,412,520)
1,280,709 595,604 685,105 53.5%
$ 41,151,453 $ 41,781,176 $ (629,723) -1.5%
5,322,653 $ 5,281,399 $ 41,2540.8%
8,764,954 8,240,434 524,520 6.0%
42,608 40,092 2,516 5.9%
3,988,092 3,480,126 507,966 12.7%
1,064,905 949,740 115,165 10.8%
3,518,654 3,748,764 (230,110) -6.5%
417,654 530,270 (112,616) ~27.0%
7,151,453 6,797,351 354,102 5.0%
2,436,627 13,324,188 (887,561) -7.1%
1,622,942 2,504,007 (881,065) -54.3%
44,330,542 $ 44,896,371 $ (565,829) -1.3%
GENERAL FUND BUDGETARY HIGHLIGHTS
Over the course of the year the Town Beard 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, 2007
CAPITAL ASSET.AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2007 the Town had $109.7 million in net capital assets including land, buildings,
Improvements, machinery and equipment, and infrastructure. The Town's component units had $22.1 million
in net capital assets including land, buildings, improvements, machinery and equipment, and sewer mains.
Capitaf 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
..C.o. mponent 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
2007 2O06
68,929,202 $ 58,341,517
1,067,738 220,114
8,316,323 8,307,223
13,624,650 13,618,159
10,197,793 9,916,143
71,461,368 70,694,655
173,597,074 16%097,811
63,868,653 60,540,499
$ 109,728,421 $ 100,557,312
2,193,353 $ 2,213,759
404,367 12,947,081
3,500,910 3,566,885
17,028,469 3,220,732
3,504,995 3,320,899
2, t72,080 2,145,280
28,804,174 27,414,636
6,702,685 6,074,572
$ 22,101,489 $ 21,340,064
-9-
TOWN OF SOUTHOL, D
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31. 2007
CAPITAL ASSET AND DEBT ADMINISTRATJON (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 [esolution 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.
~ Eq._uipmen[ 2008
General Fund $ 258,600
Highway Fund 110,000
.Special Districts 689,000
Total Equipment ,$. .... 1,057,600
Improvements
General Fund $ 6,469,328
Special Districts 1,500,08¢
Total Improvements $ 7,969,328
Total Program
$_. 9,026;928
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 bond credit rating from Moody's Investors Services was Aa2 as of December 31,
2007.
Debt Limit- The Town has the power to contract indebtedness for any Town purpose so long as the principal
amount thereof, subject [o certain 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 certain sewer facilities and cash or appropriations for current debt service.
The constitutional method for determining full valuation is calculated by laking the assessed valuation of
taxable real estate as shown upon the latest completed assessment roil and dividing Ihe same by the
equalization rate as determined by the State Board or 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
31,2007 was 4.41%.
At December 31, 2007, the Town had approximately $25.0 million in long term general obtigalion bonds
outstanding, of which $22.4 million was for general Town purposes. Also outstanding at year-end were bond
anticipation notes in the amount of $6.2 million of which $4.4 million was for general Town purposes.
Additional information on the Town's debt activity can be found in Note C.4 to the financial statements.
-10-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
ECONOMIC FACTOR'S AND NEXT YEAR'S BUDGETS AND RATEs
_Property Tax
The Town has adopted a budget for the 2008 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2008 budget
includes an overall increase in real property tax revenues from the prier year of. approximately 6.45% 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 2007, financial
assistance included slate aid consisting of mortgage tax of $2.3 million, consolidated highway aid of $296
thousand, and other state aid of approximately $794 thousand. State aid per capita was $93 thousand and
County local government assistance was $286 thousand. Additionally, if the State should r~ot 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 2008 budget included similar amounts for Ibis 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 spouse unti~ deaLh of the retiree.
CONTACTING THE TOWN'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and creditors with a general
overview of the Town's finances and to show the Town's accountability for the money it receives. If you have
questions about this repod or need additional financial information, contact the Town of Southold, Office of the
Town Comptroller, Southold, New York.
-11-
BASIC FINANCIAL
STATEMENTS
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF NET ASSETS
December 3I, 2007
ASSETS
Current Assets:
Cash and investments
Cash - restricted
Accounts receivable
Due from fiduciary funds
Due from other governments
Due from primary government
State and federal aid receivables
Prepaid charges
Inventory of material and supplies
Total Current Assets
Non-Current Assets:
Deferred charges, net of accumulated amortization
Non-depreciable capital assets
Depreciable capital assets, net of depreciation
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities
Accrued interesl payable
Bond anticipation notes payable
Due to other governments
Due to fiduciary funds
Unearned revenue
Non-current liabilities due wilhin one year
General obligation bonds payable
Claims and judgment, s payable
Estimated liability for landfill closure
and postclosure care costs
Total Current LiabililJes
Non-Current Liabilities:
General obligation bonds payable
Compensated absences
Claims and judgments payable
Estimated liability for landfill closure
and postclosure care costs
Total Non-Current Liabilities
Total Liabilities
NET ASSETS
Investment in capita[ assets, net of related debt
Restricted:
Land acquisition
Debt service
Unrestricted
Total Net Assets
Primary
Governmental Component
Activities Units
$ 27,003,180 $ 1,522,506
13,554,395
182,338 78,621
1.225,741
204,613
1,048,627
t ,275
677,898
1,522,644
5t ,49O
't,424,589 1,390,469
254,675 64,461
4,384,000 t,860,000
9,569,319
25,484
7,150,302 647,023
1,495,000 200,000
50,000
10,660
24,314,029 4,211,953
20,870,000 2,455,000
6,971,397
100,000
572,~13
28,413,5t0 2,555,000
52,727,539 6,766,953
83,294,421 17,132,809
13,909,980
79,339 2,756
3,064,811 2,052,130
$ 100,348,551 $ 19,187,695
See notes to the financial statements.
-12-
43,220,169 3,853,159
127,500
69,996,940 2,597,720
39,731,48t 19,503,769
109,855,921 22,101,489
153,076,090 25,954,648
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2007
ASSETS
Cash and Investments
Cash - restricted
Accounts Receivable
Due from Other Funds
State and Federal Aid Receivable
Due from Olher Governments
8 upply Inventory
Prepaids
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Peyable
Retained Percentages
Bond Anticipation Noles Payable
Due to Oth~r Funds
Due Io Trust Funds
Due to Other Governments
Deferred Revenue
Total Liabilities
FUND ~ALANCE
Fund Balances - Reserved:
Encumbrances
Supply Inventory
Prepaids
Community Preservation
Land Acquisition
Debt Service
Fund Balance - Unreserved:
Designated - Ensuing Year's Budget
Insurance Claims
Non-Major Special Revenue Funds
Undesignaled
Total Fund Bafance
Total Liabilities and Fund Balance
(~er~era[
MAJOR GOVERNMENTAL FUNDS Non-Major
Capilal Governmental
Highway,. Projects Funds
Totals
$ 2t,437,689
17,263
74,500
62,377
826,834
1,275
460,951
22,880,889
$ 1,193,195 $ 3,305,435 $ 1,066,861
13,554,395
11,906 153.169
1,260,522 126,342 902,933
100,000 42,236
398,907
48,546
$ 2,505,868 $ 17,49~,985. $ 2,213,745
$ 27,O03,180
13,554,395
182,338
2,364,297
204,613
1.225,741
1,275
561,648
$ 45,097,487
830,531 $ 146,552
2,305,222 2Z,090
25,484
9,569,319
5,066,541 1,253,005
$ 195,162
30,t72
4,384,000
$ 222,172 $ 1,394,417
30,172
4,384,000
31,985 2,364,297
25,484
9,569,319
830,756 7,150,302
17,797,097 1,426,647 4,609,334 1,084,913 24,917,991
193,O41
1,275
460,951
1,816,000 491,0D0
588,614
2,023,911 588,22'1
5,083,792 1,079,221
$ 22,880,889 $ 2,505,868
10,890,710
3,019,270
79,339
(1 101,668)
12,887,651
$ 17,496,985
25,770 218,811
1,275
23,315 484,266
10,890,710
3,019,270
79,339
2,307,0OO
588,614
323,400 323,400
756,347 2,266,81~
1,128,832 20,179,496
$ 2,213,745 $ 45,097,487
See notes to the financial statements.
-14-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TOTHE
STATEMENT OF NET AssETs
December 31, 2007
Total Fund Balances- Governmental Funds
Amounts reported for governmental activities in the
Statement of Net Assets are different because:
Capital assets less accumulated depreciation are
included in the Statement of Net Assets:
Capital assets - non-depreciable
Capital assets - depreciable
Accumulated depreciation
Other long-term assets are not available to pay for current-period
expenditures and, therefore, are deferred in the funds
Long-term liabilities applicable to the Town's
governmental activities are not due and payable
in the current period and accordingly are not
reported in the funds. However these liabilities
are included in the Statement of Net Assets:
General obligation bonds payable
Compensated absences
Estimated liability for landfill closure
and postclosure care costs
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 payabte ir~ 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
$ 69,996,94O
103,600,134
(63,868,653)
$ (~2,365,000)
(6,971,397)
(582,773)
20,179,496
109,728,421
(29,919,170)
486,979
127,500
(254,675)
$ 100,348,551
See notes t(~ financial statements.'
· TOWN OF SOUTHOLD
STATEMENT OF P, EVENUES, EXPENDITURES AND CHANGES tN FUND BALANCES
GOVERNMENTAL FUNDS
For the year ended December 31, 2007
REVENUES
Real Properly Taxes
Other Real Property Tax Items
NonIp~'operty Tax Items
Depadmental Income
Intergovernmental Charges
Use of Money and Property
Licenses and PermJt~
Fines and Forfeitures
Sale of Property and Compensation for Loss
Miscellaneous Local Sources
Stale Aid
Federal Aid
Total Revenues
EXPENDITURES
Current:
General Government Support
Public Safety
Public Heallh
Transportation
Economic Assistance and Oppodunlly
Home and Communily Services
Culture and Recreation
Employee Benefits
Capita~ Outlay
Debt Service:
Principal
~,terest
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures
Other Financing Sources (Uses)
Debt Proceeds
Transfers In
Transfers Oul
Total Other Financing Sources (Uses)
Net Change In Fund Balance
Fund Balances al Beginning of Year
Fund Balances al End of Year
MAJOR GOVERNMENTAL FUNDS
Non-Maim'
Capital Governmental
General Highway__ Projects Funds
I6,205,911 $4,027,695 $2,831,897
92,606 12,722 4,58I
683,873 234,091
411,790 2,147,502
Totals
$ 23,065,503
t 09,909
917.964
2,559,292
329,202 $ 6,071,436 905 6,401,543
764,912 142,50t 648,227 94,361 1,650,001
253,494 10,362 169,338, 433,194
155,477 155,477
148,283 29,213 2f 6,437 393,933
185,945 288,354 13,283 487,582
2,412,869 296,263 894,079 93,135 3,696,346
145,568 924,966 210,175 1,280,709
2t,789,930 4,518,756 8,827,062 6,0t 5,705
4%15.1,453
5,234,683 87,970
7,8t6,643 . 948,311
35,238 7,370
550,906 3,437,186
1,064,905
345,540 3,173,114
417,654
6,t72,279 5t0,185 468.989
'[2,436,627
543,040 236,058
244,735 17,001 287,370 294T738
22,425,623 3,964,372 12,723,997 5,216,550
(635,693} 554,384 (3,896.935) 799,155
5,322,653
8,764,954
42.608
3,988,092
1,084,905
3,518,654
417,654
7,151,453
t2,436,627
779,098
843,844
.44,330,54~_
(3,179,089~
14,650,000
2,738,349 211 f,333,814
(2,403,563) .. (794,696) . ..(874,115)
334.786 (794.485~ _ 15,983,8~4 (874,115~
(300,907) (240,101) 12,086,879 (74,960)
5,384,699 1,319,322 80~772 1,203,792
14,650,000
4,072,374
(4,072,37~
14,650,000
11,470,911
8,708,585
$ 5,083,792 $1,079,221 $ 12,887,651 $1,128,832 $ 20,179,496
See notes to the financial statements.
-16-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF RE. VENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO THE. STATEMEN-¢ OF ACTIVITIES
For the year ended December 31, 2007
Net Change in Fund Balance
Governmental funds report capital outlays as expenditures. However, in
the Statement of Act[vii[es 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 Ihe current period is:
Capital outlay
Depreciation expense
Loss on dispositions
$13,193,594
(4,005,790)
(16,695)
Some expenses reported in the Slatement 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 ftlnds, while the
repayment of the principal of tong term debt and capital leases consumes
the current financial resources of governmental funds.
Neither transaction has any effect on net assets.
Bonds issued
Repayment of bond principal
Due to Employees Retirement System
Compensated absences
Estimated liability for landfill closure
and postclosure care costs
Accrued interest payable
$ 11,470,911
9,171,109
27,481
(2~,250)
(14,650,000)
779,098
48,804
(495,736)
10,550
6,383
Change in Net Assets of Governmental Activities
$ 6,347,350
See notes to financial statements,
-17-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2007
ASSETS
Cash and investments
LIABILITIES
Other liabilities
Deposits hem
Total Assets
Total Liabilities
Fishers Island
Town Ferry District Totals
$ 5,718,965 $ 34,367 $ 5,753,332
$ 5,718,965 $ 34,367 $ 5,753,332
$ 4,861,089 $ 34,367 $ 4,895,456
857,876 857,876
$ 5,718,965 $ 34,367 $ 5,753,332
See notes to financial statements.
-18-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Southold (the "Town"), whfch was established in 1640, is governed by Town Law and other
general taws of the State of New York and various local laws. The Town Board is the legislative body
responsible for overalt operations. The Town Board consists of the Supervisor who is elected for a term
of four years and five council members who are elected for terms of four years. The Town Board appoints
the Town Attorney, Complroller and the Commissioner of Public Works whose terms are fixed by Town
Law. The Town Clerk, Receiver of Taxes, Superintendent of Highways, Justices and Town Truslees ate
all elected and servo 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 conformity with accounting
principles generally accepted in the United States of America (GAAP) as applied to governmental 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 consisls 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 reporting entity's financial statements to be
misleading or incomplete as set forth in GASB Statement No. 14.
The decision to include a potentiai 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 disb'icts are collected by the Town Receiver of Taxes. As a result of this fiscal dependency,
the Town is financially accountable for these special dislricts. Accordingly, these special dis;tricts
have been determined to be component units of /he Town and are presented discretely in a
separate column in the combined financial statements to emphasize that they are legally separaie
from the primary government.
2. BASIS OF PRESENTATION
The Town's basic financial statements include both government-wide (reporting the Town as a
whole) and fund financial statements (reporting the Town's major funds).
Government-wide Financial Statements
The government-wide financial statements reports information on the Town as a whole, except
fiduciary activities, with separate columns for the primary governmental activities as welt as the
discretely presented component units.
tn 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 not assets; and unrestricted net assets.
-19 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAl: STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. BASIS.OF PRESENTATION (continued)
The government-wide Statement of Activities repods both the gross 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,
cedain 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
include (a) charges for services and (b) operating and capital grants and contributions that are
directly associated with the function. Operating grants include operating-specific and
discretionary (either operating or capital) grants while the capital grants column reflects oapital-
specific grants, The net costs (by function) are normally covered by general revenue (property
taxes, intergovernmental revenues, interest income, otc). As a general rule the effect of
interfund activity has been eliminated in general purpose financial statements.
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 financial statements are similar to the financial statements presented in the previous
model. 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
self-balandng 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 governmental
functions are financed. The acquisilion, use and balances of expendable financial resources and
the related liabilities are accounted for through governmental funds. The measurement focus of
the governmental funds is upon determination of financial position and changes ir~ financial
position, Governmental funds are further classified as major and non-major funds.
The Town' reports the following major governmental funds:
General Fund - is the principal operating fund of the Town. This fund is used to account for all
financial resources except those required to be accounted for in other funds.
Highway Funds - used to account for the maintenance and operation of highways.
Capital Protects 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 tnust funds).
- 20 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 Greenpod.
Special Grant Fund - Segregate and account for projects funded by Community
Development revenue.
Special District Funds - To provide special services to areas !.hat 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 property) 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 ~usinesses within these dislricts, and follow
government fund accounting principles. These districts, which are accounted for as discretely
presented component units, are as follows:
The Fishers Island Ferry Dis~.rict, established in '1947
Orient Mosquito District, established in t916
Fishers Island Garbage and Refuse District, established in 1952
Cutchogue-New Suffolk Park District, established in 1953
Orient-Easl Marion Park District, established in 1969
Southold Park District, established in 1907
Matlituck 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 SuffoJk
Park District
P.O. Box 311
Cutchogue, NY 11935
Southold Park District
P.O. Box 959
Southold, NY 11971
Fishers Island Ferry District
P.O. Box 1179
Southold, NY 11971
Fishers island Garbage
& Refuse District
Fishers Island, NY 06390
Orient-East Marion
Park District
P.O. Box t 2
Orient, NY 11957
Mattituck Park District
P.O. Box 1413
Mattituck, NY 1 t952
-21 -
TOWN OF' SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
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 expendilures are recognized in the accounts and reporled in the financial
statements. Basis of accounting relates to the liming 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 liabiliiy is incurred or economic asset used. Revenues, expenses, gains, losses, assets,
and liabilities resuJting from exchange and exchange-like transactions are recognized when the
exchange takes place.
In the funds slatements, governmentaJ 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" 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 Iransfers. Permits, fees, and other similar 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 CapJlal
Projects Fund, long-term debt is recognized as revenue upon receipt of the proceeds.
Expenditures are recorded on the accrual basis except that (a) expenditures for prepaid expenses
are recognized when incurred; (b) principal and interest on indebtedness are recognized as
expenditures when due; (c) compensated abseqces, 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 are
recorded for budgetary control purposes in order to reserve that podion of the applicable
appropriation, is employed in the governmental funds. Appropriations for all governmental funds
except the capital projects fund lapse at year-end. However, encumbrances reserved against fund
balances are re-appropriated in lhe ensuing year. Encumbrances are reported as reservations of
fund balances since they do not cons[it, ute expenditures or liabilities. Expenditures for such
commitments are recorded in the period in which the liability is incurred.
4. ASSETS, LIABILITIES AND FUND EQUITY
CASH AND CASH EQUIVALENTS
Cash consists of funds deposited in demand accounts, time deposit accounts and cedificates of
deposit with maturities of less than three months.
For purposes of the Statement of Cash Ftows, the Town considers all highly liquid investments with
a malurity when purchased of three months or less and ali local government investment pools to be
cash equivalents.
RESTRICTED ASSETS
Certain assets of the Capital Projects including Community Preservation are classified as restricted
assets because their use is restricted by contractual agreements and regulations.
-22-
A.
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES AND FUND EQUITY (continued)
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 arc incurred.
INVENTORY - MATERIALS AND SUPPLIES
Inventory in the general and special revenue funds is valued at cost. Inventory in these funds is
accounted for under the consumption method.
CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of $5,000 or more are reported at
historical cost or estimated historical cost. Contributed assets are reported at fair market value
as of the date received. Additions, improvements and other capital outlays that significantly
exJend 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 sb'aight-
line basis over the following estimated useful lives:
Buildings 10-40 years
Improvements and other 20 years
Machinery and equipment 5-10 years
Infrastructure 20-30 years
Infrastructure assets, consisting of certain improvements other than buildings including roads,
curbs, sidewalks, bddges and street lighting are capitalized along with other capital assets.
In the fund financial statements, capital assets are recorded as capital outlay expenditures in the
governmental fund upon acquisition.
DEFERRED REVENUE/UNEARNED INCOME
Deferred revenues/'unearned income are those where asset recognition criteria have been met,
which revenue recognition cdteria have not been met. Such amounts include collections in
advance, unearned income and amounts that have been deemed to be "measurable" but not
"available' to finance current expenses pursuant to generally accepted accounting principles.
PREPAIDS
Prepaids record payments to venders that benefit future recording periods and are reported on the
consumption basis. Pmpaids in the general and special revenue funds represent insurance
premiums paid for coverage that wilt 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 cfosure
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.
REVENUES AND EXPENDITURES
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES
In Suffolk County, the assessment and lien of real property for taxation is done by the County
Depadmen~ of Assessment. Real property ~axes 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 we~l as by the County and by Special Districts of the County and
the Town.
- 23 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
5. REVENUES AND EXPENDITURES (continued)
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES (continued)
The Town of Soul. hold Receiver of Taxes collects all real property taxes for the-Town, Suffoli~
County, Town Special Dislricts 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 100% collection of real property taxes.
School District property taxes are also levied on December 1, and are also payable in two
installments. School property taxes are due in two installments, 50% on December 1 and 50% on
May 10 payable without penalty to January 10 and May 31, respectively. The County is also
responsible for uncollected school taxes.
INTERFUND TRANSACTIONS
Interfund transactions have been eliminated from the government-wide financial statements, in
the funds statements interfund transactions include:
a) Interfund Revenues
Intert'und revenues, which are quasi-external transactions, in the general fu~d 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 capitat
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 govern~nent-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
reported 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 as'sets.
- 24 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
6. EQUITY CLASSIFICATIONS (continued)
b)
Restricted net assets--Consists of net assets with conslrain.ts 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 previsions or enabling legislation.
c) Unrestricted net assets~AII other net assets that do not meet the definition of "restricted"
or "invested in capital assets, net of related debt."
In the Fund Statements, governmental fund equity is classified as fund balance. Fund balance is
further classified as reserved and unreserved, with unreserved fudher split between designated
and undesig~'~aied. Portions of fund equity are segregated For future use and therefore not available
for fulure appropriation or expenditure. Amounts reserved for encumbrances, inventory, insurance
da[ms 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
i. 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 foP, yard 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 lhe Town's
fiscal year.
The Town folJows the procedures enumerated below in establishing the budgetary data reflected in
the financial statemenls:
a)
No later than October 1, the Supervisor submils a tentative budget to the Town Board for
the fiscal year commencing the following fiscal year. The tentative budget includes the
proposed means orfinancing for all funds.
b)
After public hearings are conducted to obtain taxpayer comments, no later than November
20, the Town Board adopts the budget.
c)
The Town Board must approve all modifications of the budget. However, the Supervisor
is authorized to transfer certain budgeted amounts within depadments.
In order to show the full ~egal 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 -
Bo
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued)
2. FUND BALANCES
DESIGNATION OF FUND BALANCE
Portions of the unreserved balar~ces at December 31, 2007 were designated for the subsequent
year's operating budgets as follows:
Totat for Subsequent Fund Balance
Fund Balance Year's Unreserved
Fund Unreserved Budget Undesignated
Major Governmental Funds
General Fund- ¥ownwide
Highway Fund
Non-Major Funds:
Town Outside Village
East West Fire Protection District
Southold Wastewater District
Fishors Island Sewer District
Solid Waste Management District
$ 3,839,9tl $ 1,816,000 $ 2,023,911
1,079,221 /i91,000 588,221
699,645 317,000 382,645
20,198 6,400 13,798
213,094 213,O94
36,581 36,581
110,229 110,229
FUND DEFICITS
The capital projects fund had an undesignated deficit fund balance at December 31, 2007. The
capital projects fund deficit will be eJiminaled as shod.-term debt is redeemed or converted to
permanent financing.
DETAILED NOTES ON ALL FUNDS
CASH AND INVESTMENTS
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 Cool~erative 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,
Ar{Jcle 3A and 5-G.
Collateral is required for demand deposits and time deposits accounts at 't05% 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.
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 vaiue of its investments or collateral securities that
are in possession of an outside party.
- 26 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
1. CASH ANDINVESTMENTS (continued)
Governmental Accounting Standards Board Statement No. 40 directs that deposits be disclosed
as exposed to custodial credit r'isk if lhey are not covered by depository insurance, and the
deposits are either:
Uncollateralized
· Co]lateratized with securities held by the pledging financial institution, or.
· Col[ateratized with securities held by the pledging financial institution's trust department or
agent but not in the Town's name
At December 31, 2007 the Town's cash book balance was approximately $47,805,000. This
amount is inclusive of Fiduciary fund deposits of approximately $5,700,000 but exclusive of petty
cash of approximately ,$2,000. The available bank balance was approximately $46,200,000. Of the
bank balance, $1,100,000 was covered by Federal deposit insurance, and approximately
$86,800,000 was covered by collateral held by [he Town's agent, a third-pady financial institution, in
the Tewn's name.
2. INTERFUND RECEIVABLES AND PAYABLES
In[erfund receivables and payabfes for the primary government at December 31, 2007 were as
follows:
Major Governmental Funds:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Non-Major Governmental Funds:
General Fund ~ Part Town
East-West Fire District
Southold Wastewater District
Fishers Island Sewer District
Solid Waste Management District
Amount Amount
Receivable Payable
74,500 $ 2,305,222
,260,522 27,090
126,342
Total
267,093
157,192
1,051
47O
477,127
2,000
29,985_
~_~2~
tnterfund receivable and payable balances for the primary government at December 31, 2007
are expected to be paid currently.
Inteffund transfer balances for the primary government at December 3I, 2007 represent primarily
the payment of operating and capital expenditures and are stated as follows:
Major Governmental Funds:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Non-Major Governmental Funds:
General Fund ~ Pad Town
Solid Waste Management District
Total
Transfers Transfers
In Out
$ 2,738,349 $ 2,403,563
211 794,696
1,333,814
226,842
647,273
$___ 4.072,37_4_ $ 4.072,374
- 27 -
TOWN OF $OUTHOLD
NOTES TO FINANCIAL STATEMENTS
DecemSer 3'i, 2007
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 buildings
Machinery and equipment
Infrastructure
Total depreciable capital assets
Less accumulated dep recialion
Buildings
Improvements olher than buildings
Machinery and equipment
Infrasiructure
Tolai accumulated depreciation
Total net depreciabte capital assets
Tolaf net capital assets
Balance Balance
1/1/07, Additions Deletions 12131107
$ 58,341,517 $ 10,587,685 $ 68,929,202
220,114 847,624 1,067,738
58,561,631 11,435,309 69,996.940
8,307,223 g,'~0O 8,316,323
13,618,159 13,8t7 $ 7,325 `13,624,650
9,916,143 968,653 687,003 10,197,793
70,694,655 766,7'13 71,461,368
102,536,180 1,758,283 694,329 103,600,134
2,206,266 129,946 7,326 2,328,886
3,932,088 410,123 4,342,211
6,597,870 722,594 670,310 6,650,154
47,804,275 2,743,127 50,547,402
60,540,499 $ 4,005,790 $ 677,636 63,868,653
39,73t,481
09,721~,421
Depreciation expense was charged to governmental functions as follows:
General government support
Public safetY
Tmnsporlation
Economic assistance and oppodunity
Culture and recreation
Home and community services
246,830
160,526
2,972,168
37,295
64,2O7
524,764
$ 4,005,790
- 28-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
3. CAPITAL ASSETS (continued)
Discretely presented component units
Capital assets not being depreciated
Land
Conslruclion in progress
Total capilaf assets not being depreciated
Depreciable capital assets
Buildings
improvements other than buildings
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 depreciabte capital assets
Total net capilal assets
INDEBTEDNESS
SHORT TERM DEBT
Balance Balance
1/1/07 Additions Delelions 12/31/07
$ 2,213,759 $ 20,40~$ 2,193,353
12,947,081 $ 39,48912,582,203 404,367
15,160,$40 39,489 12,602,609 2,597,720
3,566,885 9,485 751460 3,500,910
3,220,732 13,807,737 17,028,469
3,320,899 245,096 61,000 3.504,995
2.145,280 26,800 2,172,080
12,253,796 14,089,118 136,460 26,206,454
1,373,575 84,500 1,458,075
1,179,246 410,900 39,049 1,551,097
2,284,411 148, t17 61,000 2,37t,528
1,237,340 84,645 1,321,985
$ 6,074,572 $ 728,162 $ 100,049 6,702,685
19,503,769
$ 22,101~89
Bond Anticipation Notes (BANs) - Bond anticipaUon notes (BANs) are used as a temporary
means of financing capital expenditures in the capital projects fund. State law requires that BANs
issuod for capital purposes bc converted to long-term obligalions 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 roonth period
thereafter. Liabilities for BANs are generatly accounted for in the capital projects fund. BANs arc
expected to be paid from the proceeds of future bond Issues after renewal of these notes. These
BANs bear interest at 'various rates from 3.35% to 3.95% and are due at various dates through
2008.
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
financing source is recorded in the capital projects fund.
These notes are summarized as follows:
Interest
Description Amount Rate
Various Purposes $ 3,560,000 3.95%
Various Purposes 699,000 3.75%
Fishers Island Sewer 125,000 3.35%
New London Wharf t,500,000 3.700/0·
Fishers Island Garbage 360,000 3.76%
Total $ 6.244.000
- 29 -
TowN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
4, INDEBTEDNESS (continued)
SHORT TERM DEBT (continued)
A summary of changes in BANS for lhe for the year ended December 31, 2007 is as foliows:
Balance Balance
1/1/07 IncEeases Reductions 12/3110'7
PrimaryGovemment $ 7,729,000 $ 3,673,000 $ 7,018,000 $ 4,384,000
Component Units ._ 2, t85,000 -0- 325,.000 t,¢60,000
.,$ 9.914.00__0 ~ $_. 7.343.00~0 .$ 6.244_.000
LONG TERM DEBT
Summary of changes in long-term debt transactions for the ye~ ended December 31, 2007 is as
follows:
Non-current
BaJarme Balance liabilities due Non-current
1/lj07 Increases Reductions 12/31/07 within one year liabilities '
Primary GovemmenL'
General obligallon bonds $ 8,494,098
Due to Employees Retirement
System ' 48,804
Net compensated absences 6,475,661
Eslimated liability for landlill closure
and post-closure care costs 593,323
Component Unite:
$14,650.000
495,736
779,098 $ 22,365,000 $ 1,495,000 $ 20,870,000
48,804 -0- -0-
6,971,397 6,911,39T
10,550 582,773 10,660 572.113
General obligation bonds 2.855,000 200,000 2,655.000 200.000 2,455,000
General Obligation Bonds - The Town borrows money in order to acquire land, 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 Iong4erm
liabilities, which are backed by the full faifll and credit of the Town, bear interest at various rates
from 3.14% to 6.375% and have maturity dates in 2008 through 2030.
Future principal and interest payments to maturity for both the primary govemmenl and the
component units are as follows:
Year Endin.q Principal Interest
2008 $ 1,695,000 $ 950,557
2009 1,750,000 888,643
2010 1,575,000 827,440
20t I 1,600,000 768,387
2012 1,540,000 709,850
2013 1,425,000 654,789
2014 1,440,000 600,927
2015 t,435,000 545,816
2016-2020 6,085,000 1,948,783
2021-2025 3,725,000 973,281
2026-2030 __. 2,750,000 292, t88
Totals $~ 25,020~000 $_ 9~160,661
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.
- 30 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2.007
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
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 included in
the Town's financial statements. At December 31, 2007, $1,700,000 of these bonds outstanding
are considered defeased.
5. RETIREMENT SYSTEM
Plan Description
The Town of Southold padicipates 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 Syslem provides retirement benefils 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 Securily Law (NYSRSSL). As set forth in the
NYSRSSL, the Comptroller of Ihe State of New York (Comptroller) serves 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.
Fundinq Policy
The Syslem 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 adicle fourteen or fifteen of the NYSRSSL, who contribute 3% of their salary. Prior to
October 1, 2000, all employees who joined the System after July 27, 1976 were required to
contribute 3% of their salary. Under the authority of the NYSRSSL, Ihe Comptroller shall certify
annually the rates expressed as proportions of payroll of members, which shall be used in
computirx:j the contributions required Io 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 lhe Primary government, for the current year and two preceding
years were;
ERS PFRS
2007 $ 980,628 $ 967,286
2006 $1,096,547 $ 741,445
2005 $ '~,068,200 $ 1,016,937
The Town's conlribution to the system was 100% of the contributions required each year.
-31 ~
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
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. Substantially all of the Town's employees may
become eligible for [he. se benefits if they reach normal retirement age while working for the Town.
Health care benefits in accordance with New York State Health Insurance Rules and Regulations
(administered by the New York State Depadmen[ of Civil Service), are provided through [he 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
as an expenditure in the year paid. The Town's union contracts and ordinances require that it
provide its eligible enrollees with Empire Plan benefit coverage, or if another provider is utilized, the
equivalent coverage. 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 padicipation in the Empire Plan at any time without liability for its respective share of
any previously Incurred less. During the 2007 year, $3,471,322 was paid on behalf of 96 retirees
and 216 active employees and is recorded as an expenditure in the various funds of the primary
government.
7. COMPENSATED ABSENCES
Town employees are granted vacation and sick leave 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 subject to certain maximum iimitafions.
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 Yactors; therefore, timing of future payments is not readily
determinable. However, management believes that su[ficient resources will be made available for
the payments of vacation, sick leave and compensatory absences when such payments become
due. As of December 31, 2007, the value of the accumulated vacation time and sick leave was
$6,971,397 for the primary government.
COMMITMENTS AND CONTINGENCIES
Risk Management
In common with other municipalities, the Town receives numerous notices of claims. Tha Town
established a self-insurance risk management program for general liabitity and health insurance
which are both accounted for in the Risk Retention Fund.
For general liability, the Town has a self-insured liability exposure of $50,000 per claim. Any
liability exposure above the $50,000 self-insured liability for General Liability, Automobile
Liability, and Potice Liability is covered by primary insurance policies up to $1,000,000 per claim
and $3,000,000 in aggregate for the year. After primary policy limits are exhausted, the excess
exposure above the $1,000,000 is covered by an Umbrella Liability Policy of $10,000,000 per
claim and $10,000,000 in the aggregate. The Town has a Public Officials Liability policy with a
$25,000 deductible per claim, with the excess exposure above that $25,000 amount covered by
a Primary Liability rider of up to $1,000,000 per claim, with the excess exposure above that
$1,000,00D amount covered by the aforementioned Umbrella Liability Policy.
For insurance for health be~efits that are self-insured, the Town has insurance policies which
provide coverage for specific medical cases in excess of $175,000 incurred and paid within the
calendar year, as well as coverage for all other claims in the aggregate. The exposure to the
Town under the aggregate policy is based on monthly enrollment. Considering the changes to
enrollment during 2007, the attachment point for the aggregate pol!cy was $2,948,438.
- 32 -
' TOWN OF $OUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, ;2007
COMMITMENTS AND CONTINGENCIES (continued)
Risk Management (continued)
There have been no significant reductions in insurance coverage as compared to the prior year, and
there were no settlements in excess of insurance coverage over the last three years.
The ~Risk Retention. Fund reserves for general-liability ctaims are determined by a third party
administrator, and are reported when it is probable that a loss has occurred and the amount of that loss
can be reasonably, estimated. Claims reserves for general liability claims are reevaluated periodically to
take into consideration recently settled claims and any new developments and changes.
The Risk Retenlion Fund liabilities for medical claims outstanding at year end are reported by the third
party administrator and are recorded when the claim has been incurred and paid within 60 days of the
year end,
The Town's discretely presented component units are not i~cluded in the Town's selfqnsurance risk
management program for any claims.
Net assets in the Risk Retention Fund are reserved for future catastrophic losses and are not available
for other uses. Changes in the liability [or claims and judgments for the year ended' December 31,
2007 aud 2006 are as fotlows:
2007
Unpaid Claims as of December 31,
prior year $ 161,976 $
Incurred Claims:
Provision for insured events
of the current fiscal year 2,524,953
Increase (decrease) in net provision for
insured events of prior fiscal years __ 48,556
Total Incurred Claims and
Ciaim adjustments __ 2,573,509
Payments of:
Claims dudng the current year . 2,287,641
Unpaid Claims as of December 31,
current year .:$. 44 ~L4.4. $
General
Medical Liability
2006 2007 2006
200,13t $ 908 $ 1,811
2,171,127 6,857 3,600
__ 2,011 309
2,173,13~8 7,166 ...... 2,695
,2,211,293 . 6,857 3,600
161,976 ~L 1,215 .$ 906
During the year ended December 31, 2007 charges to the operating funds for the self-insurance programs
were made as follows:
Medical
General Fund Whole '[own
General Fund Part Town
Highway Fund Part Town
Solid Waste District
General Liability
General Fund Whole Town
General Fund Part Town
Solid Waste District
Total Charges
1,035,189
193,550
452,648
183,39~
$ 356,316
16,421
16,421
$ 1,864,786
389,158
2.253,944
- 33 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STA'rEMENTS
December 31, 2007
COMMITMENTS AND CONTINGENCIES (continued)
Landfill Closure and Post-Closure Care Costs
State and.federal laws and regulations required the Town to place a final cover on its landfill sites and to
perform certain mainlenanco and monitoring functions at the sites for thirty years after closure. The Town
ceased accepting waste at its Cutchogue landfill as of October 8, 19934 The Town erttered into a
stipulation of settlement wilh 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 $650,0D0 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 certain maintenance and monitoring functions at the site for up to thirty years.
Accordingly, as of December 31, 2007 the Town has recorded a liability of $582,773 which represents the
provision to be made in future budgets for post-closure landfill 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 Depadment 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, 2007 were $209,842. Future obligations over the primary
terms of the Town's leases as of December 31, 2007 are as
2008 $ 189,393
2009 180,047
2010 105,458
2011 77,t25
2012 andthereafter 486,777
Total L I.038.80~_
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 3't, 2007:
Condensed Stateme~tt of Net. Assets:
Due from Capital Assets Other
Current Primary Net of Current Long-Term Net
Assets Govez~ment Depreciation Liabilities LiabIl[IJes Assets
Fishers Islar~l Ferry Disldc[ $ 1,621,229 $ 205,649 $ 'i6,464,366 $ 3,285,079 $ 2.500,000 $ 12,506,165
Fishers Island Refuse and Garbage 1.084,451 163,675 3,137,414 547,319 3,81 ~,221
C, utchogue-New Suffolk Park District 128,029 42,095 122,182 42,O95 250,211
Soulhold Pa~k District 88,189 91,450 668,835 91,450 755,024
Orient-East Marion Park Distric~ 3,536 10,095 432,985 21,510 425,106
Matt[tuck Perk Dislfict 262,824 139,704 1,253,38t 199,270 55,000 1,401,639
Orient Mosqu~to District 9,003 25,230 22,328 25,230 31,329
$ 3,'iT5,261 $ 677,898 $ 22,101,489 $ 4,211,953 $ 2,555,000 $ 19,187,695
TOWN OF $OUTHOLD
NOTES TO FINANCIAL STATEMEN-trs
December 31, 2007
E. CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS (continued)
Condensed Statement of ACJvities:
Prograph General Revenue Net Assets
Properly
Expenses Revenue Net Ex~nse Tax Other Chan~e 111/07 12131/07
$ 3.'l.87,121 $ 2,546,98Z $ 640,134 $ 590,000 $ 1,278,38,2 $ (1,228,248) $11,277,917 $ ~2,506,165
654,016 51.400 602,616 512,300 716,644 (625,328) 3,191,893 3,8t8,221
Fishers Island Ferry Dislrict
Fishers Island Refuse
and Garba.qe
Culchogue-New Suffolk Park
District 132,084
Soulhold Park Distdc{ 339.999
Orient-East Madon Park District 32.993
Mattituck Park District 392,468
Odent k~osq¢lo Distdc[ 86,911
13;~,084 145,000 5,446 (18,362) 231,849 250,211
339.999 315,000 41.854 (16,855) 738,169 755.024
3~'.993 30,695 50 2,248 427,354 425,106
392,468 467,527 47.243 (~22,302) 1,279,337 1.401.639
86,911 82,235 2,219 2,457 33,786 3f.329
$ 4,8~.5,592 $ 2,598,387 $ 2,227,205 $ 2,I42,757 $ 2,091,83B $ (2,007,390} $17,180,305 $19,187,6@5
F. 2% TRANSFER TAX
In November 1998, thc voters of the Town approved a referendum for a 2% Transfer Tax, which became
effective on April 1, 1999. The transfer tax receipts are recorded in the capital projects fund-community
preservation, and are used for the purchase and/or preservation of agricultural land, open space, parks, or
historic preservation sites. The tax applies to sales of vacant land worth $100,000 or more or sales or
improved Iand worlh $250,000 or more. Conveyance of real property for open space, parks or historic
preservation purposes are exempt from this tax.
At December 31, 2007, and for the four previous years, the Town has the fallowing 2% transfer tax revenue
and parks or historic preservation to any not-for-profit, or tax exempt organization, operating for conservation,
environmental or historic preservatiDn purposes are expense of:
Revenues Expenditures
Year end December 31, 2007 $ 6,071,436 $ 2,423,659
2006 5,823,714 10,969,260
2005 7,200,274 10,132,009
2004 6,045,685 6,408,951
2003 4,603,354 2,439,367
G. SUBSEQUENT EVENTS
The Town issued Public improvement Serial Bonds in the amount of $8,850,000 which were dated May
15, 2008. This issue included $7.5M for Open Space purchases and $1.35M for the Acquisition and
improvements of the Peconic Lane School. Interest rates vary from 4% to 4¼%, and the final payment is
due 5/15f30.
- 35 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STAT. EMENTS
December 31, 2007
H. 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
provid_ed after a person leaves employment, including reliree health care. Unti[ now, these benefits have
generally 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 Accour~ting
Principles) to account for OPEB and termination liabilities on an accrual basis much like they already
account for pension liabilities, generally adopting the aotuarial methodologies used for pensions, with
adjustments for the different characteristics of OPEB and termination benefits and the fact [hat 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 is required to implement GASB 45 and 47 for the year ended December 31, 2008, The Town
will implement ~e new pronouncement when effective, Based on an actuarial valuation prepared as of
December 31, 2007, the Town will have an accrued liability of approximately $42 milIion related to this
pronouncement.
Governmental Accounting Standards Board (GASB) issued Statement No. 49 (GASB 49) which is a new
accounting standard apFiicable to pollution remediatior~ obligations. The statement provides cjuidance on
how to calcufate and report the costs and obligations associated with pollution cleanup efforts. Until now,
these costs generally have been on a pay-as-you-go basis and have not been reported as a liability on
the financial statements. The Town is required to implement GASB 49 for the year ended December 31,
2008.
- 36-
REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN
MANAGEMENT DISCUSSION AND
ANALYSIS
TOWN OF SOUTHOLD
GENERAL FUND'
SCHEDULE OF REVENUES, EXPENDITURES, AND CHAblGES
IN FUND BALANCE - BUDGET AND ACTUAL
Year ended December 31, 2007
Variance with
Origina! Final Final Budget
Budget Budget Actual Encumbraf~ces Positive/(Negative)
REVENUES
F~eal Property Taxes $16,205,911 $16,205,91 t $16,205,911
Olher Real Property Tax Items 80,000 80,000 92,606 12,606
Non-Property Tax ~tems 616,000 616,000 683,873 67,873
Departmental Income 473,600 591,100 411,790 (179,310)
Intergovernmental Charges 42t ,244 347,219 329,202 (18,017)
Use of Money and Property 555,000 564,000 764,912 200,g'12
Licenses and Permits 234,900 234,900 253,494 18,594
Fines an d Forfeitures 127,000 127,000 t 55,477 28,.477
Sale of Property and Compensation for Loss 7,550 58,208 148,283 90,075
Miscellaneous Local Sources 92,554 104,819 185,945 81,126
State Aid 2,332,897 2,422,952 2,412,869 {10,083)
Federal Aid 181,7025 145,568 (35,457~
Total Revenues 21,146,656 21,533,134 21,789,930 256,796
EXPENDITURES
General Government Support 6,480,095 6,490,347 5,234,683 $ t09,889 1,145,775
Public Safety 7,704,283 7,913,905 7,816,643 83,152 14,110
Public Health 33,300 35,250 35,238 12
Transpodafion 5'26,410 581,526 550,906 30,620
Economic Assistance and Opportunity 1,091,260' 1,090,225 1,064,905 25,320
Culture and Recreation 373,870 373,870 345,540 28,330
Home and Community Services 406,556 481,326 417,654 63,672
Employee Benefits 6,190,823 6,329,564 6,172,279 157,285
Debt Service - Principal and tnterest 1,430,54~0 1 ~193,543 787,775 405,768
Total Expenditures 24,237,137 24,489,556 22,425,623 193,041 1,870,892
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Sources (Uses}
Transfers tn
Transfers Out
Total Other Financing Sources (Uses}
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
(3,090,481) (2,956,422) (635,693) (193,041) 2,127,688
3,296,446 3,336,895 2,738,349 (598,546)
(2,390,965). (2,596,808}_ I I' (2,403,563)_ _ 193,245
905,481 740,087 334,786 [405,301 )
$(2,185,000) $ (2,216,335) (300,907) , $ (193,041) $ 1,72~2,387~
5,384,699
$ 5,083,792
See notes to the financial stateroents.
TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Year ended December 31,2007
REVENUES
Real Property Taxes
Other Real Property Tax Items
Use of Money and Property
Licenses and Permits
S,~le of Properly and Compensation
for Loss
State Aid
Total Revenues
EXPENDITURES
Transportation
Employee Benefits
Debt Service - Principal and Interest
Total Expenditures
Excess of Revenues
Over Expenditures
Other Financing Sources (Uses)
Operating Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Varianbe with
Original Final Final Budget
Budget Budget Actual Positivel(Negative)
$ 4,045,195 $ 4,045,195 $ 4,027,695 $ (17,500)
11,100 11,t00 12,722 1,622
125,000 125,000 t42,501 17,501
7,000 7,000 10,362 3,362
29,213 29,213
263,535 296,263 296,263
4,451,830 4,484,558 4,518,756 34,198
3,551,380 3,697,181 3,437,186 259,995
548,150 545,450 510,185 35,265
247,600 250,300 17,001 233,299
4,347,130 4,492,931 3,964,372 528,559
104,700 (8,373) 554,384 562,757
(591,200) (595,952)
(591,2.00) __ .. (595,952),..
211 2tl
(794,696)__ (198,744)
(7.94,485)_ (198,533)
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
$ (486,500) $ (604,325)
(240,101,t
1,319,322
$ 1,079,221
$ 364,224
See notes to the financial statements.
-38-
OTHER SUPPLEMENTARY
INFORMATION
TOWN OF SOUTHOL,D
COMBINING BALANCE SHEET
NON,A4AJOR GOVERNMENTAl,, FUNDS,
Oecernber 3~, 2007
ASSETS
Cash and investments
Accounts receNable
Due from other funds
Due from other governments
Pmpaids
Total Assets
MABILITIES AND FUND BALANCE
LIABILITIES
Accoun~ payable
Due to other funds
Defen'ed revenL~e
· Total Liabilities
FUND BALANCE
Fund balance o reserved:
Encumbrances
Prepaids
Fund balsnce - unreserved:
Designated - Ensuin9 Year's Budget
UndesignAted
Total Fund Balance
Total [Jabifi*Jes and Fund I~aIance
East-West Fire Southold Fishers
Genera[ Fund Special Protection Waslewater Island Sewer
Part Town Grant District District District
$ 621,398 $ 32,854 $ 238,754 $ 39,849
61,567 1,144
267,093 157,'~ 92 '~ ,051 470
$ 42,236
23,3'15 ........
$ 973,373 $ 42,236 $ 190,046 $ 239 805 $ 41,463
Solid Waste
Management
District Totals
134,006 $1.066,861
90,458 153.169
477,127 902,933
42.236
25,231 48,546
726,822 $ 2,213,745
~[5,272 $ 42.236 $ 12.656 $ 2,882 $ 149.126 $ 222.172
2.000 29.985 31.985
235,141 157.192 $ 94'~ 437 482 830.756
250,413 42,236 '169,848 ' 94!. 4.882 616,593 1,084,913
23,315
317,000 6,400
382,645 13,798
25,770
213,094 36,585 110,229
238,864. 36,584 ' 110,229
239,805 $ 41,463
722,960 20,198
$ 973.37~3 $ 42,23~6 $ 190,04. 6
25,770
23,315
323,400
756,347
1.128.832
TOWN OF ..~OUTHOLO
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - NON-MAJOR GOVEENMENTAL FUNDS
For the year ended December31, 2007
REVENUES
Real Properly Taxes
Other Peal Propcd, y Tax Items
Non-Property Tax Items
Depertmentsl income
Intergovernmental Chan0es
US~ Of Money and Property
Licenses and Permits
Sale of Property and Compensation for Loss
Miscellaneous Local Sources
State Aid
Federal Aid
EXPENDITURES
General Government Support
Public Safeb/
Public Health ~
Home and Community Services
Employee Benefits
Debt service:
Principal
Total Revenues
East-West Fire Sour. hold
General Fund SpeciaJ Protection Wastewater
Part Town Grant Distdct District
$ 407.539
· t ,282
234,O91
669,746
44,654
5,150
2,164
93,135
1,457,761
210,175
Fishers
island Sewer
DIstrict
Solid Waste
Management:
District
Totals
$ 499,000 $ 16,29§
679 25
20,997
6,055 11.721
505,734
87,970
443,127
7,37O
$58,988 215,175
220,697
505,~
Total Expenditures 1,416,152 215~17,5 505,184
2
9,929
1,908
$ 1,907,062
2,593
1,446,830
905
30,023
164,188
214,273
13,283
51 039 11,839 3,779,157
$ 2,831,897
4,581
2.3~,O9~
2,147,502
9O5
94,361
169,338
216,437
13~83
93,135
..~10,!75
6,015,705
Excess (Deficiency) of Revenues Over EXpenditures
O(her Financing Uses: Transfers out
Total Other Finan~ng Uses
Net Change in Fund Balance
Fund Balances at Beginning of Year
Fund Balances at End of Year
33,639 16,206 2,251,106
248,292
1,960 234,098
355 294~83
3~954 16,206 _. 3 027,879
87,970
948.311
7,370
3,173,114
468,989
236,058
294,738
5,216,550
41
550 15,085 (4,367) 751,278 799,~55
,,(~47,~7~) (874.1~)
...... (64~,273). ~
(185,233)
908,193
(6,00O)
~,0o0
550 15,085 (4,387) 104,005 (74,960)
19,648 .... 2,,,23,779 40,948 6,224 1,203,792
$ 20,19~8 $ 238,86~4 $ 36,58~ $ 110,22.~9 $ 1.128,832
$ 722,960
-,10-
TOtNl¢ OF SOUTHOLD
DI$CRETL=:LY P~SENTEO COMPONENT UNITS
COMBINING STATEMENT OF NET ASSETS
December ;31, 2007'
Fishem Island C~chogue-
Fls he~s Refuse end New Suffolk
L~and Perry Garbage [~s~c~ Park
Distdr4 . (Unaudited) .
ASSETS
Currant Assets:
Cash end Investrnent:~ $ 600,638
Accounts receiv~a 64,422 '{4,104
Duc free1 primal/9oven',meet 205,649 163,675 42,095 91,450
$~te at'4 federal aid mceh/ables g33,BTD 588,774
Pcepald charges 22~299
TotaL[ Current Assets 1,826,878 1,228 !26 170,124 .
Nea-Current A~ets:
No~-~eprec~ebte ~p['{~ a.*s~.~ 41,7~7 517,262 101,198 568,801
De~re,~table c~p~aJ esset~o ne[ofdepreclatlon 16,427_649 2~620~152 ........ 20~984
ToW Nan-Current Assets 16 464 366 3,137,4t4 t22~182 66~,835__
18~291~244 4~365r$40 .... 292~,.306,
1,350,160 20.152
63,637
1,500,0QO
17"i,282 t 67,167
, . 100,000
~,785~07§
4.2,095 91,450
9f
12,414,366
:),756
89~043
Total
UABILt'T1ES
Current LiablliU~=
Accoun~ ~e and accm~
A~ed Inter~t ~b~e
B~d anUc~n ~o[~ p~e
U~n~ r~en~e
No~ur~t ~b~ffi~ d~ ~t~n ene y~r
Ge~m~ o~On ~nd~ pebble
~ms a~d Judgments
N~-Cu~t Liabtflfi~:
Cl~ a~ ~d~ ~b~e
I~estm~t I~ ~pEal a~ets, net et re[a~ed de~
~bt
U~r~e~
Sc~thc~c~ Orient-East Me.tuck Orient
Park M3flon P~rk Pe~k M~ito
~Unaud~ , {Unaud~d) {U~udlted~ (~naugi~} .
Totals
g5
10,0S5 I39,704
I3.63I
402t528 34~233
g3~,757
3t 7,624 ~_2,326
432,985
9,003 $ 1,522,506
75,6~1
35,230 677,898
1,522,644
51~490
3,853~159
2..597,720
, 19t5D;3r769
432,985 1,253,381 27~32e ?-2.,101,489
'446~616 . 1~656__~00- 9 ,,, .56~5,.%9 25r954~648
1%415 8,74~ %390,469
824 64,461
1.860,000
10,095 139,704 Z5,230 647,023
50.000
21~510 199~270 25t230
200.000
4~211~953
2,455,000
100,000.
547,319, 42~095, g1~450 ,.2~,510 254,270 .~2_~_30 676695L~3
2,831,893 738,169 1.148.~81 17,132,809
2.758
· 986.32~ ...... 250~211 ......... 16~855 425,106 253~58- , 31~329 2~052r130'
Tolal Ne/ Assets $ 12,506._.....~...~.,,165 $ 3.818,~21 $ 250211 $ 755024 $ 4£5~06 $ 1,401,63~ $ 3~,329 $ 1g,187.695
TOWN OF SOO'I'HOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITIES
Year ended December 31. 2007'
REVEN[IES
Program revenues
Real property taxes
Other ma[ pmperbJ tax items
Non-property tax items
Interest eam[rtgs
State Aid
Federal Aid
Other
Fishers Island Cutchogue- Southold Orient-East Mat~ituck Orient
Fishers Refuse and New Suffolk Park 'Marion Pare Park Mosquito
Island Fen~ Garbage Disl~ict Park D~st~fc{ District District Disldct District
District (Unaudited) ~ . (Unaudited) (Unaudited) (Unaudited) . ,.(U~dit~)
$ 2,546,987 $ 51,400
590,000
802
22,479
2~365
1.220,744
6,992
Tot~Revenues , 4,415,369
EXPENSES
General government Supl~ort
Public health
Transportation
Culture and recreation ~
Home and community sewices
Interest on dost.
Total Expenses
Totals
Changes I~ Net Assels
Net Assets at Beginning of Year
$ 2,598,387
512,300 $ 145,000 $ 315,000 $ 30,895 $ 467.527 $ 82,235 2.142,757
697 197 428 42 636 2.802
90.558 90.558
36,615 5,249 3,238 8 26,536 1,972 96.097
588,774 610.139
1,220.744
38,188 20,071 247 65.498
1.280,344 150~446 356,8~4 30,.745. 514.770 84,454 6,832,982
193,250 193,250
86,911 86,911
2,819,880 2,819,88C
132,084 339,999 32,993 387,9g4 893.070
16,405 633,048 649,453
157.586 20,968 4.474 183,028
,. 3,187.121 w 654,016 ~32,084 339.999 32,993 392,468 86911 4,825,592
1.?-28,248 62.6,328 I8,362 1§.855 (2,248] 122,302 · (2,457) 2,007,390
11,277,917 3,191,893 231.849. 738,169 427,354 1,279,337 .. 33.786 17,180~305,
Net Assets at End of Year $12.506,165 $ 3,818.221 $ 250.21,.=.,==...===~1 $ 75~ 024__ $ 425,10__~6 $ 1,401.639 $ 31,32~9 $19,187 695
CERTIFICATE OF DETERMINATION BY THE SUPERVISOR
RELATIVE TO THE TERMS, FORM AND DETAILS OF SALE
AND ISSUANCE OF $2,125,000 REFUNDING SERIAL
BONDS-2009 OF THE TOWN OF SOUTHOLD, NEW YORK
AND PROVIDING FOR THEIR PRIVATE SALE
I, SCOTT A. RUSSELL, Supervisor of the Town of Southold, in the County of
Suffolk, New York (the "Town"), HEREBY CERTIFY that pursuant to the powers and duties
delegated to me as the chief fiscal officer of the Town pursuant to the Refunding Bond
Resolution duly adopted and as set forth in Section 1 hereof and subject to the limitations
prescribed in said resolution, I have made the following determinations:
1. Authorization, Principal Amount. Maturity Schedule and Designation.
Refunding serial bonds in the principal amount of $2,125,000 and designated as
"Refunding Serial Bonds-2009" (referred to hereinafter as the "Refunding Bonds" or the
"Bonds") authorized pursuant to the Refunding Bond Resolution duly adopted by the Town
Board on February 24, 2009 (the "Refunding Bond Resolution"), entitled:
"Refunding Bond Resolution of the Town of Southold, New York,
adopted February 24, 2009, authorizing the refunding of certain
outstanding bonds of said Town, stating the plan of refunding,
appropriating an amount not to exceed $3,000,000 for such purpose,
authorizing the issuance of not to exceed $3,000,000 refunding bonds to
finance said appropriation, and making certain other detenrfinations
relative thereto,"
shall be issued to refund the Town's:
(i) $2,000,000 Agricultural Land Preservation Serial Bonds-1998, maturing in
each of the years 2010 through 2018, inclusive, in the aggregate principal amount of $1,020,000
(thc "1998 Refunded Bonds"), which bonds were originally issued pursuant to the bond
resolution adopted by the Town Board on September 3, 1996, authorizing the acquisition of
certain development rights in prime agricultural lands within said Town for the preservation of
560789.1 032681 CERT
open spaces and areas; and such 1998 Refunded Bonds mature on May 1 in each of the years and
in the principal amounts and bear interest payable semiannually on May 1 and November 1 in
each year to maturity, as follows:
Year of
Maturity
2010
2011
2012
2013
2014
2015
2016
2017
2018
The 1998 Refunded
Principal Interest
Amount Rate
$100,000 4.85%
110,000 4.85
110,000 4.85
110,000 4.85
110,000 4-7/8
120,000 4-7/8
120,000 4-7/8
120,000 4-7/8
120,000 4-7/8
Bonds maturing on
or after May 1, 2010 are subject to
redemption prior to maturity and shall be redeemed by the Town on June 3, 2009 at the
redemption price of par, plus a redemption premium equal to one per centum (1%) of the
principal amount of the 1998 Refunded Bonds to be redeemed, plus accrued interest to the date
of redemption. At the closing, the Town shall provide irrevocable instructions to The Bank of
New York Mellon, as Escrow Holder, to mail to the registered holders of the Refunded Bonds, as
the names and addresses of such holders shall appear on the books and records of the paying
agent for the Refunded Bonds, as required by Section 53.00 of the Local Finance Law, a notice
to be mailed not less than thirty (30) days prior to June 3, 2009, setting forth the date set for
redemption of the Refunded Bonds maturing on or after May 1, 2010.
(ii) $1,900,000 Open Space Preservation Serial Bonds-1999 maturing in the
years 2010 through 2019, inclusive, in the aggregate principal amount of $1,070,000 (the "1999
Refunded Bonds" and together with the 1998 Refunded Bonds, the "Refunded Bonds"), which
bonds were issued pursuant to the bond resolution adopted by the Town Board on September 2,
560789.1 032681 CERT
1997, authorizing the acquisition of interests or rights in real property within said Town for the
preservation of open spaces and areas; and such 1999 Refunded Bonds mature on May 1 in each
of the years and in the principal amounts and bear interest payable semiannually on May 1 and
November 1 in each year to maturity, as follows:
Year of Principal Interest
Maturity Amount Rae
2010 $ 90,000 4.70%
2011 100,000 4.70
2012 100,000 4.70
2013 100,000 4.70
2014 110,000 4.70
2015 110,000 4.70
2016 110,000 4.70
2017 110,000 4.70
2018 120,000 4.70
2019 120,000 4.70
The 1999 Refunded Bonds maturing on
or after May 1, 2010 are subject to
redemption prior to maturity and shall be redeemed by the Town on June 3, 2009 at the
redemption price of par, plus a redemption premium equal to two per centum (2%) of the
principal amount of the 1999 Refimded Bonds to be redeemed, plus accrued interest to the date
of redemption. At the closing, the Town shall provide irrevocable instructions to The Bank of
New York Mellon, as Escrow }Ioider, to mail to the registered holders of the Refunded Bonds, as
the names and addresses of such holders slxall appear on the books and records of the paying
agent for the Refunded Bonds, as required by Section 53.00 of the Local Finance Law, a notice
to be mailed not less than thirty (30) days prior to June 3, 2009, setting forth the date set for
redemption of the Refunded Bonds maturing on or after May 1, 2010.
The Refunding Bonds shall mature on May 1 in the principal amounts and shall
bear interest on the principal amotlnts in each of the years at the annual interest rates as set forth
below:
560789.1 032681 CERT
YCflF of
Maturity
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2. Present Value
Principal Interest
Amount Rate
$210,000 2.00%
230,000 2.00
220,000 2.00
220,000 2.25
225,000 2.50
225,000 2.75
225,000 3.00
220,000 5.00
2,35,000 5.00
115,000 3.50
Savings. The aggregate present value savings to be realized
through the refunding of the Refunded Bonds is set forth in the refunding financial plan attached
hereto as Appendix A.
3. Issue Date. The Bonds shall be dated May 4, 2009. The date of each
Bond shall appear on the face thcreof following the caption "Date of Original Issue", and each
Bond shall bear interest from such date.
4. Dates and Medium of Payment. The Bonds shall bear interest from their
date at the rates per ammm set tbrth in Section 1 hereof; payable November 1, 2009, and semi-
annually thereafter on May 1 and November 1 in each year until maturity, in any coin or
currency of the United States of America which at the time of payment is legal tender for the
payment of public and private debts. Interest shall be paid by wire transfer or in clearinghouse
funds on each interest payment date, payable to the person in whose name the bond is registered
at his address as shown upon the books of the Town kept for that purpose at the office of the
Town of the Town Clerk, Town Hall, 53095 Main Road, Southold, New York as fiscal agent (the
"Fiscal Agent"), as of the close of business on the fifteenth day of the month preceding each
interest payment date tbr the Bonds.
560789.1 032681 CERT
maturity.
5. Prior Redemption. The Bonds will not subject to redemption prior to
6. Bond Insurance. The Bonds will not be insured.
7. Denominations, Numbers and Letters. The bonds maturing in each year
shall be issued as fully registered bonds in denominations of $5,000 or any integral multiple
thereof. The bonds shall be lettered "R" and shall be numbered separately from one (1)
consecutively upward. All of the Bonds shall be transferable and exchangeable as provided
therein.
8. Book-Entry System. The Bonds when issued shall be (i) registered in the
name of Cede & Co., as nominee of The Depository Trust Company, New York, New York
("DTC"), and (ii) deposited with DTC to be held in trust until maturity. Only one Bond will be
initially issued for each maturity in the aggregate principal amount of such maturity. DTC is an
automated depository for securities and clearinghouse for securities transactions, and will be
responsible for establishing and maintaining a book-entry system for recording the ownership
interests of its participants, which include certain banks, trust companies and securities dealers,
and the transfers of the interests among its participants. The DTC participants will be
responsible for establishing and maintaining records with respect to the beneficial ownership
interests of individual purchasers in the Bonds. Individual purchases o£beneficial ownership
interests in the Bonds may only be made through book entries (without certificates issued by the
Town) made on the books and records of DTC (or a successor depository) and its participants, in
denominations of $5,000 or integral multiples thereof. Beneficial owners of the Bonds will not
receive certificates representing their interests in the Bonds. Principal of and interest on the
Bonds will be payable by the Town or its agent by wire transfer or in clearinghouse funds to
560789.1 032681 CERT
DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest
payments to participants of DTC will be the responsibility of DTC; transfer of principal and
interest payments to beneficial owners by participants of DTC will be the responsibility of such
participants and other nominees of beneficial owners. The Town will not be responsible or liable
for payments by DTC to its participants or by DTC participants to beneficial owners or for
maintaining, supervising or reviewing the records maintained by DTC, its participants or persons
acting through such participants.
9. Discontinuance of Book-Entry System. In the event that (a) DTC
determines to discontinue providing its service with respect to the Bonds by giving notice to the
Town and discharging its responsibilities with respect thereto under applicable law, and the
Town fails to appoint a successor securities depository for the Bonds, or (b) the Town determines
to discontinue the system of book-entry transfers through DTC (or a successor securities
depository), then bond certificatcs shall be delivered to the beneficial owners upon registration of
the Bonds held in the beneficial owners' names. After snch registration the beneficial owners
shall become the registered owners of the Bonds. In such event, the Supervisor of the Town
shall execute a Supplemental Certificate of Deterlnination which will set forth the terms, form
and details of issuance of such bond certificates.
10. Fiscal Agent. The Town Clerk is hereby appointed as Fiscal Agent for the
Bonds pursuant to, and to act in accordance with, applicable provisions of the Local Finance
Law, constituting Chapter 33-a of the Consolidated Laws of the State of New York. In the event
that the book-entry system described in Section 8 above is discontinued, the Town may appoint a
bank or trust company located and authorized to do business in New York State to act as
successor Fiscal Agent in connection with the issuance of bond certificates.
560789.1 032681 CERI
11. Execution of Bonds. The Bonds shall be executed in the name of the
Town by the manual signature of thc Supervisor, and shall have the corporate seal of the Town,
or a facsimile thereof, affixed, imprinted, engraved or otherwise reproduced thereon, and the seal
attested by the Town Clerk.
12. Transfer of Bonds. Each Bond shall be transferable only upon the books
of the Town, which shall be kept for such purpose at the office of the Fiscal Agent, by the
registered owner thereof in person or by his attorney duly authorized in writing, upon surrender
thereof together with a written instrument of transfer or exchange satisfactory to the Fiscal Agent
duly executed by the registered owner or his duly authorized attorney. Upon transfer of any such
Bond, the Town shall issue in thc name of the transferee or the registered owner a new Bond or
Bonds of the same aggregate principal amount and maturity as the surrendered Bond. The Fiscal
Agent may deem and treat the person in whose name any Bond shall be registered upon the
books of the Town as the absolute owner of such Bond, whether such Bond shall be overdue or
not, for the purpose of receiving payment of, or on account of, the principal of and interest on
such Bond and for all other purposes, mad all such payments so made to any such registered
owner or upon his order shall be valid and ef'f'ectual to satisfy and discharge the liability upon
such Bond to the extent of thc sum or sums so paid, and neither the Town nor the Fiscal Agent
shall be affected by any notice to the contrary.
13. Regulations With Respect to Exchanges and Transfers. In all cases in
which the privilege of exchanging or transferring Bonds is exercised, the Town shall execute and
deliver Bonds in accordance with the provisions hereof. All Bonds surrendered in any such
exchanges or transfers shall forthwith be cancelled by the Fiscal Agent. For every such
exchange or transfer of bonds, the Fiscal Agent may make a charge sufficient to reimburse the
560789.1 032681 CERT
Town for any tax, fee or other governmental charge required to be paid with respect to such
exchange or transfer, and may charge a sum sufficient to pay the cost of preparing each new
bond issued upon such exchange or transfer, which sum or sums shall be paid by the person
requesting such exchange or transfer as a condition precedent to the exercise of the privilege of
making such exchange or transfer. The Town shall not be obliged to make any such exchange or
transfer of Bonds between the fifteenth day of the month preceding an interest payment date and
such interest payment date.
14. Sale of Bonds. The Bonds are hereby sold at private sale to Roosevelt &
Cross, Incorporated, New York, New York (the "Underwriter") pursuant to the Bond Purchase
Agreement dated April 7, 2009 between said Underwriter and the Town, for the purchase price
of $2,183,287.65, consisting of the par amount of the Bonds, plus a net original issue premimn of
$74,287.65, less the Underva'iter's discount of $16,000.00, plus accrued interest, if any, from the
date of the Bonds to the datc of delivery of and payment for the Bonds. Pursuant to Section
90.10 of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws for the
State of New York, the terms and conditions of such sale are subject to the approval of the State
Comptroller. Delivery of the Bonds to the purchascrs thcrcof shall be effected on or about May
4, 2009, upon (i) receipt by the Town of the purchase price of the Bonds, and (ii) deposit of the
Bonds with DTC to be held in trust until maturity.
15. Form of Bonds. Said Bonds shall be in substantially the tbrm set fbrth in
Appendix B hereto.
16. SEC Rule 15c2-12. In order to assist bidders in complying with Rule
15c2-12 pro~nulgated by the Securities and Exchange Commission and as part of the Town's
contractual obligation arising fi'om its acceptance of the Underwriter's proposal, at the time of
560789.1 032681 CERT
the delivery of the Bonds the Town will provide an executed copy of its "Agreement to Provide
Continuing Disclosure" in substantially the form set fbrth in Appendix C hereto. Said
Agreement will constitute a written agreement or contract of thc Town for the benefit of holders
of and owners of beneficial interests in the Bonds, to provide to (i) each nationally recognized
municipal securities information repository, or to the Municipal Securities Rulemaking Board,
and (ii) to the New York State Information Depository, if created, the annual financial
information and notice of the occurrence of certain material events, as enumerated in said Rule
15c2-12.
I HEREBY FURTHER CERTIFY that the powers and duties delegated to me to
issue and sell the Bonds hereinabove described and referred to are in full force and effect and
have not been modified, amended or revoked.
[signature page follows]
560789.1 03268 ! CERT
IN WITNESS WHEREOF,
1 have hereunto set my hand to this Certificate of
Determination as~j~the 7th day of April, 2009.
Supervisor
560789.1 032681 CERT
CLERK'S CERTIFICATE
I, ELIZABETH A. NEVILLE, Town Clerk of the Town of Southold, in the
County of Suffolk, New York, DO HEREBY CERTIFY that I have compared the fbregoing
copy of the Certificate of Determination executed by the Supervisor and the same is a true and
complete copy of the Certificate filed with said Town in my office as Town Clerk on or before
May 4, 2009; and
I FURTHER CERTIFY that no resolution electing to reassume any of the powers
or duties mentioned in said Certificate and delegated to the Supervisor by the resolution cited in
said Certificate has been adopted by the Town Board.
1N WITNESS WHEREOF, I have hereunto set ~ny hand and affixed the
corporate seal of said Town this /~ ~ day of April,
2009.
(SEAL)
Town Clerk
560789.1 032681 CERT
APPENDIX A
Refunding Financial Plm~
as prepared by
Roosevelt & Cross, Incorporated
SEE TAB 6
560789.1 032681 CERT
REGISTERED
NO. R-
APPENDIX B~ 1
Bond Form
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$
REFUNDING SERIAL BOND-2009
MATURITY DATE
INTEREST DATE OF ORIGINAL CUSIP
RATE ISSUE NUMBER
May 1,
% May 4, 2009
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM:
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 4, 2009 or from the most recent interest payment date to
which interest has been paid, at the INTEREST RATE (stated above), payable November 1,
2009 and semiannually thereafter on May 1 and November 1. Interest hereon shall be payable
on each interest payment date to the registered o;vner 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 thc Fiscal Agent at the close of business on
the fifteenth day of the month prcceding 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.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH HEREIN.
560789.1 032681 CER/
The faith and credit of such Town of Southold are hereby irrevocably pledged to
the punctual payment of the principal of and interest on this bond according to its terms.
This bond has been designated by the Town as a qualified tax-exempt obligation
pursuant to the provisions of Section 265 of the Internal Revenue Code of 1986, as amended.
It is hereby certified and recited that all conditions, acts and things required by the
Constitution and statutes of the State of New York to exist, to have happened and to have been
performed precedent to and in the issuance of this bond, exist, have happened and have been
performed, and that the issue of bonds of which this is one, together with all othcr indcbtedness
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 nmne by the manual signature of its Supervisor and its corporate seal (or a
facsimile thereof) to be affixed, imprinted, engraved, or otherwise reproduced hereon and
attested by the manual signature of the Town Clerk.
TOWN OF SOUTHOLD
(SEAL)
By~
Supervisor
ATTEST:
Town Clerk
560789.1 032681 CERT
Town of Southold, New York
Refunding Serial Bond-2009
This bond is one of an authorized issue, the principal amount of which is
$2,125,000, and is issued pursuant to the provisions of the Local Finance Law, constituting
Chapter 33-a of the Consolidated Laws of the State of New York (the "Law"), the refunding
bond resolution duly adopted by the Town Board of the Town on February 24, 2009, authorizing
the issuance of refunding bonds of the Town for the refunding of certain outstanding bonds of
the Town, and a Certificate of Determination executed by the Supervisor as of April 7, 2009,
determining the terms, for~n and details of issuance of said refunding bonds (the "Bonds") and
providing for their private sale (the ~'Certificate of Determination").
The Bonds are issuable in the fbrm of registered bonds without coupons in
denominations of $5,000, or any integral multiple thereof.
This Bond is transferable or cxchangcablc, as providcd in the Certificate of
Determination, only upon the books of the Town kept fbr that purpose, by the registered owner
hereof in person, or by his attorney duly authorized in writing, upon the surrender of this bond
together with a written instrument of transfer or exchange satisfactory to the Town duly executed
by the registered owner or his attorney duly authorized in writing, and thereupon a new Bond or
Bonds, in the same ~tggregate principal mnount 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 are not subject to redemption prior to maturity.
560789.1 032681 CERT
The Town Board of the
Town of Southold, in the
County of Sufiblk, New' York
Ladies and Gentlemen:
Ha~vkins Delafield & Wood LLP
One Chase Manhattan Plaza
New York, New York 10005
May 4, 2009
We have examined a record of proceedings relating to the authorization, sale and
issuance of $2,125,000 aggregate principal amount Refunding Serial Bonds-2009 ("Bonds") of
the Town of Southold (the "Town"), in the County of Suffolk, New York. The Bonds are issued
pursuant to the provisions of the Local Finance Law, constituting Chapter 33-a of the
Consolidated Laws of the State of New York, the refunding bond resolution duly adopted by the
Town Board on February 24, 2009, authorizing the issuance of refunding bonds of the Tova~ for
the refunding of certain outstanding bonds of the Town, and a Certificate of Determination
executed by the Supervisor as of April 7, 2009, determining thc terms, form and details of
issuance of said refunding bonds and providing for their private sale. The Bonds are dated May
4, 2009 and mature on May 1, in the principal amounts in each of the following years, and bear
interest at the respective rates per mmum payable November 1, 2009 and semiannually thereafter
on May 1 and November 1, as set forth below:
Yearof Princ~al Interest
Maturity Amount R~e
2010 $210,000 2.00%
2011 230,000 2.00
2012 220,000 2.00
2013 220,000 2.25
2014 225,000 2.50
2015 225,000 2.75
2016 225,000 3.00
2017 220,000 5.00
2018 235,000 5.00
2019 1t5,000 3.50
The Bonds are not subject to redemption prior to maturity.
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.
560789.1 032681 CERT
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 tbr 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 Town Supervisor, 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 tbrth
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 m~der xvhich 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 imposcd on individuals and corporations under the Code; such interest
however, is included in the adjusted current earnings of certain corporations for 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 com~ection 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 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.
560789.1 032681 CERT
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 thc executed first numbered Bonds of said issue and, in our
opinion, the lbrm of said Bonds 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,
560789.1 032681 CERT
ASSIGNMENT
FOP, VALUE RECEIVED, the Undersigned hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING
POSTAL ZIP CODE OF ASSIGNEE
the within Bond and does hereby irrevocably constitute and appoint
Attorney
to transfer said Bond on the books kept for registration of said Bond, xvith full power of
substitution in the premises.
Dated:
Signature Guaranteed:
Notice: Signature(s) must be
acknowledged or proved, or in the
alternative, certified as to its
genuineness by an o£ficer of a bank
or trust company located and authorized
to do business in New York State.
Notice: The signature to
this assignment must cor-
respond with the name as
it appears upon the face
of the within bond in
every particular, without
alteration or enlargement or any
change whatever
560789.1 032681 CERT
APPENDIX C
AGREEMENT TO PROVIDE CONTINUING DISCLOSURE
Section 1. Definitions
"Annual Information" shall mean the information specified in Section 3 hereof.
"GAAP" shall metal generally accepted accounting principles as in effect fi-om
time to time in thc United States.
"Holder" or "Holders" shall mema 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 Town of Southold, in the County of Suffolk, a municipal
corporation of the State of New York.
"MSRB' shall mean the Municipal Securities Rulemaldng Board established in
accordance with the provisions of Section 15B(b)(1) of the Securities Exchange Act of 1934.
"NRMSIR" shall mcan each nationally recognized municipal securities
information repository within the meaning of Rule 15 c2-12.
"Rule 15c2-12" shall mean Rule 15c2-12 under the Securities Exchange Act of
1934, as amended through the date of this Agreement, including any official interpretations
thereof.
"Securities" shall mean the Issuer's $2,125,000 Refunding Serial Bonds-2009,
dated May 4, 2009 and delivered on the date hereof, maturing in various principal amounts on
May 1 in each of the years 2010 to 2019, inclusive.
"State Information Depository" shall mean the New York State Information
Depository, if and when created.
Section 2. Obligation to Provide Continuing Disclosnre. (a) The Issuer hereby
undertakes, for the benefit of Holders of the Securities, to provide or cause to be provided either
directly or ttu'ough Munistat Services, Inc., 12 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 NRMS1R and to the State Information Depository within
560789. I 032681 CERT
thirty (30) days after they become available and in no event later than 360
days after the end of each fiscal year; and
(ii)
to (a) each NRMSIR, or to the MSRB, and to (b) the State Information
Depository, in a timely manner, notice of any of the following events with
respect to the Securities, if material:
(2) principal and interest payment delinquencies;
(3) non-payment related defaults;
(4)
unscheduled draws on debt service reserves reflecting financial
difficulties;
(5)
unscheduled draws on credit enhancements reflecting financial
difficulties;
(6)
substitution of credit or liquidity providers, or their failure to
perform;
(7)
adverse tax opinions or events affectir~g the tax-exempt status of
the Securities;
(8) modifications to rights of Securities holders;
(9) bond calls;
(10) defeasances;
(11) release, substitution, or sale of property securing repayment of the
Securities; and
(12) rating changes.
(iii)
to (a) each NRMSiR, or to the MSRB, and to (b) the State Information
Depository, in a timely rammer, notice of a failure to provide by the date
set forth in Section 2(a)(i) hereof any Ammal Information required by
Section 3 hereof:
(b) Nothing herein shall be deemed to prevent the Issuer from disseminating
any other infbrmation in addition to that required hereby in the maturer set fbrth 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
560789.1 032681 CERT
not undertake to commit to provide any such notice of the occurrence of any material event
except those events listed above.
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," "Litigation" and in Appendix A.
(b) All or any portion of the Annual Infbrmation 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
MSRBo
(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 fbrm, the reasons for such modification and the effect of such modification
on the Annual Information being provided for such fiscal year. If a 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
Agreement, 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
Agreement 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 Agreement; provided that the sole and exclusive remedy for breach of this
Agreement 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 Agreement shall not constitute
an event of default on the Securities.
Section 6. Parties in Interest. This Agreement 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.
Section 7. Amcndments. Without the consent of any Holders of Securities, the
Issuer at any time and from time to time may enter into any amendments or changes to this
Agreement for any of the following purposes:
560789.1 032681 CERT
(a) to comply with or conform to any changes in Rule 15c2-12 (whether
required or optional);
(b) to add a dissemination agent fbr 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 off,er
provisions with respect to matters or questions arising under this Agreement 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 Agreement shall remain in full force and effect
until such time as all principal, redenaption 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. Agreement to Constitute Written Agreement or Contract. This
Agreetnent shall constitute the xwitten agreement or contract for the benefit of Holders of
Securities, as contemplated under Rule 15c2-12.
Section 10. Governing Law. This Agreement shall be governed by the laws of
the State of New York determined without regard to principles of conflict of law.
560789.1 032681 CERT
IN WITNESS WHEREOF, the undersigned has duly authorized, executed and
delivered this Agreement as of May 4, 2{}09.
TOWN OF SOUTHOLD
By
Supervisor and Chief Fiscal Officer
560789,1 032681 CERT
TOWN OF SOUTHOLD, SUFFOLK COUNTY, NEW YORK
$2,125,000 REFUNDING SERIAL BONDS-2009
BOND PURCHASE AGREEMENT
April 7, 2009
Mr. Scott A. Russell
Supervisor
Town of Southold
53095 Main Road
Southold, New York 1197l
Dear Mr. Russell:
The undersigned, Roosevelt & Cross, Incorporated (the "Underwriter"), hereby offers to enter
into this Bond Purchase Agreement (the "Bond Purchase Agreement") with the Town of Southold,
Suffblk County, New York (the "Issuer") which upon acceptance of this oflkr by the Issuer, will be
binding upon the Issuer and thc Underwriter. This ofl~r is made subject to your acceptance at or prior
to 5:00 o'clock P.M., New York City time on the date hereof, and if not so accepted, will be subject to
withdrawal by the Underwriter upon notice to the Issuer at any time prior to acceptance hereof by the
Issuer.
The payment for, acceptance of, and delivery and execution of any receipt for, the Bonds
(hereinafter defined) and any other instruments upon or in connection with the Closing (hereinafter
defined) shall be valid and sufficient for all purposes and binding upon the Underwriter.
1. Purchase and Sale of the Bonds. (a) Subject to the terms and conditions and upon the
basis of the representations, warranties and agreements hereinafter set forth, the Underwriter agrees to
purchase from the Issuer, and the Issuer hereby agrees to sell to the Underwriter, all (but not less than
all) $2,125,000 Refunding Serial Bonds-2009 (the "Bonds"), dated their date of delivery, being general
obligation bonds of the Issuer issued pursuant to aud in accordance with the provisions of the
Constitution of the State of New York and the Local Finance Law of the State of New York (the
"Local Financc Law'') and the Refunding Bond Resolution dated and duly adopted on February 24,
2009 by the Board of Trustees of the Issuer (the "Resolution") and the certificate of the Supervisor
determining the terms, form and details of the Bonds dated the date hereof (the "Certificate of
Determination") at the purchase price of $2,183,287.65 (being the aggregate par amount of the Bonds
plus an original issue premium of $74,287.65, less the underwriting fee of $16,000.00), plus accrued
interest, if any, on the Bonds fi'om thek dated date to the Closing Date (as hereinafter defined; the sum
so calculated constituting tile "N~rchase Price'). The Bonds shall be sold in one series and shall bear
interest from their dated date payable on the dates and at the rates as set forth, and shall mature on the
dates in the principal amounts and the years, all as set forth in Schedule I attached hereto and hereby
made a part hereof.
(b) The Bonds shall be as described ill the preliminary official statement of the
Issuer dated April 6, 2009 (the "Preliminary Official Statement"), which shall be supplemented by the
final official statement to be dated April 7, 2009 (the "Final Official Statement"; together with ally other
supplements or amendments to the Final Official Statement, the "Official Statement"), and in the
Resolution and Certificate of Determination am/shall be isst~ed st~bject to the tenns and condition,s of
the Resolution and the Local Finance Law.
(c) The Issuer authorizes the Underwriter to use copies of the Final Official
Statement and the information contained therein, including supplemental material relating to the Bonds or
the Issuer, provided to thc Uuderwriter by tile Issuer (which will bc provided to the Underwriter at the
reasonable request of the Underwriter) which may be distributed with the Final Official Statement, and
copies of the escrow contract dated as of the Closing Date (as hereinafter defined; the "Escrow
Contract") between the Issuer and The Bank of New York Mellon, as escrow holder (the "Escrow
Holder"), this Bond Purchase Agreement, and the Resolution only in connection with the public offering
and sale of the Bonds and agrees not to lhrther supplement or amend or cause to be supplemente_d or
amended any of the foregoing at any tilne prior to the Closing (as hereinafter defined) without the prior
written consent of' the Underwriter (which consent will not be unreasonably withheld). The Issuer
confim~s, approves of and ratifies the use by the Underwriter prior to the date hereof of the Prelinfinary
Official Statement in connection with the public offering of the Bonds. Within seven (7) business days
after execution of this Bond Purchase Agreement, the Issuer shall deliver to thc Underwriter copies of
the Final Official Statement in such quantities as the Underwriter may reasonably request in order for the
Underwriter to comply with the ~les of the Municipal Securities Rulemaking Board and paragraph
(b)(4) of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 by the Securities and
Exchange Colnmission (''Rule 15c2-12"). Said Final Official Statement shall consist of the Preliminary
Official Statement with only such additions and changes thereto as shall have been expressly accepted
by the Underwriter (which acceptance will not be unreasonably withheld). Delivery of copies of the
Final Official Statement to the Underwriter as described herein shall constitute the Issuer's
representation, as of the date of such delivery, that such Final Official Statement does not contain any
untrue or incorrect statement or misleading statement of a material fhct and does not omit to state a
material fact necessary in order to make thc statements made therein, in light of the circumstances under
which they were made, not misleading (provided that no view is deemed expressed with respect to any
information furnished to the Issuer by or on behalf of the Underwriter specifically for inclusion in the
Final Official Statement and, further, subject to the condition that while information in the Final Official
Statement obtained from sources other than the Issuer i} not deemed guaranteed as to accuracy,
completeness or fairness, that the Issuer has no reason to believe and does not believe that such
information is materially inaccurate or misleading);
(d) The Uuderwriter agrees to file tile Final Official Statement with every Nationally
Recognized Municipal Securities Information Repository ("NRMSIR") which has been so designated
by the Securities and Exchange Co~mnission pursuant to Rule 15c2-12 not later than two (2) business
da,vs after thc Closing (as hereinaI~er defined), and will furnish to the Issuer a list of' the names and
addresses of each NRMS1R receiving a copy. Each said filing shall be in accordance with the terms
and conditions applicable to such NRMSI R. The Underwriter further agrees that it will not confirm the
sale of any of the Bonds unless the confirmation of sale is accompanied or preceded by the deliver3, of a
copy of the Final Official Statement.
(e) The Under~vriter agrees to make a bona fide public offering of all the Bonds at
the initial public offering prices (which may be expressed in terms of yields) as set forth on tile cover
page of the Final Official Statement. Subsequent to such initial public offering, the Underwriter reserves
the right to change the public oflkring price as it may deem necessary in connection with the marketing
of the Bonds. The Undem, riter must submit to the 'lbwn a certificate (the "Reoflkring Price
Certificate"), satisfactory to Bond Counsel prior to the delivery of the Bonds, which states that:
(i) (A) On the date thereol; the Underwriter made a bond.fide public
offering of all Bonds of all maturities at initial oflkring prices corresponding to the prices or yields
set forth on the cover page of the Official Statement, and (B) as of the date thereof, the first
price at which an amount equal to at least ten percent of each maturity of the Bonds was sold to
the public was a price not higher or a yield not lower than as is set forth on the cover page of
the Official Statement (the "first price rule"), with the exception of those maturities, if any,
identified in such certificate, as to which such certificate shall explain the reasons why the first
price rule was not satisfied, OR;
(ii) The 1 lnderwriter has purchased the Bonds for its own account and not
with a view to distribution or resale and not ill the capacity of a bond house, broker or other
intermediary, and the price or prices at which such purchase was made.
For the purposes of' the Reofl~ring Price Certificate, the "public" does not include bond
houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers.
In making such representations, the successful bidder must reflect the effect on the ol2kring prices of any
"derivative products" (e.g., a tender option) used by the bidder in connection with the initial sale of any
of the Bonds.
(i) Unless otherwise notified in writing by the Underwriter on or prior to the date of
the Closing (as hereinafter defined), the Issuer can assume that the "end of the underwriting period" for
the Bonds for all purposes of Rule 15c2- 12 is the date of the Closing. In the event such notice is given
in writing by the Underwriter, the Underwriter agrees to notify the Issuer in writing followiug the
occurrence of the %nd of the uuderwriting period" as defined in Rule 15c2-12 for the Bonds. The "end
of the underwriting period" as used in this Bond Purchase Agreement, shall mean the date of the Closing
or such later date as to which notice is given by the Underwriter in accordance with the preceding
sentence.
(g) If at any time prior to the earlier of (i) the expiration of the underwriting period
during which the Bonds are still being offered for purchase by the Underwriter or (ii) 25 days after
Closing (as hereinafter defined), any event known to the Issuer relating to or affecting the Issuer or the
transactions contemplated hereby or by the Final Official Statement shall occur which might aflkct the
correctness or completeness of any statement of a material fact contained in the Final Official Statement,
the Issuer will promptly notiN~ the Ilnderwriter in writing of the circumstances and details of such event.
Ii; as a result of such event or auy other event, it is necessary', in the reasonable opinion of the
Underwriter to amend or supplement thc Final Official Statcmcnt (including the Final Official Statement
as so supplemented on any previous occasion) in order to make the statements therein, in the light of the
circumstances under which they wcrc made, not misleading, thc Issuer will forthwith cooperate with the
lJnderwriter in the prompt p'cparation and furnishing to the Underwriter of an amendlnent of, or a
supplement to, the Final Official Statement, in form and substance satisfactory' to the Undcrwritcr at the
expense of the Issuer, which will so amend or supplement the Final Official Statement so that, as
amended or supplemented, it will not contain any untrue statement of a material fact or omit to statc any
material fact necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(h) Exccution and delivery of the disclosure undertaking of the Issuer described in
Section 4(g)(xi) hereof docs not constitute and shall not be construed to imply, a waiver of any
exemptions from any provisions of Rule 15c2-12, and the Underwriter expressly reserves the right to
take into account the benefit of any such exemptions in its activities pursuant to this Bond Purchase
Agreement~
2. Closing. (a) At 10:00 o'clock A.M. New York City time, on May 4, 2009, or at such
other time or on such earlier or later date as shall have been mutually agreed upon by the Issuer and the
Underwriter, the Issucr will deliver, or cause to be delivered through thc facilities of Thc Depository
Trust Company, in New York, New York, to the Underwriter, the Bonds, in definitive roma, duly
executed by the Supervisor of the Issuer, and the Underwriter will accept such delivery and pay the
Purchase Price of such Bonds as set forth in Section 1 hereof by delivering to the Issuer immediately
available funds (which may include wire transfer to a wire transfer address to be designated in writing by
the Issuer to the Underwriter before the Closing Date (as hereinafter defined)) payable to the order of
the Issuer. Payment for and delivery of such Bonds as aforesaid shall be made at the offices of
Hawkins Delafield & Wood LLP, in New York, New York, or at such other place as shall be agreed
upon between the Issuer and the Underwriter. Such delivery of the Bonds and payment of the Pm'chase
Price is herein called the "Closing" and ~e date and time of the Closing is herein called the "Closing
Date". At said Closing, the documentation hereinafter described in Sections 4(g), (h), (i), (k) and (1)
hereof shall be delivered to the Unde~vriter. The Bonds will be delivered in registered form in
denominations such that one bond shall be issued lbr each maturity of Bonds in such amounts as
hereinafter set tbrfl~. When issued, such bonds shall be registered in the name of Cede & Co., as
nominee of The Depository Trust Company, New York, New York ("DTC'), which will act as
securities depository for the Bonds in accordance with the Book-Entry-Only system of DTC. In the
event that either DTC shall discontinue the Book-Entry-Only system or the Issuer shall terminate its
participation in such Book-Entry-Only system, such Bonds shall thereafter be in certificated form of the
denomination of $5,000 or any integral multiple thereof not exceeding the principal amount of each
respective maturity. Such certificated bonds, if any, may be exchanged at any time prior to maturity at
thc office of the Town Clerk, Town of Southold, Southold, New York (the "Fiscal Agent"), or any
successor Fiscal Agent, l~br bonds of the same maturity of any authorized denominalion or
deno~ninations in the same aggregate principal amount. Such bonds shall be in registered fbnn and shall
not be registrable to bearer or convertible into bearer coupon form. Principal of and interest on the
Bonds will be payable by check or draft mailed by the Fiscal Agent to DTC, or to its nominee, Cede &
Co., while the bonds are registered in the name of Cede & Co. in accordance with such Book-Entry-
Only System and, at any other time, to the registered owners of the Bonds, as shown on the registration
books of the Issuer maintained by the Fiscal Agent, as of the close of business on the last business day
of the calendar month preceding each interest payment date. Principal of and interest on the Bonds will
bc payable in laxvful money of the United States of America (subject to the provisions of the
Resolution).
(b) The Issuer shall cause to be deposited the Bonds with DTC at their offices in
New York, New York at least one business day prior to the Closing Date, for the benefit of the
Underwriter.
3. Represcntatious, Warranties, Covenants and Agreements of the Issuer. Thc Issncr, by
its acceptance hereof, represents, warrants, covenants and agrees as of the date hereof and as of the
Closing Date wifl~ the Underwriter as follows:
(a) The Issuer is a duly created aud validly existing Town of the State of New York
and is authorized by the Constitution and laws of the State of New York (i) subject to the approval of
the State Comptroller delivered pursuant to Section 90.10 of the Local Finance Law to sell, issue and
deliver the Bonds for the purposes specified in the Resolution and the Certificate of Detennination, and
(ii) to enter into and perform its obligations under this Bond Purchase Agreement, the Bonds, the
Resolution, the Certificate of Determination, the Escrow Contract (collectively, the "Financing
Documents"), and any other instrument or agreement tv) which the Issuer is a party and which has been
executed ill connection with the transactions contemplated by the Financhag Documents;
(b) The Issuer has full legal right, power and authority (i) to adopt the Resolution
and to execute the Certificate of Determination, (ii) to enter into and to perform and observe the
covenants and agreements on its part contained in the Financing Documents and any other document or
instrument relating thereto to which the Issuer is a pmV, (iii) to issue and sell the Bonds to the
Underwriter, subject to approval by the State Comptroller of the Certificate of the chief fiscal officer of
the Issuer executed pursuant to Section 90.10 of the Local Finance Law and (iv) to carry out and
consummate all transactions to be carried out and consm~unated by it or contemplated by each of the
Financing Documents, and the Issuer has complied or will have complied on and as of the Closing Date
with all provisions of applicable law in all matters relating to such transactions and (v) the Issuer is
subject to suit by the Underwriter to enforce the Issuer's obligations under this Bond Purchase
Agreement; the defense of sovereign immunity is not available to the Issuer hi any proceedings by the
Underwriter to enforce any of the obligations of the Issuer under this Bond Purchase Agreement or by a
holder of the Bonds to enforce any of the obligations of the Issuer under the Bonds and, to the fullest
extent permitted by law, the Issuer consents to the initiation of any such proceedings in any court of
competent jurisdiction and agrees not to assert the defense of sovereign immuni.ty in any such
proceedings;
(c) On May 4, 2009. or at such earlier date as shall be required to qualify the
Bonds tbr issuance as Book-Enn3~-Only securities, the Issuer shall cause to be deposited with DTC at
their offices in New York, New York, all of the Bonds in registered, definitive form, each duly executed
and sealed as required in accordance with the provisions of the Resolution and the Certificate of
Determination.
(d) The Issuer has, on or before the date hereo£ or will have, on or before the
Closing Date, duly taken all action necessary to be taken by it or on its behalf prior to such date for: (i)
the issuance, sale and delivery of the Bonds upon the terms and conditions and fbr the purposes
described herein, (ii) the adoption of thc Resolution, (iii) tine authorization, execution, delivery and
perfbrmance of the Financing Documents and any other instrument or agreement to which the Issuer is a
party and which has been or will be executed in connection with the transactions contemplated by the
Financing Documents, (iv) the approval, execution, delivery and distribution of the Preliminary Official
Statement and Official Statement, and (v) the carrying o.ut, giving effect to, consummating and
perIbnning of the transactions and obligations contemplated hereby and by the Final Official Statement;
provided that no representation is made with respect to compliauce with the securities or "Blue Sky"
laws of the various states of the United States;
(e) The Resolution has been duly adopted and the Certificate of Determination has
been duly executed by the Issuer and are in full force and effect, and the Financing Documents and any
other instrument or agreement to which the Issuer is a pa~y and which have been or will be executed in
connection with the consummation of the transactions contemplated by the Financing Documents have
been, or will be duly executed and delivered by the Issuer, and assuming the due execution and delivery
by the other parties hereto and thereto, will constitute legal, valid and binding obligations of the Issuer,
enlbrceable against the Issuer in accordm~ce with their respective terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws, judicial
decisions or principles of equity relating to or affecting the enforcement of creditors' rights or contraetual
obligations generally;
(f) The execution and delivehy of this Bond Purchase Agreement, the other
Financing Documents, the Final Official Statement and any other instrument or agreement to which the
Issuer is a patty and which has been or will be executed in connection with the consununation of the
transactions contemplated by the Financing Documents, the compliance with the terms, condkions or
provisions hereof and thereof, and the consummation of the transactions herein and therein
contemplated do not and will not conflict with or constitute a breach of or a default under or result in a
violation of (i) the Local Finance Law, (ii) any agreement or other instrument to which the Issuer is a
party, or by which the Issuer or any of its properties is bound, or (iii) m~y constitutional or statutory
provision or order, rule, regulation, or ordinance, or any order, decree or judgment of any court,
govermnent or governmental authority having jurisdiction over the Issuer. As used herein, tbe term
"governmental authority" refers to any legislative body or governmental official, deparnnent,
commission, board, bureau, agency, instrumentality, body or public benefit corporation;
(g) On aud as of the Closing Date, all authorizations, consents and approvals of,
notices to, registrations or fi lings with, or actions in respect of any governmental body, agency or other
instrumentality or court required to be obtained, given or taken on behalf of the Issuer under the laxvs of
the State of New York in connection with the execution, delivery and performance by the Issuer of this
Bond Purchase Agreement, the other Financing Documents (including, but not lhnited to, the Bonds)
and any other agreement or instrument to which the Issuer is a party and which has been or will be
executed in connection with consummation of the transactions contemplated by the foregoing documents
under the laws of the State of New York will have been obtained, given or taken and will be in full three
and effect, provided that no representation is made with respect to compliance with the securities or
"Blue Sky" laws of thc various states of the United States;
(h) As of the time of acceptance hereof and as of the Closing, there is no action,
suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the
knowledge of the Issuer, threatened against or affecting the Issuer, wherein an unfavorable decision,
ruling or finding would adversely af'fkct (i) to the best knowledge of the Issuer, the validity of the Local
Finance Law, (ii) the validity or enfomeability of, or the authority or ability of the Issuer to perform its
obligations under this Bond l)urchase Agreement, the other Financing Documents (including, but not
limited to, the Bonds) or any other agreement or instrument to which the Issuer is a party and which has
been or will be executed in connection with the consummation of the transactions contemplated by this
Bond Purchase Agreement;
(i) The Issuer is not, and at the time of the Closing will not be, in breach of or in
default under an>' applicable t~w (including, without limitation, any administrative rulemaking law) or
administrative regulation of the State or the United States or any applicable judgment or decree or an5'
loan agreement, note, resolution, agreement or other instrunqent to which the Issuer is, and will after the
date of Closing be, a party or otherwise subject, whicln breach or default would in any way materially
aud adversely affect the Resolution or the issuance of the Bonds, and no event has occurred and is
continuing that with the passage of time or giving of notice, or both, would constitute such a breach or
detthult; and the execution and delivery by the Issuer of this Bond Purchase Agreement, the issuance,
sale and delivery of the Bonds, thc adoption of thc Resolution by the Issuer and compliance with the
provisions hereof and thereof' will not conflict with or constitute a breach of or defauk under any law
(including, without limitation, any administrative rule-making law'), administrative regulation, judgment,
decree or any agreement or other instrument to which the Issuer is a party or otherwise subject; nor will
any such execution, delivery, issuance, sale, adoption or compliance result in the creation or imposition
of any lien, charge, encumbrance or security interest of any nature whatsoever upon any of the revenues,
property or assets of the Issuer, except as expressly provided or permitted by the Resolution and the
Bonds;
(j) As of the time of acceptance hereof and as of the Closing, except as disclosed
in the Final Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, public board or body, is or will at the Closing be pending or, to the best
knowledge of the Issuer, threatened against the Issuer, or any other person, affecting the existence or
powers of the Issuer or seeking to prohibit, restrain or enjoin the issuance, sale or delivery of all or any
polXion of the Bonds, or in any way contesting or aflacting the validity or entarceability of the Bonds, the
Resolution, this Bond Purchase Agreement, or contesting in any wa~v the completeness or accuracy of
the Preliminary Official Statcmcnt or the Final Official Statement as the same may have been
supplementcd or amended, or contesting the powers of the Issuer with respect to any authority lbr thc
issuance of the Bonds, the adoption of the Resolution or the execution, delivery or performance of this
Bond Purchase Agreement, nor to the best lmowledge et'the Issuer is there any basis therefor, wherein
an unfavorable decision, ruling or finding would materially and adversely affect the validity or
entbrceability of the Bonds, the Resolution or this Bond Purchase Agreement, or in any other manner
adversely affect provisions or sources for payment of principal of or interest on the Bonds;
(k) When issued, delivered and paid For, as herein and in the Resolution and
Certificate of Detem~ination provided, the Bonds will be duly authorized, executed, issued and
delivered, will conform in all material respects to the description thereof ill the Final Official Statement,
the Resolution and the Certificate of Detemrination, and will constitute valid and legally binding general
obligations of the Issuer enfomeable h~ accordance with their terms and the terms of the Resolution and
the Certificate of Determination, shall be secured by a pledge of the faith and43redit of the Issuer, and
the principal of and intcrest on said Bonds, if not paid fi'om othcr sources, will be payable from ad
valorem mai estate taxes levied on taxable real properly within the boundaries of tile Issuer without
limitation as to rate or amount, except as the entbrcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws, judicial decisions or principles of equity relating to
or affecting the enforcement of creditors' rights or contractual obligations generally;
(1) The Issuer will apply file preceeds from the sale of the Bonds for the purposes
specified in the Resolution, the Certificate of Determ ination and the Escrow Contract;
(in) Ally certificate authorized by Resolution of the Issuer, signed by any authorized
official of the Issuer and delivered to the Underwriter, shall be deemed a representation by the Issuer to
the Undelwvriter as to the statements made themiu;
(n) At any time prior to the expiration of 25 days from the later of (i) the Closing
and (ii) the date hereof, the Issuer will cooperate with the Undenvriter in the qualification of tile Bonds
for otti:ring and sale and the determination of the eligibility of the Bonds tbr investment under the laws
of such jurisdictions as the Unde~wvriter shall rea~sonably designate, and will use its best eflbrts to
continue any such qualification in effect so long as required for the distribution of the Bonds by the
Underwriter, provided that the Issuer shall not be required to take any unreasonable action or any
action which would subject it to general service of process in any jurisdiction where it is not now so
subject. It is understood that the Issuer is not responsible for compliance with the consequences of
failure to comply with applicable '~Blue Sky" laws;
(o) The Preliminary Official Statement dated April 6, 2009 is "deemed" final by the
Issuer, as of its date, within the meaning of Rule 15c2-12;
(p) As of the date thereof, the Prelhqninary Official Statement (including the financial
statements and other financial and statistical data included therein) did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make thc
statements therein, in the light of the circumstances under which they were made, not misleading;
(q) The audited combined finaucial statements of the issuer, contained in the Final
Official Statement, as reported upon by Causey Demgen & Moore Inc., independent certified public
accountm~ts, fairly present the financial condition of the Issuer as of the date thereof and the results of
the operations for the periods therein set forth and, except as may otherwise be set forth in the Final
Official Statement, the Issuer has no knowledge of any ~naterial adverse change in the Financial position,
results of operations or condition, lh~ancial or other-,vise, of the Issuer from that set forth in the financial
statements contained in the Final Official Statement;
(r) The iufotmation contained in the Final Official Statement (including the financial
statements and other financial and statistical data included therein) is, and as of the Closing Date will be,
tree and correct and does not and will not contain any untrue or incorrect statement or misleading
statement ora material fact and does not and will not omit to state a material fact necessary in order to
make the statemems made therein, in light of the cireumstances under which they were made, not
mislcading, provided that no view need be expressed with respect to any information furnished to thc
Issuer by.or on behalf of the Underwriter specifically for inclusion in the Final Official Statement and,
further, subject to the condition that while information in the Final Official Statement obtained from
sources other than the Issuer is not guaranteed as to accuracy, completeness or lhirness, that the Issuer
has no reason to believe and does not believe that such information is materially inaccurate or
misleading;
(s) Between thc date of this Bond Purchase Agreement and the Closing Date, the
Issuer will not incur any material amount of indebtedness for borrowed money, direct or contingent, and
there will be no adverse change of a lnaterial nature in the financial position, results of operations or
coudition, financial or othem~ise, of the Issuer;
(t) The Issuer has not been notified of any listing or proposed listing by the Internal
Revenue Service to the effect that the Issuer is a bond issuer whose arbitrage certifications may not be
relied upon; and
(u) The Issuer is the only "obligated person" as defined in Rule 15c2-12, with
respect to the Bonds.
4. Conditions To The Undem,riter's Obligations. The obligations of the Underwriter under
this Bond Purchase Agreement have been undertaken in reliance on, and shall be subject to, the due
perlbrmance by the Issuer of its obligations and agreements to be performed hereunder and to the
accuracy of and the compliance with the respective representations, warranties, covenants and
agreements of the Issuer contained herein, on and as of the date of delivery of this Bond Purchase
Agreement and on and as of the Closing Date. The obligations of the Underwriter hereunder with
respect to the Closing are also subject, in the discretion of the Underwriter, to the following thrther
conditions:
(a) The representations and warranties of the Issuer contained herein shall be true,
complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date
of the Closing, and the statements made in all certificates and the documents delivered to the
Underwriter at the Closing pursuant hereto shall be true, complete and correct at the Closing; and the
Issuer shall be in compliance with each of the agreements made by it in this Bond Purchase Agreement
(unless such agreements am waived in writing by the Underwrite0;
(b) Between the date of this Bond Purchase Agreement and the Closing:
(i) no default by the Issuer or the State or any agency, instrumentality or
public benefit corporation thereo£ or by any municipality, Town or Town corporation in the State or
any city in the State with a population of 50,000 or greater, shall have occurred and be continuing (A) in
the payment of the principal of or premium, if any, or interest on any bond, note or other evidence of
indebtedness issued, assumed or guaranteed by the Issuer or the State or any city' in the State with a
population of 50,000 or greater, or any agency, instrumentality, or public benefit corporation thereof or
by any municipality, Town, or Town corporation in the State or any city in the State with a population of
50,000 or greater,.or (B) in tine payment of any amounts payable by the Issuer or the State or any city
under any lease, mortgage or conditional sale arrangement securing, with the consent of the Issuer or the
State or any city, or any agency, instrumentality or public benefit corporation thereof, or by any
municipality, Town or Town corporation or any city in the State, as the case may be, the payment of
indebtedness of a public benefit corporation or other governmental agency, instrumentality or body for
borrowed money (except to the extent that the obligation to make such payment is being disputed in
good faith and, if appropriate, contested in proceedings diligently conducted and there is no default in
the payment of the principal of or interest on the secured indebtedness). For all purposes hereof, a
default shall not be deemed to be continuing if it has been cured, waived or otherwise remedied;
(ii) no default shall have occurred and be continuing in the payment of the
principal of or premium, if any, or interest on any bond, note or other evidence of indebtedness
constituting a general obligation of any agency, instrumentality or public benefit corporation of the State
as to which statutory provision has been ~nade whereby the State may appropriate funds to be paid in a
capital reserve or similar thnd in order to provide moneys for the pa.vment of any bond, note or other
evidence of indebtedness of such agency, instrumentality or public benefit corporation (whether or not
the securities which have the benefit of such provision are outstanding or are the securities as to which a
default has occurred). For all purposes hereof} a defhult shall not be deemed to be continuing if it has
been cured, waived or otherwise remedied;
(iii) no bankruptcy, insolvency or other similar proceeding in respect of the
Issuer or the State or any agency, instrumentality or public benefit corporation of the State described in
clauses (i) and (ii) of this Section 4(b) shall be pending or to fl~e knowledge of the Issuer contemplated,
and there shall not have been enacted since the date of this Bond Purchase Agreement any moratorium
or similar legislation with respect to any obligations described in clause (i) or (ii) of this Section 4(b); and
(ix,) the Issuer will not incur any material amount of indebtedness for
borrowed money, direct or contingent, and there will be no adverse change of a material nature in the
financial position, results of operations or condition, financial or otherwise, of the Issuer;
(c) at the time of the Closing, (i) Section 90.10 of the Local Finance Law shall bc in
full force and effect and the approval of the Comptroller of the State of New York required to be
obtained thereby shall have been received and shall not have been rescinded, amended, modified or
supplemented and the Resolution and thc other Financing Documents shall be in full liorce and eltact
and, to the extent that they affect the ~nds, shall not have been rescinded, amended, modified or
supplemented, except as may have been agreed to in writing by the Underwriter and the Issuer shall
have adopted, and there shall be in full force and effect such additional resolutions, agreements, and
certificates as shall be necessary to effect the transactions contemplated hereby, which resolutions,
agreements, and certificates shall be satisfactory in form and substance to Hawkins Delafield & Wood
LLP, bond counsel to the Issuer and there shall have been taken in connection therewith and in
connection with the issuance of'the Bonds all such actions which shall, in the opinion of such counsel, be
necessary in connection with the transactions contemplated hereby, (ii) the Bonds shall have been duly
authorized, executed and delivered, (iii) the Final Official Statement shall not have been amended,
modified or supplemented, except, in any case as ma~v have been agreed to by the Underwriter in
writing, (iv) the legal notice of estoppel, being the notice set forth in Section 81.00 of thc Local Finance
Law together with the text-of the Resolution (or a summary thereof), shall have been published in the
inanner provided therein on a date not less than twenty (20) days prior to the Closing Date, the estoppel
period provided in Section 82.00 of the Local Finance Law shall have elapsed prior to the Closing
Date, and prior to the lapsing of said estoppel period, the validity of the Bonds and/or any provision of
the Resolution shall not have been contested by the tiling of a petition or complaint or initiating of any
other contest or legal action in any court of law, which contest or legal action is continuing, and (v) the
Issuer shall perform or have performed all of its obligations under or specified in this Bond Purchase
Agreement and the other Financing Documents to be performed at or prior to the Closing and the
Underwriter shall have received evidence, in appropriate form of such actions;
(d) the provisions of Statc law governing thc Icvy of taxes by thc Issuer shall be in
full force and effect and shall not have been ameuded in any respect that would materially adversely
affect the Issuer;
(e) except as disclosed in the Final Official Statemem, no decision, ruling or tinding
shall have been entered by any court or governmental authority since the date of this Bond Purchase
Agreement (and not reversed on appeal or otherwise set aside) (i) which has any of the effects
described in Sections 3(h) and 30) hereoi} or (ii) which declares this Bond Purchase Agreement to be
invalid or unenforceable in whole or in material part;
(f) on or prior to the Closing Date, the Underwriter shall have received approval
fi'om the State Comptroller or his authorized representative of the terms and conditions of the sale of the
Bonds, and the Underwriter shall not be prohibited by any applicable law or governmental regulation or
governmental authority fi'om participating in the public offering and sale of the Bonds on the Closing
Date;
(g)
at or prior to the Closing, the Underwriter shall receive:
(i) The approving opinion of Hawkins Delafield & Wood
LLP, bond counsel to the Issuer, dated the Closing Date, addressed to the
Issuer;
(ii) The supplemental opinion of Hawkins Delafield &
Wood LLP, substantially in the form set forth in Exhibk A hereto;
(iii) Certificate of the New York State Comptroller (or
Deputy Comptroller) as required by Section 90.10 of the Local Finance Law
with respect to the Bonds;
(iv) A copy of the Resolution duty certified by the Clerk of
the Issuer as in full force and effect, not having been repealed, revoked,
rescinded or amended as of the Closing Date; together with a certified copy of
the original printer's affidavit of publication of thc Legal Notice of estoppel of
the Resolution on a date not less than twen .ty (20) days prior to the Closing;
(v) An opinion from Causey, Demgen & Moore, Inc., or
other indepefldent certified public accountant or firm of independent certified
public accountants acceptable to the Underwriter attesting to the fact that (A)
moneys and Government Obligations (as defined in the Escrow Contract) on
deposit pursuant to the Escrow Contract will be sufficient and will generate
receipts sufficient to pay the principal of, interest on and redemption premium of
the bonds of the Issuer refunded by the Bonds; and (B) all arithmetical and
mathematical computations relating to the determination of co~npliance with
Section 148 of the Internal Revenue Code of 1986, as amended the regulations
and rnlings promulgated thereunder (the "Code") relating to he Bonds are
accurate;
(vi) Executed copies of thc Financing Documents;
(vii) A ccrtificatc of the Escrow Holder dated thc Closing
Date, to the effect that:
(1) the Escrow Holder is a bank or trust company
organized under the laws of the State of New York which is located
therein and authorized under the laws of the State of New York, and
has corporate power and capacity, to execute and deliver the Escrow
Contract and to accept and execute the trusts created under the Escrow
Contract where required;
(2) the execution and delivery of the Escrow Contract has
been duly authorized by the Escrow Holder, the Escrow Contract has
been duly executed and delivered by the Escrow Holder and the trusts
created thereunder have been accepted on behalf of the Escrow Holder
by officers of the Escrow Holder pursuant to such authority and the
Escrow Contract, upon delively thereof by the Escrow Holder. Mil
constitute enforceable obligations of the Escrow Holder;
(3) there is no action, suit, proceeding, inquiry or
investigation, at law or in equity or by court, public board or body,
pending or threatened, to the Escrow Holder's knowledge, wherein an
unlhvorablc decision, ruling or finding would advemely affect thc validity'
or enforceability of the Escrow Contract with respect to the duties of
the Escrow Holder thereunder to the knowledge of the Escrow Holder;
and
(4) the execution and delivery of the Escrow Contract and
the performance by the Escrow Holder of its obligations thereunder do
not violate or constitute a default under any court order or any
agreement, indenture, mortgage, lease, note or other agreement or
instrument which is binding upon the Escrow Holder to the lmowledge
of the Escrow Holder;
(viii) A certificate, dated the Closing Date, signed by the
Supervisor, substmatially in the form set forth in Exhibit B hereto;
(ix) A Closing Certificate executed by the Supervisor
constituting a receipt for Bond proceeds and a signature verification certificate,
and including a statement that, as of the date of the Closing, m authority or
proceedings for the issuance of the Bonds has been repealed, revoked or
rescinded; and
(x) Notitication from Moody's Investors Service stating that
the Bouds have been assigned a rating of 'Aa3" and that such rating remains in
effect on the Closing Date;
(xi) A continuing disclosure undertaking in accordance with
Rule 15c2-12 of the Securities and Exchange Commission duly executed by the
Supervisor, in form and substance satisfhctory to the Underwriter;
(xii) an opinion of counsel to the Issuer substantially in the
tbnn set forth in Exhibit C hereto;
(xiii) [RESERVED];
(xiv) an arbitrage certificate signed by the Supervisor and
dated the Closing Date sufficient to satisfy, the criteria necessary under the
Code, to support the conclusion that the Bonds will not be "arbitrage bonds"
within the meauing of the Code and containing an arbitrage rebate compliauce
statement contained in the arbitrage aud use of proceeds certificate, together
with Bond Counsel's undertaking to complete and cause the execution and
delivery by the Issuer of lntemal Revenue Service Form 8038-G, to file the
same in compliance with applicable law and to provide to the Underwriter
subsequent to closing with a copy of the filed form.
(xv) [RESERVED]
(h) ten copies of the Preliminary Official Statement and the Final Official Statement,
together with any supplements or amendments thereto in the event that the Final Official Statement has
been supplemented or amcnded, with each copy of the Final Official Statement and each supplement or
amendment, if any, signed on behalf-of the Issuer by the Supervisor;
(i) [RESERVED];
(j) the Issuer shall have entered into such agreements with DTC as are required by
DTC for the Bonds to be issued in Book-Entry-Only form as DTC-eligible obligations;
(k) at the Closing, the Underwriter shall receive such additional certificates,
instruments or opinions as bond counsel may deem necessary or desirable to evidence the due
authorization, execution and delivery o['the Bonds;
(1) at the Closing, the Underwriter shall receive such additional certificates,
instruments or opinions as the Unde~vriter may reasonably request from the Issuer and its counsel, as
the case may be, to show the due performance and satisfaction by the Issuer of all agreements then to
be performed and all conditions then to be satisfied, and the accuracy and completeness of all
representations and warranties by the Issuer contained in the Financing Documents as contemplated by
this Bond Purchase Agreement and such agreements, it being nnderstood that compliance with the
conditions of this Bond Purchase Agreement must be satiMhctory in form and substance to the
Underwriter; and
On) It shall be a further condition to the obligations of the Underwriter to purchase,
to accept delivery, of and to pay for the Bonds that the entire principal amount of the Bonds shall be sold
and delivered by the Issuer as provided in this Bond Purchase Agreement.
If the Issuer shall be unable to satisfy the respective condkions to the obligations of the
Underwriter to be satisfied by them pursuant to this Bond Purchase Agreement, this Bond Purchase
Agreement shall (at the sole option of the Underwriter) terminate with the effect stated in paragraph (c)
of Section 5 hereof.
All opinions, letters, certificates, bond forms and instruments mentioned above or
elsewhere in this Bond Purchase Agreement are in compliance with this Bond Purchase Agreement only
if they are in form and substance satisfhctory to the Underwriter, except to the extent previously
approved by the Underwriter in writing.
5. Termination of this Bond Pnrchase Agreement.
(a) The Underwriter may terminate this Bond Purchase Agreement, with the eftact
stated in paragraph (c) o[' this Section 5, at any time subsequent to the date of execution of this Bond
Purchase Agreement and at or prior to the Closing by notil~ing tile Issuer in writing or by telecopy of its
election so to do, if (i) legislation slnall be introduced, by amendment or otherwise, in, or be enacted by,
tine House of Representatives or tlne Senate of the Congress of the United States, or a decision by a
court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by,
or on behalf of, the United States Securities and Exchange Commission or other governmental agency
having jurisdiction of the subject matter shall be made or proposed, to the effect that the issuance,
offering or sale of obligations of the general character of the Bonds, as contemplated hereby, is or
would be in violation of any provision of thc Sccuritics Act of 1933, the Securities Exchange Act of
1934 or the Trust Indenture Act of 1939, each as amended, or with the purpose or effect of otherwise
prohibiting the issuance, offering or sale of obligations of the general character of the Bonds, or the
Bonds, as contemplated hereby without the registration or qualification thereof; or (ii) an amendment to
the Constitution of the United States, or of the State of New York shall have been adopted, or
legislation shall have been recommended to the Congress of the United States for passage by the
President of the United States, or introduced in the Congress by the Speaker of the House of
Representatives, the President Pro Tempore of the Senate, the Chairman or ranking minority member of
the Committee of ways and Means of the House of Representatives or the Chaklnan or ranking minority
member of the Committee on Finance of the Senate, or enacted by thc Congress of the United States or
enacted by the State of New York, or legislation pending in the Congress of the United States shall
have been amended, or a decision shall have been rendered by a court of the United States or the State,
including the Tax Coral of the United States, or a ruling stnall have been made or a regulation shall have
been proposed cr made or a press release or otlner form of notice shall have been issued by the
Treasury Department of the United States or the Internal Revenue Service or other federal or New
York authority, with respect to federal or New York State taxation upon interest on obligations of the
general character of the Bonds, which may have the purpose or efli:ct, directly or indirectly, of affecting
the exclusion of interest on the Bonds from the gross income of the holders thereof, or, in the
professional opinion of the Underwriter, affects materially and adversely the mm-ket price (or yield) for
the Bonds, their marketability or their sale at the contemplated offering price, or the market price
generally of obligations of the general character of the Bonds;
(b) In addition, the Undem~riter may terminate this Bond Purchase Agreement, with
the effect stated in paragraph (c) of this Section, at any time subsequent to the date of execution of this
Bond Pumhase Agreement and at or prior to thc Closing by notifying the Issuer in writing or by telecopy
of its election so to do, if~
(i) any legislation, resolution, ordinance, rule or regulation shall be
introduced in, or be enacted by any governmental body, department or agency of the United
States, or the State of New York, or a decision by any court of competent jurisdiction within
the United States or the State of New York shall be rendered which, in the Underwriter's
professional opinion, materially adversely attacts the marketability of the Bonds or their sale at
the contemplated offering price;
(ii) (1) any amendment to the Prelilninary Otlicial Statement or Final
Official Statement is proposed on or prior to the Closing Date by the Issuer as deemed
necessary to bond counsel to the Issuer pursuant to Section l(f) hereof which, in the
Undem,riter's professional opinion, materially and adversely afl~cts the marketability of the
Bonds or their salc at thc contemplated offering price;
(2) (a) The Filial Official State~nent shall have been amended,
modified or supplemented itl any material respect without the consent in writing
of the Underwriter whieln amendment, in the professional judgment of the
Underwriter materially and adversely affbcts thc rnarketability of fl~e Bonds or
their sale at the contemplated otti~ring price or (b) any event shall occur, which
in the professional judgment of the Underwriter, makes untrue any statement of
a material fact set forth in the Final Official Statemem or results in an omission to
state a material fact necessa~7 to make the statements therein, in the light of the
circumstances under which they are made, not misleading (provided however,
that if any such event shall occur, the Issuer shall- have the right to amend the
Final Official Statement to correct such statement or to include such fact, as the
case may be, and the Underwriter shall have no right to cancel its obligation to
purchase the Bonds pursuant to this clause (b), unless, in the professional
judgment of the Underwriter such event and such amendment materially and
adversely affect the marketability of the Bonds or their sale at the contemplated
offering price;
(iii) additional material restrictions not in force as of tile date of execution
hereof shall have been imposed upon trading in securities generally by any governmental
authority' or by any national securities exchange;
(iv) any governmental authority imposes, on the Bonds, or obligations of the
general character of the Bonds, any materiat restrictions not now in force, or increase materially
those in force;
(v) a gencral banking moratorium shall have been established by' United
States or New York State authorities;
(vi) there shall have occurred a general suspension of or material limitation
of trading on the New York Stock Exchange or other national securities exchange, which
suspension or limitation is continuing, or the establishment of minhnum prices on any such
exchange;
(vii) any rating of the Bonds shall have been downgraded or withdrawn by a
national rating service, which, in the Underwriter's professional opinion, materially adversely
affects the marketability of the Bonds or their sale at the contemplated offering price;
(viii) any rating of the Issuer by a national rating service shall have been
downgraded or withdrawn, or any obligations of the Issuer are placed on "Credit Watch" with
negative implications or a similar credit alert by a national rating service which, in the
Undemrriter's professional opinion, materially adversely affects the marketability of the Bonds or
their sale, at the contemplated offering price', and
(ix) the [tilted States shall have become engaged in hostilities, whether or
not a war involving the United States shall have been declared or shall have commenced, or any
presently existing conflict involving the armed forces of the United States shall be escalated, or
any other national emergency relating to the effective operation of government or the financial
community shall have occurred, which, in the Undetx~riter's professional opinion, materially
adversely affects the marketabili ,ty of the Bonds or their sale at the contemplated offering price;
(x) the legal notice of estoppel, being the notice provided in Section 81.00
of the Local Finance La~v together with the text of the Resointion (or a summary thereof), shall
not have been published in the manner provided herein, or the.estoppel .period provided in
Section 82.00 of the Local Finance Law shall not have elapsed prior to the Closing Date, or
prior to the lapsing of said estoppel period, the validi~ of the Bonds and/or the validity of any
provision of the Resolution has been contested by the filing of a petition or complaint or
initiating of any other contest or legal action in a court of law and same is continuing or has been
resolved in a manner unfavorable to the Issuer (and has not been reversed on appeal ec
otherwise set aside);
(xi) the Comptroller of the Currency, The New York Stock Exchange or
other national securities exchange, or any governmental authority, shall impose, as to the Bonds
or obligations of the general character of the Bonds, any material restrictions not now in force,
or increase materially those now in force, with respect to the extension of credit by, or the
charge to the net capital requirements of, or financial responsibility requirements of the
Underwriter.
(c) If this Bond Purchase Agreemem is terminated as herein provided, the parties
hereto shall have no obligations one to the other except as provided in Sections 7, 8 and 9(c) hereof.
6. The performance by the Town of its obligations is conditioned upon (i) the
performance by the Undel~'riter of its obligations hereunder, (ii) receipt by the Town and the
Underwriter of opinions and certificates being delivered at the Closing by persons and entities other than
the Town and (iii) approval of thc New York State Comptroller pursuant to Section 90.10 of the I ,ocal
Financc Law. If the Town shall be unable to satisfy the conditions to the Undem, riter's obligations
contained h~ this Bond Purchase Agreement or if the Underwriter's obligations shall be terminated for
any reason permitted by this Bond Purchase Agreement~ this Bond Purchase Agreement shall be
terminated and neither the Town nor the Underwriter shall have any flu'ther obligation hereunder, except
that fl~e respective obligations of the parties set fotlh herein shall continue in full force and effect.
7. Expenses: (a) Except as specifically provided in paragraph (b) of this Section 7, the
Underwriter shall be under no obligation to pay any expenses incident to, or in connection with, the
offering, issuance and sale of the Bonds, hcluding, but not limited to (i) the cost of the printing or other
reproduction (fOr distribution prior to, on, or after the date of acceptance of this Bond Purchase
Agreement), of the Financing Documents, in reasonable quantities t~)r distribution, (ii) the cost of printing
and signing the definitive Bonds, (iii) the cost of p~'eparing, printing and distribution of the Prelimiua .fy
Official Statement and Final Official Statement (and any a~nendments or supplements thereto), (iv) the
costs associated with obtaining insurance roi' the Bonds, (v) the fees and disbursements of bond
counsel, (vi) the fees and expenses of the Escrow Agent, (vii) the tees of rating agencies, and (viii) the
fees and disbursements of any financial advisor, accountant or other expert retained by the Issuer. The
aforesaid costs and expenses shall be paid by the Issuer.
(b) The Underwriter shall pay
ottering and distribution of the Bonds, including,
c~_)sts, and such reasonable miscellaneous expenses
all expenses incurred by it in connection with the
without limitation, advertising expenses, clearance
described in MSRB Rule G- l l(h)(i).
(c) In the event that either the Issuer or the Underwriter shall have paid. obligations
of the other as set forth in this Section 7, adjustments shall be made.
8. Indemnification. (a) The Issuer will, to the extent permitted by law, indemnify and hold
harmless the Underwriter and each person, if any, who controls the Underwriter within the meaning of
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, against
any losses, claims, damages or liabilities, joint or several, to wlfich the Underwriter or such controlling
person may become subject, under regulations or otherwise, insofar as such losses, claims, damages or
liabilkies (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Preliminary Official Statement (except to the extent
corrected iu the Fiual Official Statement), the Final OtS~cial Statement, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to state therein a material
fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading; and will indcmni~ and hold hamqlcss the Underwriter and each such
controlling person in connection with investigating or defending any such loss, claim, da~nage, liability or
action; provided, however, that the Issuer will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises om of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any of such documents in reliance upon md in
conformity with written information lhmished to the Issuer by the Underwriter in certificate form
specifically' for use therein. This indemni~ agreement will be in addition to any liability which the Issuer
may otherwise have.
(b) The Underwriter will, to the extent permitted by law, indemnity' and hold
harmless the Issuer against any losses, claims, damages or liabilities to which the Issuer may become
subject, under Federal laws or regulations or otherwise, insofar as such losses, claims, damages cr
liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Final Official Statement, or any amendment or
supplement thereto under the heading "Price/Yield" on the cover of the Final Official Statemcnt and
under the caption entitled "Underwriting" only, or arise out of or are based upon the omission or thc
alleged omission to state therein a material fact necessary in order to make the statements therein, in li~t
of the circumstances under which they were made, not misleading, in each ca.se to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to the Issuer by the
Underwriter in certificate form specifically for use therein under the heading "Yield" on the cover of the
Final Official Statement and under the caption entitled "Underwriting" only; ;md will indemnify, and hold
harmless the Issuer for any legal or other expenses reasonably incurred by the Issuer in connection with
investigating or defending any such loss, claim, damage, liability or action. This indelnnity agreement will
be in addition to any liability which such Underwriter may otherwise have.
(c) Promptly, aPter receipt by an indemnified party under this Bond Purchase
Agreement of notice of the commencement of any action, such indemnified pat~y will, if a claim in
respect thereof may be made against the indemnit}fing party under this Bond Purchase Agreement, noti~
the indemnifyh~g party of the commencement of such action; but the fhilure to so notify, the indemnil}r'ing
party will not relieve it fi-om any liabilib~ which it ma5, have to a~y indemnified patV otherwise than under
this Bond Purchase Agreement. In case any such action is brought against any indemnified party, at~d it
notifies the indemni~ing parb~ of the commencement of such action, the indemnifying party, will be
entitled to participate therein and to the extent that it may wish, jointly with any other indenmifying party.
similarly notified, assume the defense of such action. After notice from the indemnifying party to such
indemnified party of its assumption of the defense of such action, the indemnifying party will not be
liable to such indemnified party under this Bond Purchase Agreement tbr any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense of such action, other
than reasonable costs of investigation unless the employment by' an indemnified pm~y of its own counsel
shall have been authorized in wrking by the indemnifying party in connection with the defense of such
action, or the indemnifying party shall not have employed (or otherwise engaged) cr3unsel to have charge
of the defense of such action, in any of which events such legal or other expenses shall be borne by the
inde~xmifying party. No indemnifying party, shall be liable under this Bond Purchase Agreement for any
compromise or settlement of any such action effected without its consent.
9. Miscellaneous. (a) Except as otherwise specifically provided in this Bond Purchase
Agreement, all notices, demands and formal actions under this Boud Purchase Agreement shall be in
writing and mailed by first-class mail, postage prepaid, telecopied (with confirmation of receipt) or
delivered to:
The Underwriter:
Roosevelt & Cross, Incorporated
55 Broadway, I Exchange Plaza
New York, New York 10006
Attn: Elahqe M. Brmman
Senior Vice President
(212) 504-9413 (Fax)
The Issuer:
Town of Southold
Town Hall
53095 Main Road
Southold, New York 11971
Attn: John Custn,nan, Town Comptroller
(631 ) 765-1366 (Fax)
(b) This Bond Purchase Agreement will inure to the benefit of and be binding upon
the Issuer and the Underwriter and their respective successors and assigns, and will not confer any
rights upon any other person, partnership, association or corporation. The terms "successors" and
"assigns" shall not include any purchaser of the Bonds fi~om the Undemrriter merely because of such
purchase.
(c) All of the representations and warranties of the Issuer and the Unde~wvriter in
this Bond Purchase Agreement shall remain operative and in flail fi>me and effect regardless of (i)
delivery of any p~iyment for the Bonds hereunder or (ii) termination or cancellation of this Bond
Purchase Agreement.
(d) Section headings have been inserted in this Bond Purchase Agreement as a
matter of convenience of reference only, and it is agreed that such section headings are not a part of this
Bond Purchase Agreement and will not be used in the h~terpretations of any provisions of this Bond
Purchase Agreement.
(e) If any provision of this Bond Purchase Agmelnent shall be held or deemed to
be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any
constitution, statute, rule of public policy, or for any other reason, such circumstauces shall not have fine
effect of rendering the provision h~ question invalid, inoperative or unenforceable in any other case or
circumstance, or of rendering an5' other provision or provisions of this Bond Purchase Agreement
invalid, inoperative or unenforceable to any extent whatever.
(f) This Bond Purchase Agreement may be executed in several counterparts, each
of which shall be regarded as an original and all of which shall constitute one and the same document.
(g) This Bond Purchase Agreement shall bccome effective upon the execution of
the acceptance hereof by the Issuer and shall be valid and enforceable as of the time of such
acceptance.
(h) This Bond Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Very truly yours,
Roosevelt & Cross, Incorporated
BY~mnn ~~~
Senior Vice President
Accepted and agreed to as of
the date first above written:
TOWN OF SOUTHOLD,
SUFFOLK COUNTY, NEW YORK
By:
Scott A. Russell
Supervisor
(Signature Page)
Very truly yours,
Roosevelt & Cross, Incorporated
By~
Elaine M Brennan
Semor Vice President
Accepted and agreed to as of
the date first above written:
Scott A. Russell
Supervisor
SCHEDULE I TO BOND PURCHASE AGREEMENT
Bond Component
Serial Bonds:
BOND PRICING
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 - 2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 -2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Maturity
Date Amount Rate Yield
05/01/2010 210,000 2.000% 1.050%
05/01/2011 230,000 2.000% 1.330%
05/01/2012 220,000 2.000% 1.580%
05/01/2013 220,000 2.250% 2.000%
05/01/2014 225,000 2.500% 2.400%
05/01/2015 225,000 2.750% 2~600%
05/01/2016 225,000 3.000% 2.870%
05/01/2017 220,000 5.000% 3.100%
05/01/2018 235,000 5.000% 3.300%
05/01/2019 115,000 3.500% 3.550%
2,125,000
Dated Date
Delivery Date
First Coupon
Par Amount
Premium
Production
U nderwriter's Discount
Purchase Price
Accrued Interest
Net Proceeds
05/04/2009
05/04/2009
11/01/2009
2,125,000.00
74,287.65
2,199,287.65 -16,000.00
2,183,287.65
2,183,287.65
103.495889%
-0.752941%
102,742948%
Price
100.934
101.312
101.222
100.954
1 OO.467
100.827
100.818
113.358
113.133
99,582
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s)
(Finance 6.011 nys:R29899) Page 5
BOND DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010- 2018)
REFUNDING OF 05/01/1999 BONDS (05/01f2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
11/01/2009 31,214.68 31,214.68
12/31/2009 31,214.68
05/01/2010 210,000 2.000% 31,743.75 241,743.75
11/01/2010 29,643.75 29,643.75
12/31/2010 271,387.50
05/01/2011 230,000 2.000% 29,643.75 259,643.75
11/01/2011 27,343.75 27,343.75
12/31/2011 286,987.50
05/01/2012 220,000 2.000% 27,343.75 247,343.75
11/01/2012 25,143.75 25,143.75
12/31/2012 272,487.50
05/01/2013 220,000 2.250% 25,143.75 245,143.75
11/01/2013 22,668.75 22,668.75
12/31/2013 267,812.50
05/01/2014 225,000 2.500% 22,668.75 247,668.75
11/01/2014 19,856.25 19,856.25
12/31/2014 267,525.00
05/01/2015 225,000 2.750% 19,856.25 244,856.25
11/01/2015 16,762.50 16,762.50
12/31/2015 261,618.75
05/01/2016 225,000 3.000% 16,762.50 241,762.50
11/01/2016 13,387.50 13,387.50
12/31/2016 255,150.00
05/01/2017 220,000 5.000% 13,387.50 233,387.50
11/01/2017 7,887.50 7,887.50
12/31/2017 241,275.00
05/01/2018 235,000 5.000% 7,887.50 242,887.50
11/01/2018 2,012.50 2,012.50
12/31/2018 244,900.00
05/01/2019 115,000 3.500% 2,012.50 117,012.50
12/3t/2019 117,012.50
2,125,000 3921370.93 2,517,370.93 2,517,370.93
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s)
(Finance 6.011 nys:R29899) Page 6
May4,2009
Roosevelt & Cross, Incorporated
55 Broadway; One Exchange Plaza
New York, New York 10006
Re'
Town of Southold, Suffolk County, New York
$2,125,000 Refunding Serial Bonds-2009
Ladies and Gentlemen:
Reference is made to a Bond Purchase Agreement, dated April 7, 2009 (the ';Bond
Purchase Agreement"), between the Town of Southold, Suffolk County, New York (the 'Town") and the
Underwriter as defined in the Bond Purchase Agreement (the "Underwriter") relating to the sale of
$2,125,000 Refi~nding Serial Bonds-2009 of the Town, dated May 4, 2009 (the "Bonds"). Except as the
context otherwise requires, all capitalized terms used herein and not defined shall have the meaning
assigned to such terms in the Bond Purchase Agreement.
We are Bond Counsel to the Town and are today rendering our opinion with respect to
fine validity of the Bonds and as to certain other matters relating thereto. You are entitled to rely on such
opinion as though it were addressed to you.
In addition, we have been requested to render our opinion as to the matters set fbrth
below.
In connection with the foregoing, we have examined (i) an executed copy of the Bond
Purchase Agreement, (ii) a copy of the Preliminary Official Statement dated April 6, 2009 (the
"Preliminary Official Statement"), and (iii) a copy of the Final Official Statement dated April 7, 2009 and
executed by the Supervisor of the Town (the "Final Official Statement") relating to the Bonds. We have
also examined the originals, or copies certified or otherwise identified to our satisfaction, of such other
documents, certificates, legal opinions, records or other instruments, and have made such investigations of
law, as we have deemed necessary or advisable for purposes of this opinion. We have relied upon
certificates of public officials of the Town, upon the representations, warranties and covenants of the
Town set forth in the Bond Purchase Agreement. We have also assumed, but have not independently
verified, (i) that the signatures on all documents and certificates that we examined were genuine, (ii) all
documents, certificates, records, instruments and legal opinions submitted to us as originals are authentic,
and (iii) documents, certificates, records, instruments and legal opinions submitted to us as copies are in
conformity with the originals thereof.
In our opinion:
(a) The Bond Purchase Agreement has been duly authorized executed and
delivered by the Town and, assuming due authorization, execution and delivery by the
Underwriter, constitutes a valid and binding agreement of the Town enforceable against
the Town in accordance with its terms, except as such enforceability ~nay be limited by
Roosevelt & Cross, Incorporated
January 27, 2009
Page 2
any kmkruptcy, insolvency or other laws affecting creditors' rights or remedies heretofore
or hereafter enacted and by the availability of equitable remedies; and
(b) The Town has full and legal right, power and authority to carry out and
effectuate the transactions contemplated by the Bond Purchase Agreement, the Bonds,
the Resolution and the Official Statement.
(c) The Town has full and legal right, power and authority to call and redeem
prior to maturity the bonds of the Town that arc to bc refunded with proceeds of the
Bonds.
(d) The Bonds are exempt flora the registration requirements of the
Securities Act of 1933, as amended, and all documents relating to the issuance of the
Bonds are exempt from qualification pursuant to the Trust Indenture Act of 1939, as
amended.
(e) The statements contained in the Final Official Statement dated April 7,
2009 prepared by the Town in connection with the Bonds under the captions
"DESCRIPTION OF THE EONDS," "AUTHORIZATION AND' PURPOSE," and
REFUNDING FINANCIAL PLAN" and the subcaptions "Constitutional Requirements"
and "Statutory Procedure" under the caption "INDEBTEDNESS OF THE TOWN" and
under the caption "TAX MATTERS" (except for any statistical and numerical data which
may be included under such captions or subcaptions, as to which no opinion is expressed),
are accurate and complete in all material respects and we have no reason to believe that,
as of the date hereof; said captions contain any untrc~e statement of a material fi2ct or omit
to state a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading; and,
without having independently verified the information contained in said Final Official
Statement except the statements contained in the above referenced captions and
subcaptions, to the best of onr knowledge, nothing has come to our attention in our
capacity as Bond Counsel, and to the extent of our review, which would lead us to believe
that the Final Official Statement does not and did not contain any untrue statements of a
material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.
Very tru[y yours,
EXHIBIT B
TO THE
BOND PURCHASE AGREEMENT
TOWN OF SOUTHOLD, SUFFOLK COUNTY, NEW YORK
CERTIFICATE OF THE SUPERVISOR
I, SCOTT A. RUSSELL, Supervisor of the Town ofSouthold, Sufiblk County, New York (the
'Town"), hereby certi~ on behalf of the Town as follows:
1. 1 am thc chief fiscal officer of the Town, delegated with the powers and duties pertaimng
or incidental to the sale and issuance of the Bonds described below, and I have responsibility tbr the
administration and m~magement of all financial affaim of tine Town.
2. The representations and warranties of the Town in the Bond Purchase Agreement are
tree and correct on and as of the date hereof as if made on the date hereo[ and the Town has complied
with and performed all of its covenants and agreements in the Bond Purchase Agreement.
3. Each of the conditions in Section 4 of the Bond Pumhase Agreement to be satisfied by
the Town has been satisfied by the Town on the date hereof and the Town is not aware of any other
condition of the Bond Purchase Agreement that has not been satisfied on the date hereof.
4. Tine Final Official Statement of the Town dated April 7, 2009 (the "Final Official
Statement") relating to the sale of the Town's $2,125,000 Refunding Serial Bonds-2009 (the "Bonds"),
delivered pursuant to the Bond Purchase Agreement, dated April 6, 2009 between tine Toxvn and the
Underwriter (the "Bond Purchase Agreemenf') (excluding from such Final Official Statement the "Yield
or Price" information on the cover page, the infbrmation under the caption "Underwriting" and
information ascribed to sources other than the Town as to whicln no representation or warranties are
made), as of the date hereof does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made therein, in the light oF the circumstances under
which they were made, not misleading, except that no representation is made as to information in the
Final Official Statement ascribed to sources other than thc Town although I have no reason to believe
and do not believe that such information is materially inaccurate or misleading.
5. The Bonds being delivered on the date hereof to the Underwriter under the Bond
Purchase Agreement conform to the descriptions thereof contained in the Final Official Statement
delivered to such Underwriter.
Page 2
6. After giving etImt to the issuance of the Bonds, the Town has not contracted
indebtedness (except "excluded debt" within the meaning ascribed in the Constitution of the State of
New York) in an amount greater than thc debt limit of the Town as set forth under' thc subcaption "Debt
Statement Summary" in the Official Statement of the Town, dated April 2, 2009.
7. The Town has not incurrcd any material amount of indebtedness for borrowed money,
direct or contingent, between the date of the Bond Purchase Agreement and the date hereof.
8. Tbcrc has been no material adverse change in the financial position, results of operations
or condition, financial or otherwise, of the Town from the date of the Final Official Statement to the date
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of' Ma3', 2009.
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
By:
Supervisor
EXHIBIT C
~lO
THE BOND PURCHASE AGREEMENT
CERTIFICATE OF THE TOWN AT?ORNEY
1, the undersigned, Town Attorney of the Town of Southold, Suflblk County,
New York (the 'Town"), hereby cei~tify, pursuant to the Bond Purchase Agreement dated April 7, 2009
(the "Bond Purchase Agreement") bem'een the Town and the Under-writer defined therein, as lbllows:
1. There is no litigation of any nature pending or threatened to restrain or en_ioin the
execution and delivery of the Bond Purchase Agreement, the issuance, sale, and delivery of the
Bonds, any of the proceedings taken with respect to the issuance and sale of the Bonds, the
application of moneys to the paymem of the Bonds or the levy or collection of taxes to pay the
principal of or interest on the bonds, or in any manner questioning the proceedings m~d authority
under which the Bonds were authorized or affecting the validity of the Bonds, the corporate
existence or boundaries o.r the Town, and no authority or proceedings for the authorization,
issuance and sale of the Bonds have been repealed, revoked or rescinded.
2. The statements contained in the Final Official Statement dated April 7, 2009
under the caption "LITIGATION" do not contain any untrue statement of material fact or omit
to state a material fact necessary to make the statements therein, in thc light of the cireumstances
under which they were made, not misleading.
3. The execution and delivery by the Issuer of the Bond Purchase Agreement, the
issuance, sale and delivery of the Bonds, and compliance with file ffovisions thereof will not
conflict with or constitute a broach of or a default under any administrative regulations,
judgment, decree or any agreement or other hstrument known to me to which the Issuer is a
party'.
Agrcement.
All terms used in this Certificate have the definitions set folXh in the Bond Purchase
IN WITNESS WHEREOF, I have hereunto set my hand this May 4, 2009.
By:
Town Attorney
CERTIFICATE OF THE SUPERVISOR WITH RESPECT TO
THE OFFICIAL STATEMENT OF THE TOWN OF
SOUTHOLD, NEW YORK, DATED APRIL 7, 2009,
DISTRIBUTED 1N CONNECTION WITH THE SALE OF THE
$2,125,000 REFUNDING SERIAL BONDS-2009
I, SCOTT A. RUSSELL, Supervisor of the Town of Southold, in the County of
Suffolk, New York (the "Town"), HEREBY CERTIFY that as of April 7, 2009, the date of the
Official Statement of the Town prepared and distributed in connection with the sale of the
$2,125,000 Refunding Serial Bonds-2009 (the "Bonds"), and at all times subsequent thereto, up
to and including the date of the delivery of the Bonds on May 4, 2009, the attached Official
Statement did not and does not contain any untrue statement of a 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 4, 2009.
(SEAL)
IN WITNESS WHEREOF,
I have hereunto set my hand and affixed thc
corporate seal of the Toxvn as of the 4th day of May,
2009.
Supervisor
560789.1 032681 CERT
OFFICIAL STATEMENT
NEW ISSUE - REFUNDING SERIAL BONDS MOODY'S INVESTOR SERVICE:Aa3
See "Bond Rating", herein
In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel to the Town, under existing statutes and?ou? d, ecis, ions and assuming continuing~
compliance with certain tax certifications described herein, (i) interest on the Bonds is excluded from gross income jor r eaerat income tax purposes pursuant
to Section 103 of the Internal Revenue Code of 1986, as amended (the "Code')., and (?0 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
certain corporations for Purposes of calculating the alternattve minimum tax imposed on such corporations. In addition, in the opinion of Bond Counsel to the
Town, 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 Yorlc See "Tax Matters" herein.
The Bonds will is be designated by the Town as "qualified tax-exempt obligations" pursuant to the provision of Section 265 of the Code.
$2,125,000
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
(the "Town")
REFUNDING SERIAL BONDS - 2009
[BOOK-ENTRY-ONLY BONDS]
Dated: Date of Delivery
Price or
Amount Maturity Rate Yield Amount Maturity
210,000 2010 2.00% 1.05% $225,000 2014
230,000 2011 2.00 1.33 225,000 2015
220,000 2012 2.00 1.58 225,000 2016
220,000 2013 2.25 2.00
Principal Due: May 1, 2010 - 2019, inclusive
Interest Due: November 1,2009 and semi-annually thereafter
on May. 1 and November 1 in eachyear until
maturity.
Price or Price or
Rate Yield Amount Maturity Rate Yield
2.50% 2.40% $220,000 2017 5.00% 3.10%
2.75 2.60 235,000 2018 5.00 3.30
3.00 2.87 115,000 2019 3.50 3.55
~ Securi~ and Squrces ofPqyment: The~ BOnds will constitute general obligations of the To.wn and will contain a pledge, of
its taith and credit tbr the punctual payment or' the principal of and in~erest on the Bonds, and all the taxable real property within
the Town will be subject to the levy o~' ad valorem taxes, without limitation as to rate or amount, for such purpose.
Prior Redemption: The Bonds will not be subject to redemption prior to maturity.
Form and Denomination: The Bonds will be issued as reRistered bonds, and, when issued, will be registered in the name
o__f Cede & Co. as nominee of The Depository Trust Company ("DTC")~ New York, New York, which will act as the Securities
Depository for the Bonds. Individual purchases of the Bonds may be made only in book-entry form in denominations of $5,000 or
integral multiples thereof. Bondholders will not receive certificates representing their ownership interest in the Bonds purchase&
See"Book-Entry-Only System" under "The Bonds," herein.
payment: Payment of the principal of and interest on the Bonds to the Beneficial Owners of the Bonds will be made by DTC
Participants and Indirect Participants in accordance with standing instructions and customary practices, as is now the case with
munic~p, al secu~ties held for tIie accounts of customers in bearer form or registered in "street name." Payment will be the
responsibility otthe DTC Particip_ant or Indirect Participant and not of 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.
The Bonds are offered subject to the J~nal approv(ng opinions of Hawkins Delafield & Wood LLP, New York, New York,
Bond Counsel, and certain other conditions. It is expected tltat delivery of the Bonds in 3ook-entryform will be made through the
facilities of DTC on or about May 4, 2009 in New York, New york.
THIS OFFICIAL STATEMENT 1S IN A FORM "DEEMED FINAL" BY THE TOWN FOR THE PURPOSE OF SECURITIES AND
EXCHANGE COMMISSION RULE 15c2-12 (THE "RULE"). FOR A DESCRIPTION OF THE TOWN'S AGREEMENT TO PROVIDE
CONTINUING DISCLOSURE FOR THE BONDS, AS DESCRIBED IN THE RULE, SEE "DISCLOSURE UNDERTAKING" HEREIN.
ROOSEVELT & CROSS
INCORPORA TED
April 7, 2009
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
Town Hall
53095 Main Road
Southold, NY 11971
Telephone: (631) 765-4333
Fax: (631) 765-1366
TOWN BOARD
Scott A. Russell, Supervisor
Louisa P. Evans
Albert J. Kmpski, Jr.
Vincent M. Orlando
William P. Ruland
Thomas H. Wickham
Elizabeth A. Neville, Town Clerk
Peter W. Harris, Superintendent of Highways
John A. Cushman II, Town Comptroller
Jennifer A. Andaloro, Esq., Assistant Town Attorney
George Sullivan, Receiver of Taxes
BOND COUNSEL
Hawkins Delafield & Wood LLP
New York, New York
FINANCIAL ADVISOR
MUNISTAT SERVICES, INC. '
Municipal Finance Advisory Service
12 Roosevelt Avenue
Port Jefferson Station, N.Y. 11776
(631) 331-8888
E-mail: info~munistat.com
Website: http://www.munistat.com
No dealer, broker, salesman or other person has been authorized by the District to give anr~'r information or to make any
representations, other than those contained in this OI2]cial Statement and ii' given or made,, such other information or
representations must not be relied upon as having been authorized by the District. This Official Sralement does not constitute an
offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in
which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained
by the District from sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness. The
information and expressions of opinion herein are subject to change without notice and neither ~he delivery of this Official
Statement nor any' sale made hereunder shall, under any circumstances, create any implication thol: there has been no change in
the affairs of the District since the date hereof.
IN CONNECTION WITH THIS OFFERING THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABLIZING IF COMMENCED, MAY BE DISCONTINUED
AT ANYTIME.
TABLE OF CONTENTS
Page
THE BONDS ................................................................................ 1
Description of the Bonds ...................... ............................................. 1
Optional Redemption ...................................................................... 1
Book-entry-only System ...................................................................
Certificated Bonds ........................................................................ 3
Authorization and Purpose ................................................................... 3
Refunding Financial Plan ..................................................................... 3
Sources and Uses of Bond Proceeds .......................................................... 4
Security and Source of Payment ............................................................. 4
Remedies Upon Default .................................................................... 4
THE TOWN ' 5
General Information ....................................................................... 5
Government ............................................................................. 5
Employees .............................................................................. 5
ECONOMIC AND DEMOGRAPHIC INFORMATION ............................................ 6
PopUlation Characteristics .................................................................. 6
Median Income of Families ................................................................ 6
Unemployment Rate Statistics ............................................................... 6
Selected Listing of Larger Employers ........................................................ 7
INDEBTEDNESS OF THE TOWN ............................................................ 7
Constitutional Requirements ................................................................ 7
Statutory Procedure ....................................................................... 7
Computation of Debt Limit and Calculation of Net Debt Contracting Margin .......................... 8
Trend of Town Indebtedness ................................................................ 9
Details of Short-Term Indebtedness Outstanding ............................................... 9
Debt Service Requirements - Outstanding Bonds and Refunding Bonds .............................. 9
Calculation of Estimated Overlapping and Underlying Indebtedness ............................... 10
Authorized But Unissued Items ............................................................. 10
Capital Program ........................................................................ 10
Community Preservation Fund ............................................................. 11
Landfill Closure and Postclosure Care Costs .................................................. 11
FINANCES OF THE TOWN ................................................................ 1 1
Financial Statements and Accounting Procedures ............................................... 11
Fund Structure and Accounts ........................................................... 11
Basis of Accounting ................................................................. 12
Investment Policy ....................................................................... 12
Budgetary Procedures .................................................................... 12
Financial Operations ..................................................................... 13
Revenues .............................................................................. 13
Real Property Taxes ................................................................. 13
State Aid ...................... : ................................................... 13
Expenditures ........................................................................... 13
Pension Systems ........................................................................ 13
Contributions to the Retirement Systems ...................................................... 14
Other Post Employment Benefits ............................................................ 14
TABLE OF CONTENTS
(continued)
Page
REAL PROPERTy TAX INFORMATION .................................................... 15
Real Property Taxes .......................... : .......................................... 15
Tax Levy and Collection Record ........................................................... 15
Tax Collection Procedure ................................................................ 15
Tax Rates ............................................................................. 15
Large Taxable Properties ................................................................. 16
LITIGATION ............................................................................. 16
BONDHOLDER RISKS AND MARKET FACTORS AFFECTING FINANCINGS
OF THE STATE AND MUNICIPALITIES OF THE STATE ..................................... 17
TAX MATTERS ........................................................................... 17
Opinion of Bond Counsel ................................................................ 17
Certain Ongoing Federal Tax Requirements and Certifications ................................... 18
Certain Collateral Federal Tax Consequences ................................................. 18
Original Issue Discount .................................................................. 18
Bond Premium ......................................................................... 18
Information Reporting and Backup Withholding ............................................... 19
Miscellaneous ......................................................................... 19
LEGAL MATTERS ........................................................................ 19
DISCLOSURE UNDERTAKING ............................................................. 19
VERIFICATION OF MATHEMATICAL COMPUTATIONS ..................................... 20
UNDERWRITING ......................................................................... 20
BOND RATING ........................................................................... 20
FINANCIAL ADVISOR .................................................................... 20
ADDITIONAL INFORMATION ............................................................. 21
APPENDIX A: FINANCIAL INFORMATION
APPENDIX B: FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31,
2007
ii
OFFICIAL STATEMENT
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
$2,125,000
REFUNDING SERIAL BONDS - 2009
[BOOK-ENTRY-ONLY BONDS]
This Official Statement and appendices thereto presents certain information relating to the Town of Southold,
in the County of Suffolk, in the State of NeWyork (the "Town," "County" and "State," respectively) in connection
with the sale of $2,125,000 Refunding Serial Bonds - 2009 (the "Bonds").
Allquotations from and summaries and explanations of provisions of the Constitution and laws of the State
and acts andproceedings of the Town contained herein do not purport to be complete and are qualified in their
entirety by reference to the official compilations thereof and all references to the Bonds and the proceedings of the
Town relating thereto are qualified in their entirety by reference to the definitive form of the Bonds and such
proceedings.
THE BONDS
Description of the Bonds
The Bonds will be dated date of delivery, and will mature in the principal amounts on May 1, in each 0fthe
years 2010 to 2019, inclusive, as set forth on the inside cover page.
The Bonds will be issued in fully registered form and when issued will be registered in the name of Cede &
Co. as nominee of The Depository Trust Company, New York, New York ("DTC'~). DTC will act as Securities
Depository for the Bonds. Individual purchases of the Bonds may be made in book-entry form only, in denominations
of $5,000 or integral multiples thereof. Purchasers will not receive certificates representing their interest in the
Bonds.
Interest on the Bonds will be payable November 1, 2009 and semi-annually thereafter on May 1 and
November 1 in each year until maturity. Principal and interest will bepaid by the Town to DTC, which will in turn
remit such principal and interest to its Participants, for subsequent distribution to the Beneficial Owners of the
Bonds, as described herein. The Bonds may be transferred in the manner described on the Bonds and as referenced
in certain proceedings of the Town referred to therein.
The Record Date of the Bonds will be the fifteenth business day of the month preceding each interest
payment date.
Optional Redemption
The Bonds will not be subject to redemption, prior to maturity.
Book-entry-only System
DTC will act as securities deposito~ for the Bonds. The Bonds will be issued as fully-registered Bonds
registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an
authorized representative ofDTC. One fully-registered Bond certificate will be issued for each maturity of each series
of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, the world's largest securities depOsitory, is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code,
and a"clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.
DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S, equity issues, corporate and
municipal debt ~ssues, and money market instruments (from over 100 countries) that DTC's particiDants ("Direct
Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales
and other securities transactions in deposited securities, through electronic computerized book-entry transfers and
pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S, securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust
& ClearingCorporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation
and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users
of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has
Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities
and Exchange Commission. More information about DTC an be found at wwwv.dtcc.com and www.dtc.org.
Purchases of Bonds trader the DTC system must be made by or through Direct Participants, which will receive
a credit for the Bonds On DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners are, however,
expected to receive written confirmations providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and
Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Securities, except in the event that use of the book-entry system for the Bonds
is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the
name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other
DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the Bonds; DTC' s records reflect only the identity of the Direct Participants to whose accounts such Bonds
are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed,
DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be
redeemed.
Rede~nption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or
such other nommee as mav be requested by an authorized representative ofDTC. DTC's~practice is to credit Direct
Participants' accounts upon DTC's receipt of funds and correspo,n, ding detail information Irom the Town, on payable
date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial
Owners will be governed by standing instructions _a~,,d customary practices, as is the case with bonds held for the
accounts of customers in bearer form or registered in street name," and will be the responsibility of such Participant
and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time
to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (Or such other
nominee as may be requested by an authorized representative of DTC) is the responsibilitv of the Town, disbursement
of such payments to Direct Participants will be the responsibility of DTC, and disbursen~ent of such payments to the
Beneficial Owners will be the responsibility of Direct and Indirect Participants.
Payments on the Bonds will b,e, made to Cede & Co., or such other nominee as mav be requested by an
authorized representative of DTC. DTC s practice is to credit Direct Participants' accounts uDon DTC's receipt of
funds and corresponding detail information from the Town, on payable date in accordance with their respective
holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing
instructions and custom _ar~,,, practices, as is the case with bonds held for the accounts of customers in bearer form or
registered in "street name,' and will be the responsibility of such Participant and not of DTC nor its nominee, or the
Town, subject to any Statutory or regulatory requirements as may be in effect from time to time. Payments to Cede
& Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of
the Town, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time bv giving
reasOnable notice to the Town. Under such circumstances, in the event that a successor depositou is not o~btained,
Bond certificates are required to be printed and delivered.
The Town may decide to discontinue use of the system of book-entry transfers through DTC (or a successor
securities depository). In that event, Bond certificates will be printed and delivered to DTC.
2
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 for the accuracy thereof.
Certificated Bonds
DTC may discontinue providing its services with respect to the Bonds at any time bv giving notice to the
Town and discharging its responsibilities with respect thereto under applicable law, or the Tc;wn mav terminate its
participation in the system of book-entry-only transfers through DTC at any time. In the event that su~'h book-entD'-
only system is discontinued, the following provisions will apply: the Bonds will be issued in registered f~r~ in
denon~inations of $5,000, or integral multiples thereof; principal of and interest on the Bonds when due a ill be
payable at the principal corporate trust office of a bank or trust company to be named by the Town as the fiscal a~ent;
certificated Bonds may be transferred or exchanged at no cost to the owner of such bonds at any timeprior to ma~ritv
at the corporate trust office of the fiscal agent for bonds of the same or any other authorized denomination dr
denominations in the same aggregate principal amount upon the terms set forth in the certificate of the Supervisor
authorizing the sale of the Bonds and fixing the details thereof and in accordance with the Local Finance Law.
Authorization and Purpose
Thc Bonds are being issued pursuant to the Constitution and statutes of the State of New York, including
among others, the Town Law and the Local Finance Law, and a refunding bond resolution duly adopted by the Town
Boardon February 24, 2009 (the "Refunding Bond Resolution"), authorizing the refunding of all or a part of the
following:
Title
Agricultural Land Preservation
Open Space Preservation
Principal Amount Principal Amount Maturities
Outstanding to be Refunded to be Refunded
$1,120,000 $1,020,000 2010-2018
1,160,000 1,070,000 2010-2019
The 1998 and 1999 Bonds are referred to herein as the "Refunded Bonds".
The Refunding Bond Resolution authorizes the issuance of the Bonds to provide the funds necessary to effect
the refunding of the Refunded Bonds.
For further information regarding bond authorizations of the Town for capital purposes and other matters
relating thereto see "Indebtedness of the Town".
Refunding Financial Plan
The Refunding Financial Plan will permit the Town to realize, as a result of the issuance of the Bonds,
cumulative dollar and present-value debt service savings.
The net proceeds of the Bonds (after payment of the underwriting fee and other costs of issuance relating to
the Bonds), together with a cash deposit from the Town, will be used to purchase non-callab!e, direct obligations of
or obligations guaranteed by the United states of America (the "Government Oblieations' ) which~ together with
remaining cash proceeds from the sale of the Bonds, will be placed in an irrevocable [rust fund (the "Escrow Fund")
to be held by The Bank of New York Mellon, (the "Escrow Holder") a bank located and authorized to do business
in the State, pursuant to the terms of an escrow contract ,b,y and between the Town and the Escrow Holder, dated as
of the delivery date of the Bonds (the "Escrow Contract '). The Government Obligations so deposited will mature
in amounts which, together with the cash so deposited, will be sufficient to pay the principal of, interest on and
applicable redemption premium of the Refunded Bonds on the dates of their redemption. The Refunding Plan requires
the Escrow Holder, pursuant to the refunding bond resolution of the Town and Escrow Contract, to pay the Refunded
Bonds at maturity or at the earliest date on xvhich the Refunded Bonds may be called for redemption prior to maturity.
The holders of the Refunded Bonds will have a first lien on all investment income from, and maturing
principal of the Government Obligations, along with other available monies held in the Escrow Fund. The Escrow
Contract shall terminate upon final payment by the Escrow Holder to the paying agents/fiscal agent for the Refunded
Bonds amounts from the Escrow Fund adequate for the payment, in full, of the Refunded Bonds, including interest
and the redemption premium payable with respect thereto.
Under the Refunding Plan, the Refunded Bonds will c_o, ntinue to be general obligations of the Town (although
the Refunded Bonds may be excluded in computingthe Town s debt limit). However, inasmuch as the Government
Obligations held in the Escrow Fund will be sufficient to meet all required payments of principal, interest and
redemption premium requirements when required in accordance with the Refunding Plan, it is not anticipated that any
other source of payment will be required.
Sources and Uses of Bond Proceeds
Sources:
Par Amount of Bonds ..............................................
Original Issue Premium (Discount) ...................................
$2,125,000.00
74,287.65
Total ......................................................... $2,199,287.65
Uses:
Escrow Deposit ...................................................
Underwriters' Discount ............................................
Allowance for Costs of ISsuance and Contingency .......................
$2,130,238.03
16,000.00
53,049.62
Total ......................................................... $2,199,287.65
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.
Remedies Upon Default
Under current law, provision is made for contract creditors (includingthe Bondholders) of the Town to enforce
payments upon such contracts, if necessary, through court action, although the present statute limits interest on the
amount adjudged due to creditors to nine per centum per annum from the date due to the date of payment. As a
general rule, property and funds of a mumcipal 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
approprmte 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 anyprovision 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 has jurisdiction over such matters and has enacted amendments to the existing federal bankruptcy statute,
generally to the effect and with the purpose of affording municipal corporations, under certain circumstances, with
easier access to judicially approved adjustment of debts, including judicial control over identifiable and unidentifiable
creditors.
In recent times, certain events and legislation affecting remedies on default have resulted in litigation. While
courts of final jurisdiction have upheld and sustained the rights of bondholders, such courts might hold that future
events, including financial crises as they may occur in the State and in municipalities of the State, require the exercise
by the State of its emergency police powers to assure the continuation of essential services.
No principal or interest payments on Town indebtedness are past due. The Town has never defaulted in the
payment of the principal of and fnterest 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 approximately twelve miles east of the mainland. Fishers Island
is accessible only by water or air, with ferry service operating between the Island and New London, Connecticut.
The Town is primarily a rural resort area with substantial shopping facilities available at Greenport, at various
shopping centers w~thin the Town, and at Riverhead just to the west. Some commercial services are available within
the Town in the hamlets of Southold, Cutchogue and Mattituck.
Agriculture has been a major industry in the Town since its origins. In recent years, farm crops 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 b2/ferry across Long Island Sound for distribution throughout New
England. A number of vineyards have been estabhshed and wine-making is an important industry.. Fishing and fish
processing are now growing industries due to improved transportation facilities. The Town is also a major summer
resort area, utilizing bays, inlets and Long Islandand Block Island Sounds.
The main highways in the Town are New York State Route 25 and the North Road. Rail transportation is
provided by the Long Island Rail Road with stations at Mattituck, Southold and Greenport. Ferry service is also
available between Orient Point, east of Greenport, and New London, Connecticut as well as from Greenport to Shelter
Island.
Electric service is provided by the Long Island Power Authority;gas service is provided by Keyspan Energy
Corporation. Fire protection is the responsibtlity of volunteer fire and fire protection districts. The Town provides
its own police protection. In the Village of Greenport, electric service and fire protection are provided by the Village.
Government
Subject to the provisions of the State Constitution, the Town operates pursuant to the Town Law, the General
MunicipalLaw, the Local Finance Law, other laws generally applicable to the Town, and any special laws specifically
applicable to the Town. Under such laws, there is no authority for the Town to have a charter, but pursuant to the
Town Law and other laws generally applicable to home rule, the Town may from time to time adopt local laws which
do not conflict with existing laws as enacted by the State.
The legislative power of the Town is vested in the Town Board, which consists of five members, elected for
a term of four years, and the Supervisor, who is the chief executive officer of the Town, elected for a term of 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 the State to raise revenues. The school districts use the Town's assessment roll as their
basis for taxation of property located within the Town.
Employees
The Town provides services through approximately 211 full-time and 66 part-time employees, some of whom
are represented by organized labor.
The following table pre.sents the number of employees' represented by organized labor, name of union and
contract expiration dates. ~
Approximate Date Contract
Name of Union Membership Expires
Civil Service Employees Assoc ........................ 169 12-31-10
Police Benevolent Assoc ............................. 50 12-31-09
Year
1970
1980
1990
2000
2007
Sotlrce:
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
Southold County State
..................................... 16,804
..................................... 19,172
..................................... 19,836
..................................... 20,599
..................................... 22,852
1,127,030 18,241,391
1,284,231 17,557,288
1,321,977 17,990,455
1,419,369 18,976,457
1,504,947 19,297,729
U.S. Bureau of the Census, Long Island Power Authority, Ne~v York State Department of Labor.
Median Income of Families
1980 .1990 2000
Town $21,013 $43,082 $61,108
County 24,194 53,247 72,112
State 20,180 39,741 51,691
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
Unemployment statistics are not available for the Town as such. The smallest area for which such statistics
are available (which includes the Town) is the County of Suffolk. The information set tbrth below with respect to
such County is included for information purposes only. It should not be implied from the inclusion of such data in
this Statement that the Town is necessarily representative of the County or vice versa.
Annual Averages:
Suffolk New York
County State
2004 ............................. 4.5% 5.9%
2005 ............................. 4.2 5.0
2006 ............................. 3.9 4.5
2007 ............................. 3.8 4.5
2008 ............................. 5.0 5.4
:Source: Department of Labor, State of New York
6
Selected Listing of Larger Employers
Name
Type
Approx. No.
of Employees
Eastern Long Island Hospital .......................
Plum Island ADC ................................
Mattituck-Cutchogue UFSD .......................
Town of Southold ...............................
Peconic Landing .................................
Southold UFSD
San Simeon by the Sound .........................
Greenport UFSD ................................
Hospital
U.S. Govt. Facility
Public School
Local Government
Life Care Community
Public School
Nursing Home
Public School
35O
310
295
277
206
181
150
110
INDEBTEDNESS OF THE TOWN
Constitutional Requirements
The State Constitution limits the power of the Town (as well as other mtmicipalities and school districts of
the State) to issue obligations and contract indebtedness. Such constitutional limitations include the following, in
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 atd ofanv
of the ~bregoing or any public corporation.' '
The Town may contract indebtedness only for a To~vn purpose and shall pledge its faith and credit for the
payment of principal of and interest thereon.
Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes or
to be paid within three fiscal year periods, indebtedness shall be paid in annual installments commencing no later than
two years after the date such indebtedness shall have been contracted and ending no later than the expiration of the
period of probable usefulness of the object or purpose determined by statute or, in the alternative, the weighted
average period of probable usefulness of the several objects or purposes for which it is contracted. No installment
may be more than 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 Legislature. The Town is required
to provide fin annual appropriation for the payment of interest due duringthe year on its indebtedness and for the
amounts required in such year for the amortization and redemption of itsbond~ and notes.
Debt Limit. Pursuant to the Local Finance [,aw, the Town has the power to contract indebtedness for any
Town purpose authorized by the Legislature of the State provided the aggregate principal amount thereof shall not
exceedseven percentum of the average five-year full valuation of the taxable real estate located in the Town and
subject to certain 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 ~aluation
consists of dividing the total assessed valuation of taxable real estate for a particular assessment roll by the fi,rt,,al
equalization ratio established for such assessment roll by the State Office of Real 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 full valuations of the last five completed assessment rolls and
dividing such sum by five.
Statutory Procedure
In general, the State Legislature has authorized the power and procedure for the Town to borrow and incur
indebtedness by the enactment of the Local Finance Law subject, of course, to the constitutional provisions set forth
above. The power to spend money, however, generally derives from other law, including the Town Law and General
Municipal Law of the State.
Pursuant to the Local Finance Law, the Town authorizes the incurrence o£indebtedness, including bonds and
bond anticipation notes issued in anticipation of such bonds, by 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 Board. If
the resolutton is submitted to the Town voters, only a three-fifths vote of the Town Board is required.
The Local Finance Law also provides a twenty-day statute of limitations after publication of a bond
resolution, which in effect, estops thereafter legal challenges to the validity of obligations authorized by such bond
resolution eXcept for alleged constitutional violations. The Town published the notice of estoppel on February 15,
2009.
Each bond resolution usually authorizes the construction, acquisition or installation of the object or purpose
to be financed, sets forth the plan of financing and specifies the maximum maturity of the bonds subject to the Iegal
(Constitution, Local Finance Law and case law) restrictions relating to the period of probable usefulness with respect
thereto.
Each bond resolution also authorizes the issuance of bond anticipation notes prior to the sale of serial bonds.
Statutory law in New York permits notes to be renewed each year, provided annual pnncipal reductions are made and
provided that such renewals generally do not extend five years beyond the original date of borrowing. However, notes
issued in anticipation of the sale of serial bonds for assessable improvements are not subject to such five year limit
and may be renewed subject to annual principal reductions for the entire period of probable usefulness of the purpose
for which such notes were originally issued. (See "Payment and Maturity" under "Constitutional Requirements." and
"Details of Short-Term Indebtedness Outstanding.")
In general, the Local Finance Law contains similar provisions providing the Town with power to issue general
obligation revenue and tax anticipation notes and general obligation budget and capital notes.
Computation of Debt Limit and Calculation of Net Debt Contracting Margin
(As of April 2, 2009)
Fiscal Year State
Ending Assessed Equalization Full
December 31: Valuation Rate Valuation
2005 ............................... $104,228,885 1.25%
2006 ............................... 105,502,965 1.13
2007 ............................... 106,950,027 1.04
2008 ............................... 108,292,749 0.95
2009 ............................... 108,991,562 1.05
$ 8,338,310,800
9,336,545,575
10,283,656,442
11,399,236,736
10,380,148,761
Total Five Year Full Valuation
Average Five Year Full Valuation .............................................
Debt Limit- 7% of Average Full Valuation ......................................
Inclusions:
Outstanding Bonds:
General Purposes
Sub-Total ...........................................................
Bond Anticipation Notes .....................................................
Total Inclusions ........................................................
Exclusions:
Appro~r, iations .........................................................
Other _xclusions ........................................................
Total Exclusions ........................................................
Total Net Indebtedness ......................................................
Net Debt Contracting Margin After Issuing the Bonds ................... · ..........
Percent of Debt Limit Exhausted ...............................................
................................................ $49,737,898,314
9,947,579,662
696,330,576
36,843,000a
-0-
36,843,000
6.579;100
43.422,100
2,398,300
-0-
2,398,300
41,023,800
$655.306,776
5.89%
a. Includes $22,141,600 issued for the preservation of open space. See "Community Prese~ation Fund" herein.
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:
2004 2005 2006 2007 2008
Debt Outstanding End of Year:
Bonds ..................
Bond Anticipation Notes ...
$6,515,000 $12,299,098 $ 11,349,098 $25,020,000 $32,175,000
.12,625,600 11,720,000 8,244,000 6,224,000 6,579,1 O0
Total Outstanding Debt ........ $19,140,600 $24,019,098 $19,593,098 $,31,244,000 $38,754,100
Details of Short-Term Indebtedness Outstanding
Bond Anticipation Notes
Maturitw Purpose Amount
04-17-09 Various Capital Projects ..................................... $ 799,300~a
09-04-09 Various Capital Projects ..................................... 4,280,000.°
09-04-09 Various Capital Projects ..................................... 299,800.~
06-05-09 Fishers Island Ferry District .................................. 1,200,000°
Total ................................................ $ 6,579,100
a. To be redeemed from the proceeds of the Bonds sold on March 10, 2009, Notes to be sold on April 13, 2009 and available funds.
b. To be funded from the proceeds of bonds, renewal notes and from available funds.
Debt Service Requirements - Outstanding Bonds and Refunding Bonds
Net After
Fiscal Year Less: Debt Issuance of
Ending Outsta~nding Refundin~g Service to be Refunding
December 31: Debt Service Debt Service Sub-Total Refunded Bonds
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
$ 317,520
502,047
443,657
338,870
098,657
044,396
997,185
856,252
849,381
311,308
~;819,787
1136,80o
109,213
855,325
857,975
843,463
792,381
568,863
528,063
501,113
458,207
409,547
$31215
2711388
286 987
272 488
267 812
267 525
2611619
255 150
241275
244 900
117 012
0
0
0
0
0
0
0
0
0
0
0
$3,348,735
3,773,435
3,730,644
3,611,358
3,366,469
3,311,921
3,258,804
3,111,402
3,090,656
3,064,687
2,428,320
2,136,800
2,109,213
1,855,325
1,857,975
1,843,463
1,792,381
1,568,863
1,528,063
1,501,113
1,458,207
1,409,547
$49.
2851
2951
2851
2751
2751
2741
2631
2521
2511
1221
954 $3,298,781
367 3,488,068
810 3,434,834
775 3,325,583
740 3,090,729
456 3,036,465
680 2,984,124
660 2,847,742
640 2,838,016
385 2,813,302
820 2,305,500
0 2,136,800
0 2,109,213
0 1,855,325
0 1,857,975
0 1,843,463
0 1,792,381
0 1,568,863
0 1,528,063
0 1,501,113
0 1,458,207
0 1,409,547
Totals ...... $ 52,640,010 $ 2,517,371 $ 55,157,381 $ 2,633,287 $ 5.~2,524,094
Calculation of Estimated Overlapping and Underlying Indebtedness
Overl_apping
Uriits
County of Suflblk .....................
Village of Greenport ...................
School Districts:
Fishers Island .............
Greenport .................
Mattituck-Cutchogue .......
New Suffolk Common ......
Oyster Ponds ..............
Southold .................
Fire Districts:
Cutchogue .................
East Marion ...............
Fishers Island ..............
Mattituck .................
Orient ....................
Southold ..................
Sourcesi
Applicable Applicable
Dare of Percentage Total Net
Report Applicable Indebtedness Indebtedness
12-11-08 3.71% $41,794,819 $~5,~6>,017
11-24-08 100.00 9,329,200 8,574,200
06-30-08 100.00 355,000 355,000
06-30-08 100.00 0 0
11-14.08 98.49 32,688,831 29,910,280
06-30-06 100.00 0 0
09-01-08 100.00 0 0
12-22-08 100.00 18,410,681 18,410,681
12-31-07 100.00 0 0
12-31-07 100.00 144,000 144,000
12-31-07 100.00 0 0
12-31-07 100.00 1,766,852 1,766,852
12-31-07 100.00 25,000 25,000
12-31-07 100.00 1,400,000 1,400,000
$105,914,383 $ 95,851,030
Annual Financial Reports on file with the Office of the State Comptroller, or more recently published Official
Statements.
Authorized But Unissued Items
The following Bonds are authorized but tmissued:
Date
Authorized Purpose Amount
02-25-03 Mattituck Inlet Shore Erosion Study ................................. $ 82,750
02-27-07 Open Space Preservation: Non-Agricultural Land ......... , ............ 10,000,000
08-28-07 Open Space Preservation: Agricultural Lands .......................... 4,000,000
Total .................................
$14.082,750
Capital Program
The Town annually adopts a three year Capital Improvement Plan. Projects may be funded by State and
Federal aid, reserves, proceeds of obligations, property taxes or a combination thereof. A summary of the capital
Budget for 2009-2011 is set forth below:
Department 2009
General Town ....................................
Highway Dept ....................................
Solid Waste District ...............................
Wastewater Disposal District ........................
Total ...........................................
Sources
Appropriations ...................................
Grants
Town Debt .................................
Total ...........................................
$ 234,400
1,280,000
135,000
750,000
$ 2.399.400
2010 2011
$ 508,123 $179,750
$ 508,123 $179.750
$ 38,400 $ 160,495 $ 39,750
196,000 -
2,165,000 347,628 140.000
$ 2,399,400 $ 508,123 $179.750
10
Community Preservation Fund
In 1998. the voters of the five East End towns (East Hampton. Riverhead, Shelter Island, Southampton, and
Southold) approved a referendum creating the Community Preservation Fund, (the "Fund") which is a conServation
program to preserve open space and farmland in the five towns. The fund is financed by a 2% tax on real estate sales.
This is a one-time tax that the buyer of real estate is required to pay when purchasing a new or used home or vacant
property. In 2006, the voters in all five towns approved a referendum to extend the collection of the tax through 2030.
The Fund facilitates a voluntary, program whereby landowners can sell their land or the development rights
to the land to the respective towns at fair market value. The towns mav issue bonds for purchases to be paid back
through the life of the Fund with the 2% tax revenues. When a town fin~ances an acquisition through the issuance of
bonds, Section 64e of Town Law requires the preparation of a report by or on behalf of the Town Supervisor which
demonstrates how such indebtedness will be repmd by the Fund; including an estimate of projected revenues of the
Fund during the period of indebtedness, an accounting of all other indebtedness incurred against the Fund to be repaid
for the same per~od, and a finding that l~here will be sufficient revenue to repay such indebtedness in its entirety trom
the Fund.
As of the date of this Official Statement, there are $22,141,600 in bonds outstanding, the debt service on
which is expected to be paid by the Fund.
Landfill Closure and Postclosure Care Costs
The Town owns a landfill on a site in the unincorporated area of Cutchogue, commonly known as the
Cutchogue Landfill. The Town ceased accepting waste at its Cutchogue Landfill as of October 8, f993. 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 Town to perform certain
maintenance and monitoring functions at the site for up to thirty years. The Town has and will 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 $26,610 for such costs in 2008 and will continue to pay these costs in the
future.
Actual costs associated with the capping 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 mount of
$2,000,000. The balance was provided through a State subsidized loan received in July, 2004 from the New York
State Environmental Facilities Corporation. Costs associated with postclosure care will be paid from 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 irs 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 31,2007. In addition, the
financial affairs of the Town are subject to periodic compliance review by the Office of the State Comptroller to
ascertain whether the Town has complied w~th 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 t~s 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 Accounts
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 of a commercial nature; and, (3) fiduciary funds that
account for assets held m 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.
11
The Town presently maintains the following governmental funds: General Fund, Highway Fund and Special
Districts Funds, and the Capital Projects Fund. Fiduciary funds consist of a Trust and Agency Fund. There are no
proprietary funds. Account groups are maintained for £~xed assets and long-term debt.
Basis of Accounting
The Town's governmental funds are accounted for on a modified accrual basis of accounting. Under the
modified accrual basis, revenues are recognized when they become susceptible to accrual - that is, when they become
"measurable" and "available" to finance expenditures to the current period. Revenues are susceptible to accrual
include real property taxes, intergovernmental revenues (State and Federal aid) and operating transfers.
Expenditures are generally recognized under the modit~ ed accrual basis of accounting, that is when the related
fired liability is incurred. An exception to this general rule is unmatured interest on general long-term debt which is
recognized when due.
Investment Policy
Pursuant to State law, including Sections 10 and 11 of the General Municipal Law (the "GML"), the Town
is generally permitted to deposit moneys in banks or trust companies 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.
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 by the United States 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 municipality,
school district, or district corporation, other than those notes issued by the Town, itself; (5) certificates of participation
issued in connection with installment purchase agreements entered into by political subdivisions of the State 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 of obhgations purchased with the proceeds of bonds or notes, shall'be payable Or redeemable in any event,
at the option of the owner, Within two years of the date of purchase. Unless registered Or inscribed in the name of the
Town, such instruments and investments must be purchaSed through, delivered to and held in custody of a 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 policv and such policy conforms with applicable laws of the State
governing the deposit and investment of public money~. All deposits and investments of the Town are made in
accordance with such policy.
Budgetary Procedures
The head of each administrative unit of the Town is required to file detailed estimates of revenues (other than
real property, taxes) and expenditures for the next fiscal year with the budget officer (Supervisor) on or before August
15th. Estimates for each fire district situated within the Town must also be filed with the budget officer by this c~ate.
After reviewing these estimates, the budget officer~prepares a tentative budget which includes his recommendations.
A budget message explaining the main features otthe budget is also Prepared at this time. The tentative budget is
filed with the ToWn Clerk not later than the 30th of September. Subsequently, the Town Clerk presents the tentative
budget to the Town Board at the regular or special hearing which must be held on or before October 5th. The Town
Board reviews the tentative budget and makes such changes as it deems necessary and that are not inconsistent with
the provisions of the law. Following this review process, the tentative budget and such modifications, if any, as
approved by the Board become the preliminary budget. Apublic 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 th~ Thursday
immediately following the general election. At such hearing, any ~erson may express his opinion concerning the
preliminary budget; however, there is no requirement orprowsion that the preliminary budget or any portion thereof
t>e voted on by members of the public. After the public hearing, the Town Board ma~ further change and revise the
preliminary budget. The Town Board, by resolution, adopts the preliminary budget a~ submitted or amended no later
than November 20th, at which time, the preliminary' budget becomes the annual budget 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 2008 and 2009 fiscal years may be found in Appendix A.
12
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 Ibr the Town's accounting and financial reporting activities. In addition, the
Supervisor is 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
resolution, all material financial transactions such as operating and capital budgets and'bonded debt.
Town finances are operatedprimarily through the General and Special Revenue Funds. The General Fund
receives most of its revenue from realproperty tax and State aid. Current operating expenditures are paid from these
funds subject to available appropriatmns. The Town also has refuse, sewer and wastewater districts, which are
accounted for 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 in special Capital projects funds. The Town observes a calendar year (January
1 through December 31) for operating and reporting purposes.
Revenues
The Town receives most of its revenues from a real property tax on all taxable property situated within the
Town and from State Aid. A summary of such revenues for the fixSe most recently completed fiscal years may be
found in Appendix A.
Real Property Taxes
See "Real Property Tax Information", herein.
State Aid
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 in any form
Whatsoever and, in any event, if appropriated and apportioned to the Town, payment can be made only if such ~nonies
are available therefore. The State ~s not constitutionally obliged to maintain or continue such aid. See Appendix A.
Expenditures
The major categories of expenditure for the Town are General Government Support, Public Safety,
Transportation, Economic Assistance and Opportunity, Home and Community Services, Cu~l~ure and Recreation,
Employee Benefits and Debt Service. A summary of the expenditures for the five most recently completed fiscal
years may be found in AppendLx 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 St,a? and Local Police and Fire Retirement System ("PFRS"). (Both
Systems are referred to together hereinafter as the 'Retirement Systems" where appropriate.) The Retirement Systems
a~e c9st-sharing multiple public employer retirement systems. The obligation of employers and employees to
contribute and the benefits to employees are governed by the New York State Retirement System and Social 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 sal_ary, vesting of retirement benefits, death and disability benefits and
optional methods of benefit payments. All-benefits generally vest after five years of credited service. The Retirement
System Law generally provides that all participating employers in each retirement system are jointly and severally
liable for any unfunded investments. Such amounts are collected through annual billings to all_participatin~
employers. Generally, all employees, except certain part-time employees, participate in the Retirement Systems. The
Retirement Systems are non-contributory with respect to members hired prior to July 27, 1976. All employees who
became members on or after July 27, 1976 must contribute 3% of their gross annuaf salary towards the cost of their
retirement program. Chapter 86'of the Laws of 2000 eliminated the 3% t'or Tier 3 and Tier 4 members with 10 years
of service credit.
A pension reform bill was signed by the Governor into Law' as Chapter 49 of the Laws of 2003 which changed
the cycle of billing to match budget cycles of the Town. Under the previous method, the Town was unsure of how
mucfi it would have to pay to the sy~stem until after its budget was implemented. Under the new system the
contribution for a given fiscal year w~ll be based on the value of the pension fund on the prior April 1 instead of the
following April 1 so that the TSwn will be able to more accurately inc~lude the cost of the contribution into its budget.
Chapter 49 requires the Town to make a minimum contribution of 4.5% of payroll every year, including years in
which the investment performance of the fund would make a lower contribufio[a possible.
13
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 gives the employer the option to move the
issue bonds to finance their 2005-2006 and 2006-2007 fi~cal year contributions in excess of 9.5% and 10.5%,
respectively. This amortization may be made with the Retirement System or the Town could issue a maximum of l 0-
year general obligation bonds, the l~nterest on which would be set at prevailing bond market rates on the date of sale
and would be taxable for federal income tax purposes.
The Legislature enacted new pension provisions (Chapter 260, Laws of 2004) that enabled local governments
to amortize a portion of their bill. The law allows local governments to amortize required contributions in excess of
10.5 percent for 2006, 9.5 percent for 2005 and 7 percent for 2004 of estimated salaries over a 10-year period.
Employers are required to pay 5 percent interest on any amortized amounts.
Contributions to the Retirement Systems
Fiscal Year Amount
Ending of
December 31: Contribution
2004 ....................................... $1,670,102
2005 ....................................... 2,085,137
2006 ...................................... 1,837,992
2007 ....................................... 1,947,914
2008 ....................................... t,838,376
2009 (Budget) ................................ 1,875,500
Other Post Employment Benefits
It should also be noted that the Town provides post-retirement healthcare benefits to various categories of
former emplo,vees. These costs may be expected to rise substantially in the future. There is now an accounting rule
that will reqmre governmental ennties, such as the Town, to account for post-retirement healthcare benefits as it
accounts for vested pensi,o,n benefits. GASB Statement No. 45 CGASB 45") of the Governmental Accounting
Standards Board ("GASB '), described below, requires such accounting. Although GASB 45 encourages earlier
adoption, implementation is required by the following dates, based on the size of government measured by annual
revenue:
Annual Revenue
Greater than $100 million
Between $10 million and $100 million
Less than $10 million
Effective for Fiscal Year Ending After:
December 15, 2006
December 15, 2007
December 15, 2008
School Districts and Boards of Cool?erative Education Services, unlike other municipal units of government
in the State, have been prohibited from reducing retiree health benefits or increasing health care contributions received
or paid by retirees below the level of benefits or contributions afforded to or required from active employees since
the implementation of Chapter 729 of the Laws of 1994. This protection from un, ilateral reduction of benefits has
been extended annually and continued through May 15, 2009 pursuant to Chapter 4.~ of the Laws of 2008. Legislative
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 mumcipal units in the State do presently receive
such benefits.
GASB 45 and OPEB. OPEB refers to "other post-employment benefits," meaning other thanpension
benefits, disability benefits and OPEB consist primarily of health care benefits, and may include other benefits such
as disability benefits and life insurance. Until now, these benefits have generally been administered on a pay-as-you-
go basis and have not been reported as a liability on governmental financial statements.
GASB 45 will require municipalities and school districts to account for OPEB liabilities much like they
already account for pension liabilities, generally adopting the actuarial methodologies used for pensions, with
adjustments for the &fferent characteristics of OPEB and the fact that most municipalities and school districts have
not set aside any funds against this liability. Unlike GASB 27, which covers accounting for pensions, GASB 45 does
not require municipalities or school districts to report a net OPEB obligation at the start.
Under GASB 45, based on actuarial valuation, an annual required contribution ("ARC") will be determined
for each municipality or school district. The ARC is the sum of(a) the normal cost for the year (the present value of
future benefits being earned by current employees) plus (b) amortization of the unfunded accrued liability (benefits
14
already earned by current and former employees but not yet provided for), using an amortization period of not more
than 30 years. Ifa municipaliW or school district contributes an amount less than the ARC, a net OPEB obligation
will result, which is required t6 be recorded as a liability on its financial statements.
The actuarial study has been completed by an independent actuarial firm. The Town's ARC is approximatelv
$4.5 million and its unfunded actuarial accrued liability is avproximately $43 million. GASB 45 does not require that
thc unfunded liability actually be amortized nor that it be affvance funded, only that the municipali ,ty or school district
account for its unfunded accrued liability and compliance in meeting its AP~C.
Actuarial Valuation will be required every 2 years tbr OPEB plans with more than 200 members, every 3
years if there are less than 200 members.
REAL PROPERTY TAX INFORMATION
Real Property Taxes
The Town derives a significant portion of its annual revenue through a direct real property tax.
The following table presents the total tax levy, by purpose, with adjustments and collection performance for
each of the last five fiscal years.
Tax Le~7 and Collection Record
2005
Total Tax Levy ................ $89,495,573
Amount Collected ............. 83,356,976
Returned to County
Amount .................... 2,138,597
Percentage .................. 2.39%
Uncollected at End of Year
of Levy. ................... None
a. As of Jmmary 23, 2009.
Fiscal Year Ending December 3 l:
2006 2007 2008 2009
$89,934,663 $97,216.091 $103,216,661 $108.610,530
86,628,595 94,288~000 100}030,520 58~000,009a
3,106,068 2,928,091 3,186,141 NAa
3.45% 3.01% 3.08% NAa
None None None NA
Tax Collection Procedure
Property taxes for the Town are collected by the Town tax receiver. Such taxes are due and payable in equal
installments on December 1 and May 10, but may' be paid without penalty by January 10 and May 31, respectively.
The penalty added to delinquent taxes is one-twelfth the rate of interest determined by the State Commissioner of
Taxation and Finance. The rate is determined each year by July 15 based On the one-year constant maturity yield
index for United States Treasury securities for the quarter-year ending on the immediately preceding June 30. The
rate is effective for a twelve month period commencing August 1 each year and in no event will be less than ten per
centum per annum.
The Town receives its full levy before the end of its fiscal year. Uncollected amounts are not segregated by
the Town tax receiver, and any deficiency in tax collection is the County's liability.
Tax Rates
(Per $100 Assessed Valuation)
Fiscal Year Ending December 31:
2005 2006 2007 2008 2009
General - Townwide ................ $139.73 $140.37 $151.02 $160.22 $184.44
General - Outside Village ............ 5.43 4.90 3.99 7.84 6.87
Highway ...................... 38.37 40.68 39.63 41.74 39.75
15
Large Taxable Properties
2009 Assessment Rolla
mflnle
Peconic Landing at Southold .......................
LILCO, LIPA, Marketspan, Keyspan .................
Village of Greenport-Power Plant .: ..................
Fishers Island Dev. Corp ...........................
Robins Island Holding LLC .........................
Alan Cardinale ..................................
North Fork Bank .................................
Damimms, Herodotus ..............................
New York Telephone .............................
Levin Family Limited Partnership ....................
Anderson, Bradley & Francesca .....................
Norris, Susan ....................................
Laurel Links & Country Club .......................
Kimogenor Pt Co .................................
Driftwood Cove
Type
Commercial
UtiliD'
Utility
Residential Development
Private Lands
Shopping Center
Bank Building
Vineyard
Utility
Motel& Restaurant
Farmland & Private Lands
Various Properties
Country Club
Co-Op
Co-Op
tr Assessment Roll established in 2008 for levy and collection of taxes during 2009 Fiscal Year.
b. Represents approximately 5.69% of the total taxable assessed valuation of the Town for 2009.
Assessed
Valuation
1,707,704
1,515,689
585,000
460,100
330,500
282,600
234,131
234,000
187,936
148,950
121,400
t 11,800
96,300
94,600
90,000
$6,200.710b
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 not likely to have a material
adverse effect on the Town.
There are certain matters worthy of special mention:
Stanton, at al. v. Town of Southotd - This is an action in inverse condemnation and nuisance by forty-two
property owners, alleging property damage in the form of erosion caused by a Town-owned jetty. The Town is
engaged in studies to determtne the issues surrounding the alleged erosion, its causes, and possible solutions.
Although this case was first filed in 1997, discovery has not been completed. The issues in this case are complex and
will require extensive expert testimony. The nature and extent of damages, if any, are tmknown at thtspoint.
Insurance coverage may be available for potential liability for alleged compensatory- damages. The Town has denied
any wrongdoing and intends vigorously to defend any further prosecution of this action.
Quad Enterprises. et al. v. Town of Southold - This action arises from the Town Board of the Town of
Southold's alleged refusal to approve a change of zone application filed byplaintiffs, which sought substantially to
increase the zoning density ora parcel oflandowned by a developer plaintiff. Plaintiffs assert claims under the Pair
Housing Act, Americans with Disabilities Act, State and To,~,~n Law, al!eging housing discrimilmtion against senior,
handicapped and disabled 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 action). Insurance coverage may be available for potential liability for alleged
compensatory damages. Both sides have filed summary judgment off liability issues only. The Town has denied all
wrongdoing and intends vigorously to contest these claims.
East End Resources, LLC v. Town of Southold Plannin~ Board. et al - This action arises from a residential
site plan application pending before the Town of Southold Planning Board, seeking the approval of a multi-unit
planned retirement communitv (the "Application"). Plaintiff/Petitioner alleges that the Town, and its various
agencies, have systematically' delayed and sought to defeat the approval of the Application. In this action,
Plaintiff/Petitioner asserts eight claims, seekine declaratory relief compelling the approval of the Application, as well
as compensatory relief in the mnount of $20 rr~llion as a result of alleged federal and state constitutional violations.
The Town intends vigorously to defend this action and to contest all asserted claims.
Notices of Claim - One possible noteworthy Notice of Claim has been filed against the Town relating to
police matters. In the Notice of Claim, the plaintiff demands $5 million in damages for physical, emotional and civil
rights injuries related to an alleged incident, believed to be an arrest by Town police officers "on or about February,
21, 2007 andprior arrests." Due to the vague nature of the allegations, the Town is not aware of any details of this
purported claim, and intends vigorously to contest it both prior to and after the institution ora lawsuit. As of the date
of this Official Statement, no lawsuit has been served upon the Town.
16
BONDHOLDER RISKS AND MARKET FACTORS AFFECTING FINANCINGS
OF THE STATE AND MUNICIPALITIES OF THE STATE
There are certain potential risks associated with an investment in the Bonds, and investors should be
thoroughly fm'niliar with th~s Official Statement, including its appendices, in order to make an informed investment
decision. Investors should consider, in particular, the following factors:
The Town's credit rating could be affected by circumstances beyond the Town's control. Economic conditions
such as the rate of unemployment and inflation, termination of commercial operations by corporate taxpayers aa~d
employers, as well as natural catastrophes, could adversely affect the assessed valuation of Town property and its
ability to maintain fund balances and other statistical indices commensurate with its current credit rating.
Accordingly, a decline in the Town's credit rating could adversely affect the market value of the Bonds.
In addition, if and when a holder of any of the Bonds should elect to sell a Bond prior to its maturity, there
can be no assurance that a market shall have been established, maintained and be in existence for the purchase and
sale of any Bonds. The price or principal value of the Bonds is dependent on the prevailing level of interest rates.
If interest rates should increase, the price of a bond or note may decline causing the bond or noteholder to potentially
incur a capital loss if such bond or note is sold prior to its maturity.
The financial condition of the Town as well as the market for the Bonds could be affected by a variety of
factors, some of which are beyond the Town's control. There can be no assurance that adverse events in the State,
including, for example, the seeking by a municipality of remedies pursuant to the Federal Ban~.u~ptcy Act or
otherwise, will not occur which might affect the market price of and the market for the Bonds. Ifa signihcant dethult
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 within the State, both the ability of the Town
to arrange for additional borrowings and the market for arid market value of outstanding debt obligations, including
the Bonds, could be adversely affected.
Future amendments to applicable statutes affecting the treatment of interest paid on municipal bonds,
including the Bonds, for income taxation purposes could have an adverse effect on the market value of the Bonds (see
"Tax Matters" herein).
TAX MATTERS
Opinion of Bond Counsel
In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel to the Town, under existing statutes and
court decisions and assuming continuing compliance with certain tax certifications described herein, (i) interest on
the Bonds is excluded from gross income,for Federal income tax purposes pursuant to Section 103 of the Internal
Revenue Code of 1986, as amended (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 for purposes of calculating the alte _rn,a,,tive
minimum [,,ax imposed on such corporations. The Arbitrage and Use of Proceeds Certificate of the Town (the Tax
Certificate ), which will be delivered concurrently with the delivery of the Bonds will contain provisions and
procedures relating to compliance with applicable requirements of the Code. In rendering its opinion, Bond Counsel
has relied on certain representations, certifications of fact, and statements of reasonable expectations made bv the
Town in connection with the Bonds, ~a~d Bond Counsel has assmned compliance by the Town with certain provi;ions
and procedures set forth in the 'Fax 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. The provisions of
the American Recovery and Reinvestment Act of 2009 relating to the treatment of interest on certain tax-exempt
bonds do not apply to the Bonds.
In addition, in the opinion of Bond Counsel to the Town, under existing statutes, interest on the Bonds is
exempt from personal incom& taxes of New York State and its political subdivisions, including The City of New York.
Bond Counsel to the Town expresses no opinion regarding any other Federal or state tax consequences with
respect to the Bonds. Bond Counsel renders its opinion under existing statutes and court decisions as of the issue date,
andassumes no obligation to update its opinion after the issue date to reflect any future action, fact or circumstance,
or change in law or interpretation, or otherwise. Bond CoUnsel expresses 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 o£interest on
the Bonds.
17
Certain Ongoing Federal Tax Requirements and Certifications
The Code establishes certain significant ongoing requirements that must be met subsequent to the issuance
and deliveu of the Bonds in order that interest on such Bonds be and remain excluded from gross income under
Section 103 of the Code. These requirements include, but are not limited to, requirements relating to use and
expenditure of gross proceeds of the Bonds, yield and other restrictions on investments of grossproceeds, and the
arbitrage rebate reqmrement that certain excess earnings on gross proceeds be rebated to the Federal govermnent.
Nonco.m. pliance wiih such requirements ma,/cause interest on the Bonds to become included in gross income tbr
Federal income tax purposes retroactive to {heir issue date, irrespective of the date on which such noncompliance
occurs or is discovered. The Town, in executing the Tax Certificate, will certify 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 the exclusion of interest on the Bonds from gross income under Section 103 of the
Code.
Certain Collateral Federal Tax Consequences
The following is a brief discussion 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 relevant to a particular owner of a Bond:
Prospective investors, particularly those who may be subject to special rules, are advised to consult their own tax
advisors regarding the Federal tax consequences of owning and d~sposing of the Bonds.
Prospective owners of the Bonds should be aware that the ownership of such obligations may result in
collateral Federal income tax consequences to various categories of persons, such as corporations (including S
co.rporations and foreign corporationS), financial institutions, property and caSualty and life insurance compames,
individual recipients of Social Security and railroad retirement benefits, individuals otherwise eligible for the earned
income tax credit, and taxpayers deemed to have incurred or continued indebtedness to purchase or carry obligations
the interest on which is excluded from gross income for Federal income tax purposes. Interest on the Bonds may be
taken into account in determining the tax liability of foreign corporations subject to the branch profits tax imposed
by Section 884 of the Code.
Original Issue Discount
"Original issue discount" ("OID") is the excess of the sum of all amounts payable at the stated maturity., of
a Bond (excluding certain "qualified stated interest" that is unconditionally pavable at least annually at prescribed
rates) over the issue price of that maturity. In general, the "issue price" ofa m~turitv means the first price at which
a substantial amount of the Bonds of that maturity was sold (excluding sales to b~nd houses, brokers, or similar
persons acting in the capacity as underwriters, placement agents, or wholesalers). In general, the issue price for each
maturity of the Bonds ~s expected to be the initialpublic offering price set tbrth in this Official Statement. Bond
Counsel further is of the opinion that, for any Bondhaving OD (a "Discount Bond"), OID that has accrued and is
properly allocable to the owners of the Discount Bond under Section 1288 of the Code is excludable from gross
income for Federal income tax purposes to the same extent as other interest on the Bonds.
In general, under Section 1288 of the Code, OlD on a Discount Bond accrues under a constant yield method,
based on periodic compounding of interest over prescribed accrual periods using a compotmding rate determined by
reference to the yield on that Discount Bond. An owner' s adjusted basis in a Discount Bond is increased by accrued
OID for purposes of determining gain or loss on sale, exchange, or other disposition of such Discount Bond. Accrued
OID may be taken into account as an increase in the amount of tax-exempt income received or deemed to have been
received for purposes of determining various other tax consequences of owning a Discount Bond even though there
will not be a corresponding cash payment.
Owners of Discount Bonds should consult their own tax advisors with respect to the treatment of original
issue discount for Federal income tax purposes, including various special rules relating thereto, and the state and local
tax consequences of acquiring, holding, and disposing of Discount Bonds.
Bond Premium
In general, if an owner acquires a Bond for a purchase price (excluding accrued interest) or otherwise ar a tax
basis that reflects a premium over the sum of all amounts payable on the Bond after the acquisition date (excluding
certain "qualified staled interest" that is unc,o, nditionally pay,a,,ble at least annually at prescribed rates), that premium
constitutes "bond premium" on that Bond (a 'Premium Bond ). In general, under Section 171 of the Code, an owner
of a Premium Bond must amortize the bond premium over the remaining term of the Premium Bond, based on the
owner' s yield over the remaining term of the Premium Bond, determined based on constant yield principles (in certain
cases involving a Premium Bond callable prior to its 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 Premium Bond).
An owner of a Premium Bond must amortize the bond premium by offsetting the qualified stated interest allocable
to each interest accrual period under the owner's regular method of accounting against the bond premium allocable
to that period. In the case of a tax-exempt Premium Bond, if the bond premium allocable to an accrual period exceeds
the qualified stated interest allocable to that accrual period, the excess is a nondeductible loss. Under certain
circumstances, the owner of a Premium Bond may realize a taxable gain upon disposition of the Premium Bond even
18
though it is sold or redeemed for an amount less than or equal to the owner's original acquisition cost. Owners of any
Premium Bonds should consult their own tax advisors regarding the treatment of bond premium for Federal income
tax purposes, including various special rules relating thereto, andstate and local tax consequences, in connection with
the acquisition, ownership, amortization of bond premium o~'~, sale, exchange, or other disposition of Premium Bonds.
Information Reporting and Backup Withholding
Information reporting requirements apply to interest on tax-exempt obligations, including the Bonds. In
,g, eneral, such requirements are satisfied if the interest recipient co,,n}pletes, and provides the payor with, a Form W-9,
'Request for Taxpayer Identification Number and Certification, or unless the recipient is one of a limited class of
exempt recipients, including corporations. A recip, ient not otherwise exempt from information reporting who fails
to satisfy the information reporting requirements will be subject to "backup withholding," which means that the payor
is required to deduct and withhold a tax from the interest payment, calculated in the manner set forth in the Code.
For the tbregoing purpose, a "payor" generally refers to the person or entity from whom a recipient receives its
payments of interest or who collects such payments on behalf of the recipient.
If an owner purchasing a Bo.nd through a brokerage account has executed a Form W-9 in connection with the
establishment of such account, as generally 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 Feder~
income tax purposes. Any amounts withheld pursuant to backup withholding ~vould be allowed as a refund or a credit
against the owner's Federal income tax once the required information is furnished to the Internal Revenue 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 consult their own tax advisors regarding the foregoing matters.
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 to the Town. Certain legal matters will be
passed on for the Town by its Assistant Town Attorney.
DISCLOSURE UNDERTAKING
This Official Statement is in a form "deemed final" by the Town for the purposes of Securities m~d Exchange
Commission Rule 15c2-12. At the time of the delivery of the Bonds, the Town will provide an executed copy of tts
"Undertaking to Provide Continuing Disclosure" (the "Undertaking"). Said Undertaking will constitute a written
agreement or contract of the Town for the benefit of holders of and owners of beneficial interests in the Bonds, to
provide, or cause to be provided:
(1)
during any succeeding fiscal year of the Town in which the ,B,~nds are outstanding, to (a) each nationally
recognized municipal securities information repository ("NRMSIR") and (b) the New York State Information
Depositorv, if created, ("SID"), (i) certain annual financial information, in a form generally consistent with
the inforrrlation contained or cross-referenced in this Official Statement un,d,.er the headings: "The Town",
"Economic and Demographic Information","Indebtedness of the Town", 'Finances of the Town", "Real
Property Tax lnibrmation", and "Litigation"; and in Appendix A, on orprior to. the 180th day following thc
end of ~ach fiscal year, including (ii) the audited financial statement, if any, for the preceeding fiscal year
of the Town, unless such audited financial statement, if any, shall not then be available in which case the
unaudited financial statement shall be provided and an audited financial statement shall be delivered to each
NRMSIR and to the SID within 30 days after it becomes available and in no event later than 360 days after
the end of each fiscal year;
(2)
to (a) each NRMSIR, or to the Municipal Securities Rulemaking Board ("MSRB"), and to (b) the SID, timely
notice of the occurrence of any of the following events with respect to the Bonds, if material:
(i) principal and interest payment delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws
on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements
reflecting financial difficulties; (v) substitution of credit or liquidity providers, of 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) defeasances; (x) release, substitution, or sale of property securing
repayment of the Bonds; and (xi) rating changes.
19
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 is 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, in a timely manner, notice of a failure to provide
the annual financial information by the date specified.
The Town's Undertaking shall remain in full force and effect until 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 compel specffie performance of the undertakings of the Town, and
no person or entity, including a holder of the Bonds, shallbe entitled to recover monetary damages thereunder under
any circumstances. Any failure by the Town to comply with the Undertaking will not constitute a default with respect
to the Bonds.
The Town reserves the right to amend or modify the Undertaking under certain circumstances set forth
therein provided that any such amendment or modification will be done in a manner consistent with Rule 15c2-12
as then ~n effect.
The Town is in compliance with all previous undertakings made pursuant to Rule 15c2-12.
VERIFICATION OF MATHEMATICAL COMPUTATIONS
The accuracy of the mathematical computations (a) regarding the adequacy of the maturing principal of and
interest earned on the Government Obligations together with the uninvested cash, to pay, when due, the principal of
and interest on and redemption premium, if any, with regard to the Refunded Bonds on the applicable payment dates
and (b) relating to the determination by Bond Counsel of compliance with the regulations and rulings promulgated
under Section 148 of the Code, as amended, will be verified by Causey Demgen & Moore Inc. Such verification of
the accuracy of the mathematical computations will be based, in part, upon factual information supplied by the
District and the Underwriter (as defined below).
UNDERWRITING
Roosevelt & Cross, Inc. (the "Underwriter'") has agreed, subject to certain conditions, to purchase the Bonds
from the District. The Underwriter' s obligations are subj eot to certai{~ conditions precedent, and the Underwriter will
be obligated t° Purchase all the Bonds if any of the Bonds are delivered at a purchase price of$2,183,287.65 which
represents the aggregate par amount of the Bonds, plus an original premium of $74,287,65 less an underwriting
discount of $16,000.00. The Bonds may be offered and sold to certmn dealers (including dealers depositing such
Bonds into unit investment trusts) at prices lower than the public offering prices as set forth on the cover page hereof.
The initial public offering prices may be changed from time to time by the Underwriter.
BOND RATING
Moody's Investors Services has assigned a rating of"Aa3" to the Bonds. Such rating reflects only the view
of such rating agency, and any desired explanation of the significance of such rating should be obtained from such
rating agency. Generally, a rating agency bases its ratings on the information and materials furnished to it and on
investigation, studies and assumptions by the rating agency. There is no assurance that aparticular rating will apPly
for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment of-the agency
originally establishing the rating, circumstances so warrant. Any downward revision or withdrawal of such ratings
could have an adverse affect on the market price of the Bonds or the availability of a secondary market for such
Bonds. Such ratings should not be taken as a recommendation to buy or hold. the Bonds.
FINANCIAL ADVISOR
Munistat Services, Inc. has assisted the District as financial advisor in certain matters with respect to the
preparation of this Official Statement.
20
ADDITIONAL INFORMATION
Additional information may be obtained upon request from the office of the Town Comptroller, John A.
Cushman II, Town of Sou, thold, Town Hall, P.O. Box 1179, Southold, New York 11971, telephone number 631/765-
4333, email:john.cushman~town.southold.ny.us or from the office of Munistat Services, Inc., 12 Roosevelt Avenue,
Port Jefferson Station, New York 11776, telephone number 631/331-8888 and website: http://www.munistat.com.
Any statements in this Official Statement involving matters of opinion or estimates, whether or not expressly
so stated, are intended as such and not as representations of fact. 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 SOUTHOLD, NEW YORK
April 7, 2009
By: s/s
SCOTT A. RUSSELL
Town Supervisor and Chief Fiscal Officer
21
APPENDIX A
FINANCIAL INFORMATION
Balance Sheet
General Fund
ASSETS
Cash and Investments
Accounts Receivable
Due From Other Funds
Due From Trust Funds
State and Federal Aid Receivables
Duc From Other Governments
Supply Inventory
Prepaid Expenses
Total Assets
2005
$ 9,292,437
24,533
176,390
68
81,849
1,867,136
1,204
498,344
$ 11,941,961
Fiscal Year Ending December 31:
2006
8,339,472
22,346
190,208
110,153
2,075,955
2,099
426,200
$ 11,166,433
2007
21,437,689
17,263
74,500
62,377
826,834
t,275
460,951
22,880,889
LIABILITIES AND FUND EQUITY
Accounts Payable
Due to Other Funds
Due to Other Governments
Due to Trust Funds
Deferred Revenues
627,049
1,888,241
393,570
7,044
3,018,595
$ 701,018
1,205,516
243,292
t2,601
3,619,307
830,531
2,305,222
9,569,319
25,484
5,066,541
Total Liabilities 5,934,499 5,781,734 17,797,097
13,284
513,329
2,099
426,200
2,185,000
2,244,787
Fund Balances - Reserved:
Encumbrances 4,009
Insurance claims 1,105,879
Supply Inventory 1,204
Prepaid Expenses 498,344
Fund Balances - Unreserved:
Designated - Ensuing Year's Budget 2,657,200
Undesignated 1,740,826
193,041
588,614
1,275
460,951
1,816,000
2,023,911
Total Fund Equity 6,007,462 5,384~699 5,083,792
$ 11,166,433
Total Liabilities and Fund Equity $ 11,941,961
Sources: Audited Financial Reports of the Town (2005 through 2007)
Table itself NOT audited.
22,880,889
A-1
Statement of Revenues, Expenditures and Changes in Fund Balance
General Fund Town Wide
Fiscal Year Ending December 3 I:
2003 2004 2005 2006 2007
Revenues:
Real Property Taxes $ 13,247,572 $ 13,962,268 $ 14,608,674 $ 14,872,736 $ 16,205,911
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 315,289 344,217 345 356 477,849 411,790
Intergovernmental Charges 202,917 296,050 252,558 316,049 329,202
Usc of Money & Property 201,702 254,142 489,796 684,166 764,912
Licenses & Permits 188,480 214,46l 249,178 258,794 253,494
Fines & Forfeitures 107,084 107,315 140,192 171,763 155,477
Sale of Property & Comp. for 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 Aid 2,225,401 2,974,027 2,637,870 2,725,177 2,412,869
Federal Aid 146,574 160,337 174,348 228,491 145,568
17,277,604 19,326,712 19,908,009 20,678,820 21,789,930
Expenditures:
General Government Support
Public Safety
Public Health
Transportation
Economic Assistance & Opportunity
Culture & Recreation
Itome & Community Services
Employee Benefits
Debt Service Principal & Interest
3,751,469 4,395,571 4,641,568 5,177,745 5,234,683
6,033,207 6,254,365 7,177,145 7,371,280 7,816,643
32,988 33,288 33,288 32,988 35,238
398,358 401,866 446,877 452,050 550,906
833,501 931,566 901,139 949,740 1,064,905
317,769 304,071 354,768 384,983 345,540
228,578 341,764 315,273 530,270 417,654
2,617,783 4,868,116 5,857,963 5,811,868 6,172,279
1,007,318 2,104,202 1,560,055 1,313,234 787,775
Tolal Expenditures
15,220,971 19,634,809 21,288,076 22,024,158 22,425,623
Excess (Deficiency) of Revenues Over
Expenditures
2,056,633 (308,097) (1,380,067) (1,345,338) (635,693)
Operating Transfers In
Operating Transfers Out
1,392,850 2,932,574 2,642,859 2,253,944 2,738,349
(1,910,781) (1,304,195) (1,895,023) (1,531,369) (2,403,563)
Total Other Financing Sources (Uses)
(517,931) 1,628,379 747,836 722,575 334,786
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses
1,538,702 1,320,282 (632,231) (622,763) (300,907)
Fund Balance Beginning of Year
3,780,709 5,319,411 6,639,693 6,007,462 5,384,699
Fund Balance End of Year
$ 5,319,411 $ 6,639,693 $ 6,007,462 $ 5,384,699 $ 5,083,792
Sources: Audited Financial Reports of the Town (2003-2007)
Table itself NOT audited.
A-2
Statement of Revenues, Expenditures and Fund Balance
Highway Fund
Fiscal Year Ended December 31:
2003 2004 2005 2006 2007
Revenues:
Real Property Taxes $ 3,513,902 $ 3,520,332 $ 3,805,032 $ 4,095,347 $ 4,027,695
Other Real Property Tax Items 6,428 3,679 9,046 12,689 12,722
Intergovernmental Charges 15,573
Use of Money & Property 18,520 23,884 77,817 140,578 142,501
Licenses & Permits 8,231 4,937 11,126 9,484 10,362
Sale of Property & Comp. for Loss 4,033 2,960 2,796 7,521 29,213
Miscellaneous Local Sources 16 155,054
State Aid 458,686 228,337 188,147 276,337 296,263
Federal Aid 67,699
4,093,072 3,784,145 4,249,018 4,54t,956 4,518,756
Expenditures:
Transportation
Employee Benefits
Debt Service
2,733,518 2,638,121 2,913,768 3,028,076 3,437,186
976,406 415,102 500,343 515,106 510,185
15,128 22,219 178,371 283,652 17,001
Total Expenditures
3,725,052 3,075,442 3,592,482 3,826,834 3,964,372
Excess (Deficiency) of Revenues Over
Expenditures
Operating Transfers In
Operating Transfers Out
368,020 708,703 656,536 715,122 554,384
2ll
(60,000) (690,390) (520,085) (452,648) (794,696)
(60,000) (690,390) (520,085) (452,648) (794,485)
308,020 18,313 136,451 262,474 (240,101)
594,064 902,084 920,397 1,056,848 1,319,322
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
$ 902,084 $ 920,397 $ 1,056,848 $ 1,319,322 $
1,079,221
Sources: Audited Financial Reports of the Town (2003-2007)
'Fable itself NOT audited.
A-3
Statement of Revenues, Expenditures and Changes in Fund Balance
Non-Major Governmental Funds (1)
Fiscal Year Ending December 31:
2003 2004 2005 2006 2007.
Revenues:
Real Property Taxes $ 2,197,525 $ 2,506,945 $ 2,381,335 $ 2,741,362 $ 2,831,897
Other Real Property Tax Items 874 3,105 2,516 4,489 4,581
Non-Property Tax Items 117,449 336,139 213,786 229,346 234,09 l
Departmental Income 2,339,227 2,517,584 2,504,880 2,275,935 2,147,502
Intergovernmental Charges 1,614 1,013 1,013 1,809 905
Use of Money & Property 18,147 21,365 64,092 95,272 94,361
Licenses & Permits 139,620 199,849 165,965 163,780 169,338
Fines and Forfeitures 49,000
Sale of Property & Comp. for Loss 44,450 76,069 109,137 135,662 216,437
Miscellaneous Local Sources 230 5,025 153,591 6,652 13,283
State Aid 161,393 72,651 75,374 127,278 93,135
Federal Aid 111,299 166,368 224,136 41,163 210,175
5,180,828 5,906,113 5,895,825 5,822,748 6,015,705
Expenditures:
General Government Support
Public Safety
Public Health
~Iome & Community Services
~mployee Benefits
7)ebt Service
134,969 92,514 99,895 103,654 87,970
749,904 739,198 807,474 869,154 948,311
6,408 6,664 6,864 7,104 7,370
3,230,201 3,225,586 3,102,639 3,363,781 3,173,114
874,049 371,038 444,858 470~377 468,989
117,562 88,803 671,720 822,590 530,796
?otal Expenditures
5,l 13,093 4,523,803 5,133,450 5,636,660 5,216,550
-;xcess (Deficiency) of Revenues Over
gxpenditures
67,735 1,382,310 762,375 186,088 799,155
)perating Transfers In
)perating Transfers Out
'otal Other Financing Sources (Uses)
(483,500) (1,081,441) (504,720) (429,145) (874,115)
(483,500) (1,081,441) (504,720) (429,145) (874,115)
(415,765) 300,869 257,655 (243,057) (74,960)
1,261,339 845,574 1,146,444 1,446,849 (2) 1,203,792
~xcess (Deficiency) of Revenues and Other
;ourccs Over Expenditures and Other Uses
~und Balance Beginning of Year
'und Balance End of Year
$ 845,574 $ 1,146~443 $ 1,404,099 $ 1,203,792 $ 1,128,832
Includes the following funds: General Fund Part Town, Special Grant Fund, East-West Fire Protection Fund, Southold Wastewater
District, Fishers Island Sewer District and Solid Waste Management District.
Difference due to Prior Year Accounting Adjustment
ources: Audited Financial Reports of the Town (2003-2007)
'able itself NOT audited.
A-4
BUDGET SUMMARY
Fund
Fiscal Year Ending December 31, 2009
Appropriations Less: Less:
and Provisions Estimated Unexpended
for Other Uses Revenues Balance
General
General-Outside Village
Highway-Townwide
Community Development
Risk Retention Fund
Community Preservation Fund
Employees Health Plan
Total-Town
$
$
25,749,632
2,231,278
4,935,705
t 30,000
674,500
3,997,500
4,098,872
41,817,487
$ 4,321,679 $ 1,262,000
1,225,350 292,000
421,519 381,000
130,000 0
674,500 0
3,997,500 0
4,098,872 0
$ 14,869,420 $ 1,935,000
Orient Road Improvement District
East-West Fire Protection District
Fishers Island Ferry District
Solid Waste Management District
Southold Wastewater District
Fishers Island Sewer District
F.I. Refuse & Garbage District
Orient Mosquito District
Subtotal-Special Districts
Amount to be
Raised by
Tax
$ 20,165,953
713,928
4,133,186 .
0
0
0
0
$ 25,013,067
4,580 0 20 4,560
597,863 3,000 5,700 589,163
3,412,000 2,822,000 0 590,000
3,997,640 2,490,100 0 1,507,540
87,500 8,000 75,000 4,500
30,705 30,705 0 0
549,800 50,000 100,000 399,800
70,000 0 0 70,000
Orient-East Marion Park District
Southold Park District
Cutchogue-New Suffolk Park Dist.
Mattituck Park District
Subtotal-Park Districts
$ 8,750,088
$ 5,403,805 $ 180,720
35,583 0 0
315,000 0 0
145,000 0 0
608,928 31,750 I00,000
$ 100,000
Fishers Island Fire District
Orient Fire District
East Marion Fire District
Southold Fire District
Cutchogue Fire District
Mattituck Fire District
Subtotal-Fire Districts
Total-Ali Districts
$ 1,104,511
359,700
525,240
541,716
1,738,238
1,150,350
1,881,871
$ 31,750
3,300
60,724
2,000
44,200
20,000
0
0
0
18,750
0
246,750
0
65,5oo
546,220
Grand Total
6,197,115
16,051,714
$ 130,224
5,565,779
$ 2,481,220
Source: Adopted Budget of the Town.
$_~7~8_869,201
$ 20,435,199
$ 3,165,563
35,583
315,000
145,000
477,178
$ 972,761
356,400
464,516
520,966
1,694,038
883,600
1,881,871
$ 5,801,391
9,939,715
$_34~4~952,782
A-5
Fund
General
General-Outside Village
Highway Fund
Community Development
Risk Retention Fund
Community Preservation Fund
Employees Health Plan
Total-Town
Orient Road Improvement District
East-West Fire Protection District
Fishers Island Ferry District
Solid Waste Management District
Southold Wastewater District
Fishers Island Sewer District
F.I. Refuse & Garbage District
Orient Mosquito District
Subtotal-Special Districts
Orient-East Marion Park District
Southold Park District
Cutchogue-New Suftblk Park Dist.
Mattituck Park District
Subtotal-Park Districts
Fishers Island Fire District
Orient Fire District
East Marion Fire District
Southold Fire District
Cutchogue Fire District
Mattituck Fire District
Subtotal-Fire Districts
Total-All Districts
Grand Total $
Source: Adopted Budget of the Town.
BUDGET SUMMARY
Fiscal Year Ending December 31, 2008
Appropriations Less: Less:
and Provisions Estimated Uncxpendcd
for Other Uses Revenues Balance
24,413,069
2,246,677
5,198,627
136,000
765,000
5,200,000
2,892,500
40,851,873
$ 5,205,781 $ 1,816,000
1,119,700 317,000
396,032 491,000
136,000 0
765,000 0
5,200,000 0
2,692,500 200,000
$ 15,515,013 $ 2,824,000
Amount to be
Raised by
Tax
$ 17,391,288
809,977
4,311,595
0
0
0
0
$ 22,512,860
4,500 0 0
552,863 5,000 6,400 541,463
3,220,775 2,630,775 0 590,000
4,224,695 2,640,350 77,400 1,506,945
102,265 9,020 90,000 3,245
30,950 30,700 250 0
563,800 0 0 563,800
86,900 0 0 86,900
8,786,748
$ 5,315,845 $ 174,050
34,780 0 0
315,000 0 0
145,000 0 0
560,229 29,000 50,000
$ 50,000
1,055,009
359,700
483,940
536,380
1,631,025
1,412,000
t,978,770
$ 29,000
3,300
45,272
13,200
33,000
20,000
0
6,401,815
3,292,353
34,780
315,000
145,000
481,229
16,243,572
976,009
356,400
438,668
523,180
1,598,025
1,392,000
1,978,770
57,095,445
114,772 $ 0 $ 6,287,043
224,050
5,459,617
$ 3,g48_~050
$ 20,974,630
10,555,405
$. 33,068,26~
A-6
TOWN OF SOUTHOLD
APPENDIX B
FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
NOTE: SUCH FINANCIAL REPORT AND OPINIONS WERE PREPARED AS OF THE
DATE THEREOF AND HAVE NOT BEEN REVIEWED AND/OR UPDATED IN
CONNECTION W1TH THE PREPARATION AND DISSEMINATION OF THIS
OFFICIAL STATEMENT. CONSENT OF THE A[}DITORS HAS NOT BEEN
I~EQUESTED OR OBTAINED.
FINANCIAL SECTION
Independent Auditors' Report .................................................... ' ........................................ ~. ....................... %2
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
IBASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements Statement of Net Assets .........................................................................................................................
Statement of Activities ............................................................................................................................
Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet and Reconciliation of the Governmental Funds Balance Sheet to
The Statement of Net Assets ............................................................................................................
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 ..................................... ..................
Fiduciary Fund Financial Statements
Statement of Fiduciaw Net Assets .........................................................................................................
Notes to Financial Statements ..................................................................................................................
3-11
12
13
14-15
16-17
18
19-36
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT DISCUSSION AND
ANALYSIS
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
General Fund ....................................................................................................................................... 37
Highway Fund ...................................................................................................................................... 38
i
OTHER SUPPLEMENTARY INFORMATION I
COMBINING FUND STATEMENTS:
Non-major Governmental Funds Combining Balance Sheet
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................
IDISCRETELY PRESENTED COMPONENT UNITS
Discretely Presented Component Units:
Combining Statement of Net Assets ......................................................................................................
Combining Statement of Activities ..........................................................................................................
39
40
41
42
FINANCIAL
SECTION
25 $~J~olk Coz~rz, _['[auj~l~a~ge, N'~,v York ]] 758
651.454.9500 · _~z.,,c
1/v'~,CW. ~. V'Z. COIl'/
INDEPENDENT AUDITORS' REPORT
Honorable Supervisor and Town Board
Town of Southold
Southot~, 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, 2007, and for the year then ended, which
collecUvely 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 Amedca. 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 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. The discretely
presented component units represent 29.5%, 34.8% and 35.4%, respectively, of the assets, net assets
and revenues of the aggregate 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 respective financial position of the governmental activities, the aggregate discretely
presented component units, each major fund and the aggregate remaining fund information of the Town
of Sou[hold, New York, as of December 31,2007, and the respective changes in financial position 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 Amedca. 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.
ALBRECHt, VIGGIANO, ZURECK. ~ COI~IPANY, P.C.
-1-
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively compdse 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 part of the basic financial statements. The combining and individual fund financial statements
have 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
October 2, 2008
-2-
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
· 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, 2007. 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.
Reporting 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 all 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 impodant 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, 2007
Reporting the Town's Most Si.qnificant Funds
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds4not the Town as a
whole. Some funds are required to be established by state law and by bond covenants. However, the Town
establishes many other funds to help it control and manage sources of funding and spending related to specific
activities.
The Town's basic services are reported 'in governmental.funds, which focus on how money flows into and out
of those funds and the bal'ances left at year-end that are available for spending. These funds are reported
using an accounting method called modified accrual accounting, which measures cash and all other financial
assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term
view of the Town's general government operations and the basic services it provides. Governmental fund
information helps you determine wl~ether there are more or fewer financial resources that can be spent in the
near future to finance the Town's programs. We describe the relationship (or differences) between
governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and
governmental funds in a reconciliation that follows these fund financial statements.
The Town as Trustee
Reportin.q the Town's Fiduciary Respon..s(bi!itie~
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 reporled 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
Primary Governmental Activities
December 31, 2007 and 2006
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
Restricted:
Land acquisition
Debt service
Unrestricted
Total net assets
2007 2006
$ 43,347,669 $ 23,769,534
109,728,421 100,557,312
153,076,090 124,326,846
24,314,029 15,552,211
28,413,510 14,773,434
52,727,539 30,325,645
83,294,421 84,334,214
13,909,980 6,864,987
79,339 17,572
3,064,811 2,784,428
$ 100,348,551 $ 94,001,201
-4-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Total assets in the Town as of December 31, 2007 were $153 million, an increase of $28.7 million. Total
liabilities as of December 31, 2007 were $52.7 million, which represents an increase of $22.4 million from
December 31', 2006. This results in a net asset balance of $100.3 million, an increase of $6.3 million. Of the
Town's .net asset balance $83.2 million were invested in capital assets, net of related debt; $14 million was
restricted for future land acquisition and payments on debt service while $3 million was unrestricted.
Changes.in Net Assets
Primary Governmental Activities
for the years ended December 31, 2007 and 2006
Program Revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General Revenues Real property taxes
Other real property tax items
Non-property tax items
Interest earnings
State aid - unrestricted
Other
Total Revenues
Program Expenses
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Expenses
Increase in Net Assets $
2007
$ 3,260,873
842,604
2,121,558
6,225,035
23,065,503
109,909
6,989,40O
1,502,349
2,293,295
930,666
34,891,122
41,116,157
7,020,895
12,358,296
46,146
6,98O,032
1,506,488
629,444
5,390,045
837,461
34,768,807
6,347,350
2006
$ 3,407,682
713,597
4,834,716
8,955,995
21,709,445
102,986
6,669,730
1,233,122
2,610,189
463,671
32,789,143
41,745,138
6,843,661
11,421,283
43,499
7,298,698
1,354,610
713,164
4,912,384
553,713
33,141,012
$ 8,604,126
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
FINANCIAL ANALYSIS ~3F THE TOWN AS A WHOLE (continued)
Total Cost of Services
Primary Governmental Activities
for the year ended December 31, 2007
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
$ 7,020,895
12,358,296
46,146
6,980,032
1,5O6,488
629,444
5,390,045
837,461
$ 34,768,807
Net Cost of Services
Primary Governmental Activities
for the year ended December 31, 2007
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Cost Program Net Cost
of Services Revenues of Services
$ 7,020,895 $ 322,350 $ 6,698,545
12,358,296 675,103 11,683,193
46,146 10,316 35,830
6,980,032 355,337 6,624,695
1,506,488 438,810 1,067,678
629,444 185,682 443,762
5,390,045 4,237,437 1,152,608
837,461 837,461
$ 34,768,807 $ 6,225,035 $28,543,772
The cost of all governmental activities this year was $34.8 million. The net cost of these services, however,
after subsidized by program revenues including charges for services and program grants, was $28.5 million.
The Town's change in net assets after general revenues of $28.8 million was an overall increase of $6.3
million.
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
$14,000,000
$12,000,000
$10,000,000
$8,000,000
Expenses and Program Revenues
Governmental Activities
BI Expenses
i BIProgram Revenues
$6,000,000
$4,O0O,OOO
$2,000,000
General Public safety Public health Transportation Economic Culture and Home and Interest on debt
government assistance eno recreation community
Operating Capital graters
grants and and
contributions contributions
2% 12%
Charges for ~ ~r /.,/ ' . ./
"v2' II . /
State aid -
unrestricted
6%
Revenue by Source
Governmental Activities
for the year ended December 31, 2007
Real property taxes
State aid - unrestricted
Charges for services
Other general revenues
Operating grants and contributions
Capital grants and contributions
$ 23,065,503
2,293,295
3,260,873
9,532,324
842,604
2,121,558
$ 41,116,157
-7-
TOWN OF SOUTHOL:'D
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
THE TOWN,S FUNDS
The general fund balance has decreased by approximately $300,000 due primarily to actual expenditures in
excess of revenues.
The following schedule presents a summary of the governmental funds - (general, special revenue, and
capital Projects) revenues and expenditures for the year ended December 31, 2007, and the amount of
change and percentage of total in relation to the prior year.
Increase %
2007 2006 (Decrease) Change
REVENUES
Real property taxes
Other real property tax items
Non-properly tax items
Departmental income
Intergovernmental charges
Use of money and property
Licenses and permits
Fines and forfeitures
Sale of property and compensation for loss
Miscellaneous local sources
State aid
Federal aid
Total Governmental Fund Revenues
EXPENDITURES
General government supped
Public safety
Public health
Transportation
Economic assistance and opportunity
Home and community services
Culture and recreation
Employee benefits
Capital
Debt service principal and interest
Total Govemmental Fund Expenditures
$ 23,065,503 $ 21,709,041 $ 1,356,462 5.9%
109,909 102,986 6,923 6.3%
917,964 846,016 71,948 7.8%
2,559,292 2,753,784 (194,492) -7.6%
6,401,543 6,142,177 259,366 4.1%
1,650,001 1,376,729 273,272 16.6%
433,194 432,058 1,136 0.3%
155,477 17t,763 (16,286) -10.5%
393,933 238,240 155,693 39.5%
487,582 303,912 183,670 37.7%
3,696,346 7,108,866 (3,412,520) -92.3%
1,280,709 595,604 685,105 53.5%
$ 41,151,453 $ 41,781,176 $ (629,723) -1.5%
$ 5,322,653 $ 5,281,399 $ 41,254 0.8%
8,764,954 8,240,434 524,520 6.0%
42,608 40,092 2,516 5.9%
3,988,092 3,480,126 507,966 12.7%
1,064,905 949,740 115,165 10.8%
3,518,654 3,748,764 (230,110) -6.5%
417,654 530,270 (112,616) -27.0%
7,151,453 6,797,351 354,102 5.0%
12,436,627 13,324,188 (887,561) -7.1%
1,622,942 2,504,007 (881,065) -54.3%
$ 44,330,542 $ 44,896,371 $ (565,829) -1.3%
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.
TOWN .OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of DeCember 31, 2007 the Town had $109.7 million in net capital assets including land, buildings,
improvements, machinery and equiPment, and infrastructure. The Town's component units had $22.1 million
in net capital assets including land, buildings, improvements, machinery and equipment, and sewer mains.
Capital Assets at December 31,
Primary ,qovernm ent 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
2007 2006
$ 68,929,202 $ 58,341,517
1,067,738 220,114
8,316,323 8,307,223
13,624,650 13,618,159
10,197,793 9,916,143
71,461,368 70,694,655
173,597,074 161,097,811
63,868,653 60,540,499
$ 109,728,421 $ 100,557,312
$ 2,193,353 $ 2,213,759
404,367 12,947,081
3,500,910 3,566,885
17,028,469 3,220,732
3,504,995 3,320,899
2,172,080 2,145,280
28,804,174 27,414,636
6,702,685 6,074,572
$ 22,101,489 $ 21,340,064
-9-
TOWN OF SOUTHOL~D
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
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.
Equipment 2008
General Fund $ 258,600
Highway Fund 110,000
· Special Districts 689,000
Total Equipment $ 1,05.7.,600
Improvements
General Fund $ 6,469,328
Special Districts 1,500,000
Total Improvements $ 7,96~),328
Tota/Program $ 9.026.928
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 bond credit rating from Moody's Investors Services was Aa2 as of December 31,
2007.
Debt Limit - The Town has the power to contract indebtedness for any Town purpose so long as the principal
amount thereof, subject to certain limited exceptions, shall not exceed seven percent of the average full
valuation of taxable real estate of the Town, and subject to certain enumerated exclusions and deductions
such as water and certain sewer facilities and cash or appropriations for current debt service.
The constitutional method for determining full valuation 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, 2007 was 4.41%.
At December 31, 2007, the Town had approximately $25.0 million in long term general obligation bonds
outstanding, of which $22.4 million was for general Town purposes. Also outstanding at year-end were bond
anticipation notes in the amount of $6.2 million of which $4.4 million was for general Town purposes.
Additional information on the Town's debt activity can be found in Note C.4 to the financial statements.
-10-
TOWN OF sOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
DeCember 31, 2007
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
_Property Tax_
The Town has adopted a budget for the 2008 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2008 budget
includes an overall increase in real properly tax revenues from the prior year of approximately 6.45% 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 2007, financial
assistance included state aid consisting of mortgage tax of $2.3 million, consolidated highway aid of $296
thousand, and other state aid of approximately $794 thousand. State aid per capita was $93 thousand and
County local government assistance was $286 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 2008 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 spouse until death of the retiree.
CONTACTING THE TOWN'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and creditors with a general
overview of. the Town's finances and to show the Town's accountability for the money it receives. If you have
questions about this report or need additional financial information, contact the Town of Southold, Office of the
Town Comptroller, Southold, New York.
-11-
BASIC FINANCIAL
STATEMENTS
TOWN OF SOUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT QF NET ASSETS
December 31, 2007
ASSETS
Current Assets:
Cash and investments
Cash - restricted
Accounts receivable
Due from fiduciary funds
Due from other governments
Due from primary government
State and federal aid receivables
Prepaid charges
Inventory of material and supplies
Total Current Assets
Non-C urrent Assets:
Deferred charges, net of accumulated amortization
Non-depreciable capitat assets
Depreciable capital assets, net of depreciation
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities
Accrued interest payable
Bond anticipation notes payable
Due to other governments
Due to fiduciary funds
Unearned revenue
Non-current liabilities due within one year
General obligation bonds payable
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 landfill closure
and postclosure care costs
Total Non-Current Liabilities
Total Liabilities
NET ASSETS
Investment in capital assets, net of related debt
Restricted:
Land acquisition
Debt service
Unrestricted
Total Net Assets
Primary
Governmental
Activities
$ 27,003,180
13,554,395
182,338
1,225,741
204,613
1,048,627
1,275
43,220,169
127,500
69,996,940
39,731,481
109,855,921
153,076,090
1,424,589
254,675
4,384,000
9,569,319
25,484
7,150,302
1,495,000
10,660
24,314,029
20,870,000
6,971,397
572,1.13
28,413,510
52,727,539
83,294,421
13,909,980
79,339
3,064,811
$100,348,551
Component
Units
$ 1,522,506
78,621
677,898
1,522,644
51,490
3,853,159
2,597,720
19,503,769
22,101,489
25,954,648
1,390,469
64,461
1,860,000
647,O23
200,000
50,000
4,211,953
2,455,000
100,000
2,555,000
6,766,953
17,132,809
2,756
2,052,130
$ 19,187,695
-See. notes to-the-financial-statements:
-12-
PRIM.~dqLY
Government ^cUvities:
Pubt~ ~fe~
Pub~ ~eith
Tm~po~t~n
E~mic a~ a~ oppo~unity
C~ure a~ ~e~eet~n
Home and ~mmuni[y se~i~s
Intems~ on debt
T~al P~ima~ Gov~m~t
COMPONENT UNITS
Gemini govem~n( sup~
Tmns~n
Cul~e and recreation
Ho~e a~ communF(y semites
Intet~t on debt
TOWN OF SOUTHOLO
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF ACTIVITIES
Year ended December 31. 2007
program Revenues
Opera,rig
Charges for Grants and
, .Expenses Services Cont~bm~ons
Grants and Prlmary
Contributions Government
Net Expense~ and
Change in Net Assets
Component
UniL~
%020.895 $ 210.585 $ 111.765
2.358.296 543.811 I3i.292
46.146 10.316
6.950.032 39.074 20.00~
%506.488 184.273 254.537
629.444 t86,862
5,390,045 2,097,448 3t4,694
.837.46,1
34.768.807
$ $.698.545
t t.683~193
35.830
$ 296.263 8.624.695
1.0~?.676
4-43.762
1.825.295 1.152.608
837.46t
$ 3,260,873 $ 842,604_ $ 2,1~1,55.._~~ $ 28 543 772__
193.250
86,911
2,819.880 $ 2.546,987
893.070
649.453 51,400
183.
Total Componj~nt Units ...... $ 4,825,592~ $ 2,5_98.387 $ -0- $ 1.2Z0.744
GENERAL R~ENUES
O~r rea[ pro,Ay ~x ~ms
Nom~eAy ~x items
lntem~ eam~
State a~ - ~mst~ctad
O[~r
Change in Net Assets
Net Assets at Beginning of Year
$ 193,250
(947.661)
893.070
598,053
183,028
$ 1,008,461
23.085.$03 $ 2.142.757
109.g0g 2.802
6.989.400 90.558
1,502,34g 96.097
2,293,295 · 616,139
93O,666 65,498
34,8,91,122 3,013,~51
6,347,350 2,007,390
94,001,20l 17,180.305
Net Ass6ts at End of Year $ 190.L~48.551 $ 19.187.895
See notes to ~inancial statements.
-13-
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2007
ASSETS
Cash and Investments
Cash - restricted
Accounts Receivable
Due from Other Funds
State and Federal Aid Receivable
Due from Other Governments
Supply Inventory
Prepaids
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable
Retained Pementages
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 Inventory
Prepaids
Community Preservation
Land Acquisition
Debt Service
Fund Balance - Unreserved:
Designated - Ensuing Year's Budget
Insurance Claims
Non-Major Special Revenue Funds
Undesignated
Total Fund Balance
Total Liabilities and Fund Balance
MAJOR GOVERNMENTALFUNDS
Non-Major
Capital Governmental
General Highway Projects Funds Totals
$ 21,437,689 $ 1,193,195 $ 3,305,435 $ 1,066,861 $ 27,003,180
13,554,395 13,554,395
17,263 11,906 153,169 182,338
74,500 1,260,522 126,342 902,933 2,364,297
62,377 100,000 42,236 204,613
826,834 398,907 1,225,741
1,275 1,275
460,951 52,151 48,546 561,648
$ 22,880,889 $ 2,505,868 $ 17,496,985 $ 2,213,745 $ 45,097,487
$ 830,531 $ 146,552 $ 195,162 $ 222,172 $ 1,394,417
30,172 30,172
4,384,000 4,384,000
2,305,222 27,090 31,985 2,364,297
25,484 25,484
9,569,319 9,569,319
5,066,541 1,253,005 830,756 7,150,302
17,797,097 1,426,647 4,609,334 1,084,913 24,917,991
193,041 25,770 218,811
1,275 1,275
460,951 23,315 484,266
10,890,710 10,890,710
3,019,270 3,019,270
79,339 79,339
1,816,000 491,000 2,307,000
588,614 588,614
323,400 323,400
2,023,911 588,221 (1,101,668) 756,347 2,266,811
5,083,792 1,079,221 12,887,651 1,128,832 20,179,496
$ 22,880,889 $ 2~505,868 $ 17,496,985~ $ 2,213,745 $ 45,097,487
Seemotes-to'-t he- ffn-a-ncia-l-statem-edts.
-14-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET ASSETS
December 31, 2007
Total Fund Balances - Governmental Funds
Amounts reported for gove,rnmental activities in the
Statement of Net Assets are different because:
Capital assets less accumulated depreciation are
included in the Statement of Net Assets:
Capital assets - non-depreciable
Capital assets - depreciable
Accumulated depreciation
Other long-term assets are not available to pay for current-period
expenditures and, therefore, are deferred in the funds
Long-term liabilities applicable to the Town's
governmental activities are not due and payable
in the current period and accordingly are not
reported in the funds. However these liabilities
are included in the Statement of Net Assets:
General obligation bonds payable
Compensated absences
Estimated liability for landfill closure
and postclosure care costs
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
$ 69,996,94O
103,600,134
(63,868,653)
$ (~2,365,000)
(6,971,397)
(582,773)
20,179,496
109,728,421
(29,919,170)
486,979
127,500
(254,675)
$ 100,348,551
· See-notes -to-financial-statements:
-15-
· TOWN OF SOUTHOLD
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the year ended December 31, 2007
MAJOR GOVERNMENTAL FUNDS
REVENUES
Real Properly Taxes $16,205,911
Other Real Property Tax Items 92,606
Non-Property Tax Items 683,873
Departmental Income 411,790
Intergovernmental Charges 329,202
Use of Money and Property 764,912
Licenses and Permits 253,494
Fines and Forfeitures 155,477
Sale of Property and Compensation far Loss 148,283
Miscellaneous Local Sources 185,945
State Aid 2,412,869
Federal Aid 145,568
Capital
General Highwa¥ Projects
$4,027,695
12,722
142,501
10,362
29,213
296,263
$ 6,071,436
648,227
288,354
894,079
924,966
Non-Major
Governmental
Funds
Totals
$2,831,897
4,581
234,091
2,147,502
9O5
94,361
169,338
216,437
13,283
93,135
210,175
$ 23,065,503
109,909
917,964
2,559.292
6,401,543
1,650,001
433,194
155,477
393,933
487,582
3,696,346
1,280,709
Total Revenues 21,789,930 4,518,756 8,827,062 6,015,705 41,151,453
EXPENDITURES
Current:
General Government Support 5,234,683
Public Safety 7,816,643
Public Health 35,238
Transportation 550,906
Economic Assistance and Oppodunity 1,064,905
Home and Community Services 345,540
Culture and Recreation 417,654
Employee Benefits 6,172,279
Capital Outlay
Debt Service:
Principal 543,040
Interest 244,735
Total Expenditures 22,425,623
Excess (Deficiency) of Revenues Over
Expenditures (635,693)
Other Financing Sources (Uses)
Debt Proceeds
Transfers In 2,738,349
Transfers Out (2,403,563)
Total Other Financing Sources (Uses) 334,786
Net Change in Fu~d Balarlce (300,907)
Fund Balances at Beginning of Year 5,384,699
Fund Balances at End of Year
3,437,186
510,185
17,001
12,436,627
287,370
87,970
948,311
7,370
3,173,114
468,989
236,058
294,738
5,322,653
8,764,954
42,608
3,988,092
1,064,905
3,518,654
417,654
7,151,453
12,436,627
779,098
843,844
3,964,372
554,384
211
(794,696)
(794,485)
(240,101)
1,319,322
12,723,997
(3,896,935)
14,650,000
1,333,814
15,983,814
12,086,879
800,772
5,216,550
799,155
(874 115)
(874,115_)_
44,330,542
(3,179,089)
14,650,000
4,072,374
(4,072,374)
t4,650,000
(74,960)
1,203,792
11,470,911
8,708,585
$ 5,083,792 $1,079,221 $ 12,887,651 $1,128,832 $ 20,179,496
· See-n-otes to-t h-e-fin-a-n-cial--state-m or,ts.
-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 31,2007
Net Change in Fund Balance
Governmental funds report capital outlays as expenditures. However, in
the Statement of Activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense. The amount
by which capital outlay exceeds depreciation in the current period is:
Capital outlay
Depreciation expense
Loss on dispositions
$13,193,594
(4,005,790)
(16,695)
Some expenses reported in the Statement of Activities do not require
the use of current financial resources and therefore, are not reported as
expenditures in governmental funds:
Prepaid charges
Deferred charges
The issuance of long-term debt and increase in obligations under capital
leases provides current financial resources to governmental funds, while the
repayment of the principal of long term debt and capital leases consumes
the current financial resources of governmental funds.
Neither transaction has any effect on net assets.
Bonds issued
Repayment of bond principal
Due to Employees Retirement System
Compensated absences
Estimated liability for landfill closure
and postclosure care costs
Accrued interest payable
$ 11,470,911
9,171,109
27,481
(21,250)
(14,650,000)
779,098
48,804
(495,736)
10,5'50
6,383
Change in Net Assets of Governmental Activities
$ 6,347,350
See notes to financial statements.
-17-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2007
ASSETS
Cash and investments
LIABILITIES
Other liabilities
Deposits held
Total Assets
Total Liabilities
Town
5,718,965
5,718,965
4,861,089
857,876
5,718,965
Fishers Island
Ferry District Totals
$ 34,367 $ 5,753,332
$ 34,367 $ 5,753,332
$ 34,367 $ 4,895,456
857,876
$ 34,367 $ 5,753,332
See notes to financial statements.
-18-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Southotd (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 the legislative body
responsible for overall operations. The Town Board consists of the Supervisor who is elected for a term
of four years and five council members who are elected for terms of four years. The Town Board appoints
the Town Attorney, Comptroller and the Commissioner of Public Works whose terms are fixed by Town
Law. The Town Clerk, Receiver of Taxes, Superintendent of Highways, Justices and Town Trustees are
all elected and serve for four years, respectively. The Town provides a full range of municipal services,
including public safety, 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 conformity with accounting
principles generally accepted in the United States of America (GAAP) as applied to governmental 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 (reporting the Town as a
whole) and fund financial statements (reporting the Town's major funds)_
Government-wide Financial Statements
The government-wide financial statements reports information on the Town as a whole, except
fiduciary activities, with separate columns for the primary governmental activities as well as the
discretely presented component units.
In the 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 repoded 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, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. BASIS .OF PRESENTATION (continued)
The government-wide Statement of Activities. reports both the gross and net cost of each of the
Town's functional categories (public safety, transportation, 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
include (a) charges for services and (b) operating and capital grants and contributions that are
directly associated with the function. Operating grants include operating-specific and
discretionary (either operating or capital) grants while the capital grants column reflects capital-
specific grants. The net costs (by function) are normally covered by general revenue (property
taxes, intergovemmental revenues, interest income, otc). As a general rule the effect of
interfund activity has been eliminated in general purpose financial statements.
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 financial statements are similar to the financial statements presented in the previous
model. 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
self-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:
Govemmental Funds - Governmental funds are those through which most governmental
functions are financed. The acquisition, use and balances of expendable financial resoumes and
the related liabilities are accounted for through governmental funds. The measurement focus of
the governmental 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:
General Fund - is the principal operating fund of the Town, Th, is fund is used to account for all
financial resources except those required to be accounted for in other funds.
Highway Fund8 - used 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 31,2007
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 Pad 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
Southold Park District
P.O. Box 959
Southold, NY 11971
Fishers Island Ferry District
P.O. Box 1179
$outhold, NY 11971
Fishers Island Garbage
& Refuse District
Fishers Island, NY 06390
Orient-East Marion
Park District
P.O. Box 12
Orient, NY 11957
Mattituck Park District
P.O. Box 1413
Mattituck, NY 11952
TOWN .OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2007
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 exchange-like 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" 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 similar 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 pdme factor in determining eligibility for state
and federal grants, revenues are recognized when the expenditure is incurred. In the Capital
Projects Fund, long-term debt is recognized as revenue upon receipt of the proceeds.
Expenditures are recorded on the accrual basis except that (a) expenditures for prepaid expenses
are recognized when incurred; (b) principal and interest on indebtedness are recognized as
expenditures when due; (c) compensated abser~ces, 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 are
recorded for budgetary control purposes in order to reserve that portion of the applicable
appropriation, is employed in the governmental, funds. Appropriations for all 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
CASH AND CASH EQUIVALENTS
Cash consists of funds deposited in demand accounts, time deposit accounts and certificates of
deposit with maturities of less than three months.
For purposes of the Statement of Cash Flows, the Town considers all highly liquid investments with
a maturity when purchased of three months or less and all local government investment pools to be
cash equivalents.
RESTRICTED ASSETS
Certain assets of the Capital Projects including Community Preservation are ~;lassified as restricted
assets because their use is restricted by contractual agreements and regulations.
- 22 -
-A.
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. ASSETS, LIABILITIES AND FUND EQUITY (continued)
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 AND SUPPLIES
Inventory in the general and special revenue funds is valued at cost. Inventory in these funds is
accounted for under the consumption method.
CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of $5,000 or more are reported at
historical cost or estimated historical cost. Contributed assets are reported at fair market value
as of the date received. Additions, improvements and other capital outlays that significantly
extend the useful life of an asset are capitalized. Other costs incurred for repairs and
maintenance are expensed as incurred. Depreciation on all assets is provided on the straight-
5o
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 and street lighting are capitalized along with other capital assets.
In the fund financial statements, capital assets are recorded as capital outlay expenditures in the
governmental fund upon acquisition.
DEFERRED REVENUE/UNEARNED INCOME
Deferred 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 in
advance, unearned income and amounts that have been deemed to be "measurable" but not
"available" to finance current expenses pursuant to generally accepted accounting principles.
PREPAIDS
Prepaids record payments to vendors 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 pedod 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.
REVENUES AND EXPENDITURES
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES
In Suffolk County, the assessment and lien of real property for taxation is done by the County
Department of Assessment. Real property taxes become a lien on December I for both school and
general taxes. The Town's assessment rolls are used for the levy of real property taxes by the
Town and the School 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, 2007
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 alt 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 col acted to
the County which assumes collection responsibility. The Town and Town's Special Districts
therefore realize annually the 100% collection of real property taxes.
School District property taxes are also levied on December 1, and are also payable in two
installments. School property taxes are due in two installments, 50% on December I and 50% on
May 10 payable without penalty to January 10 and May 31, respectively. The County is also
responsible for uncollected school taxes.
INTERFUND TRANSACTIONS
Interfund transactions have been eliminated from the government-wide financial statements. In
the funds statements interfund transactions include:
a) Interfund Revenues
Interfund revenues, which are 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 capital
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
reported as expenditures and a liability in the funds statement in the respective fund that will pay it.
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, 2007
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
6. EQUITY CLASSIFICATIONS (continued)
b)
Restricted net assets--Consists of net assets with constraints placed on the use either by
(1) external groups such as creditors, grantors, contributors, or laws or regulations of other
governments; or (2) law through constitutional provisions or enabling legislation.
c)
Unrestricted net assets--All other net assets that do not meet the definition of "restricted"
or "invested in capital assets, net of related debt."
In the Fund Statements, governmental fund equity is classified as fund balance. Fund balance is
further classified as reserved and unreserved, with unreserved further split between designated
and undesignated. Portions of 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 carded 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 /he Town's
fiscal year.
The Town follows the procedures enumerated below in establishing the budgetary data reflected in
the financial statements:
a)
No later than October 1, the Supervisor submits a tentative budget to the Town Board for
the fiscal year commencing the 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 all modifications of the budget. However, the Supervisor
is authorized to transfer cedain 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, 2007
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued)
2. FUND BALANCES
DESIGNATION OF FUND BALANCE
Portions of the unreserved balances at December 31, 2007 were designated for the subsequent
year's operating budgets as follows:
Fund
Total for Subsequent Fund Balance
Fund Balance Year's Unreserved
Unreserved Budget Undesignated
Major Governmental Funds
General Fund- Townwide
Highway Fund
Non-Major Funds:
Town Outside Village
East West Fire Protection District
Southold Wastewater District
Fishers Island Sewer District
Solid Waste Management District
$ 3,839,911 $ 1,816,000 $ 2,023,911
1,079,221 491,000 588,221
699,645 317,000 382,645
20,198 6,400 13,798
213,094 213,094
36,581 36,581
110,229 110,229
FUND DEFICITS
The capital projects fund had an undesignated deficit fund balance at December 31, 2007. The
capital projects fund deficit will be eliminated as short-term debt is redeemed or converted to '
permanent financing.
DETAILED NOTES ON ALL FUNDS
1. CASH AND INVESTMENTS
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.
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 party.
- 26 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31. 2007
DETAILED NOTES ON ALL FUNDS (continued)
1. CASH ANDINVESTMENTS (continued)
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:
· Uncoflateralized
· Collateralized with securities held by the pledging financial institution, or
· Collateralized with securities held by the pledging financial institution's trust department or
agent but not in the Town's name
At December 31, 2007 the Town's cash book balance was approximately $47,805,000. This
amount is inclusive of Fiduciary fund deposits of approximately $5,700,000 but exclusive of petty
cash of approximately $2,000. The available bank balance was approximately $46,200,000. Of the
bank balance, $1,100,000 was covered by Federal deposit insurance, and approximately
$86,800,000 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, 2007 were as
follows:
Major Governmental Funds:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Non-Major Governmental Funds:
General Fund - Part Town
East-West Fire Distdct
Southold Wastewater District
Fishers Island Sewer District
Solid Waste Management District
Amount Amount
Receivable Payable
$ 74,500 $ 2,305,222
1,260,522 27,090
126;342
Total
267,093
157,192
1,051
470
477,!27
$ 2.364.297
2,000
29,985
$ 2,364,297
Interfund receivable and payable balances for the primary government at December 31, 2007
are expected to be paid currently.
Interfund transfer balances for the primary government at December 31, 2007 represent primarily
the payment of operating and capital expenditures and are stated as follows:
Major Governmental Funds:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Non-Major Governmental Funds:
General Fund - Part Town
Solid Waste Management District
Total
Trar~sfers Transfers
In Out
$ 2,738,349 $ 2,403,563
211 794,696
1,333,814
$ 4,072,374
226,842
647,273
$ 4,072,374
-27-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
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 buildings
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
1/1/07 Additions Deletions 12/31/07
$ 58,341,517 $ 10,587,685 $ 68,929,202
220,114 847,624 1,067,738
58,561,631 11,435,309 69,996,940
8,307,223 9,100 8,316,323
13,618,159 13,817 $ 7,326 13,624,650
9,916,143 968,653 687,003 10,197,793
70,694,655 766,713 71,461,368
102,536,180 1,758,283 694,329 103,600,134
2,206,266 129,946 7,326 2,328,886
3,932,088 410,123 4,342,211
6,597,870 722,594 670,310 6,650,154
47,804,275 2,743,127 50,547,402
$ 60,540,499 $ 4,005,790 $ 677,636 63,868,653
39,731,481
$ 109,728,421
Depreciation expense was charged to govemmental functions as follows:
General government support
Public safety
Transportation
Economic assistance and oppodunity
Culture and recreation
Home and communily services
$ 246,830
160,526
2,972,168
37,295
64,207
524,764
$ 4,005,790
- 28 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOT~-S ON ALL FUNDS (continued)
3. CAPITAL ASSETS (continued)
Discretely presented component units
Capital assets not being depreciated
Land
Construction in progress
Total capital assets not being depreciated
Depreciable capital assets
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total depreciable capital assets
Less accumulated depreciation
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total accumulated depredation
Total net depreciable capital assets
Total net capital assets
INDEBTEDNESS
SHORT TERM DEBT
Balance Balance
1/1/07 Additions Deletions 12/31/07
$ 2,213,759 $ 20,406 $ 2,193,353
12,947,081 $ 39,489 12,582,203 404,367
15,160,840 39,489 12,602,609 2,597,720
3,566,885 9,485 75,460 3,500,910
3,220,732 13,807,737 17,028,469
3,320,899 245,096 61,000 3,504,995
2,145,280 26,800 2,172,080
12,253,796 14,089,118 136,460 26,206,454
1,373,575 84,500 1,458,075
1,179,246 410,900 39,049 1,551,097
2,284,411 148,117 61,000 2,371,528
1,237,340 84,645 1,321,985
$ 6,074,572 $ 728,162 $ 100,049 6,702,685
19,503,769
$ 22,101,489
Bond Anticipation Notes (BANs) - Bond anticipation notes (BANs) are used as a temporary
means of financing capital expenditures in the capital projects fund. State law requires that BANs
issued for capital purposes be converted 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 .various rates from 3.35% to 3.95% and are due at various dates through
2008.
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
financing source is recorded in the capital projects fund.
These notes are summarized as follows:
Interest
Description Amount Rate
Various Purposes $ 3,560,000 3.95%
Various Purposes 699,000 3.75%
Fishers Island Sewer 125,000 3.35%
New London Wharf 1,500,000 3.70%
Fishers Island Garbage 360,000 3.76%
Total ~;_ 6~44,00~)
- 29-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
SHORT TERM DEBT (continued)
A summary of changes in BANS for the for the year ended December 31, 2007 is as follows:
Balance Balance
1/1/07 Increases Reductions 12/31/07
Primary Government $ 7,729,000 $ 3,673,000 $ 7,018,000 $ 4,384,000
Component Units 2,185,000 -0- 325,000 _ !,860,000
$ 9.9~14.000 $ .3.673,Q000 ~_~.~,3,00_~0 $. 62~_44_~00_0
LONG TERM DEBT
Summary of changes in long-term debt transactions for the year ended December 31, 2007 is as
follows:
Non-current
Balance Balance liabilities due Non-current
1/1/07 Increases Reductions 12131/07 within one year liabilities
Primary Government:
General obligation bonds $ 8,494,098
Due to Employees Retirement
System 48,804
Net compensated absences 6,475,661
Estimated liability for landfill closure
and post-closure care costs 593,323
Component Units:
$14,650,000
495,736
$ 779,098 $ 22.365,000 $ 1.495,000 $ 20,870,000
48,804 -0- -0-
6,971,397 6.971,397
10,550 582,773 10.660 572.113
General obligation bonds 2,855,000 200,000 2.655,000 200,000 2,455,000
General Obligation Bonds - The Town borrows money in order to acquire land, 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 2008 through 2030.
Future principal and interest payments to maturity for both the primary government and the
component units are as follows:
Year Ending Principal Interest
2008 $ 1,695,000 $ 950,557
2009 1,750,000 888,643
2010 1,575,000 827,440
2011 1,600,000 768,387
2012 1,540,000 709,850
2013 1,425,000 654,789
2014 1,440,000 600,927
2015 1,435,000 545, 816
2016-2020 6,085,000 1,948,783
2021-2025 3,725,000 973,281
2026-2030 2,750,000 292, ! 88
Totals $ 25.020.00~0 ~_~, 160,6~_1
Other long-term liabilities for claims and judgments, compensated absenc(~s, 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.
- 30 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
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 included in
the Town's financial statements. At December 31, 2007, $1,700,000 of these bonds outstanding
are considered defeased.
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) serves as sole trustee and
administrative head of the System. The Comptroller shall adopt and may amend ru~es 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 conbaining 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_
Fundinq 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 f'dleen of me NYSRSSL, who contribute 3% of their salary. Prior to
October 1, 2000, all employees who joined the System after July 27, 1976 were required to
contribute 3% of their salary. Under the authority of the NYSRSSL, the Comptroller shall 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:
2007 $ 980,628 $ 967,286
2006 $1,096,547 $ 741,445
2005 $ 1,068,200 $ 1,016,937
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, 2007
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. Substantially 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 in accordance with New York State Health Insurance Rules and Regulations
(administered by the New York State Department of Civil Service), are provided 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
as an expenditure in the year paid. The Town's union contracts and ordinances require that it
provide its eligible enrollees with Empire Plan benefit coverage, or if another provider is utilized, the
equivalent coverage. 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 2007 year, $3,471,322 was paid on behalf of 96 retirees
and 216 active employees and is recorded as an expenditure in the various funds of the primary
government.
7. COMPENSATED ABSENCES
Town employees are granted vacation and sick leave 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 subject 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, 2007, the value of the accumulated vacation time and sick leave was
$6,971,397 for the primary government.
COMMITMENTS AND CONTINGENCIES
Risk Management
In common with other municipalities, the Town receives numerous notices of claims. The Town
established a self-insurance risk management program for general liability and health insurance
which are both accounted for in the Risk Retention Fund.
For general liability, the Town has a self-insured liability exposure of $50,000 per claim. Any
liability exposure above the $50,000 self-insured liability for General Liability, Automobile
Liability, and Police Liability is covered by primary insurance policies up to $1,000,000 per claim
and $3,000,000 in aggregate for the year. After primary policy limits are exhausted, the excess
exposure above the $1,000,000 is covered by an Umbrella Liability Policy of $10,000,000 per
claim and $10,000,000 in the aggregate. The Town has a Public Officials Liability policy with a
$25,000 deductible per claim, with the excess exposure above that $25,000 amount covered by
a Primary Liability rider of up to $1,000,000 per claim, with the excess exposure above that
$1,000,000 amount covered by the aforementioned Umbrella Liability Policy.
For insurance for health benefits that are self-insured, the Town has insurance policies which
provide coverage for specific medical cases in excess of $I 75,000 incurred and paid within the
calendar year, as well as coverage for all other claims in the aggregate. The exposure to the
Town under the aggregate policy is based on monthly enrollment. Considering the changes to
enrollment during 2007, the attachment point for the aggregate policy was $2,948,438.
- 32-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
COMMITMENTS AND CONTINGENCIES (continued)
Risk Management (continued)
There have been no Significant reductions in insurance coverage as compared to the prior year, and
there were no settlements in excess of insurance coverage over the last three years.
The 'Risk Retention.. Fund reserves for general-liability claims are determined by a third party
administrator, and are reported when it is probable that a loss has occurred and the amount of that loss
can be reasonably estimated. Claims reserves for general liability claims are reevaluated periodically to
take into consideratfon recently settled claims and any new developments and changes.
The Risk Retention Fund liabilities for medical claims outstanding at year end are reported by the third
party administrator and are recorded when the claim has been incurred and paid within 60 days of the
year end.
The Town's discretely presented component units are not included in the Town's self-insurance risk
management program for any claims.
Net assets in the Risk Retention Fund are reserved for future catastrophic losses and are not available
for other uses. Changes in the liability for claims and judgments for the year ended December 31,
2007 and 2006 are as follows:
General
Medical Liability
2007 2006 2007 2006
Unpaid Claims as of December 31,
prior year $ 161,976
Incurred Claims:
Provision for insured events
of the current fiscal year 2,524,953
Increase (decrease) in net provision for
insured events of prior fiscal years 48,556
Total Incurred Claims and
Claim adjustments 2,573,509
Payments of:
Claims during the current year 2,287,641
Unpaid Claims as of December 31,
current year $ 447,844
$ 200,131 $ 906 $ 1,811
2,171,127 6,857 3,600
2,011 309 (905)
2,173,138 7,166 2,695
. 2,2!.1,293 6,857 3,600
$ 161.976 $ 1_,215 $ 906
During the year ended December 31, 2007 charges to the operating funds for the self-insurance programs
were made as follows:
Medical
General Fund Whole Town
General Fund Part Town
Highway Fund Part Town
Solid Waste District
General Liability
General Fund Whole Town
General Fund Pad Town
Solid Waste District
Total Charges
$ 1,035,189
193,550
452,648
183,399
$ 356,316
16,421
16,421
$ 1,864,786
389,158
$ ~.2_~253,944
Do
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
COMMITMENTS AND CONTINGENCIES (continued)
Landfill Closure and Post-Closure Care Costs
State and federal laws and regulations required the Town to place a final cover on its landfill sites and to
perform cedain 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 certain maintenance and monitoring functions at the site for up to thirty years.
Accordingly, as of December 31, 2007 the Town has recorded a liability of $582,773 which represents the
provision to be made in future budgets for post-closure landfill 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, 2007 were $209,842. Future obligations over the primary
terms of the Town's leases as of December 31, 2007 are as follows:
2OO8 $ 189,393
2009 180,047
2010 105,458
2011 77,125
2012 and thereafter 486,777
Total $_____1,038,800
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, 2007:
Condensed Statement of Net Assets:
Due from Capital Assets Other
Current primary Net of Current Long-Term
Assets Government Depreciation Liabilities Liabilities
Fishers Island Ferry District $ 1,621.229
Fishers IsJand Refuse and Garbage 1.064.451
Cutchogue-New Suffolk Park District 128,029
Southold Park District 86,189
Orient-East Marion Park District 3,536
Mattituck Park District 262,824
Orient Mosquito District .9.003
205,649 $ 16,464,366 $ 3,285,079 $ 2,500,000
163,675 3,137,414 547,319
42,095 122,182 42,095
91,450 668,835 91,450
10,095 432,985 21,510
139,704 1,253,381 199,270 55,000
25,230 22,326 25,230
Assets
$ 12,506,165
3,818,221
250,211
755,024
425,106
1,401,639
31,329
$ 3,175,261 $ 677,898 $ 22,101,489 $ 4,211,953' $ 2,555,000 $ 19,187,695
- 34 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
E. CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS (continued)
Condensed Statement of Activities:
Program General Revenue Net Assets
Property
Expenses Revenue Net Expense Tax Other Change 1/1/07 12/31/07
F[sherslslandFerryDiskJct $ 3,1~7,121 $ 2,546,987 $ 840,134 $ 590,000 $ 1,278,382 $ (1,228,248)$11,277,917 $12,506,165
Fishers Island Refuse
and Garbage 654,01S 51,400 602,616 512,300 716,644 (626,328] 3,191,893 3,818,Z2l
Cutchogue-New Suffolk Park
Disidct 132,084 132,084 145,000 5,446 (t8,362) 231,849 250,211
Southold Park District 339,999 339,999 315,000 41,854 (16,855) 738,169 755,024
Orient-East Marion Park District 32,993 32,993 30,695 50 2,248 427, 354 425,106
Ma~tuck Park District 392,468 392,488 467,527 47,243 (122,302) 1,279,337 1,401,639
Orient Mosquito Distdct 86,911 86,911 82,235 2,219 2,457 33,786 31,329
4,825.592 $ 2,598,387 $ 2,227,205 $ 2,142,757 $ 2,091.838 $ I2,007,390) $ 17,180,305 $ 19,187,6~95
F. 2% TRANSFER TAX
In November 1998, the voters of the Town approved a referendum for a 2% Transfer Tax, which became
effective on April 1, 1999. The transfer tax receipts are recorded in the capital projects fund-community
preservation, and are used for the purchase and/or preservation of agricultural land, open space, parks, or
historic preservation sites. The tax applies to sales of vacant land worth $100,000 or more or sales or
improved land wodh $250,000 or more. Conveyance of real property for open space, parks or historic
preservation purposes are exempt from this tax.
At December 31, 2007, and for the four previous years, the Town has the following 2% transfer tax revenue
and parks or historic preservation to any not-for-profit, or tax exempt organization, operating for conservation,
environmental or historic preservation purposes are expense of:
Revenues Expenditures
Yearend December31,2007 $ 6,071,436 $ 2,423,659
2006 5,823,714 10,969,280
2005 7,200,274 10,132,009
2004 6,045,685 6,408,951
2003 4,603,354 2,439,367
G. SUBSEQUENT EVENTS
The Town issued Public Improvement Serial Bonds in the amount of $8,850,000 which were dated May
15, 2008. This issue included $7.5M for Open Space purchases and $1.35M for the Acquisition and
Improvements of the Peconic Lane School. Interest rates vary from 4% to 4¼%, and the final payment is
due 5/I5/30.
- 35 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
H. 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
generally, 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 is required to implement GASB 45 and 47 for the year ended December 31, 2008. The Town
will implement the new pronouncement when effective. Based on an actuarial valuation prepared as of
December 31, 2007, the Town will have an accrued liability of approximately $42 million related to this
pronouncement.
Governmental Accounting Standards Board (GASB) issued Statement No. 49 (GASB 49) which is a new
accounting standard applicable to pollution remediation obligations. The statement provides guidance on
how to calculate and report the costs and obligations associated with pollution cleanup efforts. Until now,
these costs generally have been on a pay-as-you-go basis and have not been reported as a liability on
the financial statements. The Town is required to implement GASB 49 for the year ended December 3¢t,
2008.
- 36 -
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, 2007
REVENUES
Real Property Taxes
Other Real Property Tax Items
Non-Properly Tax Items
Depadmental Income
Intergovernmental Charges
Use of Money and Property
Licenses and Permits
Fines and Forfeitures
Sale of Property and Compensation for Loss
Miscellaneous Local Sources
State Aid
Federal Aid
Total Revenues
EXPENDITURES
General Government Support
Public Safety
Public Health
Transportation
Economic Assistance and Opportunity
Culture and Recreation
Home and Community Services
Employee Benefits
Debt Service - Principal and Interest
Total Expenditures
Excess (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
Vadance with
Original Final Final Budget
Budget Budget Actual Encumbrances Positive/(Negative)
$16,205,911 $16,205,911 $16,205,911
80,000 80,000 92,606 12,606
616,000 616,000 683,873 67,873
473,600 591,100 411,790 (179,310)
421,244 347,219 329,202 (18,017)
555,000 564,000 764,912 200,912
234,900 234,900 253,494 18,594
127,000 127,000 155,477 28,477
7,550 58,208 148,283 90,075
92,554 104,819 185,945 81,126
2,332,897 2,422,952 2,412,869 (10,083)
181,025 145,568 (35,457)
21,146,656 21,533,134 21 789,930 256,796
6,480,095 6,490,347 5,234,683 $ 109,889 1,145,775
7,704,283 7,913,905 7,816,643 83,152 14,110
33,300 35,250 35,238 12
526,410 581,526 550,906 30,620
1,091,260 1,090,225 1,064,905 25,320
373,870 373,870 345,540 28,330
406,556 481,326 417,654 63,672
6,190,823 6,329,564 6,172,279 157,285
!,430,540 1,193,543 787,775 405,768
24,237,137 24,489,556 22,425,623 193,041 1,870,892
(3,090,481) (2,956,422) (635,693) (193,041) 2,127,688
3,296,446 3,336,895 2,738,349 (598,546)
(2,390,965) (2,596,808)~ 193,245
905,481 740,087 334,786 (405,301)
$ (2,185,000) $.~..(2,216,335)
(300,907) $ (193,041) $ 1,722,387
5,384,699
$ 5,083,792
See notes to the financial statements.
-37-
TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Year ended December 31, 2007
REVENUES
Real Property Taxes
Other Real Property Tax Items
Use of Money and Property
Licenses and Permits
Sale of Property and Compensation
for Loss
State Aid
Total Revenues
EXPENDITURES
Transportation
Employee Benefits
Debt Service - Principal and Interest
Total Expenditures
Excess of Revenues
Over Expenditures
Other Financing Sources (Uses)
Operating Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Variance with
Original Final Final Budget
Budget Budget Actual Positive/(Negative)
$ 4,045,195 $ 4,045,195 $ 4,027,695 $ (17,500)
11,100 11,100 12,722 1,622
125,000 125,000 142,501 17,501
7,000 7,000 10,362 3,362
29,213 29,213
263,535 296,263 296,263
4,451,830 4,484,558 4,518,756 34,198
3,551,380 3,697,181 3,437,186 259,995
548,150 545,450 510,185 35,265
247,600 250,300 17,001 233,299
4,347,130 4,492,931 3,964,372 528,559
104,700 (8,373) 554,384 562,757
211 211
(591,200) (595,952) (794,696)~
(591,200) (595,952) (794,485) (1~.,533)
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
$ (486,500) $ (604,325) (240,101) $ 364,224
1,319,322
$ 1,079,221
See notes to the financial statements.
-38-
OTHER SUPPLEMENTARY
INFORMATION
TOWN OF $OUTHOLD
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
December 3.1, 2007
ASSETS
Cash and investments
Accounts mc. eh/able
Due from other funds
Due from other governments
Prepaids
UABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
Due to other funds
Deferred revenue
Total Assets
Total Liabilities
FUND BALANCE
Fund balance - reserved:
Encumbrances
Prepaids
Fund balance - unreserved:
Designated - Ensuing Year's Budget
Undesignated
Total Fuhd Balance
Total L~abilities and Fund Balance
East. West Fire Southold
Genera[ Fund Special Protection Wastewater
Part Town Grant Distdct District
$ 621.398 $ 32,854 $ 238,754
61,567
267.093 157.192 1,051
$ 42,236
2;~.315
$ 973.373 $42.236 $ 190046 $ 239,805
$ 15,272
235,141
250.413
42,230
42.236
$ 12,656
~.~7,192
'169,848
$ 941
' 941
23,315
317,000
382.645
722.960
..s,~73373 3 42,2~3~
6,400
13,798
20,198
25,770
213,094
238,864
$ 239,805
Fishers
Island Sewer
District
Solid Waste
Management
District
$ 39.849
1,144
470
$ 41,48~
$ 134,006
90.458
477,127
25,231
$ 726,822
$ 2,882
2,000
4,882
$ t49.126
29,985
437.482
616,593
36,581
36,581
41,463
110,229
110.229
$ 726,822
Totals
$1,066,861
153,169
902,933
42~36
48,546
$2,213,745
$ 222,172
3t,985
830,756
1,084,913
25,770
23,315
323,400
756.347
1,128,832
2.213,745
~39-
TOWN OF SOUTHOLD
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - NON-MAJOR GOVERNMENrrAL FUNDS
For the year ended December 31, 2007
REVENUES
Real Properly Taxes
Other Real Property Tax Items
Non-Property Tax Items
Departmental Income
Intergovernmental Charges
Use of Money and Property
Licenses and Permits
Sale of Property and Compensation for Loss
Miscellaneous Local Sources
State Aid
Federal Aid
EXPENDITURES
General Government Support
Public Safety
Public Health ~
Home and Community Services
Employee Benefits
Debt service:
Principal
Interest
Total Revenues
Total Expenditures
Excess (Deficiency) of Revenues Over Expenditures
Other Financing Uses: Transfers out
Total Other F~nancing Uses
Net Change in Fund Balance
Fu~nd Balances at Beginning of Year
Fund Balances at End o[' Year
East-West Fire Southold
General Fund Spatial Protection Wastewater
Part Town Grant Distdct District
$ 407,539
t ,282
234,091
669,746
44,654
5,150
2,164
93,135
1,457,761
87,979
443,127
7,370
656,988
220,697
__1,416,152
41,609
(226,842}.
(226 842)
(185,233)
908,193
$ 722,960
$ 499,000 $ 18,296
679 25
20,997
6,055 11,721
210,I75
210,175 505,734
505,184
215,17S
215,175 505,I84
(5,ooo) 55o
(5,ooo) 52o
5,000 19,648
$ -0~ $ 20,198
-40-
...... 51~039
33,639
1,960
355
35,954
15,085
15,085
223,779
$ 238,864
Fishers
Island Sewer
District
$ 2
9,929
1,908
.. 11,839
16,206
16,206
(4,367)
(4,367)
40,948
3~,581.
Solid Waste
Management
Distdct
$ 1,907,062
2,593
1,446,830
905
30,023
I64,188
214,273
t3,283
3,779,157
2,251,106
248,292
234,098
... 294,383__
3,027,879
751,278
...... ,{647,273)~
104,005
6,22__~_4
_$ 11o,~29
Totals
$ 2,831,897
4,58I
234,091
2,147.502
9O5
94,361
169,338
216,437
13,283
93,135
210,175
6,015~70~
87,970
948,311
7,370
468,989
236,058
294,738
5.216,550
799,155
(74.960)
1,203,792
t,128,832
DISCRETELY PRESENTED COMPONENT UNITS
TOWN OF $oUTHOLD
DISCRETELY PRESENTED COMPONENT UN[TS
COMBINING STATEMENT OF NIE'[' ASSETS
December 31. 2007
ASSETS
Current Assels:
Cash and Investments
Accounts receivabte
Due from primary government
State and federal aid cecelvab~s
Prepaid c.h~gas
Total Current Assets
N o n-Cu~Ter'.t Assets:
Non-.depreciable oapi~aJ asseL~
De~eciable capital assets, ne~ of depreclaUon
Fishers Island Cutc~ogue-
F~shers Refuse and New Suffolk
Is~n4 Ferry G~rbage District. Park O{sbict
Dtstdct . (Unaud!ted) (Unaudite~}
So~jthok:~ Oder. t-East Matt[tuck Orient
Pa~ M~ion Park P~k Mosquito
(Unaudited)__ {Unaudlt~) ~ (~psu~i~e~)._ , , Totals
$ 600,638 $ 432,382 $ 128,029 $ 86,189
64,422 14,104
205,649 163,675 42,095 91.,450
9~,870 ~,774
1.826.~78 1,228,126 t79.124 . 177,639
3,536 $ 262.729 $ 9,003 $ 1,522,506
95 78,621
10.095 139,704 25,230 677,898
1,522,644
I3.631 , 402,528 34,233 , .3,853~159_
41,717 517,282 101.198 568,801
16.422~649 2,620~15_2 _ . 20,984 100~034
432.985 935.7.57 2,597,720
317,(]24 . ~2.326 I9,503,.7,69 ,
Total klon-Current Assets . 16_.461¢,366 . . 3,t37,414 .., 122t182 668,~.~.~ 432,985 , 1,253,38I
Total Assets
LIABILll'IES
Current Liabili~;iest
Accounts payable and ac~ I[ablUtles
Ac~ed Int~t payable
Bo~ ante[paten ~s payable
U~m~ r~e~ue
No~rmnt ~ab~ifles d~ ~(~ one y~r
Genii o~i~on ~s pebble
C~I~ a~ ~dg~n~ pa~b~
Total Cu~nt
Non-Cu~t Lia~t~es:
G~ obli~fi~ ~s payabie
Claims and judgments payable
N~ ASSETS
[~tment ~ ~pilaI asses, ne( o~ Felat~ debt
R~Vlct~:
Debt s~lce
, 18~291~244 , 4~365~540 292,306 846,474 446~616 1~655~909 .... 56~559 25~954~648
1.350.160 20.152 11,415 8,742 't ,390,469
63.637 824 64,46I
1.500,000 360,000 1,880,000
171.282 167,167 42.095 gl.450 10.095 139.704 25,230 647,023
t50,000 50,000 200,000
......... 5C;~0D0 50,000
3~285,0T9 547,319
2.400,000
, , 100,000~
5,785,079 , 547,319 .....
12,414,366 2,831.893
2,756
89,043
TaU{ Net Assets $ 1_2~506 !.65 · $ 3.818,221
z12,095 .91,450 21r510 . '199,270 ..... 25,230 4,211,953
55.000 2,455,000
'~00,00~
42,095, _ 91~450 _ 2_1.510 254.270 25,250 6.766~953
738,169 1,148,381 17,132,809
2.756
986.328 2;50t211 16~$55 ...... 425,106 253 258 ~ 31~2~ __ 2,052~'~30
$ 25~.21~ ~ 7550~,~24 $ 425,106 :~ 1.401.639 $ 3'[,329 $ 19,187,695
41-
TOWN OF SOU"t'HOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVmES
Year ended December 31, 2007
REVENUES
Program revenues
Real property taxes
Other real property tax items
Non-property tax items
inte~,st earnings
State Aid'
Federal Aid
Other
Total ReVenues
EXPENSES
General government support
Public health
Transportation
Culture and recreation ~
Home and community services
Interest on debt
Total Expenses
Changes in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
Fishers island Cutcbogue-
Fishers Refuse and New Suffolk
Island Ferry' Garbage DistriCt Park Disf~ict
District {Unaudited). , (Unaudited)
Southold Off~ent-East Mattituck Orient
Park 'Marion Park Park Mosquito
District District District District
(Unaudited) ...(Unaudited) (Unaudited) (Unaudited)
Totals
$ 2,546,987 $ 51,400 $ 2.598.387
590.000 512.300 $ 145,000 $ 315.000 $ 30.695 $ 467.527 $ 82,235 2,142,757
802 697 197 428 42 836 2,802
90.558 90,558
22,479 36,615 5,249 3,238 8 26,536 1,972 96.097
27,365 588,774 616.139
1,220,744 1,220.744
6,992,,. 38,188 20..0,71 247 65.498
4,415,369 1,280,344 156~448 356,854 30,745 514.770 84. ,454 6,832,982
193.250 193,250
86.911 86,9'~ 1
2,8t 9 880 2,819,880
132.084 339.999 32,993 387.994 893,070
16.405 633,048 649.453
157 586 20..96~, ..... 4.474 183.028
3.187.121 6,54,016 132,084 339.999 32,993 392,468 ,86,9!,1 4,825,592
1,228,248 626,328 18,362 16,855 (2,248} 122,302 , (2,457) 2,007,390
11,277,917 3,191,893 231,84,,,9,,. 738,169 427,354 1,279,~,337 33,786 17.180,305
$12,506.165 $ 3 818,22.1 $ 250.211 $ 755,024 $ 425 106 $ %401,639 $ 31,329 $19 187,695
-42-
FINAL PRICING ANALYSIS
Dated Date 514/2009
Refunding Par Amount
Bond Arbitrage Yield
Escrow Yield
Refunded Bonds Par Amount
Average Coupon of Refunded Bonds
2,125,000
2.727616%
0.153096%
2,090,000
4.778251%
Net PV Savings 104,906.52
Percentage of PV Savings 5.019451%
Aggregate Budgetary Savings 115,916.57
Annual Budgetary Savings (Dec 31)
Fiscal Year 2009
Fiscal Year 2010
Fiscal Year 2011
Fiscal Year 2012
Fiscal Year 2013
Fiscal Year 2014
Fiscal Year 2015
Fiscal Year 2016
Fiscal Year 2017
Fiscal Year 2018
Fiscal Year 2019
18,739.07
13,980.00
8,822.50
13,287.50
7,927.50
7,931.25
13,061.25
8,510.00
11,365.00
6,485.00
5,807.50
ROOSEVELT & CROSS
41712009
SOURCES AND USES OF FUNDS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 -2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Dated Date 05/04/2009
Delivery Date 05/04/2009
Bond Proceeds:
Par Amount 2,125,000.00
Net Premium 74,287.65
2,199,287.65
Uses:
Refunding Escrow Deposits:
Cash Deposit
SLGS Purchases
21.03
2,130,217.00
2,130,238.03
51,000.00
16,000.00
67,000.00
Delivery Date Expenses:
Cost of Issuance
Underwdter's Discount
Other Uses of Funds:
Additional Proceeds
2,049.62
2,199,287.65
Apr7,2009 12:44pm Prepared by Roosevelt & Cross, lncorporated(s) (Finance6.O11 nys:R29899) Page1
SOURCES AND USES OF FUNDS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 - 2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Dated Date 05/04/2009
Delivery Data 05/04/2009
REFUNDING REFUNDING
Sources: BONDS BONDS Total
Bond Proceeds:
Par Amount 1,030,000.00 1,095,000.00 2,125,000.00
Net Premium/OlD 37,974.30 36,313,35 74,287.65
1,067,974.30 1,131,313.35 2,199,287.65
REFUNDING REFUNDING
Uses: BONDS BONDS Total
Refunding Escrow Deposits:
Cash Deposit
SLGS Purchases
10.90 10.13 21.03
1,034,482.00 1,095,735.00 2,130,217.00
1,034,492.90 1,095,745.13 2,130,238.03
24,720.00 26,280.00 51,000.00
7,755.29 8,244.71 16,000.00
32,475.29 34,524.71 67,000.00
Delivery Date Expenses:
Cost of Issuance
Underwdtar's Discount
O~her Uses of Funds:
Additional Proceeds
1,006.11 1,043.51 2,049.62
1,067,974.30 1,131,313.35 2,199,287.65
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporatad (s) (Finance 6.011 nys:R29899) Page 2
SUMMARY OF REFUNDING RESULTS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 - 2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Dated Date
Delivery Date
Arbitrage yield
Escrow yield
Bend Par Amount
True Interest Cost
Net Interest Cost
All-In TIC
Average Coupon
Average Life
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
PV of prior debt to 05/04/2009 @ 2.727616%
Nat PV Savings
Percentage savings of refunded bonds
Percentage savings of refunding bonds
05~04~2009
05K)4/2009
2.727616%
0.153096%
2,125,000.00
2.879379%
2.985072%
3.373851%
3.482389%
5.302
2,090,000.00
4.778251%
5.432
2,302,144.55
104,906.52
5.019451%
4.936777%
Apr7,2009 12:44pm Prepared by Roosevelt & Cross, lncorporated(s) (Finance6.011 nys:R29899) Page3
SAVINGS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05101/1998 BONDS (0510112010 - 2018
REFUNDING OF 05/01/1999 BONDS (0510112010 - 2019
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Present Value
Pdor Refunding Annual to 05/04/2009
Date Debt Service Debt Service Savings Savings @ 2.7276158%
11/01/2009 49,953.75 31,214.68 18,739.07 18,491.12
12/31 ~2009 18,739.07
05/01/2010 239,953.75 241,743.75 -1,790.00 -1,742.55
11/01/2010 45,413.75 29,643.75 15,770.00 15,145.41
1 2/31/2010 13,980.00
05/01/2011 255,413.75 259,643.75 -4,230.00 -4,007.81
11/01/2011 40,396.25 27,343.75 13,052.50 12,200.49
12/3112011 8,822.50
05/01/2012 250,396.25 247,343.75 3,052.50 2,814.86
11/01/2012 35,378.75 25,143.75 10,235.00 9,311.20
12/31/2012 13,287.50
05/01/2013 245,378.75 245,143.75 235.00 210.91
11/01/2013 30,361.25 22,668.75 7,692,50 6,811.13
1 2/31/2013 7,927.50
05/01/2014 250,361.25 247,668.75 2,692.50 2,351.93
11/01/2014 25,095.00 19,856.25 5,238.75 4,514.54
12/31/2014 7,931.25
0510112015 255,095.00 244,856.25 10,238.75 8,704.62
11/01/2015 19,585.00 16,762.50 2,822.50 2,367.30
1 2/31/2015 13,061.25
05/01/2016 249,585.00 241,762.50 7,822.50 6,472.66
11/01/2016 14,075.00 13,387.50 687.50 561.21
12/31/2016 8,510.00
05/01/2017 244,075.00 233,387.50 10,687.50 8,606.91
11/01/2017 8,565.00 7,887.50 677.50 538.27
1 2/31/2017 11,365.00
05/01/2018 248,565.00 242,887.50 5,677.50 4,450.03
1110112018 2,820.00 2,012.50 807.50 624.40
12/31/2018 6,485.00
05/01/2019 122,820.00 117,012.50 5,807.50 4,430.26
1 2/31/2019 5,807,50
2,633,287.50 2,517,370.93 115,916.57 115,916.57 102,856.89
Savinqs Summary
PV of savings from cash flow
Plus: Refunding funds on hand
102,856.89
2,049.62
Net PV Savings 104,906.51
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s)
Finance 6.011 nys:R29899) Page 4
Bond Component
BOND PRICING
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (0510112010 -2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Matudty
Date Amount Rate Yield
Pdce
Serial Bonds:
05/01/2010 210,000 2.000% 1.050% 100.934
05/01/2011 230,000 2.000% 1.330% 101.312
05/01/2012 220,000 2.000% 1.580% 101.222
05/01/2013 220,000 2.250% 2.000% 100.954
0510112014 225,000 2.500% 2.400% 100.467
05/01/2015 225,000 2.750% 2.600% 100.827
05/01/2016 225,000 3.000% 2.870% 100.818
05/01/2017 220,000 5.000% 3.100% 113.358
05/01/2018 235,000 5.000% 3.300% 113.133
05/01/2019 115,000 3.500% 3.550% 99.582
2,125,000
Dated Date
Delivery Date
First Coupon
Par Amount
Premium
Production
Underwfiter's Discount
Purchase Price
Accrued Interest
Net Proceeds
05/04/2009
05~04~2009
11/01~009
2,125,000.00
74,287.65
2,199,287.65
-16,000.00
2,183,287.65
2,183,287.65
103.495889%
-0.752941%
102,742948%
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 5
BOND DEBT SERVICE
Town of SouthOldl New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 - 2018)
REFUNDING OF 0510111999 BONDS (05/01/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
11/01 ~2009 31,214.68 31,214.68
12/31 ~2009 31,214.68
05/01/2010 210,000 2.000% 31,743.75 241,743.75
11/01/2010 29,643.75 29,643.75
1 2/31/2010 271,387.50
05/0112011 230,000 2.000% 29,643.75 259,643.75
11/01/2011 27,343.75 27,343.75
1 2/31/2011 286,987.50
05/01/2012 220,000 2.000% 27,343.75 247,343,75
11/01/2012 25,143.75 25,143,75
1 2/31/2012 272,487.50
05/01/2013 220,000 2.250% 25,143.75 245,143.75
1110112013 22,668.75 22,668.75
12/31/2013 267,812.50
05/01/2014 225,000 2.500% 22,668.75 247,668.75
11/01/2014 19,856.25 19,856.25
1 2/31/2014 267,525.00
05/01/2015 225,000 2.750% 19,856.25 244,856.25
11/01/2015 16,762.50 16,762.50
1 2/31/2015 261,618.75
05/01/2016 225,000 3.000% 16,762.50 241,762.50
11/01/2016 13,387.50 13,387.50
1 2/31/2016 255,150.00
05/01/2017 220,000 5.000% 13,387.50 233,387.50
11/01/2017 7,887.50 7,887.50
1 2/31/2017 241,275.00
0510112018 235,000 5.000% 7,887.50 242,887.50
11/01/2018 2,012.50 2,012.50
1 2/31/2018 244,900.00
05/01/2019 115,000 3.500% 2,012.50 117,012.50
12/31/2019 117,012.50
2,125,000 392,370.93 2,517,370.93 2,517,370.93
Apr7,2009 12:44pm Prepared by Roosevelt & Cross, lncorporated(s) (Finance6.011 nys:R29899) Page6
SUMMARY Of BONDS REFUNDED
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/199B BONDS (05/01/2010 - 2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Maturity Interest Par Call
Bond Date Rate Amount Date
Call
Pdce
Agricultural Land Preservation Serial Bonds, 1998, 1998:
SERIALS 05/01/2010 4.850% 100,000.00 06/03/2009
05/01/2011 4.850% 110,000.00 06113/2009
05/01/2012 4.850% 110,000.00 06/03/2009
05/01/2013 4.850% 110,000.00 06113/2009
05/01/2014 4.875% 110,000.00 06113/2009
05/01/2015 4.875% 120,000.00 06113/2009
05/01/2016 4.875% 120,000.00 06/03/2009
05/01/2017 4.875% 120,000.00 06113/2009
05111/2018 4.875% 120,000.00 06/03/2009
1,020,000.00
Open Space Preservation Serial Bonds, 1999, 1999:
101.000
101.000
101.000
101.000
101.000
101.000
101.000
101.000
101.000
SERIALS 05/01/2010 4.700% 90,000.00 06/03/2009 102.000
05/01/2011 4.700% 100,000.00 06~03~2009 102.000
05/01/2012 4.700% 100,000.00 06/03/2009 102.000
0510112013 4.700% 100,000.00 06~03~2009 102.000
05/01/2014 4.700% 110,000.00 06~03~2009 102.000
05/01/2015 4.700% 110,000.00 06~03~2009 102.000
05/01/2016 4.700% 110,000.00 06113/2009 102.000
05/01/2017 4.700% 110,000.00 06~03~2009 102.000
05/01/2018 4.700% 120,000.00 06113/2009 102.000
05/01/2019 4.700% 120,000.00 06113/2009 102.000
1,070,000.00
2,090,000.00
Apr7,2009 12:44pm Preparedby Roosevelt&Cross, Incorporated(s) (Finance6011 nys:R29899) Page7
PRIOR BOND DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 -2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 -2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
11/01 ~2009 49,953.75 49,953.75
12/31 ~2009 49,953.75
05/01/2010 190,000 ** 49,953.75 239,953.75
11/01/2010 45,413.75 45,413,75
1 2/31/2010 285,367.50
05/01/2011 210,000 ** 45,413.75 255,413,75
11/01/2011 40,396.25 40,396.25
12/31/2011 295,810.00
05/01/2012 210,000 ** 40,396.25 250,396.25
11/01/2012 35,378.75 35,378.75
1 2/31/2012 285,775.00
05/01/2013 210,000 ** 35,378.75 245,378.75
11/01/2013 30,361.25 30,361.25
1 2/31/2013 275,74000
05/01/2014 220,000 ** 30,361.25 250,361.25
11/01/2014 25,095.00 25,095.00
1 2/31/2014 275,456.25
05/01/2015 230,000 ** 25,095.00 255,095.00
11/0112015 19,585.00 19,585.00
1 2/31/2015 274,680.00
05/0112016 230,000 ** 19,585.00 249,585.00
11/01/2016 14,075.00 14,075.00
12-131/2016 263,660.00
05/01/2017 230,000 ** 14,075.00 244,075.00
11/01/2017 8,565.00 8,565.00
1 2/31/2017 252,640.00
05/01/2018 240,000 ** 8,565.00 248,565.00
11/01/2018 2,820.00 2,820.00
1 2/31/2018 251,385.00
05/01/2019 ~ 20,000 4.700% 2,820.00 122,820.00
1 2/31/2019 122,820.00
2,090,000 543,287.50 2,633,287.50 2,633,287.50
Apr7,2009 12:44pm Prepamd by Roosevelt & Cross, lncorporated(s) (Finance6011 nys:R29899) Page8
ESCROW REQUIREMENTS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 -2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 -2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Period Principal Redemption
Ending Interest Redeemed Premium Total
08/03/2009 8,880.66 2,090,000.00 31,600.00 2,130,480.66
8,880.66 2,090,000.00 31,600.00 2,130,480.66
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 9
ESCROW DESCRIPTIONS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 -2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Type of Type of Maturity First Int Par Max
Security SLGS Date Pmt Date Amount Rate Rate
May 4, 2009:
SLGS CedJficate 06~03~2009 06/03/2009 2,130,217 0.150% 0.150%
2,130,217
SLGS Summary
SLGS Rates File
Total Certificates of Indebtedness
07APR09
2,130,217.00
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 10
ESCROW COST
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 -2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 -2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Type of Maturity Par Total
Security Date Amount Rate Cost
SLGS 06/03/2009 2,130,217 0.150% 2,130,217.00
2,130,217 2,130,217.00
Purchase Cost of Cash Total
Date Securities Deposit Escrow Cost
05104/2009 2,130,217 21.03 2,130,238.03
2,130,217 21.03 2,130,238.03
Apr7,2009 12:44pm Prepared by Roosevelt & Cross, lncorporated(s) (Finance6.011 nys:R29899) Page11
ESCROW CASH FLOW
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/0111998 BONDS (05/01/2010 - 2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Net Escrow
Date Principal interest Receipts
06/03/2009 2,130,217.00 262.63 2,130,479.63
2,130,217.00 262.63 2,130,479.63
Escrow Cost Summary
Purchase date
Purchase cost of securities
0510412009
2,130,217.00
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 12
ESCROW SUFFICIENCY
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 -2018)
REFUNDING OF 05/01/1999 BONDS (05101/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Escrow Net Escrow Excess Excess
Date Requirement Receipts Receipts Balance
05/04/2009 21.03 21.03 21.03
06/03/2009 2,130,480.66 2,130,479.63 -1.03 20.00
2,130,480.66 2,130,500.66 20.00
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 13
ESCROW STATISTICS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 - 2018)
REFUNDING OF 05/01/1999 BONDS (0510112010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED -Aa3 UNDERLYING
Modified Yield to Yield to Perfect Value of
Total Duration Receipt Disbursement Escrow Negative Cost of
Escrow Escrow Cost (years) Date Date Cost Arbitrage Dead Time
REFUNDING BONDS, Global Proceeds Escrow:
1,034,492.90 0.080 0.153097% 0.153097% 1,032,36495 2,127.93 0.02
1,095,745.13 0.080 0.153095% 0.153095% 1,093,491.18 2,253.93 0.02
2,130,238.03 2,125,856.13 4,381.86 0.04
Delivery date 05/04/2009
Arbib-age yield 2.727616%
Apr 7 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 n 14
Date
PROOF Of ARBITRAGE YIELD
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 -2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 -2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Debt Service Total
Present Value
to 05~04~2009
@ 2.7276158%
11/0112009 31,214.68 31,214.68 30,801.65
05/01/2010 241,743.75 241,743.75 235,335.51
11/01/2010 29,643.75 29,643.75 28,469.67
05/01/2011 259,643.75 259,643.75 246,005.18
1110112011 27,343.75 27,343.75 25,558.86
05/01/2012 247,343.75 247,343.75 228,087.50
11/01/2012 25,143.75 25,143.75 22,874.29
05/01/2013 245,143,75 245,143.75 220,016.64
11/01/2013 22,668.75 22,668.75 20,071.48
05101/2014 247,668.75 247,668.75 216,341.63
11/01/2014 19,856.25 19,856.25 17,111.31
05/01/2015 244,856.25 244,856.25 208,168.13
11/01/2015 16,762.50 16,762.50 14,059.15
05/01/2016 241,762.50 241,762.50 200,044.28
11/01/2016 13,387.50 13,387.50 10,928.33
05/01/2017 233,387.50 233,387.50 187,952.87
11/01/2017 7,887.50 7,887.50 6,266.54
05/01/2018 242,887.50 242,887,50 190,375.35
11/01/2018 2,012.50 2,012.50 1,556.18
05/01/2019 117,012.50 117,012.50 89,263.10
2,517,370.93 2,517,370.93 2,199,287.65
Proceeds Summary
Delivery date
Par Value
Premium (Discount)
Target for yield calculation
05/04/2009
2,125,000.00
74,287.65
2,199,287.65
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 15
PROOF OF COMPOSITE ESCROW YIELD
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 - 2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
All restricted eacrow~ funded by bond proceeds
Present Value
Security to 05/04/2009
Date Receipts @ 0.1530962%
06~03~2009 2,130,479.63 2,130,217.00
2,130,479.63 2,130,217.00
Escrow Cost Summary
Purchase date
Purchase cost of securities
Target for yield calculation
05/04/2009
2,130,217.00
2,130,217.00
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 16
BOND SUMMARY STATISTICS
Town of Southold, NewYork
REFUNDING BONDS
REFUNDING OF 05/01/1998 BQNDS (05/01/2010 - 2018)
REFUNDING OF 05/0111999 BONDS (0510112010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Dated Date
Delivery Date
Last Maturity
05/04/2009
05/04/2009
05/01/2019
Arbi~'age Yield
True Interest Cost (TIC)
Net Interest Cost (NIC)
Ail-In TIC
Average Coupon
2.727616%
2.879379%
2.965072%
3.373851%
3.482389%
Average Life (years)
Duration of Issue (years)
5.302
4.873
Par Amount
Bond Proceeds
Total Interest
Net Interest
Total Debt Service
Maximum Annual Debt Service
Average Annual Debt Service
2,125,000.00
2,199,287.65
392,370.93
334,083.28
2,517,370.93
286,987.50
251,947.05
Underwdter's Fees (per $1000)
Average Takedown
Other Fee
7.529412
Total Underwriter's Discount
7.529412
Bid Price 102.742948
Par Average Average
Bond Component Value Price Coupon Life
Serial Bonds 2,125,000.00 103.496 3.482% 5.302
2,125,000.00 5.302
Par Value
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount
- Cost of Issuance Expense
- Other Amounts
All-In Arbitrage
TIC TIC Yield
2,125,000.00
74,287.65
-16,000.00
2,125,000.00
74,287,65
-16,000.00
-51,000.00
2,125,000.00
74,287.65
Target Value 2,183,287.65 2,132,287.65 2,199,287.65
Target Date 05~04~2009 05/04/2009 05~04~2009
Yield 2,879379% 3.373851% 2.727616%
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 17
FORM 8038 STATISTICS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 0510111998 BONDS (05/01/2010 -2018)
REFUNDING OF 05/01/1999 BONDS (05/01/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANCED - Aa3 UNDERLYING
Dated Date 05/04/2009
Delivery Date 05K)4/2009
Bond Component
Redemption
Date Principal Coupon Pdce Issue Price at Matudt¥
Sedal Bonds:
05/0112010 210,000.00 2.000% 100.934 211,961.40 210,000.00
05/01/2011 230,000.00 2.000% 101.312 233,017.60 230,000.00
05/01/2012 220,000.00 2.000% 101.222 222,688.40 220,000.00
05/01/2013 220,000.00 2.250% 100.954 222,098.80 220,000.00
05/01/2014 225,000.00 2.500% 100.467 226,050.75 225,000.00
05/01/2015 225,000.00 2.750% 100.827 226,860.75 225,000.00
05/01/2016 225,000.00 3.000% 100.818 226,840.50 225,000.00
05/01/2017 220,000.00 5.000% 113.358 249,387.60 220,000.00
05/01/2018 235,000.00 5.000% 113.133 265,862.55 235,000.00
05/01/2019 115,000.00 3.500% 99.582 114,519.30 115,000.00
2,125,000.00 2,199,287.65 2,125,000.00
Stated Weighted Net
Maturity Interest Issue Redemption Average Interest
Date Rate Price at Matudty Maturity Yield Cost
Final Matudty 05/01/2019 3.500% 114,519.30 115,000.00
Entire Issue 2,199,287.65 2,125,000.00 5.3783 2.7276% 2.6891%
Proceeds used for accrued interest
Proceeds used for bond issuance costs (including underwriters' discount)
Proceeds used for credit enhancement
Proceeds allocated to reasonably required reserve or replacement fund
Proceeds used to currently refund prior issues
Proceeds used to advance refund prior issues
Remaining weighted average maturity of the bonds to be currently refunded
Remaining weighted average maturity of the bonds to be advance refunded
0.00
67,000.00
0.00
0.00
2,130,238.03
0.00
5.3996
0.0000
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 18
FORM 8038 STATISTICS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 05/01/1998 BONDS (05/01/2010 - 2018)
REFUNDING OF 05/01/1999 BONDS (05101/2010 - 2019)
(BANK QUALIFIED); (NON-CALLABLE)
UNENHANDED - Aa3 UNDERLYING
Refunded Bonds
Bond
Component Date Principal Coupon Price Issue Price
Agricultural Land Preservation Serial Bonds, 1998:
SERIALS 05/01/2010 100,000.00 4.850% 102.276 102,276.00
SERIALS 05/01/2011 110,000.00 4.850% 101.357 111,492.70
SERIALS 05/01/2012 110,000.00 4.850% 100.448 110,492.80
SERIALS 05/01/2013 110,000.00 4.850% 100.000 110,000.00
SERIALS 05/01/2014 110,000.00 4.875% 99.722 109,694.20
SERIALS 05/01/2015 120,000.00 4.875% 99.143 118,971.60
SERIALS 05/01/2016 120,000.00 4.875% 98.527 118,232.40
SERIALS 05/01/2017 120,000.00 4.875% 98.477 118,172.40
SERIALS 05/01/2018 120,000.00 4.875% 98.430 118,116.00
1,020,000.00 1,017,448.10
Open Space Preservation Serial Bonds, 1999:
SERIALS 05/01/2010 90,000.00 4.700% 102,583 92,324.70
SERIALS 05/01/2011 100,000.00 4.700% 101.831 101,831.00
SERIALS 05/01/2012 100,000.00 4.700% 101.368 101,368.00
SERIALS 05/01/2013 100,000.00 4.700% 100.909 100,90900
SERIALS 05/01/2014 110,000.00 4.700% 100.452 110,497.20
SERIALS 05/01/2015 110,000,00 4.700% 100.000 110,000.00
SERIALS 05/01/2016 110,000.00 4.700% 99,419 109,360.90
SERIALS 05/01/2017 110,000.00 4.700% 99.398 109,337.80
SERIALS 05/01/2018 120,000.00 4.700% 98.762 118,514,40
SERIALS 05/01/2019 120,000.00 4.700% 98.722 118,466.40_
1,070,000,00 1,072,609.40
2,090,000,00 2,090,057.50
Remaining
Last Weighted
Call Issue Average
Date Date Matudty
Agricultural Land Preservation Serial Bonds, 1998 06/03/2009 05/19/1998 5.0977
Open Space Preservation Serial Bonds, 1999 06/03/2009 05/18/1999 5.6859
All Refunded Issues 06/03/2009 5.3996
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 19
SOURCES AND USES OF FUNDS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1998 BONDS (05/01/2010- 2018)
Dated Date 05/04/2009
Delivery Date 05~)4/2009
Bond Proceeds:
Par Amount 1,030,000.00
Premium 37,974.30
1,067,974.30
Uses:
Refunding Escrow Deposits:
Cash Deposit
SLGS Purchases
Delivery Date Expenses:
Cost of Issuance
Under~vdter's Discount
Other Uses of Funds:
Additional Proceeds
10.90
1,034,482.00
1,034,492.90
24,720.00
7,755.29
32,475.29
1,006.11
1,067,974.30
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6011 nys:R29899) Page 20
SUMMARY OF REFUNDING RESULTS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1998 BONDS (05/01/2010 -2018)
Dated Date
Delivery Date
Arbi~'age yield
Escrow yield
Bond Par Amount
True Interest Cost
Net Interest Cost
All-In TIC
Avemge Coupon
Average Life
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
PV of pdor debt to 05/04/2009 @ 2.727616%
Net PV Savings
Percentage savings of refunded bonds
Percentage savings of refunding bonds
05/04/2009
05/04/2009
2.727616%
0.153097%
1,030,000.00
2.793522%
2.883619%
3.312733%
3.470805%
4.997
1,020,000.00
4.869808%
5.129
1,122,633.98
60,223.52
5.904267%
5.846944%
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 21
SAVINGS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1998 BONDS (05/01/2010 - 2018)
Present Value
Prior Refunding Annual to 05/04/2009
Date Debt Service Debt Service Savings Savings @ 2.7276158%
11/01/2009 24,808.75 14,922.08 9,886.67 9,755.85
12/31/2009 9,886.67
05/01/2010 124,808.75 125,175.00 -366.25 -356.54
11/01/2010 22,383.75 14,075.00 8,308.75 7,979.67
12/31/2010 7,942.50
05/01/2011 132,383.75 134,075.00 -1,691.25 -1,602.41
11/01/2011 19,716.25 12,875,00 6,841.25 6,394.68
12/31/2011 5,150.00
05/01/2012 129,716.25 127,875.00 1,841.25 1,697.90
11/01/2012 17,048.75 11,725.00 5,323.75 4,843.23
12/31/2012 7,165.00
05/01/2013 127,048.75 126,725.00 323.75 290.57
11/01/2013 14,381.25 10,431.25 3,950.00 3,497.43
1 2/31/2013 4,273.75
05/01/2014 124,381.25 120,431.25 3,950.00 3,450.37
11/01/2014 11,700.00 9,056.25 2,643.75 2,278.28
12/31/2014 6,593.75
05/01/2015 131,700.00 124,056.25 7,643.75 6,498.45
11/01/2015 8,775.00 7,475.00 1,300.00 1,090.34
1 2/31/2015 8,943.75
05/01/2016 128,775.00 122,475.00 6,300.00 5,212.88
11/01/2016 5,850.00 5,750.00 10Q00 81.63
1 2/31/2016 6,400.00
0510112017 125,850.00 120,750.00 5,100.00 4,107.16
1110112017 2,925.00 2,875.00 50.00 39.72
12/31/2017 5,150.00
05/01/2018 122,925.00 117,875.00 5,050.00 3,958.19
12/31/2018 5,050.00
1,275,177.50 1,208,622.08 66,555.42 66,555.42 59,217.41
Savinqs Summary
PV of savings from cash flow
Plus: Refunding funds on hand
59,217.41
1,006.11
Net PV Savings 60,223.52
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 22
Bond Component
BOND PRICING
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1998 BONDS (05/01/2010 - 2018)
Maturity
Date Amount Rate Yield
Pdce
Serial Bonds:
05/01/2010 110,000 2.000% 1.050% 100.934
05/01/2011 120,000 2.000% 1,330% 101.312
05/01/2012 115,000 2.000% 1.580% 101.222
05/0112013 115,000 2,250% 2.000% 100.954
05/01/2014 110,000 2.500% 2.400% 100.467
05/01/2015 115,000 2.750% 2.600% 100.827
05/01/2016 115,000 3.000% 2.870% 100.818
05/01/2017 115,000 5.000% 3.100% 113.358
0510112018 115,000 5.000% 3,300% 113.133
1,030,000
Dated Date
Delivery Date
First Coupon
Par Amount
Premium
Production
Underwdter's Discount
Purchase Price
Accrued Interest
Net Proceeds
05/04/2009
05/04/2009
11/01/2009
1,030,000.00
37,974.30
1,067,974.30
-7,755.29
1,060,219.01
1,060,219.01
103.686825%
-0.752941%
102,933884%
Apr7,2009 12:44pm Prepared by Roosevelt & Cross, lncorporated(s) (Finance6.011 nys:R29899) Page23
BOND DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1998 BONDS (05/01/2010 - 2018)
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
11/01/2009 14,922.08 14,922.08
12/3112009 14,922.08
05/01/2010 110,000 2.000 % 15,175.00 125,175.00
11/01/2010 14,075.00 14,075.00
12/31/2010 139,250.00
05/01/2011 120,000 2,000% 14,075.00 134,075.00
11/01/2011 12,875.00 12,875.00
1 2/31/2011 146,950.00
05/01/2012 115,000 2.000% 12,875.00 127,875.00
11/01/2012 11,725.00 11,725.00
1 2/3112012 139,600.00
05/01/2013 115,000 2.250% 11,725.00 126,725.00
11/01/2013 10,431.25 10,431.25
1 2/31/2013 137,156.25
05/01/2014 110,000 2.500% 10,431.25 120,431.25
11/01/2014 9,056,25 9,056.25
1 2/31/2014 129,487.50
05/01/2015 115,000 2.750% 9,056.25 124,056.25
11/01/2015 7,475.00 7,475.00
1 2/31/2015 131,531.25
05/01/2016 115,000 3.000% 7,475.00 122,475.00
11/01/2016 5,750.00 5,750.00
12/31/2016 128,225.00
05/01/2017 115,000 5.000% 5,750.00 120,750.00
11/0112017 2,875,00 2,875.00
1 2/31/2017 123,625 00
05/01/2018 115,000 5.000% 2,875.00 117,875.00
12/31/2018 117,875.00
1,030,000 178,622.08 1,208,622.08 1,208,622.08
Apr7,2009 12:44pm Prepared by Roosevelt & Cross, lncorporated(s) (Finance6.011 nys:R29899) Page24
SUMMARY OF BONDS REFUNDED
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1998 BONDS (05/01/2010
Maturity Interest Par
Bond Date Rate Amount
-2018)
Call
Date
Call
Pdce
Agricultural Land Preservation Serial Bonds, 1998, 1998:
SERIALS 05/0112010 4.850% 100,000.00
05/01/2011 4.850% 110,000.00
05/01/2012 4.850% 110,000.00
05/01/2013 4.850% 110,000.00
05/01/2014 4.875% 110,000.00
05/01/2015 4.875% 120,000.00
05/01/2016 4.875% 120,000.00
05/01/2017 4.875% 120,000.00
05/01/2018 4.875% 120,000.00
06/03/2009
06/03/2009
06/03/2009
06/03/2009
06/03/2009
06/03/2009
06/03/2009
06/03/2009
06~03~2009
101.000
101.000
101.000
101.000
101.000
101,000
101.000
101.000
101.000
1,020,000.00
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, incorporated (s) (Finance 6.011 nys:R29899) Page 25
PRIOR BOND DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1998 BONDS (05/0112010 - 2018)
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
11/01 ~2009 24,808.75 24,808.75
12/31/2009 24,808.75
05101/2010 100,000 4.850% 24,808.75 124,808.75
11/01/2010 22,383.75 22,383.75
12/3112010 147,192.50
05/0112011 110,000 4.850% 22,383.75 132,383.75
11/01/2011 19,716.25 19,716.25
1 2/31/2011 152,100.00
05/01/2012 110,000 4.850% 19,716.25 129,716.25
11/0112012 17,048.75 17,048,75
12/31/2012 146,765.00
05/01/2013 110,000 4.850% 17,048.75 127,048.75
11/01/2013 14,381.25 14,381.25
12/31/2013 141,430.00
05/01/2014 110,000 4.875% 14,381.25 124,381.25
11/01/2014 11,700.00 11,700.00
1 2/31/2014 136,081.25
05/01/2015 120,000 4.875% 11,700.00 131,700.00
11/01/2015 8,775.00 8,775.00
12/31/2015 140,475.00
05/01/2016 120,000 4.875% 8,775.00 128,775.00
11/01/2016 5,850.00 5,850.00
12/31/2016 134,625.00
05/0112017 120,000 4.875% 5,850.00 125,850.00
1110112017 2,925.00 2,925.00
1 2/31/2017 128,775.00
05/01/2018 120,000 4.875% 2,925.00 122,925.00
1 2/31/2018 122,925.00
1,020,000 255,177.50 1,275,177.50 1,275,177.50
Apr7,2009 12:44pm Prepared by Roosevelt & Cross, lncorporated(s) (Finance6.011 nys:R29899) Page26
SOURCES AND USES OF FUNDS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1999 BONDS (05/01/2010 -2019)
Dated Date 05/04/2009
Delivery Date 05~)4/2009
Bond Proceeds:
Par Amount 1,095,000.00
Net Premium 36,313.35
1,131,313.35
Uses:
Refunding Escrow Deposits:
Cash Deposit
SLGS Purchases
Delivery Date Expenses:
Cost of issuance
Underwdter's Discount
Other Uses of Funds:
Additional Proceeds
10.13
1,095,735.00
1,095,745.13
26,280.00
8,244.71
34,524.71
1,043.51
1,131,313.35
Apr7,2009 12:44pm Prepared by Roosevelt & Cross, lncorporated(s) (Finance6.011 nys:R29899) Page27
SUMMARY OF REFUNDING RESULTS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1999 BONDS (05/01/2010 -2019)
Dated Date
Delivery Date
Arbitrage yield
Escrow yield
Bond Par Amount
True Interest Cost
Net Interest Cost
Ail-In TIC
Average Coupon
Average Life
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
PV of prior debt to 05/04/2009 @ 2.727616%
Net PV Savings
Percentage savings of refunded bonds
Percentage savings of refunding bends
05/04/2009
05~)4/2009
2.727616%
0.153095%
1,095,000.00
2.952626%
3.033557%
3.426074%
3.492129%
5.590
1,070,000.00
4.700000%
5.721
1,179,510.57
44,683.00
4.175981%
4.080639%
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 28
SAVINGS
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1999 BONDS (05/01/2010 -2019)
Present Value
Pdor Refunding Annual to 05/04/2009
Date Debt Service Debt Service Savings Savings @ 2.7276158%
11/01 ~2009 25,145.00 16,292.60 8,852.40 8,735.27
12/31/2009 8,852.40
05/01/2010 115,145.00 116,568.75 -1,423.75 -1,386.01
11/01/2010 23,030.00 15,568.75 7,461.25 7,165.74
1 2/31/2010 6,037.50
05/01/2011 123,030.00 125,568.75 -2,538.75 -2,405.39
11/01/2011 20,680.00 14,468.75 6,211.25 5,805.81
12/31/2011 3,672.50
0510112012 120,680.00 119,468.75 1,211.25 1,116.95
11/01/2012 18,330.00 13,418.75 4,911.25 4,467.96
12/31/2012 6,122.50
05/01/2013 118,330.00 118,418.75 -88.75 -79.65
11/01/2013 15,980.00 12,237.50 3,742.50 3,313.70
1 2/31/2013 3,653.75
05/01/2014 125,980.00 127,237.50 -1,257.50 -1,098.44
11/01/2014 13,395.00 10,800.00 2,595.00 2,236.27
12./31/2014 1,337.50
05/01/2015 123,395.00 120,800.00 2,595.00 2,206.18
11/01/2015 10,810.00 9,287.50 1,522.50 1,276.96
12/31/2015 4,117.50
05/01/2016 120,810.00 119,287.50 1,522.50 1,259.78
11/01/2016 8,225.00 7,637.50 587.50 479.58
12/31/2016 2,110.00
05/01/2017 118,225.00 112,637.50 5,587.50 4,499.76
11/01/2017 5,640.00 5,012.50 627.50 498.54
12/31/2017 6,215.00
0510112018 125,640.00 125,012.50 627.50 491.83
11/01/2018 2,820.00 2, 012.50 807.50 624.40
1 2/31/2018 1,435.00
05/01/2019 122,820.00 117,012,50 5,807.50 4,430.26
12/31/2019 5,607.50
1,358,110.00 1,308,748.85 49,361.15 49,361.15 43,639.49
Savinos Summary
PV of savings from cash flow
Plus: Refunding funds on hand
43,639.49
1,043.51
Net PV Savings 44,683.00
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6,011 nys:R29899) Page 29
Bond Component
BOND PRICING
Town of Southeld, New York
REFUNDING BONDS
REFUNDING OF 1999 BONDS (05/01/2010 -2019)
Maturity
Date Amount Rate Yield
Pdce
Serial Bonds:
05/01/2010 100,000 2.000% 1.050% 100.934
05/01/2011 110,000 2.000% 1.330% 101.312
05/01/2012 105,000 2.000% 1.580% 101.222
05/01/2013 105,000 2.250% 2.000% 100.954
05/01/2014 115,000 2.500% 2.400% 100.467
05/01/2015 110,000 2.750% 2.600% 100.827
05/01/2016 110,000 3.000% 2.870% 100.818
05/01/2017 105,000 5.000% 3.100% 113.358
05/01/2018 120,000 5.000% 3.300% 113.133
05/01/2019 115,000 3.500% 3.550% 99.582
1,095,000
Dated Date
Delivery Date
First Coupon
Par Amount
Premium
Production
Underwriter's Discount
Purchase Price
Accrued Interest
Net Proceeds
05/04/2009
05/04/2009
11/01/2009
1,095,000.00
36,313.35
1,131,313.35 -8,244.71
1,123,068.64
1,123,068.64
103.316288%
q3.752942%
102.563346%
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 30
BOND DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1999 BONDS (05/01/2010 -2019)
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
11/01/2009 16,292.60 16,292.60
12/31 ~2009 16,292.60
05/01/2010 100,000 2.000% 16,568.75 116,568.75
11/01/2010 15,568.75 15,568.75
1 2/31/2010 132,137.50
05101/2011 110,000 2.000% 15,568.75 125,568.75
11/01/2011 14,468.75 14,468.75
12/31/2011 140,037.50
05/01/2012 105,000 2.000% 14,468.75 119,468.75
11/01/2012 13,418.75 13,418.75
1 2/31/2012 132,887.50
05/01/2013 105,000 2.250% 13,418.75 118,416.75
11/01/2013 12,237.50 12,237.50
12/31/2013 130,656.25
05/01/2014 115,000 2.500% 12,237.50 127,237.50
11/01/2014 10,800.00 10,800.00
1 2/3112014 138,037.50
05/01/2015 110,000 2.750% 10,800.00 120,800.00
11/0112015 9,28750 9,287.50
12/31/2015 130,087.50
05/01/2016 110,000 3.000% 9,287.50 119,287.50
11/01/2016 7,637.50 7,637.50
1 2/31/2016 126,925.00
05/01/2017 105,000 5.000% 7,637.50 112,637.50
11/01/2017 5,012.50 5,012.50
1 2/31/2017 117,65000
05/01/2018 120,000 5.000% 5,012.50 125,012.50
11/01/2018 2,012.50 2,012.50
1 2/31/2018 127,025.00
05/01/2019 115,000 3.500% 2,012.50 117,012.50
1 2/31/2019 117,012.50
1,095,000 213,748.85 1,308,748.85 1,308,748.85
Apr7,2009 12:44pm Preparedby Roosevelt&Cross, Incorporated(s) (Finance6.011 nys:R29899) Page31
SUMMARY OF BONDS REFUNDED
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1999 BONDS (05/01/2010
Maturity Interest Par
Bond Date Rate Amount
~2019)
Call
Date
Call
Pdce
Open Space Preservation Serial Bonds, 1999, 1999:
SERIALS 05/01/2010 4.700% 90,000.00
05/01/2011 4.700% 100,000.00
05/01/2012 4.700% 100,000.00
05/01/2013 4.700% 100,000.00
05/01/2014 4.700% 110,000.00
05/01/2015 4.700% 110,000.00
05/01/2016 4.700% 110,000.00
05/0112017 4.700% 110,000.00
05/0112018 4.700% 120,000.00
05/01/2019 4.700% 120,000,00
06~03~2009
06~03~2009
06/03/2009
06~03~2009
06/03/2009
06~03~2009
06/03/2009
06~03~2009
06/03/2009
06/03/2009
102.000
102.000
102.000
102.000
102.000
102.000
102.000
102.000
102.000
102.000
1,070,000.00
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6011 nys:R29899) Page 32
Period
Ending
PRIOR BOND DEBT SERVICE
Town of Southold, New York
REFUNDING BONDS
REFUNDING OF 1999 BONDS (0510112010 - 2019)
Annual
Debt Debt
Principal Coupon Interest Service Service
11/01/2009 25,145 25,145
12/31/2009 25,145
05/0112010 90,000 4.700% 25,145 115,145
11/01/2010 23,030 23,030
12/31/2010 138,175
05/01/2011 100,000 4.700% 23,030 123,030
11/01/2011 20,680 20,680
12/31/2011 143,710
05/01/2012 100,000 4.700% 20,680 120,680
11/01/2012 18,330 18,330
1 2/31/2012 139,010
05/01/2013 100,000 4.700% 18,330 118,330
11/01/2013 15,980 15,980
12/31/2013 134,310
05101/2014 110,000 4.700% 15,980 125,980
11/01/2014 13,395 13,395
1 2/31/2014 139,375
05/01/2015 110,000 4.700% 13,395 123,395
11/01/2015 10,810 10,810
12/31/2015 134,205
05/01/2016 110,000 4.700% 10,810 120,810
11/01/2016 8,225 8,225
1 2/31/2016 129,035
05/01/2017 110,000 4.700% 8,225 118,225
11/01/2017 5,640 5,640
1 2/31/2017 123,865
05/01/2018 120,000 4700% 5,640 125,640
11/01/2018 2,820 2,820
1 2/31/2018 128,460
05/01/2019 120,000 4.700% 2,820 122,820
1 2/31/2019 122,820
1,070,000 288,110 1,358,110 1,358,110
Apr 7, 2009 12:44 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 33
EIC
Date
Cashflow
Present Value
to 05/04/2009
@ 2.7276158%
11/01/2009 31,214.68 30,801.65
05/01/2010 241,743.75 235,335.51
11/01/2010 29,643.75 28,469.67
05/01/2011 259,643.75 246,005.18
11/01/2011 27,343.75 25,558.86
05/01/2012 247,343.75 228,087.50
11/01/2012 25,143.75 22,874.29
05/01/2013 245,143.75 220,016.64
11/01/2013 22,668.75 20,071.48
05/01/2014 247,668.75 216,341.63
1110112014 19,856.25 17,111.31
0510112015 244,856.25 208,168.13
1110112015 16,762.50 14,059.15
05/0112016 241,762.50 200,044.28
11/01/2016 13,387.50 10,928.33
05/01/2017 233,387.50 187,952.87
11/01/2017 7,887.50 6,266.54
05/01/2018 242,887.50 190,375.35
11/01/2018 2,012.50 1,556.18
05/01/2019 117,012.50 89,263.10
2,517,370.93 2,199,287.65
Summary
Valuation date
Amount
Target for yield calculation
05/04/2009
2,199,287.65
2,199,287.65
Apr 7, 2009 12:43 pm Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 ) Page I
BLENDED ARBITRAGE YIELD - 2.703090%
SOURCES AND USES OF FUNDS
Town of Southold, New York
SCHOOL DISTRICT REFUNDING SERIAL BONDS - 2009
&
VARIOUS PUPOSES BOND ANTICIPATION NOTE - 2009
Sources:
Bond Proceeds, 04/17/2009:
Par Amount
Bond Proceeds, 05/04/2009:
Par Amount
Net Premium
371,000.00
2,125,000.00
74,287.65
2,199,287.65
2,570,287.65
Uses:
Project Fund Deposits, 04/17/2009:
BAN Proceeds
Refunding Escrow Deposits, 05/04/2009:
Cash Deposit
SLGS Purchases
Delivery Date Expenses, 05/04/2009:
Cost of Issuance
Underwriter's Discount
Other Uses of Funds, 05~04/2009:
Additional Proceeds
371,000.00
21.03
2,130,217.00
2,130,238.03
51,000.00
16,000.00
67,000.00
2,049.62
2,570,287.65
UNDERWRITER'S DISCOUNT ON COMPETITVE BAN NOT PROVIDED
Apr 20, 2009 11:32 am Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 1
BOND SUMMARY STATISTICS
Town of Southold, New York
SCHOOL DISTRICT REFUNDING SERIAL BONDS - 2009
&
VARIOUS PUPOSES BOND ANTICIPATION NOTE - 2009
Earliest Dated Date
Earliest Delivery Date
Last Maturity
Arbitrage Yield
True Interest Cost (TIC)
Net Interest Cost (NIC)
Ail-In TIC
Average Coupon
Average Life (years)
Par Amount
Bond Proceeds
Total Interest
Net Interest
Total Debt Service
Maximum Annual Debt Service
Average Annual Debt Service
Underwriter's Fees (per $1000)
Average Takedown
Other Fee
04/17/2009
04/17/2009
05/01/2019
2.703090%
2.849544%
2.909304%
3.326075%
3.405892%
4.703
2,496,000.00
2,570,287.65
399,770.32
341,482.67
2,895,770.32
649,786.89
288,455.26
6.410256
Total Underwriter's Discount
6.410256
Bid Price 102.335242
Par Average Average
Bond Component Value Price Coupon Life
Serial Bond 371,000.00 100.000 2.000% 0.997
Serial Bonds 2,125,000.00 103.496 3.482% 5.302
2,496,006.00 4.662
Par Value
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount
- Cost of Issuance Expense
- Other Amounts
Ail-In Arbitrage
TIC TIC Yield
2,496,000.00
74,287.65
-16,000.00
2,496,000.00
74,287.65
-16,000.00
-511000.00
2,496,000.00
74,287.65
Target Value 2,554,287.65 2,503,287.65 2,570,287.65
Target Date Multiple Multiple Multiple
Yield 2.849544% 3.326075% 2.703090%
UNDERWRITER'S DISCOUNT ON COMPETITVE BAN NOT PROVIDED
Apr 20, 2009 11:32 am Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 2
PROOF OF ARBITRAGE YIELD
Town of Southold, New York
SCHOOL DISTRICT REFUNDING SERIAL BONDS - 2009
&
VARIOUS PUPOSES BOND ANTICIPATION NOTE - 2009
Date Debt Service Total
11/01/2009 31,214.68 31,214.68
04/16/2010 378,399.39 378,399.39
05/0112010 241,743.75 241,743.75
11/01/2010 29,643.75 29,643.75
05/01/2011 259,643.75 259,643.75
11/0112011 27,343.75 27,343.75
05/01/2012 247,343.75 247,343.75
11/01/2012 25,143.75 25,143.75
05/01/2013 245,143.75 245,143.75
11/01/2013 22,668.75 22,668.75
05/01/2014 247,668.75 247,668.75
11/01/2014 19,856.25 19,856.25
05/01/2015 244,856.25 244,856.25
11/01/2015 16,762.50 16,762.50
05/01/2016 241,762.50 241,762.50
11/01/2016 13,387.50 13,387.50
05/01/2017 233,387.50 233,387.50
1110112017 7,887.50 7,887.50
05/01/2018 242,887.50 242,887.50
11/01/2018 2,012.50 2,012.50
05/01/2019 117,012.50 117,012.50
Present Value
to 04/17/2009
@ 2.7O309O4%
30,766.28
368,402.08
235,093.72
28,443.86
245 811.90
25,541.87
227 963.45
22,864.62
219 950.20
20,067.84
216 328.63
17,112.35
208 205.99
14,063.40
200 129.09
10,934.29
188,078.06
6,271.47
190,548.24
1,557.78
89,365.79
2,895,770.32 2,895,770.32 2,567,500.92
Proceeds Summary
Present Value
Delivery Premium to 04/17/2009
Date Par Value (Discount) Yield Target @ 2.7030904%
04/17/2009 3711000.00 371,000.00 371,000.00
05104/2009 2,125,000.00 74,287.65 2,199,287.65 2,196,500.92
2,496,000.00 2,567,500.92
UNDERWRITER'S DISCOUNT ON COMPETITVE BAN NOT PROVIDED
Apr 20, 2009 11:32 am Prepared by Roosevelt & Cross, Incorporated (s) (Finance 6.011 nys:R29899) Page 3
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
CAUSEY DEMGEN & MOORE INC.
Certified Public Accountants and Consultants
May 4, 2009
Suite 4650
1801 California Street
Denver, Colorado 80202-2681
Telephone: (303) 296-2229
Facsimile: (303) 296-3731
www.cdmcpa.com
Town of Southold
53095 Main Road
Southold, New York 11971
Munistat Services, Inc.
12 Roosevelt Avenue
Port Jefferson Station, New York 11776
Hawkins Delafield & Wood LLP
One Chase Mmlhattan Plaza, 42® Floor
New York, New York 10005
Roosevelt & Cross, Inc.
One Exchange Plaza - 22"d Floor
New York, New York 10006
We have completed our engagement to Verify the mathematical accuracy of the computations
relating to the adequacy of cash plus a U.S. Treasury Secm-ity to be held in escrow to pay the debt
service requirements of the following bonds (herein collectively referred to as the "Refunded
Bonds") issued by the Town of Southold, Suffolk Couniy, New York (herein referred to as the
"Town"):
Agricultural Land Preservation Serial Bonds - 1998 (herein referred to as the
"Refunded 1998 Bonds"), and
Open Space Preservation Serial Bonds - 1999 (herein referred to as the "Refunded
1999 Bonds").
We express no opinion on the attainability of the assumptions underlying the computations or the
tax-exempt status of the Refunding Serial Bonds - 2009 (herein referred to as the "Refunding
Bonds") to be issued by the Town. Our verification was performed solely on the schedules of
proposed transactions provided by Roosevelt & Cross, Inc. (herein referred to as the
"Underwriter"). In the course of our engagement to verify the mathematical accuracy of the
computations in the schedules provided to us, we prepared Exkibits A through B-2 attached hereto
and made a part hereof.
The scope of our engagement consisted of performing the procedures described herein. These
procedures were performed in a manner that we deem to be appropriate.
The accompanying exlfibits of proposed transactions were prepared on the basis of assumptions
underlying the computations and in accordance with the procedures described herein. We did not
independently confirm the information used with outside parties.
OUR UNDERSTANDING OF THE TRANSACTION
The Refunding Bonds are to be issued on May 4, 2009 to current refund the Refunded Bonds. A
portion of the proceeds of the Refunding Bonds will be used to purchase a U.S. Treasury Security
CDM
Town of Southold
May 4, 2009
Page 2
and to provide cash which will be placed into an escrow account to current refund the Refunded
Bonds.
The Escrow Agent will redeem the Refunded 1998 Bonds on June 3, 2009, at a redemption price
equal to 101% of par, plus accrued interest thereon.
The Escrow Agent will redeem the Refunded 1999 Bonds on June 3, 2009, at a redemption price
equal to 102% of par, plus accrued interest thereon.
ESCROW ACCOUNT TRANSACTIONS
We verified the mathematical accuracy of the accompanying calculations of the escrow account
transactions proposed to current refund the Refunded Bonds.
The presently outstanding debt service requirements of the Refunded Bonds, as described above,
will be satisfied by the purchase of a U.S. Treasury Security (as described in Exhibit A-2) plus
$21.03 in cash. The security and cash will be placed in an irrevocable escrow account and held
therein until the Refunded Bonds are redeemed as previously described. -
We read copies of the Official Statements for the Refunded Bonds insofar as such obligations are
described with respect to principal outstanding, interest rates, ~naturity dates, and redemption
provisions. We assumed these documents to be accurate and all debt service payments on the
Refunded Bonds to be current as of May 4, 2009. We compared the above information set forth in
these Official Statements with the related information contaiued in the schedules provided to us and
found the information to be consistent.
We read a copy of the application for the purchase of the U.S. Treasury Security (State and Local
Government Series) to be placed in the escrow account insofar as such security is described with
respect to maturity date, maturing principal amount, interest rate, and fa'st interest payment date.
We compared the above information set forth in such application with the related information in the
schedules provided to us and found the information to be consistent.
We compared the subscribed interest rote of the U.S. Treasury Security (State and Local
Government Series) to be purchased and placed in escrow with the ~naximum allowable interest
rotes as published in the SLGS Securities Daily Rate Table by the Bureau of the Public Debt for
April 7, 2009 and found the subscribed rate to be less than or equal to the maximum allowable rote
that was in effect on the subscription date for such maturity date.
Based on the procedures and information set forth above, the computations provided to us and
represented in Exhibits A through B-2, which indicate that the cash and security proposed to be
placed in escrow by the Town will produce the amount necessary to provide for the timely payment
of the proposed debt payment schedule on the Refunded Bonds, are mathematically correct.
Southold- 2[8854 IBOC
Town of Southold
May 4, 2009
Page 3
USE OF THIS REPORT
It is understood that this report is solely for the information of and assistance to the addressees
hereof in connection with the issuance of the Refunding Bonds and is not to be used, relied upon,
circulated, quoted or otherwise referred to for any other propose without our written consent, except
that (i) reference may be made to the report in the Official Statement for the Refunding Bonds in
the section captioned "Verification of Mathematical Computations," (ii) reference may be made to
the report in the purchase contract or in any closing docmnents pertaining to the issuance of the
Refunding Bonds covered by the Official Statement, (iii) the report may be used in its entirety as an
exhibit to the escrow agreement for the Refunded Bonds, (iv) the report may be included in the
transcripts pertaining to the issuance of the Refunding Bonds, (v) the report may be relied upon by
Bond Counsel in connection with its opinions concerning the Refunded Bonds, (vi) the report may
be relied upon by any rating agency or bond insurer that shall have rated or insured or that will rate
or insure the Refunded Bonds or the Refunding Bonds, and (vii) the report may be relied upon by
the Escrow Agent for the Refunded Bonds.
The scope of our engagement is deemed by the addressees hereto to be sufficient to assist such
parties in evaluating the mathematical accuracy of the various computations cited above. The
sufficiency of this scope is solely the responsibility of the specified users of this report and should
not be taken to supplant any additional inquiries or procedures that the users would undertake in
their consideration of the issuance of the bonds related to the transaction described herein. We
make no representation regarding the sufficiency of the scope of this engagement. This report
should not be used by any party who does not agree to the scope sel forth herein and who does not
take responsibility for the sufficiency and appropriateness of such scope for their purposes.
We have no obligation to update this report because of events, circumstances, or transactions
occurring subsequent to the date of this report.
Very truly yours,
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXHIBIT A
ESCROW ACCOUNT CASH FLOW
AS OF MAY 4, 2009
Date
Beginning
Balance:
03-Jun~09
Total Cash
Receipt From Cash
U.S. Treasury Disburscmcnt
SLGs From Escrow
(Exhibit A-l) (Exhibit B)
Cash
Balance
$21.03
$2,130,479.63 $2,130,480.66 20.00
$2,130,479.63 $2,130,480.66
EXHIBIT A-I
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BON DS - 2009
CASH RECEIPT FROM THE ESCROWED SECURITY
AS OF MAY 4, 2009
$2,130,217.00
0.~50000% Total
Payment SLGS (1) Cash
Date 03-Jun-09 Receipt
03-Jun-09 $2,130,479.63 $2,130,479.63
$2,130,479.63 $2,130,479.63
(1) U.S. Treasury Certificate of Indebtedness
(State and Local Government Series).
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXItlBIT A-2
DESCRIPTION OF THE ESCROWED SECURITY
AS OF MAY 4, 2009
Settlement Maturity Par Coupon
Type Date Date Amount II. ate Price Cost
SLGS 04-May-09 03-Jun-09 $2,130,217.00 0.150% 100.000000% $2,130,217.00
$2,130,217.00 $2,130,217.00
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXHIBIT B
ESCROW ACCOUNT DISBURSEMENT REQUIREMENT
FOR THE REFUNDED BONDS
AS OF MAY 4, 2009
Debt Payment For
Refunded Refunded
Payment 1998 Bonds 1999 Bonds Total Debt
Date (Exhibit B-I) (Exhibit B-2) Payment
03-Jun-09 $1,034,610.44 $1,095,870.22 $2,130,480.66
$1,034,610.44 $1,095,870.22 $2,130,480.66
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXHIBIT B-1
ESCROW ACCOUNT DISBURSEMENT REQUIREMENT
FOR THE REFUNDED 1998 BONDS
AS OF MAY 4, 2009
Payment For
Payment Principal
Date Rate Redeemed Interest Premium Total
03-Jun-09 Various
$1,020,000.00 $4,410.44 $I0,200.00 $1,034,610.44
$1,020,000.00 $4,410.44 $10,200.00 $1,034,610.44
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXHIBIT B-2
ESCROW ACCOUNT DISBURSEMENT REQUIREMENT
FOR THE REFUNDED 1999 BONDS
AS OF MAY 4, 2009
Payment For
Payment Principal
Date Rate Redeemed Interest Prcmium Total
03-Jun-09 4.700% $1,070,000.00 $4,470.22 $21,400.00 $1,095,870.22
$1,070,000.00 $4,470.22 $21,400.00 $1,095,870.22
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXHIBIT B-3
DEBT SERVICE REQUIREMENTS FOR THE REFUNDED 1998 BONDS
ASSUMING NO OPTIONAL REDEMPTIONS PRIOR TO MATURITY
AS OF MAY 4, 2009
(FOR INFORMATIONAL PURPOSES ONLY)
Payment Payment For Total Debt
Date Rate Principal Interest Payment
0 l-Nov-09 $24,808.75 $24,808.75
01-May-10 4.850% $I00,000.00 24,808.75 124,808.75
0 l-Nov-10 22,383.75 22,383.75
01-May-ll 4.850% 110,000.00 22,383.75 132,383.75
01-Nov-I 1 19,716.25 19,716~25
01~May-12 4.850% 110,000.00 19,716.25 129,716.25
01-Nov-12 17,048.75 17,048.75
0 l~May-13 4.850% 110,000.00 17,048.75 127,048.75
0 l-Nov- 13 14,381.25 14,381.25
01-May-14 4.875% 110,000.00 14,381.25 124,381.25
01-Nov-14 11,700.00 11,700.00
01-May-15 4.875% 120,000.00 11,700.00 131,700.00
01~Nov~15 8,775.00 8,775.00
01-May-16 4.875% 120,000.00 8,775.00 128,775.00
01-Nov-16 5,850.00 5,850.00
01-May-17 4.875% 120,000.00 5,850.00 125,850.00
01-Nov-17 2,925.00 2,925.00
01-May-lB 4.875% 120,000.00 2,925.00 122,925.00
$1,020,000.00 $255,177.50 $1,275,177.50
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXHIBIT B-4
DEBT SERVICE REQUIREMENTS FOR THE REFUNDED 1999 BONDS
ASSUMING NO OPTIONAL REDEMPTIONS PRIOR TO MATURITY
AS OF MAY 4, 2009
(FOR INFORMATIONAL PURPOSES ONLY)
Payment Payment For Total Debt
Date Rate Principal Interest Payment
01-Nov-09 $25,145.00 $25,145.00
01-May-10 4.700% $90,000.00 25,145.00 115,145.00
01-Nov-10 23,030.00 23,030.00
01-May-I 1 4.700% 100,000.00 23,030.00 123,030.00
0l-Nov-11 20,680.00 20,680.00
01-May-12 4.700% 100,000.00 20,680.00 i20,680.00
01-Nov-12 18,330.00 18,330.00
01-May-13 4.700% 100,000.00 18,330.00 I 18,330.00
01-Nov-13 15,980.00 I5,980.00
01-May-14 4.700% 110,000.00 15,980.00 125,980.00
01-Nov-14 13,395.00 13,395.00
01-May-15 4.700% l ~0,000.00 13,395.00 123,395.00
01-Nov-15 10,810.00 10,810.00
01-May-16 4.700% 110,000.00 10,810.00 120,810.00
01-Nov-16 8,225.00 8,225.00
0l-May-17 4.700% 110,000.00 8,225.00 118,225.00
01-Nov-17 5,640.00 5,640.00
01-May-18 4.700% 120,000.00 5,640.00 125,640.00
01-Nov-18 2,820.00 2,820.00
01-May-19 4.700% 120,000.00 2,820.00 122,820.00
$1,070,000.00 $288,110.00 $1,358,110.00
TOWN OFSOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUND~GSERIALBONDS-2009
EX] IIBIT C
ESTIMATED SOURCES AND USES OF FUNDS
AS OF MAY 4, 2009
Sources of Funds: Par Va/ue of Bonds
Net Original Issue Premium
Total Sources of Funds
$2,125,000.00
74,287.65
$2,199,287.65
Uses of Funds:
Beginning Escrow Account Cash Balance
Cost of the Escrowed Security
Underwriter's Discount
Issuance Costs
Contingency
Total Uses of Funds
$21.03
2,130,217.00
16,000.00
51,000.00
2,049.62
5;2,199,287.65'
U.S. TREASURY SECURITIES
Confirmation Notice - Time Deposit
Treasury Case Number Assigned: 2009-01523
Rate Table Date: 04/07/2009
issue Date: ~ 05/04/2009
Issue Amount: $2,130,217.00
TIN: 11-6001939
Owner Name: Town of $outhold, New York
Confirmation Date: April 07, 2009
Confirmation Time: 03:17 PM ET
Status: Complete
Date: 4/7/2009
U.S. TREASURY SECURITIES
Subscription Review
Issue Information
Treasu~ Case Number: Rank Ref Number:
2009-01523
Issue Date: Rate Table Date:
05104/2009 84/07/2009
Issue Amount: Status:
$2,138,217.00 Complete
State or Local Government Body
Underlying Bond Issue: Refunding Serial Bonds - 2009
Taxpayer Identification Number: 11-6001939
TOWN OF SOUTHOLD, NEW YORK
TOWN HALL
53095 MArN ROAD
SOUTHOLD, NY 11971
Contact: JOHN A. CUSHMAN Il, TOWN COMPTROLLER
Telephone: 631-765-4333
Fax: 631-765-1366
E-Mail: John. Cushma n@town.southold.ny.us
Trustee Bank
ABA Routing Number: 021000018
BANK OF NEW YORK
101 BARCLAY S~EET, 7W
NEW YORK. NY 10286
Contact: NICOLE PINERO
Telephone: 212-815-7167
Fax: 212-815-5595
E-Mail: nicole.pinero@b ny.mellon.corn
Financial Institution Managing (A CH) Payments
ABA Routing Number: 021000018
BANK OF NEW YORK
101 BARCLAY STREET, 7W
NEW YORK, NY 10286
Contact: NICOLE PINERO
Telephone: 212-815-7167
Fax: 212-815-5595
E-Mall: nicole.pinero@bny.merlon.com
ACH Payment Instructions:
Account Name: BNY TAS #
Account Number: GLA111566
Account Type: Checking
ABA Routing Number: 021000018
Date: 4/712009
U.S. TREASURY SECURITIES
Subscription Review
Financial Institution Transmitting Funds for Purchase
ABA Routing Number: 021000018
THE BANK OF NEW YORK MELLON
Contact: NICOLE PINERO
Telephone: 212-815-7167
Fax: 212-815-5595
E-Malh nicole.pinero@bny.melron.com
Subscdber
ABA Routing Number or T~N: 132728032
Roosevelt & Cross. Inc.
One Exchange Plaza
55 Broadway, 22nd Floor
New York. NY 10006
Contact: SCOTT T MONAH^N
Telephone: 212-504-9260
Fax: 212-480-9385
E-Mail: smonahan@roosevelt-cmss.com
Date: 4/7/2009
Viewers
U.S. TREASURY SECURITIES
Subscription Review
Issue Information
Treasury Case Number: Bank Ref Number:
2009-01523
Issue Date: Rate Table Date:
05/04/2009 04/07/2009
issue Amount: Status:
$2,130,217.00 Complete
Date: 4/712009
Schedule of SLGS Securities
Security Number Principal Interest Rate Maturity Date First Interest
Amount Payment
1 / $2,130,217.00 0.15 06/03/2009
CERTIFICATE OF THE CHIEF FISCAL OFFICER PURSUANT TO
SECTION 90.10(g) OF THE LOCAL FINANCE LAW
I, Scott A. Russell, duly appointed and qualified Supervisor of the Town of
Southold, County of Suffolk, New York (the "Town"), DO HEREBY CERTIFY as follows:
1. As used in this certificate:
(a) The term "Refunded Bonds" shall mean shall mean:
(i) all of the Town's $2,000,000 Agricultural Land Preservation Serial Bonds-
1998, maturing in the years 2010 through 2018, in the aggregate principal amount of $1,020,000;
and
(ii) all of the Town's $1,900,000 Open Space Preservation Serial Bonds-1999,
maturing in the years 2010 through 2019, in the aggregate principal amount of $1,070,000.
(b) The term "Refunding Bonds" shall mean the $2,125,000 aggregate
principal amount of Refunding Serial Bonds-2009 dated and issued May 4, 2009, and maturing
on May 1 in each of the years 20010 to 2019, inclusive and such series authorized to be issued by
the Refunding Bond Resolution adopted by the Town Board of said Town on February 24, 2009
for the object or purpose of refunding the Refunded Bonds.
2. The effective net interest rate on the Refunding Bonds as calculated in
accordance with Section 90.10(b)(2)(a) is 2.727616%.
3. The present value of the total payments of both principal of and interest on
the Refunded Bonds is $2,302,144.55.
4. All costs, fees, charges and expenses incidental to the issuance of the
Refunding Bonds including the development of the refunding financial plan set forth in said
Refunding Bond Resolution will be paid from the proceeds of the Refunding Bonds.
5. No accrued interest will be received by the Town.
6. The Town will not make a cash contribution to the refunding.
7. The present value of the total payments of both principal of and interest on
the Refunding Bonds is $2,199,287.65.
560789.1 032681 CERT
8. The present value of the total debt service savings to said Town, resulting
from the issuance of the Refunding Bonds is $104,906.51 (inclusive of $2,049.62 of refunding
funds on hand), computed by subtracting the present value of the total payments of both principal
and interest to become due and payable on the Refunding Bonds at their stated maturity dates
from the present value of the total payments of both principal and interest to become due and
payable on the Refunded Bonds at their stated maturity dates, and adding thereto the accrued
interest on the Refunding Bonds, in the amount of $-0-. All computations of present value set
forth in this certificate have been made in accordance with the provisions of subdivision 2 of
paragraph b of Section 90.10 of the Local Finance Law, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand as of the 4th day of
May, 2009.
Supervisor
560789.1 032681 CERT
THOMAS P. DiNAPOLI
STATE COMPTROLLER
STATE OF NEW YORK
110 STATE STREET
ALBANY, NEW YORK 12236-0001
OFFICE OF THE STATE COMPTROLLER
Pursuant to subdivision g of section 90.10 of the Local Finance Law, I hereby approve the
certificate by Scott A. Russell, Supervisor, Town of Southold, setting forth $104,906.51 as the
present value savings to the Town of Southold from the issuance of $2,125,000 aggregate principal
amount of its Refunding Bonds-Series 2009 to refund $1,020,000 aggregate principal amount of its
Agricultural Land Preservation Bonds-Series 1998 and $1,070,000 aggregate principal amount of its
Open Space Preservation Bonds-Series 1999.
In taking this action, my role, as set forth in the statute and the Governor's Memorandum of
Approval of it, is "to ensure the accuracy of the calculations in such certificate". Pursuant to the
statute, I am therefore approving the computation of the present value of the savings contained in the
certificate. However, my approval pursuant to this statute should in no way be construed as a
determination on my part that the present value savings to be achieved by this refunding, when
contrasted with the amount of expenses incurred to issue the refunding bonds, warrants the issuance
of refunding bonds in this instance. That judgment rests with the appropriate Town of Southold,
New York officials. My approval herein only reflects that the present value savings set forth in the
attached certificate has been computed in accordance with section 90.10 of the Local Finance Law.
In reviewing the accuracy of the present value savings set forth above and the terms and
conditions of sale as required by section 90.10(f)(2) of the Local Finance Law, I do not undertake to
review the legality, validity, constitutionality or enforceability of the refunding bonds or to determine
whether the interest payable on the bonds will be subject to any tax, including the federal alternative
minimum tax. I also express no opinion on whether any proceeds of the bonds or earnings thereon
may be invested at a rate above the yield on the bonds, or whether, if so invested, any arbitrage
earned must be rebated to the federal govemment. A review of these matters is not necessary to
fulfill my statutory role and is more appropriately undertaken by bond counsel and counsel to the
underwriters.
Thomas P. DiNapoli
State Comptroller
-S~ ancox~~''~
By: Deput~~r
Dated: May 6" , 2009
ACCOUNTING & FINANCE DEPT.
John A. Cushman, Town Comptroller
Telephone (631) 765-4333
Fax (631 ) 765-1366
accounting@town.southold.ny.us
TOWN HALL ANNEX
54375 Main Road
P.O. Box 1179
Southold. NY 11971-0959
http://sout holdt own.northfork.net/
TOWN OF SOUTHOLD
OFFICE OF THE SUPERVISOR
May 4, 2009
Hon. Thomas P. DiNapoli
Comptroller of the State of New York
Department of Audit and Control
110 State Street
Albany, New York 12236
RE: Town of Southold, New York, $2,125,000 Refunding Serial Bonds-2009
Dear Comptroller DiNapoli:
The Town of Southold, Suffolk County, New York (the "Town"), has sold an
issue of bonds of the Town to be issued pursuant to Sections 90.00 and 90.10 of the Local
Finance Law in the principal amount of $2,125,000 and designated as Refunding Serial Bonds-
2009 of the Town (the "Bonds"), to Roosevelt & Cross, Incorporated, New York, New York (the
"Underwriter").
The purpose of the Bonds is to provide the Town with sufficient proceeds to
refund the Town's $2,000,000 Agricultural Land Preservation Serial Bonds-1998, maturing in
the years 2010 through 2018, in the aggregate principal amount of $1,020,000 and the Town's
$1,900,000 Open Space Preservation Serial Bonds-1999 maturing in the years 2010 through
2019, in the aggregate principal amount of $1,070,000.
The Purchaser has agreed to purchase the Bonds at a purchase price of
$2,183,287.65, (being the aggregate of the $2,125,000.00 par amount of the Bonds plus the net
reoffering premium of $74.287.65, less an Underwriter's discount of $16.000.00) plus accrued
interest of $-0-, at an effective interest rate to the Town of 2.727616%. The Town has calculated
the present value debt service savings attributable to the issuance of the Bonds to be $104,906.51
(inclusive of $2,049.62 of refunding funds on hand) as set forth in the final refunding financial
plan (the "Refunding Financial Plan") attached hereto and made a part hereof as Exhibit A.
560789.1 032681 CERT
The Bonds will mature on the dates, in the principal amounts, and will bear
interest at the rates per armum, in accordance with the terms set forth on pages 5 and 6 in the
Refunding Financial Plan for the attached hereto and made a part hereof as Exhibit A. The costs
of issuance relating to the issuance of the Bonds are itemized in Exhibit B hereto.
Enclosed herewith, I forward to you my certificate, executed pursuant to Section
90.10(g) of the Local Finance Law.
On behalf of the Town, I would appreciate your formal approval of the Section
90.10(g) certificate setting forth the present value of the total debt service savings resulting from
the issuance of the Refunding Bonds.
Scott A. Russell
Supervisor
The terms and conditions of the Refunding Serial Bonds-2009 of the Town of
Southold, Suffolk County, New York, as set forth in the above letter, and in Exhibits A and B
attached hereto, are hereby approved.
Thomas P. DiNapoli
State Comptroller
By:
Dated: ,2009
The Bonds will mature on the dates, in the principal amounts, and will bear
interest at the rates per annum, in accordance with the terms set forth on pages 5 and 6 in the
Refunding Financial Plan for the attached hereto and made a part hereof as Exhibit A. The costs
of issuance relating to the issuance of the Bonds are itemized in Exhibit B hereto.
Enclosed herewith, I forward to you my certificate, executed pursuant to Section
90.10(g) of the Local Finance Law.
On behalf of the Town, I would appreciate your formal approval of the Section
90.10(g) certificate setting forth the present value of the total debt service savings resulting from
the issuance of the Refunding Bonds.
Supervisor
The terms and conditions of the Refunding Serial Bonds-2009 of the Town of
Southold, Suffolk County, New York, as set forth in the above letter, and in Exhibits A and B
attached hereto, are hereby approved.
Thomas P. DiNapoli
State Comptroller
Dated: ~" ~ ,2009
EXHIBIT A
FiNAL REFUNDING FINANCIAL PLAN
SE~ TAB 6
560789.1 032681 CERT
EXHIBIT B
COST OF ISSUANCE
560789,1 032681 CERT
DETAILS OF COST OF ISSUANCE
TOWN OF SOUTHOLD
Suffolk County, New York
REFUNDING SERIAL BONDS - 2009
Hawkins Delafield & Wood
Munistat
Moody's
Causey Demgen & Moore
Bank of New York Mellon
Printing of POS/OS
Closing Binders
Contingencies
TOTAL
Bond Counsel
Financial Advisor
Rating Agency
Verification Agent
Escrow Holder
CM ROM transcript
22,500.00
17,500.00
3,850.00
2,000.00
700.00
3,500.00
520.00
430.00
51,000.00
CLOS1NG CERTIFICATES
RELATING TO THE BONDS OF THE
TOWN OF SOUTHOLD, NEW YORK
CERTIFICATE AS TO SIGNATURES AND LITIGATION
WE, 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 $2,125,000 Refunding
Serial Bonds-2009 (the "Bonds"), dated May 4, 2009 and more fully described in Schedule A
attached hereto and hereby made a part hereof, were 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 signatures, and the imprinting 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 Issuer holding the offices indicated by the official titles set forth opposite
our signatures hereto, for terms exp!ring on the dates set forth opposite such titles.
WE FURTHER CERTIFY that the seal which is impressed upon this certificate
has been imprinted 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 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 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 officers of the Issuer to their respective offices is being contested, that no authority or
560789.1 032681 CERT
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 4th day of May, 2009.
SI/G~ATURE
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
Town, which appear above, are true and genuine and that I know said officers and know them to
hold the respective offices set opposite their signatures.
John Cushman
Town Comptroller
560789.1 032681 CERT
CERTIFICATE OF DELIVERY AND PAYMENT
I, SCOTT A. RUSSELL, the duly chosen, qualified and acting Supervisor of the
Issuer hereinafter named, HEREBY CERTIFY that on the 4th day of May, 2009, I delivered or
caused to be delivered to Roosevelt & Cross, Incorporated, New York, New York, $2,125,000
Refunding Serial Bonds-2009 ("Bonds") of the Town of Southold, a municipal corporation of the
State of New York and herein referred to as the "Issuer", each bond duly and completely
executed by or on behalf of the Issuer and all described as set forth in Schedule A annexed hereto
and by this reference made a part hereof.
At or before the time of such delivery of said Bonds, I received from said
purchaser the following amounts:
Received prior to such delivery ................................................. $ 0.00
Received at time of such delivery ........................................... 2,183,287.65
Total amount received ............................................................. $2.183.287.6~5
being full payment for said Bonds in accordance with the contract of sale thereot; computed as
follows:
Par Amount of Bonds .............................................................. $2,125,000.00
Plus: Original Issue Premium ....................................................... 74,287.65
Less: Underwriters Discount ......................................................... 16,000.00
Interest on said Bonds accrued to the date of delivery 0.00
Total ........................................................................................ $2.183.~287.65
I 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 th.e validity of said Bonds, said opinion (except as to omission of the date of
such delivery) having been printed on each of said Bonds.
IN WITNESS WHEREOF,
I have hereunto set my hand as of the 4th day of
May, 2009.
Supervisor
5607891 032681 CERT
Schedule A
Bonds of the Town of Southold, in the County of Suffolk, New York, substantially in
form, and offered for sale, as provided by the Certificate of Determination executed by the
Supervisor as of April 7, 2009 and to be delivered thereunder in the principal amount of
$2,125,000.
Ntrmber of Issues:
Amounts and Titles:
Dated:
Denominations,
Numbers and Letters:
1
$2,125,000 Refunding Serial Bonds-2009 (the "Bonds")
May 4, 2009
In the form of registered bonds without coupons in denominations
of $5,000 or any integral multiple thereof, not exceeding the
aggregate principal amount of bonds maturing in any year,
registered in the name of Cede & Co., as nominee of The
Depository Trust Company, New York, New York, numbered
separately and consecutively upward with the letter "R" prefixed
thereto.
Place of Payment of
Principal Interest:
Maturities,
Interest Rates
and Payment Dates
for the Bonds:
The office of the Town Clerk, Town of Southold, 53095 Main
Road, Southold, New York (the "Fiscal Agent"). Interest payable
by wire transfer or in clearinghouse funds from said Fiscal Agent
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 fifteenth day of the month preceding each interest payment
date with regard to the Bonds.
Mature on May 1 in the principal amounts in each of the following
years and bear interest at the respective rates per annum, payable
November 1, 2009, and semi-annually thereafter on May 1 and
November 1 as set forth below:
560789.1 032681 CERT
Year of Princip~ Imerest
Maturity Amount R~e
2010 $210,000 2.00%
2011 230,000 2.00
2012 220,000 2.00
2013 220,000 2.25
2014 225,000 2.50
2015 225,000 2.75
2016 225,000 3.00
2017 220,000 5.00
2018 235,000 5.00
2019 115,000 3.50
The Bonds are not subject to redemption prior to maturity.
560789.1 032681 CERT
TOWN OF SOUTHOLD, NEW YORK
CERTIFICATE OF THE SUPERVISOR/CHIEF FISCAL OFFICER
I, SCOTT A. RUSSELL, Supervisor of the Town of Southold, Suffolk County, New York
(the "Town"), hereby certify on behalf of the Town as follows:
1. I am the chief fiscal officer of the Town, delegated with the powers and duties
pertaining or incidental to the sale and issuance of the Bonds described below, and I have
responsibility for the administration and management of all financial affairs of the Town.
2. The representations and warranties of the Town in the Bond Purchase Agreement
are true and correct on and as of the date hereof as if made on the date hereof, and the Town has
complied with and performed all of its covenants and agreements in the Bond Purchase
Agreement.
3. Each of the conditions in Section 4 of the Bond Purchase Agreement to be
satisfied by the Town has been satisfied by the Town on the date hereof and the Town is not
aware of any other condition of the Bond Purchase Agreement that has not been satisfied on the
date hereof.
4. The Final Official Statement of the Town dated April 7, 2009 (the "Final Official
Statement") relating to the sale of the Town's $2,125,000 Refunding Serial Bonds-2009 (the
"Bonds"), delivered pursuant to the Bond Purchase Agreement, dated April 7, 2009 between the
Town and the Underwriter (the "Bond Purchase Agreement") (excluding from such Final
Official Statement the "Yield or Price" information on the cover page, the information under the
caption "Underwriting" and information ascribed to sources other than the Town as to which no
representation or warranties are made), as of the date hereof does not contain any untrue
statement of a material fact or omit to state-a material fact necessary to make the statements
made therein, in the light of the circumstances under which they were made, not misleading,
except that no representation is made as to information in the Final Official Statement ascribed to
sources other than the Town although I have no reason to believe and do not believe that such
information is materially inaccurate or misleading.
5. The Bonds being delivered on the date hereof to the Underwriter under the Bond
Purchase Agreement conform to the descriptions thereof contained in the Final Official
Statement delivered to such Underwriter.
6. After giving effect to the issuance of the Bonds, the Town has not contracted
indebtedness (except "excluded debt" within the meaning ascribed in the Constitution of the
State of New York) in an amount greater than the debt limit of the Town as set forth under the
subcaption "Debt Statement Summary" in the Official Statement of the Town, dated April 2,
2009.
7. Except for the Town's $371,000 Bond Anticipation Note for Various Purposes -
2009, the Town has not incurred any material amount of indebtedness for borrowed money,
direct or contingent, between the date of the Bond Purchase Agreement and the date hereof.
560789,1 032681 CERT
8. There has been no material adverse change in the financial position, results of
operations or condition, financial or otherwise, of the Town from the date of the Final Official
Statement to the date hereof.
1N WITNESS WHEREOF, I have hereunto set my hand this 4th day of May, 2009.
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
Supervisor
560789.1 032681 CERT
CERTIFICATE OF THE ASSISTANT TOWN ATTORNEY
FOR THE TOWN OF SOUTHOLD, NEW YORK
I, the undersigned, Assistant Town Attorney for the Town of Southold, New York (the
"Issuer"), hereby certify on behalf of the Issuer and pursuant to the Bond Purchase Agreement
dated April 7, 2009 ("Bond Purchase Agreement), between the Issuer and the Underwriter
defined therein, as follows (all terms used herein have the definitions set forth in the Bond
Purchase Agreement).
1. There is no litigation of any nature pending or threatened to restrain or enjoin the
issuance, sale, execution or delivery of the Bond Purchase Agreement, the Bonds or any of the
proceedings taken with respect to the issuance and sale of the Bonds, the application of moneys
to the payment of the Bonds or in any manner questioning the proceedings and authority under
which the Bonds were authorized or affecting the validity of the Bonds, the existence or
boundaries of the Issuer or the title of officials of the Issuer who have acted with respect to the
proceedings for the issuance and sale of the Bonds to their respective office, and no authority or
proceedings for the issuance and sale of the Bonds have been repealed, revoked or rescinded.
2. The statements contained in the Official Statement dated April 7, 2009, under the
caption "LITIGATION" as of said date and as of the date hereof did not and do not contain any
untrue statement of a 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.
3. The execution and delivery by the Issuer of the Bond Purchase Agreement, the
issuance, sale and delivery of the Bonds, and compliance with the provisions thereof will not
conflict with or constitute a breach of or a default under any administrative regulations,
judgment, decree or any agreement or other instrument known to me to which the Issuer is a
party.
All terms used in this Certificate have the definitions set forth in the Bond Purchase
Agreement.
1N WITNESS WHEREOF, I have hereunto set my hand as of the 4th day of May, 2009.
TOWN OF SOUTHOLD, NEW YORK
560789.1 032681 CERT
Schedule A
Bonds of the Town of Southotd, in the County of Suffolk, New York, substantially in
form, and offered for sale, as provided by the Certificate of Determination executed by the
Supervisor as of April 7, 2009 and to be delivered thereunder in the principal amount of
$2,125,000.
Number of Issues:
Amounts and Titles:
Dated:
Denominations,
Numbers and Letters:
1
$2,125,000 Refunding Serial Bonds-2009 (the "Bonds")
May 4, 2009
In the foim of registered bonds without coupons in denominations
of $5,000 or any integral multiple thereof, not exceeding the
aggregate principal amount of bonds maturing in any year,
registered in the name of Cede & Co., as nominee of The
Depository Trust Company, New York, New York, numbered
separately and consecutively upward with the letter "R" prefixed
thereto.
Place of Payment of
Principal Interest:
Maturities,
Interest Rates
and Payment Dates
for the Bonds:
The office of the Town Clerk, Town of Southold, 53095 Main
Road, Southold, New York (the "Fiscal Agent"). Interest payable
by wire transfer or in clearinghouse funds from said Fiscal Agent
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 fifteenth day of the month preceding each interest payment
date with regard to the Bonds.
Mature on May 1 in the principal amounts in each of the following
years and bear interest at the respective rates per annum, payable
November 1, 2009, and semi-annually thereafter on May 1 and
November 1 as set forth below:
560789.1 032681 CERT
Year of Principal Interest
M~ufit¥ Amount R~e
2010 $210,000 2.00%
2011 230,000 2.00
2012 220,000 2.00
2013 220,000 2.25
2014 225,000 2.50
2015 225,000 2.75
2016 225,000 3.00
2017 220,000 5.00
2018 235,000 5.00
2019 115,000 3.50
The Bonds are not subject to redemption prior to maturity.
560789,1 032681 CERT
CERTIFICATE OF THE TOWN CLERK
I, Elizabeth A. Neville, Town Clerk of the Town of Southold, Ne~v York,
HEREBY CERTIFY as follows:
1. That the names of the members of the Town Board and of the officers of the Town,
the dates of their election or appointment and the dates of commencement and expiration of their
terms of office for the official year commencing January 1, 2009 and ending December 31, 2009
are as follows:
Date of Date of
Name and Election or Commencement Date of End
Office Appointment of Term of Term
Supervisor:
Scott A. Russell 11/6/2007 1/1/2000 12/31/2011
Members of the
Town Board:
LouisaP. Evans 11/8/2005 1/1/2006 12/31/2009
Albert J. Kmpski, Jr. 11/8/2005 1/1/2006 12/31/2009
Vincent M. Orlando 11/6/2007 1/1/2008 12/31/2011
William P. Ruland 11/6/2007 1 /1/2008 12/31/2011
Thomas H. Wickham 11/8/2005 1/1/2006 12/31/2009
Town Clerk:
Elizabeth A. Neville 11 / 8/2005 1 / 1/2006 12/31/2009
Assistant Town Attorney:
Jennifer A. Andaloro, Esq.
Town Comptroller
Johrl Cushman
2/12/2009 3/9/2009 12/31/2009
1/2/2008 1/1/2008 12/31/2009
560789.1 032681 CERT
All of the foregoing members of the Town Board and officers filed their oaths of
office with the undersigned Town Clerk and such of them as were required to file or give bonds
or official undertakings filed or gave such bonds or official undertakings in form and sum
approved by the Town Board and all of such members of the Town Board and officers are
legally eligible and are otherwise duly qualified as such and are the acting members of the Town
Board and officers of the Town.
2. The seal impressed upon this Certificate is the duly adopted and only official
corporate seal of the Town.
IN WITNESS WHEREOF,
(SEAL)
I have hereunto set my hand and affixed the
corporate seal of said Town as of the 4th day of
May, 2009.
Town Clerk
560789.1 032681 CERT
AGREEMENT 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 t¥om
time to time in the United States.
"Holder" or "Holders" 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 Town of Sonthold, 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 amended through the date of this Agreement, including any official interpretations
thereof.
"Securities" shall mean the Issuer's $2,125,000 Refunding Serial-Bonds-2009,
dated May 4, 2009 and delivered on the date hereof, maturing in various principal amounts on
May 1 in each of the years 2010 to 2019, inclusive.
"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, for the benefit of Holders of the Securities, to provide or cause to be provided either
directly or through Munistat Services, Inc., 12 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
560789.1 032681 CERT
thirty (30) days after they become available and in no event later than 360
days after the end of each fiscal year; and
(ii)
to (a) each NRMSIR, or to the MSRB, and to (b) the State Information
Depository, in a timely manner, notice of any of the following events with
respect to the Securities, if material:
(2) principal and interest payment delinquencies;
(3) non-payment related defaults;
(4)
unscheduled draws on debt service reserves reflecting financial
difficulties;
(5)
unscheduled draws on credit enhancements reflecting financial
difficulties;
(6)
substitution of credit or liquidity providers, or their failure to
perform;
(7)
adverse tax opinions or events affecting the tax-exempt status of
the Securities;
(8) modifications to rights of Securities holders;
(9) bond calls;
(10) defeasances;
(11) release, substitution, or sale of property securing repayment of the
Securities; and
(12) 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
560789.1 032681 CERT
not undertake to commit to provide any such notice of the occurrence of any material event
except those events listed above.
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," "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. If a 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
Agreement, then any Holder of Securities may enfome, for the equal benefit and protection of all
Holders similarly situated, by mandamus or other suit or proceeding at law or in equity, this
Agreement 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 Agreement; provided that the sole and exclusive remedy for breach of this
Agreement 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 Agreement shall not constitute
an event of default on the Securities.
Section 6. Parties in Interest. This Agreement 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.
Section 7. Amendments. Without the consent of any Holders of Securities, the
Issuer at any time and from time to time may enter into any amendments or changes to this
Agreement for any of the following purposes:
560789.1 032681 CERT
(a) to comply with or conform to any changes in Rule 15c2-12 (whether
required or optional);
(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 Agreement 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 Agreement 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. Agreement to Constitute Written Agreement or Contract. This
Agreement shall constitute the written agreement or contract for the benefit of Holders of
Securities, as contemplated under Rule 15 c2-12.
Section 10. Governing Law. This Agreement shall be governed by the laws of
the State of New York determined without regard to principles of conflict of law.
560789.1 032681 CERT
1N WITNESS WHEREOF, the undersigned has duly authorized, executed and
delivered this Agreement as of May 4, 2009.
~upervisor and Chief Fiscal Officer
560789.1 032681 CERT
ARBITRAGE AND USE OF PROCEEDS CERTIFICATE
I, Scott A. Russell, Supervisor and Chief Fiscal Officer of the Town of Southold,
Suffolk County, New York (the "Issuer"), hereby certify and reasonably expect with respect to
the issuance on May 4, 2009 (the "Issue Date") of the Issuer's $2,125,000 Refunding Serial
Bonds - 2009 (the "Bonds"), as follows in this Certificate.
Unless the context clearly requires otherwise, all capitalized terms not otherwise
defined herein shall have the meanings set forth in EXHIBIT A or in the Resolution, the Code or
the Regulations (each as defined in EXHIBIT A).
ARTICLE I
GENERAL
1.1. Authority of Signatory. I am an officer of the Issuer charged with the
responsibility for the execution, delivery, and issuance of the Bonds, and I am acting for and on
behalf of the Issuer in signing this Certificate.
1.2. .Purpose of Certificate This Certificate is made for the purpose of
establishing evidence of the expectations of the Issuer as of the Issue Dfite as to future events
regarding the amount and use of proceeds of the Bonds. It is intended and may be relied upon
for ptirposes of Sections 103 and 141 through 150 of the Code and as a certification described in
Sectibn 1.148-2(b)(2) of the 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.
1.3. 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 I41 of the
Code. To the best of my knowledge and belief, such expectation is reasonable and there are no
other facts, estimates or cimumstances that would materially change that expectation.
1.4. Composite Issue. Except for the $371,000 Bond Anticipation Notes for
Various Purposes - 2009 (the "BANs"), which were sold in a private sale on April 13, 2009, no
other obligations the interest on which is tax-exempt have been sold less than 15 days prior to, or
will be sold less 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. As such, pursuant to Treas. Reg. 1.150-1(c), the Bonds and BANs are being treated as
one issue (the "Composite Issue") for compliance with arbitrage and certain other federal tax
law requirements. For purposes of this section, obligations are considered sold on the earlier of
the date a commitment letter or a purchase agreement is executed.
1.5 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 IV, (b) held in any refunding escrow, or (c) invested in obligations of the United
560819.3 032681AC
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 21B(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 in excess of five percent of such Gross
Proceeds is or will be (A) used in making loans with respect to which the payment of principal or
interest is to be federally guaranteed, or (B) invested directly or indirectly in federally insured
deposits or accounts.
For purposes of this Certificate, generally, Gross Proceeds consist of Sale
Proceeds, Transferred Proceeds, if any, Investment Proceeds and Replacement Proceeds, if any,
of the Bonds.
1.6. Tax Representation. The Issuer will comply with 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 gross income of the owners thereof for the purpose of federal income taxation.
1.7. Additional Information. The Issuer will provide such other information as
may be required to assure the exclusion from gross income of interest on the Bonds for federal
income taxation purposes.
1.8. No Hedge Bonds. (a) The Issuer reasonably expected as of the respective
issue date of each issue of the Prior Bonds (as defined in Section 2.2 below) that (a) at least
85 percent of the spendable proceeds of such issue would be used to carry out the governmental
purposes of such issue within three years of the respective issue dates thereof and (b) not more
than 50 percent of the spendable proceeds of such issue would be invested in investment
property which (i) would be acquired with the amounts received as a result of investing original
proceeds of the issue and (ii) would have a substantially guaranteed yield for four years or more.
For the purposes of this paragraph, the Prior Bonds include each issue of prior obligations of the
Issuer refunded thereby.
(b) As described in Sections 2.2 and 2.5, the proceeds of the Bonds will be
used for refunding purposes.
1.9. Reliance by Bond Counsel. The representations of the Issuer expressed in
this Certificate may be relied upon by the Issuer's Bond Counsel in connection with the
rendering of any opinion with respect to the interest on the Bonds.
1.10. Noncompliance. The Issuer shall perform each of the representations
undertaken by it in this Certificate unless, in the written opinion of Bond Counsel,
560819.3 032681 AC
noncompliance therewith will not cause interest on the Bonds to be included in gross income for
purposes of federal income taxation.
1.11. IRS Form 8038-G. The Issuer will arrange for the filing of IRS Form
8038-G, attached hereto as EXHIBIT B, with respect to the Bonds by the 15th day of the second
month after the calendar quarter in which the Bonds are issued.
ARTICLE II
USE OF PROCEEDS
2.1. Authorization. The Bonds are authorized to be issued pursuant to
applicable provisions of the laws of the State of New York, the Local Finance Law and the
Resolution.
2.2. Purpose of the Bonds. The proceeds of the Bonds will be used to current
refund all of the Issuer's $2,000,000 Agricultural Land Preservation Serial Bonds - 1998 issued
on May 19, 1998 (the "1998 Bonds"), currently outstanding in the principal amount of
$1,120,000, and all of its $1,900,000 Open Space Preservation Serial Bonds - 1999 issued on
May 18, 1999 (the "1999 Bonds" and together with the 1998 Bonds, the "Prior Bonds"),
currently outstanding in. the principal amount of $1,160,000.
The outstanding 1998 Bonds and 1999 Bonds to be current refunded with the
proceeds of the Bonds are referred to herein, respectively, as the "1998 Refunded Bonds" and
the 99 Refunded Bonds and together, the "Refunded Bonds".
"19 "
The refunding of the 1998 Refunded Bonds and the 1999 Refunded Bonds will
produce, respectively, the net present value debt service savings of $60,223.52, or 5.904267% of
the principal amount of the 1998 Refunded Bonds, $44,683.00, or 4.175981% of the principal
amount of the 1999 Refunded Bonds, all calculated using the discount rate of 2.727616%, which
is the Bond Yield (as defined in Section 4.3(c) below).
2.3. Proceeds of Prior Bonds. The proceeds of the 1998 Bonds and 1999
Bonds were used to provide original financing for the acquisition of rights and interests in prime
agricultural lands and real property, respectively, for the preservation of open spaces and areas.
The projects financed with the proceeds of the Prior Bonds and refinanced with the proceeds of
the Bonds are collectively referred to as the "Projects" and are summarized in EXHIBIT C.
2.4. Sale Proceeds. The Issuer negotiated the sale of the Bonds and entered
into the Bond Purchase Agreement with respect to the Bonds, dated April 7, 2009, with
Roosevelt & Cross, Inc. (the "Underwriter"). The Issuer will receive on the Issue Date as a
result of the sale of the Bonds the principal amount of the Bonds, $2,125,000.00, plus net
original issue premium of $74,287.65, for a subtotal of $2,199,287.65 (the "Sale Proceeds"),
less underwriting discount of $16,000.00, for a total of $2,183,287.65.
3
560819.3 032681 AC
follows: 2.5. _Application of Sale Proceeds. The Sale Proceeds will be applied as
Bond Proceeds:
Par Amount
Reoffering Premium
Subtotal
Total Sources
Uses:
Delivery Date
Expenses:
Underwriter's
Discount
Cost of Issuance
Bonds Bonds
Refunding Refunding
1998 Bonds 1999 Bonds
Total
$I,030,000.00 $1,095,000.00 $2,125,000.00
~737974.3Q 3~6,3133~5 ~287.65
$1,067,974.30 $1,131,313.35 $2,199,287.65
$7,755.29 $ 8,244.71 $16,000.00
2~5726. ~323.5[ _53~049.6~22
33,481.40 35,568.22 69,049.62
Deposit to Refianding
Escrow:
Cash Deposit $ 10.90
SLGS Purchases _1,034,482.00
$ 10,13 $ 21.03
10~735.0Q _2,130,217.0~0
1,034,492.90 1,095,745.13 2,130,238.03
~ $1.131.313.3~ ~
Total Uses
ARTICLE III
p_RIVATE ACTIVITY
3.1. Ownership/Lease/Sal~. The Issuer has owned and owns the Projects.
While the Bonds remain outstanding, all of the Projects will be owned by the Issuer or another
state or local governmental unit and will not be owned by or leased to any person who is not a
state or local governmental unit. The Projects will not (except to the extent that any portion of
any of the Projects was financed with grants, if any) 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 maturity date of the Bonds.
3.2. No Private Loans. As shown in EXItIBIT C, none of the proceeds of the
Prior Bonds or the Bonds were, are or will be used, directly or indirectly, to make loans to
4
560819.3 032681 AC
persons other than a state or local governmental unit while the Bonds remain outstanding. The
Issuer will not make any private loans from the proceeds of the Bonds or the Prior Bonds after
the Issue Date unless the Issuer has received the written opinion of Bond Counsel that such
private loan will not adversely affect the exclusion of the interest on the Bonds from gross
income for purposes of federal income taxation.
3.3. Limitations on Private Use. As shown in EXHIBIT C, at all times while
the Refunded Bonds have been and the Bonds will be outstanding, tess than the lesser of
$15,000,000 or ten pement of either: (a) the aggregate amount of the proceeds of the Refunded
Bonds have been, and the aggregate amount of the proceeds of the Composite Issue will be, used
directly or indirectly in a trade or business carried on by a person other than a state or local
governmental unit ("Private Use"); or (b)the aggregate present value debt service on the
Refunded Bonds, and the present value debt service on the Composite Issue, during the term
thereof was and is, under the terms of the Refunded Bonds and the Bonds, as applicable, 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. Payments by a person for a use of
proceeds do not include the portion of any payment that is properly allocable to the payment of
ordinary and necessary expenses (as defined under Section 162 of the Code) directly attributable
to the operation and maintenance of the financed property used by that person. For this purpose,
general overhead and administrative expense are not directly attributable to those operations and
maintenance.
3.4. Unrelated/Related Disproportionate Use. As shown in EXHIBIT C, at all
times ~vhile the Refunded Bonds have been and the Bonds will be outstanding, less than the
lesser of $15,000,000 or five percent of either: (a) the proceeds of the Refunded Bonds have
been, and the proceeds of the Composite Issue will be, used directly or indirectly in the trade or
business of a person other than a state or local 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 3.2 which meets this test; or (b) the aggregate present value
debt service on the Refunded Bonds, and the present value debt service on the Composite Issue,
during the term thereof was and is, under the terms of the Refunded Bonds and the Bonds, as
applicable, or any underlying arrangement, directly or indirectly, secured by any interest in
property used or to be used for Private Use or in payments in respect of property used or to be
used for 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 Private Use. For purposes of this Certificate,
proceeds of the Refunded Bonds and the Bonds are allocable to a disproportionate related Private
Use to the extent that the proceeds of the Refunded Bonds and the Bonds used or to be used to
finance property in Private Use which is related to the governmental use of the property exceeds
the proceeds of the Refunded Bonds and the Bonds, respectively, used for the governmental use
to which such Private Use relates.
3.5. Private Use Defined. (a) For purposes of Sections 3.3 and 3.4, Private
Use consists of any contract or other arrangement including, without limitation, leases,
management contracts, guarantee contracts, take or pay contracts, put or pay contracts, output
5
560819.3 032681AC
contracts or research contracts which provides for use of any of the Projects by a person or
persons who are not state or local governments on a basis different than the general public. The
Issuer will not enter into any such contract or arrangement unless the Issuer has obtained an
opinion from Bond Counsel that such contract or arrangement does not adversely affect the
exclusion of the interest on the Bonds from federal income taxation. None of the Projects were
financed or are being refinanced for use by any specific user.
(b) Use by State or Local Governmental Units. The Projects may be used by
or on behalf of a state or local governmental unit provided that there is no transfer or flow-
through of such use to any person or entity carrying on any trade or business that does not
constitute General Public Use (as defined in (c) below).
(c) General Public Use. The Projects may be used by any person or entity,
including any person or entity carrying on any trade or business, if such use constitutes General
Public Use. "General Public Use" is any arrangement providing for use that is available to the
general public at either (i) no charge, or (ii) on the basis of rates that are generally applicable and
uniformly applied. For this purpose, rates may be treated as generally applicable and uniformly
applied even if (i) different rates apply to different classes of users, such as volume purchasers, if
the differences in rates are customary and reasonable, or (ii) a specially negotiated rate
arrangement is entered into, but only if the user is prohibited by federal law from paying the
generally applicable rates, and the rates established are as comparable as reasonably possible to
the generally applicable rates.
The Issuer imposes generally applicable and uniform rates and charges, if any, on
all users of the Projects pursuant to the schedules of rates and charges adopted by the Issuer from
time to time.
(d) No Priority Rights or Other Preferential Benefits. The Projects will not be
used by any person or entity under any arrangement that conveys priority rights or other
preferential benefits.
(e) 200 Days General Public Use Arrangements. The Projects may be used
by any person or entity under any arrangement that is available to members of the general public
and that does not otherwise convey priority rights or other preferential benefits is treated,
nevertheless, as General Public Use if the term of the use under the arrangement, including all
renewal options, is not greater than 200 days. For this purpose, a right of first refusal to renew
use under the arrangement is not treated as a renewal option if (i) the compensation for the use
under the arrangement is redetermined at generally applicable, fair market value rates that are in
effect at the time of renewal, and (ii) the use of the financed property under the same or similar
arrangements is predominantly by natural persons who are not engaged in a trade or business.
(f) 50 Days Negotiated Arm's-Length Use Arrangements. The Projects may
be used by any person or entity under any arrangement (other than as an owner) for a term
(including renewal options) not longer than 50 days, provided the arrangement is negotiated at
arm's-length, the compensation paid for the use is at fair market value and the Projects is not
financed for the principal purpose of such private trade or business use.
560819.3 032681AC
(g) 100 Days Limited General Public Use Arrangements, The Projects may
be used by any person or entity under any arrangement for use (other than as an owner) for a
term (including renewal options) of not longer than 100 days, provided that the arrangement
would be General Public Use except that it is not available on the same basis for use by natural
persons because generally applicable and uniformly applied rates are not reasonably available to
natural persons not engaged in a trade or business and the Projects are not financed for the
principal purpose of such private trade or business use.
(h) Incidental Use Arrangements. The Projects or any specific facility of the
Projects may be used by any person or entity where the use is incidental if, except for vending
machines, pay telephones, kiosks and similar uses, the use does not involve the transfer of
possession and control of space separated from other areas of the facility by walls, partitions,
barriers and the like, the nonpossessory use is not functionally related to any other use of such
facility by the same person (other than a different nonpossessory use) and all nonpossessory uses
do not in the aggregate exceed 2.5 percent of the Projects or such facility.
3.6. Management and Operations Contracts. The Issuer manages and operates
all of the Projects. The Issuer has not been a party to any management contract with any person
or entity for management services to be provided to the Issuer at or with respect to the Projects.
The Issuer will not enter into any such contract while the Bonds remain outstanding except a
contract with respect to which the Issuer shall have received an opinion of Bond Counsel that
such contract either (a)meets the requirements of Revenue Procedure 97-13 (each a "Safe-
Harbor Management Contract") as summarized in EXHIBIT D or (b)will not adversely
affect the exclusion of the interest on the Bonds from gross income for federal income taxation
purposes.
3.7. Monitoring and Measurement of Private Activity. The Issuer covenants to
monitor the amount of private business or trade use at all of the Projects to ensure that the
aggregate amount of such private business or trade use at all of the Projects will not exceed the
applicable limits described in this Article. The Issuer has established or will establish procedures
for monitoring the amount of private business or trade use at the Projects.
The amount of private business use of a Project is determined according to the
average percentage of private business use of such Project during the measurement period. To
the extent a Project is owned by the Issuer, the measurement period with respect to such Project
(a) begins on the later of the Issue Date or the placed-in-service date of such Project, and
(b) ends on the earlier of the expiration date of the economic life of such Project or the last
maturity of the Bonds. The average percentage of private business use is the average of the
percentages of private business use during the one-year periods within the measurement period
and is to be determined, with appropriate adjustments, as provided in the Regulations.
The Issuer also covenants to monitor the amount of private payments and security
at each of the Projects to ensure that the present value of the aggregate amount of private
payments and security at all of the Projects financed with the proceeds of the Composite Issue
will not exceed: (a) five percent with respect to unrelated or related and disproportionate private
trade or business described in Section 3.4, and (b) ten percent with respect to total private trade
560819.3 032681AC
or business use described in Section 3.3, of the present value of the aggregate debt service on the
Composite Issue. Such present values are to be determined, with appropriate adjustments, as
provided in the Regulations.
The Issuer will advise Bond Counsel not less than annually of any change in the
amount of: (a) unrelated or related and disproportionate private trade or business described in
Section 3.4, (b) private activity and total private trade or business use described in Section 3.3,
and (c) the corresponding amount of private payments and security arising from any contract or
other arrangement including, without limitation, ownership, leases, management and operation
contracts, research agreement, guarantee contracts, take or pay contracts, put or pay contracts, or
other output contracts or any other action or event described in this Article.
3.8. No Pooled Loan Financings. None of the proceeds of the Bonds have
been or will be used directly or indirectly to make or finance loans to two or more ultimate
borrowers (including loans referred to in Section 3.2 and loans to state or local governmental
units).
ARTICLE IV
ARBITRAGE
4.1. Issue Price. The Issuer has been advised by the Underwriter in its letter
contained in EXHIBIT E that the first price or yield at which at least ten percent of each
maturity of the Bonds was sold to the general public (excluding sales to bond houses, brokers, or
similar persons or organizations acting in the capacity as underwriters, placement agents, or
wholesalers) in a bonafide public offering was not greater than the respective price, or was not
lower than the respective yield, shown in the Official Statement. Based on such advice, the issue
price of the Bonds is $2,199,287.65 (the "Issue Price"), representing the stated principal amount
of $2,125,000.00, plus net original issue premium of $74,287.65.
4.2. No Transferred Proceeds. All of the proceeds of each issue of the Prior
Bonds have been expended as of the Issue Date and, therefore, no proceeds of the Refunded
Bonds will become transferred proceeds of the Bonds on the date when a portion of the principal
of each issue of the Refunded Bonds is redeemed from the proceeds of the Bonds.
4.3. Bond Yield and Investment Yield (a) When used in this Certificate, the
term "yield" refers to yield computed by the actuarial or present value method using a 360-day
year and semiannual compounding, and means the discount rate which, when used in computing
the present value of all payments of principal and interest to be paid on an obligation, produces
an amount equal to the Issue Price thereof in the case of the Bonds and the purchase price in the
case of investments purchased with Gross Proceeds of the Bonds.
(b) The Issuer has not entered into a Qualified Guarantee, as defined in
Section 1.148-4(1) of the Regulations, or a Qualified Hedge, as defined in Section 1.148-4(h) of
the Regulations, with respect to the Bonds.
560819.3 032681 AC
(c) The Bonds constitute a Fixed Yield Issue. The yield on the Bonds
(the "Bond Yield") has been computed by the Underwriter to be 2.727616%, based on the Issue
Price. None of the Bonds are subject to mandatory, contingent or optional redemption.
(d) The Bond Yield will not be affected by subsequent unexpected events,
except to the extent provided in Section 1.148-5(h)(3) of the Regulations when and if the Issuer
enters into a Qualified Hedge or into any transaction transferring, waiving or modifying any right
that is part of the terms of the Bonds. The Issuer will consult with Bond Counsel prior to
entering into any of the foregoing transactions.
4.4. Exceptions to Yield Restriction. The Issuer will not invest the Gross
Proceeds of the Bonds in Investments at yields that are materially higher, as that term is defined
in Section 1.148-2(d) of the Regulations ("Materially Higher"), than the Bond Yield except as
set forth in this Section or Article VI below.
(a) Temporary Period for Bond Proceeds Used for Current Refunding. The
proceeds of the Current Refunding Bonds will be expended in their entirety within 90 days after
the Issue Date, and may be invested until such date without restriction as to yield. The Issuer
elects to waive the right to invest such proceeds without yield restriction during such temporary
period.
(b) Temporary Period for Costs of Issuance The Sale Proceeds to be used to
pay costs of issuance of the Bonds may be invested at an unrestricted yield for a temporary
period not to exceed 13 months from the Issue Date.
(c) Temporary Period for Investment Earnings. Investment earnings received
on investment of Gross Proceeds of the Bonds may be invested at an unrestricted yield for a
period not to exceed one year from the date of receipt.
(d) Temporary Period for Bona Fide Debt Service Fund. As further discussed
in Section 6.2 below, amounts deposited in a bona fide debt service fund may be invested
without yield restriction for a period of 13 months from the date of deposit in such fund.
(e) Minor Portion. A minor portion of the Gross Proceeds of the Composite
Issue may be invested without yield restriction in an amount not exceeding the lesser of (i)
$100,000.00 or (ii) five percent of the Sale Proceeds of the Composite Issue.
4.5. Escrow Deposit Fund. As described in the Escrow Contract between the
Issuer and The Bank of New York Mellon dated the Issue Date (the "Escrow Contract"), the
Sale Proceeds in the amount of $2,130,238.03 will be deposited into the Escrow Deposit Fund
(as defined in the Escrow Contract), $21.03 of which will be retained as initial cash and
$2,130,217.00, the balance, will be applied to the purchase of United States Treasury Certificates
of Indebtedness and Notes - State and Local Government Series, Time Deposit Series ("$LGS").
A copy of the subscription for SLGS is attached hereto as EXHIBIT G. Causey Demgen &
Moore Inc. (the "Verification Agent") in its verification report dated the May 4, 2009
(the "Verification Report"), has verified the adequacy of the maturing SLGS purchased with the
proceeds of the Bonds and deposited in the Escrow Deposit Fund and the interest thereon to pay,
560819.3 032681 AC
when due, the redemption price of the Refunded Bonds and the accrued interest thereon. The
yield on the SLGS purchased with proceeds of the Bonds and deposited in the Escrow Deposit
Fund (the "Escrow Yield") has been computed by the Underwriter to be 0.153096%. The
Escrow Yield does not exceed yield on the Composite Issue (the "Composite Yield") of
2.703090%, which was also computed by the Underwriter.
4.6 Current Refundine and Redemption Date As provided in the Escrow
Contract, proceeds of the Current Refunding Bonds will be spent within 90 days after the Issue
Date to retire or pay debt service and redemption premium, if any, on the Current Refunded
Bonds.
4.7. Yield Restricted Money. Amounts that may not be invested at an
unrestricted yield, if any, will be invested in either (i) Nonpurpose Investments at a fair market
price which produces a yield not materially higher, as that term is defined in Section 1.148-2(d)
of the Regulations ("Materially Higher"), than the Bond Yield, (ii) SLGS which produce yield
not Materially Higher than the Bond Yield, or (iii) Tax-Exempt obligations.
4.8. No Overissuanc~e. The proceeds of the Bonds, including investment
proceeds, will not exceed the amount necessary for the purposes of the Issue. Proceeds of the
Bonds not otherwise used to pay costs of issuance will be used by the Issuer to pay debt service
on the Bonds.
4.9. Yield Reduction Payments. Notwithstanding any of the provisions in this
Certificate that require Sale Proceeds and investment earnings thereon to be invested at a yield
not in excess of the Bond Yield, the yield on certain investments acquired with proceeds of the
Bonds will not be considered to be higher than the applicable yield limitation described herein if
the Issuer makes or causes to be made "yield reduction payments" to the United States Treasury
at the time and in the amounts described in Section 1.148-5(c) of the Regulations. The Issuer
will consult with Bond Counsel prior to making any investments in reliance on its eligibility to
make yield reduction payments.
4.10. Universal Cap. (a) On each Valuation Date, the Issuer shall value the
Universal Cap and the Nonpurpose Investments allocable to the Bonds thereunder. Nonpurpose
Investments in a bonafide 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 Bonds 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 Investments 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 that such allocation does not
cause the value of Nonpurpose Investments allocated to the Bonds to exceed the Universal Cap.
I0
560819.3 032681AC
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) amounts allocable to Replacement Proceeds,
(ii) amounts allocable to Transferred Proceeds,
(iii) amounts allocable to Sale Proceeds and Investment Proceeds.
(b) Amounts are allocable to only one issue at a time as Gross Proceeds.
Amounts that are original or transferred proceeds allocable to an issue must be so allocated to
that issue and may not be allocated instead as replacement proceeds to another issue. Amounts
cease to be original proceeds or transferred proceeds allocated to an issue only when they are
properly allocated to an expenditure for'a governmental purpose, when they become transferred
proceeds of another issue or when they cease to be allocated to an issue by operation of the
Universal Cap. 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 may 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.
(c) 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 i_f the value of Nonpurpose Investments allocated to
the Bonds did not exceed the value of the Bonds outstanding on such date.
4.11. No Replacement Proceeds. No "replacement proceeds" (as defined in
Section 1.148-1 (c) of the Regulations) are expected to be created as a result of issuing the Bonds,
as the weighted average maturity of the Bonds as set forth in EXHIBIT H does not exceed
120 percent of the remaining weighted average economic life of the Projects as set forth in
EXHIBIT C.
4.12. Fair Market Value. The Issuer will not acquire Nonpurpose Investments
at other than an arm's-length, fair market value price.
4.13. 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 Gross Proceeds of the
Bonds in such a manner that the amount to be rebated to the federal government is less than it
would have been had the transaction been at arm's-length and the Bond Yield had not been
relevant to either party.
4.14. Disposition Receipts. The Issuer will consult with Bond Counsel as to
how to invest and dispose of any amounts received from the condemnation, insurance, or
disposition of any part of the Projects.
11
560819.3 032681 AC
4.15. Allocation of Proceeds to Expenditures. The Issuer understands that it
may treat proceeds as expended on the date such proceeds are applied to the payment of costs
constituting capitalizable items. The Issuer further understands that proceeds used to pay
working capital items will not be considered expended, until the Issuer establishes that it has
depleted all other available proceeds from sources other than the bonds before drawing on such
amounts. This latter concept is referred to as the "gross-proceeds-spent-last" rule. Exceptions to
this rule are set forth in (a), (b) and (c) below:
(a) Gross Proceeds of an issue used for expenditures for extraordinary, non-
recurring 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. The
exception set forth in the preceding sentence shall apply only if the Issuer or a related party does
not otherwise maintain a reserve for such items or set aside other available amounts for such
expenses.
(b) Gross Proceeds of an issue used to make a grant (a transfer of money by
the Issuer to a transferee that is neither a member of the Issuer's Controlled Group nor an agent
of the Issuer that imposes on the transferee no obligation or condition to repay any amount to the
Issuer).
(i)
In this regard, obligations or conditions intended solely to assure the
expenditure of transferred money in accordance with the governmental
purpose of the transfer do not prevent a transfer from qualifying as a grant.
(ii)
The Issuer understands that in the unexpected event that a repayment is
made with respect to a bond-financed grant, the repaid amount is treated
as unspent proceeds of the bonds as of the repayment date unless
expended within 60 days of the repayment.
(iii)
The amount of grants not meeting the definition above will not be
considered expended until expended by the ultimate recipient.
(c) Gross Proceeds used to pay Working Capital Expenditures may be
considered expended pursuant to any reasonable consistently applied accounting method (e.g.,
"gross-proceeds-spent-first" or "specific tracing") if they are described in (i) or (ii) of this
subsection:
(i)
Expenditures for administrative costs; qualified guarantees or hedges;
payments of interest on the issue for a period commencing the date hereof
and ending on the later of three years from today or one year after the date
a Project is placed in service; rebate or penalty or yield reduction
payments; payments of principal or interest on an issue paid from
unexpected excess sale or investment proceeds; and principal or interest
on an issue paid from investment earnings on a reserve or replacement
fund that are deposited in a bonafide debt service fund;
12
560819.3 032681 AC
(ii)
Expenditures for working capital not in excess of five percent of the sales
proceeds of the Bonds that are directly related to the Capital Expenditures
financed by the Bonds.
All other Working Capital Expenditures are subject to a gross-proceeds-
expended-last expenditure rule. In this regard, an amount not greater than five percent of the
Working Capital Expenditures of the Issuer for the fiscal year preceding the current fiscal year
shall be treated as unavailable.
(d) Gross Proceeds used by the Issuer to reimburse amounts expended in
anticipation of the issuance of the Bonds are considered expended on the date of the
reimbursement allocation if the Issuer established the official intent, in accordance with Section
1.150-2 of the Regulations, prior to or within 60 days after the date of such expenditure 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 capital expenditures as
defined in Section 1.150-1(b) of the Regulations. No reimbursement proceeds will be used for
purposes that would prevent the allocation from being treated as an expenditure pursuant to
Section 1.150-2 of the Regulations or prior law as applicable. To the extent that any Sale
Proceeds are used to reimburse the Issuer for expenditures made before the Issue Date, either
such expenditures are for preliminary expenditures that are not in excess of 20 percent of the
Issue Price, or the Issuer has evidenced in the Resolutions or other documents its official intent
to make such reimbursements for payment of a portion of the cost of the Projects. Such
reimbursements wilt be treated as an allocation to expenditure of the Sale Proceeds for purposes
of Section 148 of the Code and Section 1.148 of the Regulations to the extent the requirements of
Section 1.150-2 of the Regulations are satisfied.
(e) Investment proceeds of the Bonds that are deposited into the Issuer's
general fund or other funds and commingled with substantial tax or other revenues from the
governmental operations of the Issuer may be treated as allocated to expenditures for a
governmental purpose if such investment proceeds are expected to be spent within six months of
the date of commingling.
ARTICLE V
REBATE
5.1. 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 this Article. The Issuer shall do and perform all acts and things
necessary in order to assure that the arbitrage and rebate requirements of Section 148 of the Code
are met.
13
560819.3 032681 AC
5.2. Rebate Options. With respect to the investment of the proceeds of the
Bonds, the Issuer will:
(a) comply with the requirements of any applicable rebate exception
described in this Article and if it is unable to comply with any of such requirements, rebate
arbitrage earnings in accordance with the provisions of this Article;
(b) invest all Gross Proceeds at all times from the Issue Date until expended
in investments 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;
(c) invest all Gross Proceeds in obligations having a yield that does not
exceed the Bond Yield; or
(d) comply with the rebate provisions described in this Article.
5.3. Calculation of Rebate Amount. 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 would have been earned had the
amount so invested been invested at a rate equal to the Composite Yield, together with any
income attributable to such excess. Except as provided below, all Gross Proceeds 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 (e.g., proceeds from the sale of the Bonds, loan repayments,
and investment earnings). For each Nonpurpose Investment acquired with or allocated to Gross
Proceeds, 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
made with Gross Proceeds, including the payment of any Rebate Amount (as defined below)
with respect to the Bonds.
(b) Eligibility of Qualified Guarantee. Payments for a Qualified Guarantee
will be eligible to be taken into account as issue payments for purposes of computing the
Composite Yield only if the payment for the guarantee represents a reasonable payment for a
Qualified Guarantee.
(c) Computation of Rebate Amount. Subject to the special rules set forth in
Sections (d), (e), (f), (g) and (h) of this Section, the Issuer will determine the Rebate Amount on
14
560819,3 032681AC
each Computation Date. The Rebate Amount as of any Computation Date is 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. The
Computation Date is (1) the last day of any bond year selected by the Issuer as the date for the
payment of the first Rebate Amount, which date is not later than five years after the Issue Date,
and (2) after the date for the payment of the first Rebate Amount, the last day of the selected
bond year or the last day of each succeeding fifth bond year, as the Issuer may elect. 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 (the
"Nonpurpose Receipts") include (A) actual receipts, amounts actually or
constructively received with respect to an investment, reduced by qualified
administrative costs as defined in Section 1.148-5(e) of the Regulations;
(B) disposition receipts, the fair market value of investments deemed to be
sold on the date the investment ceases to be allocated to the Bonds,
(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); (C) Computation Date receipts as defined in
Section 1.148-3(d) of the Regulations, the fair market value (present
value, in the case of guaranteed investment contracts and fixed rate
investments) of all Nonpurpose Investments allocated to the Bonds at the
close of business on a Computation Date; and (D) rebate receipts, any
recovery of an overpayment of rebate.
(ii)
Payments. Payments with respect to Nonpurpose Investments include (A)
direct payments, the amount of Gross Proceeds directly used to purchase
the investment, including qualified administrative costs; (B) constructive
payments, the value of an investment allocated to (but not directly
purchased with) Gross Proceeds on the date so allocated; (C) Nonpurpose
Investments allocated to the Bonds at the end of the preceding
computation period, at the value of the investments at the beginning of the
computation period; (D) rebate payments, payments of Rebate Amounts
when due and yield reduction payments on Nonpurpose Investments; and
(E) the Computation Date credit as defined in Section 1.148-3(d) of the
Regulations (the "Computation Date Credit").
(d) Six-Month Spending Exception to Rebate. Notwithstanding anything in
this Section to the contrary, if all of the Gross Proceeds (other than amounts on deposit in the
Debt Service Fund, as defined below, or a reserve fund), including investment earnings received
with respect to all funds and accounts with respect to the Bonds except the Debt Service Fund,
have been expended for the governmental purpose of the Bonds within six months after the Issue
Date, then the only Nonpurpose Investments to be taken into account in the calculation of the
15
560819.3 032681 AC
Rebate Amount with respect to the Bonds are Nonpurpose Investments acquired with or
allocated to Gross Proceeds held in any reasonably required reserve fund (there are none with
respect to the Bonds), and to any Gross Proceeds arising after such six months which were not
reasonably anticipated as of the Issue Date. 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 the Bonds are not treated as expended on the
governmental purpose of the Bonds. The Issuer expects that the gross proceeds of the Current
Refunding Bonds will meet the requirements of this rebate exception.
(e) Eighteen-Month Spending Exception to Rebate. None of the Gross
Proceeds qualify for this spending exception to rebate.
(f) Two-Years Construction Bond Exception to Rebate. None of the Gross
Proceeds qualify for this spending exception to rebate.
(g) $100,000 Debt Service Fund Gross Earnings Exception. Notwithstanding
anything in this Section to the contrary, if the gross earnings from the investments held in a Debt
Service Fund for the bond year in question, as determined under paragraph (c) above, 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 earnings limitation is
deemed satisfied if the annual debt service on the issue does not exceed $2,500,000. For
purposes of this paragraph, 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.
(h) Debt Service Fund Exception. If the average maturity of the Bonds is at
least five years and the rates of interest do not vary during the term of the Bonds, then any
amount earned on the Debt Service Fund (other than amounts representing accrued interest or
capitalized interest) shall not be taken into account in determining the Rebate Amount.
5.4. 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 afier 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 afier the final computation date defined in
Section 1.148-3(e) of the Regulations, interest on the Rebate Amount will be deemed to accrue at
the underpayment rate under Section 6621 of the Code, beginning on the date the Rebate
Amount is due and ending on the date ten days before it is paid.
(b) The Issuer will mail each payment to the Internal Revenue Service Center,
Ogden, Utah 84201 or such other address as the Regulations may require. Each payment shall be
accompanied by the Form 8038-T (or other prescribed form) and such information and
documents as the Regulations may require.
16
560819.3 032681AC
5.5. Engagement of Experts. The Issuer shall, before the date which is the
earlier of (i) the fifth anniversary of the Issue Date, or (ii) the date all of the Bonds have matured
or have been retired, engage a firm nationally recognized in the calculation of rebate to perform
the calculation necessary to comply with the rebate requirements of the Code.
ARTICLE VI
DEBT SERVICE
6.1. Source of Repayment Funds. The principal and interest on the Bonds will
be paid from the Issuer's taxes and revenues.
6.2. Debt Service Fund. The taxes and revenues 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-twelfth of the debt service
on the Bonds for the immediately preceding bond year. So long as the foregoing are satisfied,
amounts in the debt service fund may be invested until expended without yield restriction.
6.3. Sinking Funds. 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.
ARTICLE VII
BANK QUALIFICATION
7.1. Designation. The Bonds are hereby designated as "qualified tax-exempt
obligations" pursuant to the provisions of Section 265 of the Code. In making such designation
it has been determined with respect to the Bonds that:
(i)
the Issuer reasonably anticipates that the aggregate issue price of all tax-
exempt obligations issued by the Issuer in the current calendar year will
not exceed $30,000,000;
(ii)
the Issuer reasonably anticipates that not more than $30,000,000 of the
obligations issued by the Issuer in the current calendar year will be
designated by the Issuer as "qualified tax-exempt obligations" for
purposes of Section 265 of the Code; and
17
560819.3 032681 AC
(iii)
no obligations issued by the Issuer in the current calendar year will be
deemed designated as "qualified tax-exempt obligations" by reason of
Section 265(b)(3)(D)(ii).
ARTICLE VIII
MISCELLANEOUS
8.1. Recordkeeping. The Issuer shall maintain records to support the
representations, certifications and expectations set forth in this Certificate until the later of (i) the
date six years after the last of the Bonds is retired, or, (ii) if any of the Bonds are refunded with
proceeds of Tax-Exempt obligations, the date six years after the last of such refunding Tax-
Exempt obligations is retired. The records the Issuer will retain include, but are not limited to:
(a) basic records and documents related to the Bonds, including the
Resolution, this Certificate and the opinion of Bond Counsel,
(b) documentation evidencing the expenditure of the proceeds of the Bonds,
(c) documentation evidencing all sources of payment or security for the
Bonds,
(d) documentation pertaining to any investment of the Gross Proceeds of the
Bonds, including the purchase and sale of securities, SLGS subscriptions, yield calculations for
each class of investment of the proceeds of the Bonds and guaranteed investment contracts,
(e) documentation evidencing determinations made pursuant to Section 5.3
and records of all amounts paid to the United States pursuant to Section 5.4, and
(f) documentation evidencing determinations made pursuant to Article III as
to the use of the Projects.
[signature page follows]
18
560819.3 032681 AC
IN WITNESS WHEREOF,
I have hereunto set my hand to this Arbitrage and
Use or Proceeds Certificate as of the 4th day of
__~May, 2009.
Supervisor
560789.1 032681 CERT
Table of Exhibits
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
-- Definitions
-- Form 8038-G
-- The Projects - Economic Life and Private Activity
-- Safe-Harbor Management Contract Guidelines
-- Letter of Underwriter
-- Reserved
-- Copy of SLGS Subscription
Certain Bond Calculations
560819.3 032681 AC
EXHIBIT A
DEFINITIONS
"Available Construction Proceeds" means the issue price of the Bonds (i) plus
earnings on the issue price and on amounts in any reserve fund not funded from bond proceeds,
and eamings 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.
"BANs" means the $371,000 Bond Anticipation Notes for Various Purposes -
2009, which were sold by the Issuer in a private sale on April 13, 2009 and defined in Section
1.4 of the Arbitrage and Use of Proceeds Certificate.
"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 that ends at the close of business on
the same date of each calendar year as the Issuer may select; the first Bond Year and the last
Bond Year may be short periods. If the Issuer has not select a day by the earlier of the final
maturity date of the issue or five years after the Issue Date, Bond Year shall mean any year
ending on the anniversary of the Issue Date and the final maturity date.
"Bond Yield" means the yield on the Bonds as defined in Section 4.3 of the
Arbitrage and Use of Proceeds Certificate.
"Capital Expenditure" means a capital expenditure, plus related Working
Capital Expenditures to which the de minimis rule under Section 1.148-6(d)(3)(ii)(A) of the
Regulations applies, that carry out the governmental purposes of an issue.
"Code" means the Internal Revenue Code of 1986, as amended.
"Composite Issue" means the treatment as one issue of the Bonds and BANs as
described in Section 1.4 of the Arbitrage and Use of Proceeds Certificate.
"Composite Yield" means the yield on the Composite Issue as defined in Section
4.5 of the Arbitrage and Use of Proceeds Certificate.
A-1
560819.3 032681 AC
"Computation Date" means (i) the last day of any Bond Year selected by the
Issuer as the date for the payment of the first Rebate Amount, which date is not later than five
years after the Issue Date, and (ii) after the date for the payment of the first Rebate Amount, the
last day of Bond Year or the last day of each succeeding fifth Bond Year, as the Issuer may elect.
"Computation Date Credit" means $1,490 for each Bond Year during which
there are gross proceeds of the Bonds on a Computation Date other than the Final Computation
Date and $2,980 on the Final Computation Date, as may be adjusted from time to time by the
Treasury.
"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 that part of the Bonds which are either (i)
Governmental Bonds; (ii) Qualified 501(c)(3) bonds or (iii) Private Activity Bonds to finance
property owned by a governmental unit or a 501(c)(3) organization, if at least 75 percent of the
net proceeds of the issue are to be used, for expenditures for construction, reconstruction and
rehabilitation of property which is owned by a governmental entity or a 501(c)(3) organization.
"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.
"Fair Market Value" of an Investment shall have the following meanings:
(a) In General. Except as elsewhere specifically stated herein, the Fair
Market Value of an Investment is the price at which a willing buyer would purchase the
Investment from a willing seller in a bonafide, 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 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.
A-2
560819.3 032681 AC
(d) Guaranteed Investment Contracts and Yield Restricted Defeasance
Escrows. The Fair Market Value of a guaranteed investment contract or an investment
purchased for a yield restricted defeasance escrow is its purchase price, provided the issuer of the
Bonds makes a bona .fide solicitation for such contract that satisfies all of the following
requirements:
(i)
The bid specifications are in writing and are timely forwarded to potential
providers.
(ii)
The bid specifications include all material terms of the bid; material terms
are defined as terms that may directly or indirectly affect the yield or cost
of the investment.
(iii)
The bid specifications include a statement notifying potential providers
that submission of a bid is a representation that the potential provider did
not consult with any other potential provider about its bid, that the bid was
determined without regard to any other formal or informal agreement that
the potential provider has with the issuer or any other person (whether or
not in connection with the bond issue), and that the bid is not being
submitted solely as a courtesy to the issuer or any other person for
purposes of satisfying the requirements of the applicable provisions of the
Regulations.
(iv)
The terms of the bid specifications are commercially reasonable, i.e., there
is a legitimate business purpose for the term other than to increase the
purchase price or reduce the yield of the investment (for example, for
solicitations of investments for a yield restricted defeasance escrow, the
hold firm period must be no longer than the issuer reasonably requires).
(v)
With respect to purchases of guaranteed investment contracts only, the
terms of the solicitation take into account the issuer's reasonably expected
deposit and drawdown schedule for the amounts to be invested.
(vi)
All potential providers have an equal opportunity to bid, for example, no
potential provider is given the opportunity to review other bids (i. e., a "last
look") before providing a bid.
(vii)
At least three reasonably competitive providers are solicited for bids;
reasonably competitive provider is a provider that has an established
industry reputation as a competitive provider of the investments being
purchased.
The bids received must meet all of the following requirements:
(i)
The issuer receives at least three bids from providers that the issuer
solicited under a bonafide solicitation, which bids meet the requirements
set forth immediately above and that do not have a material financial
A~3
560819.3 032681 AC
interest in the issue. A lead underwriter in a negotiated underwriting
transaction is deemed to have a material financial interest in the issue until
15 days after the Issue Date. In addition, any entity acting as financial
advisor with respect to the purchase of the investment at the time the bid
specifications are forwarded to potential providers has a material financial
interest in the issue. A provider that is a related party to a person that has
a material financial interest in the issue is deemed to have a material
financial interest in the issue.
(ii)
At least one of the three bids received is from a reasonably competitive
provider of such types of investments, as described in Section (vii) above.
(iii)
If the issuer uses an agent to conduct the bidding process, the agent did not
bid to provide the investment.
The winning bid is:
(i)
In the context of a guaranteed investment contract, the highest yielding
bonafide bid (determined net of any broker's fees).
(ii)
In the context of investments other than guaranteed investment contracts,
the lowest cost bona.fide bid (including any broker's fees). The lowest
cost bid is either the lowest cost bid for the portfolio or if the issuer
compares the bids on an investment-by-investment basis, the aggregate
cost of a portfolio comprised of the lowest cost for each investment. Any
payment received by the issuer from a provider at the time the investment
is purchased (e.g., an escrow float contract) for a yield restricted
defeasance escrow under a bidding procedure meeting the requirements of
this definition is taken into account in determining the lowest cost bid. In
general, the lowest cost bonafide bid (including any broker's fee) may not
be greater than the cost of the most efficient portfolio comprised
exclusively of SLGS. The cost of the most efficient portfolio of SLGS is
to be determined at the time that bids are required to be submitted
pursuant to the terms of the bid specifications. This requirement to
compare to the most efficient SLGS portfolio does not apply if SLGS are
not available for purchase on the date that bids are required to be
submitted because sales of those securities have been suspended.
The provider of the investments or the obligor on the guaranteed investment
contract certifies the administrative costs that it pays (or expects to pay), if any, to third parties in
connection with supplying the investment.
The issuer must retain the following records with the bond documents until three
years after the last outstanding bond is redeemed:
(i)
For guaranteed investment contracts, a copy of the contract, and for other
types of purchases, the purchase agreement or confirmation.
A-4
560819.3 032681 AC
(ii)
The receipt or other record of the amount actually paid by the issuer for
the investment, including a record of any administrative costs paid by the
issuer to third parties and the certification of such costs.
(iii)
For each bid that is submitted, the name of the person and entity
submitting the bid, the time and date of the bid and the bid results.
(iv)
The bid solicitation form and, if the terms of the purchase agreement or
the guaranteed investment contract deviated from the bid solicitation form
or a submitted bid is modified, a brief statement explaining the deviation
and stating the purpose of the deviation. If the issuer replaces an
investment in the winning bid portfolio with another investment, the
purchase price of the investment must be bid under a bidding procedure
meeting the requirements of this definition.
(v)
For purchases of investments other than guaranteed investment contracts,
the most efficient portfolio of SLGS, determined at the time that the bids
were required to be submitted pursuant to the terms of the bid
specifications.
"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 computing 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.
"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
A-5
560819.3 032681 AC
services if a principal purpose of prepayment is to receive an investment return from the time the
prepayment is made until the time payment would otherwise have been made.
"Investment Proceeds" means any amounts actually or constructively received
from investing proceeds of the Bonds.
"Issue" means the Bonds as defined in the Arbitrage and Use Proceeds Certificate
to which this EXHIBIT A is attached.
"Issue Date" means May 4, 2009.
"Issue Price" means the first price at which a substantial amount (ten percent) of
the Bonds is sold to the public (not including bond houses or brokers, or similar persons or
organizations acting in the capacity of underwriters or wholesalers), or if privately placed, the
price paid by the first buyer of such obligations. The Issue Price of the Bonds that are publicly
offered in a bona.fide public offering is determined on the basis of actual facts and reasonable
expectations as of the sale date and shall not be adjusted to take into account actual facts after
such date. In no event shall the Issue Price of a Bond exceed its Fair Market Value as of the sale
date. The Issuer has relied upon representations made to it by the Underwriter attached hereto as
EXHIBIT E with respect to the Issue Price of the Bonds.
"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 of a minor portion.
"Nonpurpose Investment" means any Investment in which Gross Proceeds are
invested and which is not acquired to carry out the governmental purpose of the issue.
"Official Statement" means the Official Statement dated April 7, 2009 of the
Issuer relating to the Bonds.
"Person" 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 two percent of the stated redemption price at
maturity plus the amount of original issue premium attributable exclusively to underwriters'
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.
"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 two pement of the stated redemption
price at maturity, (ii) is issued for a price that does not include Pm-Issuance Accrued Interest,
(iii) bears interest from the Issue Date at a single stated fixed rate or is a variable rate obligation
A-6
560819.3 032681 AC
under Section 1275 of the Code that pays interest unconditionally payable at least annually, and
(iv) has a lo,vest stated redemption price not less than its outstanding stated principal amount.
formula:
"Present Value" or "PV" means the amount determined by using the following
FV
PV=--
(l+i)~
where 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 intervals 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 which 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.
"Projects" means the acquisition of interests or rights in real property for the
preservation of open spaces and areas and agricultural lands refinanced with the proceeds of the
Bonds as described in the Resolution and summarized in EXHIBIT C.
"Qualified 501(c)(3) Bonds" means bonds which meet the definition contained
in Section I45 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 Issuer 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
funds other than gross proceeds of Tax-Exempt bonds.
(i)
Regulated Investment Companies and External Commingled Funds. For
publicly offered regulated investment companies (as defined in Section
67(c)(2)(B)) and commingled funds in which the Issuer and any
Controlled Entity do not own mom than ten 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 Section.
(ii)
GICs and Investments Purchased for a Yield Restricted Defeasance
Escrow. An amount paid for a broker's commission or similar fee paid
with respect to a guaranteed investment contract or investments purchased
A-7
560819.3 032681 AC
for a yield restricted defeasance escrow will be considered reasonable if
(i) the fee does not exceed the lesser of $35,000 or 0.2% of the
"computational base", or, if more, $4,000, where "computational base"
means (A) for a guaranteed investment contract, the amount reasonably
expected, as of the date the contract is acquired, to be deposited in the
guaranteed investment contract over the term of the contract and (B) for
yield restricted defeasance escrows, the amount of proceeds initially
invested in those investments; and (ii) for any issue, the fees paid, do not
exceed $99,000 in the aggregate. In the case of a calendar year after 2009,
each of the dollar amounts set forth above shall be increased by an amount
equal to such dollar amount multiplied by the cost of living adjustment for
such calendar year as described in Section 1.148-5(e)(2)(iii)(B) of the
Regulations.
(b) _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, any of 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 Bond Yield as the discount rate.
(c) _Program 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 Section.
"Qualified Guarantee" means, with respect to a bond, an unconditional transfer,
in any form, of substantially all 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, will 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 ten 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 entered into to modify the Issuer's risk of interest rate changes
with respect to the Bonds that meets the requirements of Section 1.148-4(h) of the Regulations.
The contract may be an interest rate swap, an interest rate cap, a futures contract, a forward
contract, an option or may take another form.
A-8
560819,3 032681AC
"Reasonable Retainage" for purposes of the 18-month exception or the two-year
construction bond exception to rebate, means an amount retained by the Issuer for reasonable
business purposes relating to the Projects, such as to ensure or promote compliance with the
terms of one or more construction contracts (e.g., "punch list" items) and the payee concedes that
the amount retained is not yet payable (as with "punch list" items, or at the end of the 18-month
period or the two-year period, as the case may be, following the date of issuance of the Bonds,
the Issuer reasonably determines that an actual dispute exists regarding either completion of
construction or payment, and that the amount retained is reasonable in relation to the dispute.
With respect to the 18-month exception, the five percent limitation determined by reference to
the Net Proceeds on the date 18 months after the Issue Date. With respect to the two-year
exception, the five percent limitation is determined by reference to the Available Construction
Proceeds as of the end of the two year phased expenditure period and is comprised of five
percent of the excess of such Available Construction Proceeds over any amount used to, or
deposited in an escrow to be used to redeem the Bonds.
"Rebate Amount" means with respect to the Bonds, the amount computed as
described in Section 5.3(c) of the Certificate.
"Regulatiohs" means the Income Tax Regulations, Temporary Regulations and
Proposed Regulations promulgated by the United States Treasury Department pursuant to
Section 103 and related provisions of the Code, as applicable to the Bonds, as they may be
amended from time to time.
"Replacement Proceeds" means amounts with a sufficiently direct nexus to the
Bonds or the Projects to conclude that such amounts would have been used for the Projects if the
proceeds of the Bonds were not so used, including, to the extent held by or derived from the
Issuer or a Controlled Entity (as defined in Section 1.150-1 (e) of the Regulations) of the Issuer:
(a) sinking funds, such as debt service funds, redemption funds, reserve funds,
replacement funds, or any other fund, to the extent reasonably expected to be used directly or
indirectly to pay principal or interest on the Bonds;
(b) pledged funds, any amount directly or indirectly pledged to pay principal
or interest on the Bonds, cast in any form but providing reasonable assurance that such amount
will be available to pay principal or interest on the Bonds, even if the Issuer encounters financial
difficulty;
(c) negative pledges, amounts held under an agreement to maintain such
amount at a particular level for the direct or indirect benefit of holders or a guarantor of the
Bonds, excluding amounts the Issuer, or a Controlled Entity of the Issuer may grant rights in
superior to the rights of the bondholders or the guarantor and amounts not in excess of the
reasonable needs for which it is maintained, the required level of which is tested no more
frequently than every six months and which may be spent without any substantial restriction
other than a requirement to replenish such amount by the next testing date.
(d) other replacement proceeds, including amounts arising during a period
that the Bonds, to the extent reasonably expected by the Issuer as of the Issue Date, remain
A-9
560819.3 032681 AC
outstanding longer than necessary and amounts arising to the extent proceeds of the Bonds are
used to finance a working capital reserve unless all of the Net Sale Proceeds of the Bonds are
spent within six months of their Issue Date, or meet the small issuer rebate exception or the
Issuer traditionally maintained a working capital reserve. The amount of the working capital
reserve maintained is the average amount so maintained during annual periods of at least one
year, the last of ~vhich ends within a year of the Issue Date.
"Resolution" means the refunding bond resolution duly adopted by the Issuer on
February 24, 2009 authorizing the refunding of all or a portion of the Prior Bonds.
"Sale Proceeds" means any amounts actually or constructively received from 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 Section 1.148-4(b)(4) of the Regulations.
"SLGS" means U.S. Treasury Book Entry Securities, State and Local
Government Series.
"Tax-Exempt", when used in connection with any obligation or its status for
purposes of federal income taxation, means any obligation described in Section 103(a) of the
Code, interest on which is excluded from the gross income of the owners thereof and which is
not a specified private activity bond as defined by Section 57(a)(5)(C) of the Code.
"Transferred 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
Bonds. Nonpurpose Investments shall be taken into account as Nonpurpose Receipts at their
Value on a Valuation Date.
"Valuation 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 of a Bond, the Value of a Bond andin the case of an
Investment, the Value of an Investment.
"Value of a Bond" means, in the case of a Plain Par Bond, its outstanding stated
principal amount, plus accrued unpaid interest or in the case of a Plain Par Bond actually
A-10
560819.3 032681 AC
redeemed, or treated as redeemed, its stated redemption price on the redemption date plus
accrued unpaid interest. In the case of a 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 of a 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, on any date means, as permitted or required,
the Present Value or the Fair Market Value of the Investment or its outstanding principal amount.
Sections (a) through (f) below specify the valuation methods required or permitted to be used for
the Investments listed.
(a) Fixed Rate Investments. A Fixed Rate Investment may be valued at its
Present Value or at its Fair Market Value on any date unless it is required to be invested at a
restricted yield.
(b) Plain Par Investments. A Plain Par Investment may be valued at its
outstanding stated principal amount on any date (plus interest accrued but unpaid on that date)
unless it is required to be invested at a restricted yield.
(c) Any Investment. Any Investment may be valued at its Fair Market Value
on any date unless it is required to be invested at a restricted yield.
(d) Yield Restricted Investments. An Investment required to be invested at a
restricted yield (for example, an Investment held after the expiration of the applicable investment
temporary period) must be valued at its Present Value as of any date unless the Investment is
required to be valued at Fair Market Value as provided in Section (e) below.
(e) Mandatory Valuation at Fair Market Value. Subject to Section (d) above,
Investments deemed to be acquired or disposed of with respect to bonds (as a result, for example,
of sinking fund deposits or withdrawals) must be valued on the deemed acquisition or disposition
date at Fair Market Value unless (i) the Investment was allocated from one issue of Tax-Exempt
bonds to another as Transferred Proceeds or as a result of the application of the Universal Cap
rule in which case it may be valued at Present Value or (ii) the Investment is held in a
commingled fund (other than a bonafide debt service fund or a commingled fund that operates
exclusively as a reserve fund, sinking fund or replacement fund for two or more issues of the
Issuer) unless it is an investment being initially deposited in or withdrawn from a commingled
fund.
(f) Special Rule for Transferred Proceeds. Notwithstanding any matter stated
above, the Value of any Nonpurpose Investment allocable to Transferred Proceeds of an issue of
refunding obligations may not exceed the Value of that Investment used for purposes of applying
the arbitrage restrictions to the refunded obligations on the date proceeds of the refunding
obligations are used to redeem the refunded obligations.
"Working Capital Expenditure" means any cost of a type that does not
constitute a Capital Expenditure.
A-11
560819.3 032681 AC
"Yield" means, as of any Computation Date, the Yield computed on the Issue
under Section 1.148-4(b) of the Regulations and on an Investment under Section 1.148-5 of the
Regulations in either case by compounding interest at the end of each compounding interval as
further described in Sections (a) and (b) below:
(a) When used ~vith respect to a Fixed Yield Issue, Yield means 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 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 five years of its Issue Date and the Yield not talsing into account the optional redemption
is more than 1/8 of one percent 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 one percent
multiplied by the product of the stated redemption price to maturity and the number of complete
years to the first optional 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.
(b) When used with respect to any Investment allocated to an Issue, Yield
means the Yield on the Investment computed using the same compounding interval and financial
conventions used to calculate the Yield on the issue of obligations to which it is allocated. The
Yield on an Investment allocated to an issue is the discount rate that, when used on the date the
Investment is first purchased with Gross Proceeds or allocated to Gross Proceeds of the issue to
compute the Present Value on that date of all unconditionally payable Nonpurpose Receipts from
the Investment, produces an amount equal to the Present Value on that date of all unconditionally
payable Nonpurpose Payments for the Investment.
"Yield Reduction Payments" means periodic payments made on Installment
Computation Dates with respect to certain Investments subject to yield restriction ~vhich are
treated as a payment for such Investments that reduces the Yield on such Investment. Yield
reduction payments may be made with respect to (a) Investments allocable to proceeds eligible
for a temporary period after such temporary period has expired, (b) investments allocable to a
Variable Yield Issue during any Computation Period in which at least five percent of the issue is
represented by variable yield bonds, (c) Nonpurpose Investments allocable to Transferred
Proceeds of a current refunding issue to the extent necessary to satisfy yield restriction or of an
A-12
560819.3 032681 AC
advance refunding to the extent that investment in zero yielding Nonpurpose Investments fails to
properly restrict the Yield, (d) purpose investments allocable to certain qualified student loans,
(e) Nonpurpose Investments allocable to a reasonably required reserve or replacement fund that
but for its size would be treated as a reasonably required reserve or replacement fund, to the
extent that certain other size constraints are satisfied, (f) Nonpurpose Investments allocable to
Replacement Proceeds by virtue of the Universal Cap, and (g) amounts eligible for transitional
relief.
A-13
560819.3 032681 AC
FORM 8038-G
EXHIBIT B
560819.3 032681 AC
Porm 8038-G I
(Rev. November 2000)
I Part I I Reporting Authority
Town of Southold
Information Return for Tax-Exempt Governmental Obligations I
· Under Internal Revenue Code section t49(e)
· See separate Instructions. OMa No. 1545-0720
Caution: If the issue pdce is under $100,000, use Form 8038-GC.
If Amended Return, check here ·
2 Issuer's employer identification number
11-6001939
j eoom'suiteI' ;epo nu
3 Number and street (or RO. box if mail is not delivered to street address)
53095 Main Street
$ City, town, or post office, state, and ZIP code
Southold, New York 11971
15
16
17
~8
19
20
I Part IiiI
7 Name of issue
$2,125,000 Refunding Serial Bonds-2009
9 Name and title of officer or legal representative whom the IRS may call for more information t0 Telephone number of officer or legal representati'~
William J. Jackson, Esq. (212) 820-9620
[ Part II I Type of Issue (check applicable box(es) and enter the issue price) See instructions and attach schedule
12 [] Health and hospital.. 12
13 [] Transportation 13
14 [] Public safety ................................................................
[] Environment (including sewage bonds) ............................................
[] Housing 16 /
[] Utilities.. 17
/
[] Other. Describe!l~ O~,6~, . ~,~.~ ~,,~/ ,~qCC(.uJt. dc¢4~ ~c~ ¢)¢e4~J'C,~ld¢. 18 2% I~fq,jlFT..6~'
If obligations are TANs or RANs, c~eck box · [] If"~bligations are BANs, check box ...... · [] ' ' '
If obligations are in the form of a lease or installment sale, check box ................. · []
Description of Obligations. (Complete for the entire issue for which this form is being filed.)
(a) Final maturity date b ssue p ce (c) Sated red~m?tion d Weighte~
I J [ price at ma,urgy J average matur, ty (e) Yield
2~r 05/01/19 I$"~.lqC(,;X~'7.6,i- I$ 2,125,000.00I I,.{,'~/,.~q yearsI
Part IV I Uses of Proceeds o~ Bond Issue (including underwriters' discount)
22 Proceeds used for accrued interest ..................................................
23 Issue price of entire issue (enter amount from line 21, column (b)) ..........................
24 Proceeds used for bond issuance costs (including underwriters' discount) 24 I (oq: Oct~', (,,~
25 Proceeds used for credit enhancement ........................... 25 (~. 00
26 Proceeds allocated to reasonably required reserve or replacement fund.. 26 0.0 0
27 Proceeds used to currently refund prior issues ..................... ~ 27 ~,J~O!'~, ;~?,O ~
28 Proceeds used to advance refund prior issues ..................... I 28 I ' C).O~
29 Total (add lines 24 through 28) .....................................................
30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) ........
Part VI Description of Refunded Bonds (Complete this part only for refunding bonds.)
Z2
~3
0.00
2,, t c{c~ ;),8'7, 65'
c~.OO
31 Enter the remaining weighted average maturity of the bonds to be currently refunded ........... · ,_~',
32 Enter the remaining weighted average maturity of the bonds to be advance refunded ........... ·
33 Enter the last date on which the refunded bonds will be called ............................ · 06
34 Enter the date(s) the refunded bonds were issued · 5 / 1 9 / 9 8; 5 / 18 / 9 9
Part VII Miscellaneous
years
years
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) ......... ~a
36a Enter the arnount of gross prooeeds invested or to be invested in a guaranteed investment contract (see instructions) ....
b Enter the final maturity date of the guaranteed investment contract ·
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units ........... 37a
bIf this issue is a loan made from the proceeds of another tax-exempt issue, check box · [] and enter the name of the
issuer I~ and the date of the issue
38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(lll) (small issuer exception), check box ............ · []
39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box .................................. · []
40 If the issuer has identified a hedge, check box .......................................................... ·
Under penalties of perjur!u.~,declare that I ha,~ examined this return and accompanying schedules and statemen s, and o he best of my knowledge and belief
they are true, correct, complete.
:Sor~fecPte,2.2.~, ;re..Z~ ../. Scott A. Russell
~1, S, nature~~~~-~ 05/04/09 ~ Supervisor
F 'g o issuer's authorized representati,~ Date · Type or print name and title
For Paperwork Reduction Act Notice, see page 2 of the Instructions. ~SA Form 8038-G (Re~ 11-2000)
STF FED6403F
EXHIBIT C
THE PROJECTS - ECONOMIC LIFE AND PRIVATE ACTIVITY
560819.3 032681 AC
Town of Southold -- Refunding Serial Bonds - 2009
Issue Date: 05/04/2009
SUMMARY OF REMAINING AVERAGE REASONABLY EXPECTED ECONOMIC LIFE OF BOND FINANCED ASSETS & PRIVATE ACTIVITY
Proceeds of Refunding Private Activity %
Bonds Deposited in (from each Series of
Refunded Principal Escrow Refunded Bonds)
1 1998 $ 1,120,000.00 $ 1,034,492.90 0,000% 19.04
2 1999 $ 1,160,000,00 $ 1,095,745.13 0.000% 20,04
$ 2,280,000.00 $ 2,130,238.03 0.0000% 19.55
Refunded
Bond Series
issue Price of 2009 Bonds:
Total Private Activity Amount:
2,199,287.65
Remaining Average
Economic Life of Assets
(from each Series of Refunded
Bonds, in years)
Town of Southold -- Refunding Serial Bonds - 2009 issue date: 51412009
REMAINING AVERAGE REASONABLY EXPECTED ECONOMIC LIFE OF BOND FINANCED ASSETS AND PRIVATE ACTIVITY
Tola~ J
Tokai D
Town of Southold -- Refunding Serial Bonds - 2009 issue date: 514/2009
REMAINING AVERAGE REASONABLY EXPECTED ECONOMIC LIFE OF BOND FINANCED ASSETS AND PRIVATE ACTIVITY
Asset
EXHIBIT D
SAFE-HARBOR MANAGEMENT CONTRACT GUIDELINES
REV. PROC. 97-13
General Rule.
A contract between a state or local govermnental unit or a section 501(c)(3)
organization (a "Qualified User") and a non-exempt provider (a "Provider) for the management
of, or services rendered at, or incentive payment in respect of, a Tax-Exempt bond-financed
facility that meets the safe-harbor guidelines of Rev. Proc. 97-13 as summarized below and does
not otherwise give the Provider an ownership or leasehold interest in bond-financed property for
federal income tax purposes is treated as not creating any private business use under section
141(b) or 145(a)(2)(B) of the Internal Revenue Code (the "Code"). In addition, if the guidelines
are met, the burden to prove that the contract creates impermissible private activity would shift to
the Internal Revenue Service ("IRS") in a tax court proceeding. All contracts must be reviewed
on a case-by-case basis.
General Requirements.
1. Reasonable Compensation and No Net Profits. The compensation must be
reasonable and no portion of the compensation paid to the Provider may in any event be based on
net profits derived from the bond-financed facility. However, a compensation that is based on a
percentage either of gross revenues or of expenses (but not both) is permitted. Reimbursement
for actual and direct expenses paid by the Provider to unrelated persons is not by itself treated as
compensation.
2. No Penalty if Required to be Cancelable. Whenever a contract is required
to be cancelable as described below, it must be possible to cancel it without penalty imposed on
the Qualified User. A "penalty" means: (a) any limitation on the Qualified User's right to
compete with the Provider; (b) any requirement that the Qualified User purchase equipment,
goods or services from the Provider; or (c) any requirement that the Qtialified User pay
liquidated damages for cancellation of the contract. A requirement that the Qualified User
reimburse ordinary and necessary expenses of the Provider or a restriction against hiring key
persormel of the Provider is not a penalty. A penalty may exist where provisions of another
contract between the Provider and Qualified User (e.g., a loan or guarantee) impair the practical
ability of the Qualified User to terminate the service contract for example by automatically
terminating when the service contract terminates.
3. No Role or Relationship between Qualified User and Provider. There
must not be any role or relationship between the Qualified User and the Provider that would
substantially limit the Qualified User's ability to exercise its rights under the contract, including
cancellation rights. This requirement is considered satisfied if (a) not more than 20 percent of
the voting power of the governing board of the Qualified User is vested in the Provider and its
directors, officers, shareholders and employees, (b) overlapping board members do not include
the chief executive officers of the service provider or its governing body or the Qualified User or
D-1
560819.3 03268lAC
its governing body, and (c) the Qualified User and the Provider are not "related persons" within
the meaning of Section 1.150-1 (b) of the Regulations.
Permitted Contract Term and Compensation Arrangements.
The contract term (which includes renewal options) and the compensation
arrangements must meet one of the following five requirements:
Contract Maximum Term Permissible Compensation Arrangements
Limit
1. Lesser of 15 years (20 years 1. At least 95% of compensation for each annual period
for public utility property) or must be based on a periodic fixed fee. A one-time
80% of the reasonably productivity award is permitted.
expected useful life of the
bond-financed property. No
cancellation right required.
2. Lesser of 10 years (20 years 2. At least 80% of compensation for each annual period
for public utility property) or must be based on a periodic fixed fee. A one-time
80% of the reasonably productivity award is permitted.
expected useful life of the
bond-financed property. No
cancellation right required.
3. 5 years, cancelabte by the 3. At least 50% of compensation for each annual period
Qualified User at the end of 3 must be based on a periodic fixed fee or, alternatively,
years without penalty. 100% must be based on a capitation fee or any
combination of periodic fixed fees and capitation fees.
4. 3 years, cancelable by the 4. 100% of compensation may be based on a per-unit fee
Qualified User at the end of 2 stated in the contract or otherwise specifically limited
years without penalty, by the govermnental service recipient or an independent
third party (e.g., Medicare reimbursement formulas).
Alternatively, 100% of compensation may be based on
any combination of periodic fixed fees and per-unit fees.
5. 2 years, cancelable by the 5. 100% of compensation may be based on a percentage of
Qualified User at the end of 1 the fees charged at the bond-financed facility except
year without penalty, that, during the start-up period of the facility, it may be
based on either gross revenues, gross revenues adjusted
for bad debt or similar allowances or the expenses of the
facility. This compensation arrangement is available
only (i) with respect to facilities providing services to
third parties (e.g., radiology, facilities) or (ii) during an
initial start-up period during which operations have been
insufficient to permit a reasonable estimate of annual
gross revenues.
D-2
560819.3 032681AC
Definitions of Permissible Compensation Arrangements.
1. Periodic Fixed Fee is a stated dollar amount for services rendered for a
specified period of time. The stated dollar amount may automatically increase according to a
specified objective external standard that is not linked to the output or efficiency of a facility,
e.g., the Consumer Price Index and similar external indices that track increases in prices in an
area or increases in revenues or costs in an industry are objective external standards.
2. Capitation Fee is a fixed periodic amount payable for each person for
whom services are provided (e.g., an HMO member) as long as the quantity and type of services
actually provided vary substantially from person to person. A capitation fee may include a
variable component of up to 20 percent of the total capitation fee designed to protect the Provider
against risks such as catastrophic loss.
3. Per-Unit Fee is a stated amount for each unit of services provided (e.g.,
medical procedure performed, car parked, passenger mile traveled, ton of waste incinerated, unit
of landfill capacity consumed).
4. Productivity Award is a stated dollar amount of additional compensation
based on increases or decreases in gross revenues or reductions in total expense target (but not
both) in any annual period during the term of a contract.
Revision and Renewal of Management Contract.
If the compensation arrangements of a management contract are materially
revised, the requirements for compensation arrangements are retested as of the date of the
material revision and the management contract is treated as one that was newly entered into as of
the date of the material revision.
A renewal option is a provision under which the Provider has a legally
enforceable right to renew the contract. Thus, for example, a provision under which a contract is
automatically renewed for one-year periods absent cancellation by either party is not a renewal
option (even if it is expected to be renewed).
Certain Exceptions.
Certain arrangements generally are not treated as management contracts that are
subject to the above rules. These include:
(a) Contracts for services that are solely incidental to the primary
governmental function or functions of a bond-financed facility (e.g., contracts for janitorial,
office equipment repair, hospital billing or similar services);
(b) The mere granting of admitting privileges by a hospital to a doctor, even if
those privileges are conditioned on the provision of de minimis services, if those privileges are
available to all qualified physicians in the area, consistent with the size and nature of its
facilities;
D-3
560819.3 032681 AC
(c) A contract to provide for the operation of a facility or system of facilities
that consists predominantly of public utility property (as defined in section 168(i)(10) of the
1986 Code), if the only compensation is the reimbursement of actual and direct expenses of the
service provider and reasonable administrative overhead expenses of the service provider; and
(d) A contract to provide for services, if the only compensation is the
reimbursement of the service provider for actual and direct expenses paid by the service provider
to unrelated parties.
D-4
560819.3 032681 AC
LETTER OF UNDERWRITER
EXHIBIT E
560819.3 032681 AC
CERTIFICATE OF ROOSEVELT & CROSS, INCORPORATED
May 4, 2009
Town of Southold
53095 Main Road
Southold, New York 11971
Hawkins Delafield & Wood LLP
One Chase Manhattan Plaza
New York, New York
Town of Southold, Suffolk County, New York
_$2,125,000 Refunding Serial Bonds-2009 (the "Bonds".)
(a) All Bonds of all maturities have been the subject of an initial offering to the
public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of
underwriters or wholesalers), at prices not higher than, or, in the case of obligations sold on a yield basis,
at yields not lower than, those shown in the Official Statement relating to the Bonds.
(b) On the date of the Bonds' sale, to the best of our knowledge based on our
records, the first price or 3~ield at which at least ten percent of each maturity of the Bonds was sold to the
public (excluding-such bond houses, brokers or similar persons or organizations acting in the capacity of
underwriters or wholesalers) was not greater than the respective price, or was not lower than the
respective yield, shown in the Official Statement. At the time we agreed to purchase the Bonds, based on
our assessment of the then prevailing market conditions, we had no reason to believe that any of the
Bonds would be initially sold to the public (excluding such bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters or wholesalers) at prices greater than the prices, or
yields lower than the yields, shown in the Official Statement, and such prices and yields, maturity-by-
maturity, represented our best judgment of the fair market value of the Bonds.
We understand that the representations contained herein may be relied upon by the issuer
of the Bonds in making certain of the representations contained in the Arbitrage and Use of Proceeds
Certificate, and we further understand that bond counsel to the issuer may rely upon this certificate,
among other things, in providing an opinion with respect to the exclusion fi.om gross income of the
interest on the Bonds pursuant to Section 103 of the Internal Revenue Code of 1986, as amended.
Very truly yours,
Roosevelt & Cross, Incorporated
New York, New York
By: ..~ ~'];~~~
560789.1 032681 CERT
RESERVED
EXHIBIT F
560819.3 032681AC
COPY OF SLGS SUBSCRIPTION
EXHIBIT G
560819,3 032681 AC
U.S. TREASURY SECURITIES
Confirmation Notice - Time Deposit
Treasury Case NumberAssigned: 2009-0t523
Rate Table Date: 0410712009
Issue Date: 05104/2009
Issue Amount: $2,130,217.00
TIN: 1t-6001939
Owner Name: Town of Southold, New York
Confirmation Date: April 07, 2009
Confirmation Time: 03:17 PM ET
Status: Complete
Date: 4~7/2009
U.S. TREASURY SECURITIES
Subscription Review
Issue Information
Treasury Case Number: Bank Ref Number:
2009-01523
Issue Bate: Rate Table Bate:
05/04/2009 04/07/2009
Issue Amount: Status:
$2,130,217.00 Complete
State or Local Government Body
Underlying Bond Issue: Refunding Serial Sonds - 2009
Taxpayer Identification Number: 11-6001939
TOWN OF SOUTHOLD, NEW YORK
TOWN HALL
53095 MAIN ROAD
SOUTHOLD, NY 11971
Contact: JOHN A. CUSHMAN [1, TOWN COMPTROLLER
Telephone: 631-765-4333
Fax: 631-765-1366
E-Mail: John. Cushman@town.snuthold.ny.u$
Trustee Bank
AeA Routing Number: 021000018
BANK OF NEW YORK
101 SARCLAY STREET, 7W
NEW YORK, NY 10266
Contact: NICOLE PINERO
Telephone: 212-616-7167
Fax: 212-815-5595
E-Malh nicole.plnero@b ny.mellon.corn
Financial Institution Managing (ACH) Payments
ABA Routing Number: 021000018
t3ANK OF NEW YORK
101 BARCLAY STREET, 7W
NEW YORK. NY 10286
Contact: NICOLE PINERO
Telephone: 212-815-7167
Fax: 212-815-5595
E-Malt: nicole.pinero@bny.mel~on.com
ACH Payment Instructions:
Account Name: BNY TAS #
Account Number: GLA111566
Account Type: Checking
ABA Routing Number: 021000018
Date: 4/7/2009
U.S. TREASURY SECURITIES
Subscription Review
Financial Institution Transmitting Funds for Purchase
ABA Routing Number: 021000018
THL BANK OF NEW YORK MELLON
Contact: HICOLE PINERO
Telephone: 212-815-7167
Fax: 2~2-815-5595
E-Mail: nicole.pinero@bny.melron corn
Subscdber
ABA Routing Number or TIN: 132728032
Roosevelt & Cross, Inc~
One Exchange P!aza
55 Broadway. 22nd Floor
New York, NY 10006
Contact: SCOTT T MONAHAN
Telephone: 212-504-9260
Fax: 212-480-9385
E-Mail: smonahan@roosevelt-cross.com
Date: 4/7/2009
Viewers
U.S. TREASURY SECURITIES
Subscription Review
Issue Information
Treasury Case Number: Bani( Ref Number:
2009-01523
Issue Date: Rate Table Date:
05/04/2009 04/07/2009
Issue Amount: Status:
$2,130,217,00 Comple(e
Date: 4/712009
Schedule of SLGS Securities
Security Number Principal Interest Rate Maturity Date First Interest
Amount Payment
1 $2,130,217.00 0.15 06/03/2009 ..
CERTAIN BOND CALCULATIONS
EXHIBIT H
560819,3 032681AC
Town of Southoid
Suffolk County, New York
$2,125,000 Refunding Serial Bonds - 2009
$371,000 Bond Anticipation Note
New Structure Summary And Results
Dated Date
Issue Date
First Interest Payment Date
Second Interest Payment Date
Last Maturity Date
BAN Serial Bonds
April 17, 2009 May 4, 2009
April t7, 2009 May 4, 2009
April 16, 2010 November 1, 2009
NIA May t, 2010
April 16, 2010 May 1, 2019
Call Dates Call Price
Optional Redemptions
N/A N/A
NIA N/A
NIA N/A
Arbitrage Yield
2.703090%
N.I.C.
(Net rnterest Cost)
2.668200%
W.A.M. Combined
(Weighted Average Maturity In Years) BAN
Serial Bonds
R.W.A.M. (for refundings only)
(Remaining Weighted Average Maturity In Years)
4.7459
0.9972
5.3783
Current Refundings
Advance Refundings
5.3995 Years
NIA Years
Arbitrage Yield Target
Par Amount + 2,496,000.00
Original Issue Premium/(Discount) + 74,287.65
Credit Enhancement +
Accrued Interest +
Total 2,570,287.65
Adjusted Total for N.I.C
Total interest Cost + 399,770.33
Original Issue Premium/(Discount) 74,287.65
Accrued Interest
Adjusted Total 325,482.68
Reasonably Required Reserve Is The Minimum of:
10% of Principal Amount/Issue Price 257,028.77
125% of Average Annual Debt Service 360,569.08
Maximum of Annual Debt Service 651,357.83
Reserve Requirement
5/8/2009 12:53 PM 560752_1 XLS
257,028.77
1 of 9
Town of Southold
Suffolk County, New York
$2,125,000 Refunding Serial Bonds - 2009
$371,000 Bond Anticipation Note
Arbitrage Yield Analysis
Maturity
Date
Principal
Amount
Coupon
Total Annual
In.rest DeM Se~ice DebtSe~ice
Value to
2.703090%
04/17/09
05/04/09
05/04/09
04/16/10
05/01/12
05/01/13
05/01/14
05/01/16
05/01118
05/01/19
371,000
210,000
230,000
220,000
220,000
225,000
225,000
225,000
220,000
235,000
115,000
2.000%
2.000%
2.000%
2.000%
2.250%
2.500%
2.750%
3.000%
5.000%
5.000%
3.500%
31,214.69 31,214.69
7,399.39 378,399.39
31,743.75 241,743.75
29,643.75 29,643.75
29,643.75 259,643.75
27,343.75 27,343.75
27,343.75 247,343.75
25,143.75 25,143.75
25,143.75 245,143.75
22,668.75 22,668.75
22,668.75 247,668.75
19,856.25 19,856.25
19,856.25 244,856.25
16,762.50 16,762.50
16,762.50 241,762.50
13,387.50 13,387.50
13,387.50 233,387.50
7,887.50 7,887.50
7,887.50 242,887.50
2,012.50 2,012.50
2,012.50 117,012.50
651,357.83
289,287.50
274,687.50
270,287.50
270,337.50
264,712,50
258,525.00
246,775.00
250,775.00
119,025.00
(371,000.00)
(2,196,500.92)
30,766.29
368,402.08
235,093.72
28,443.86
245,811.90
25,541.87
227,963.45
22,864.62
219,950.20
20,067.84
216,328.63
17,112.35
208,205.99
14,063.40
200,129.09
10,934.29
188,078.06
6,271.47
190,548.24
1,557.78
89,365.79
Totals 2.496.000.00
399.770.33 2.899.770.33 2.898.770.33
0.00
5/8/2009 12:53 PM 560752_1.XLS 2 of 9
Town of Southold
Suffolk County, New York
$2,125,000 Refunding Serial Bonds - 2009
$37t,000 Bond Anticipation Note
Price/Yields, Weighted Average Maturity and Net Interest Cost
Maturity
Date
Principal
Amount Coupon
Priced Years to
Yield Price to-- Issue Price Maturity
Bond Yield To Call
Years Bond?
05/04/09
05/04/09
05/01/10
05/01/12
05/01113
05/01/15
05/01/19
Totals
371,000 2000%
210,000 2 000%
230~000 2 000%
220,000 2 000%
220.000 2250%
225,000 2500%
225,000 2750%
225,000 3000%
220,000 5000%
235,000 5000%
115,000 3500%
2.496.000.00
2000% 100.000 Maturity
1 050% 100934 Matudty
1 330% 101.312 Maturity
1580% 101.222 Maturity
2000% 100.954 Maturity
2400% 100.467 Maturity
2600% 100.827 Maturity
2.870% 100818 Maturity
3100% 113,358 Maturity
3 300% 113133 Maturity
3 550% 99582 Maturity
371,00000
211,961.40
233,01760
222,688.40
222,09880
226,050.75
226,860,75
226,840.50
249,387.60
265,862.55
114,519.30
2.570~287.60
1 O0
0.99
299
3 99
4.99
5.99
699
7.99
8.99
9.99
369,969
210,195
464,093
666,209
886,544
1,359,274
1,585,993
1,993,023
2,390,547
1,144,239
Total Interest Cost 399,770.33
OIP/(O$D) 74,287.65
Accrued Interest -
Adjusted Total 325~482.68
IW.A.M* = 4.745~1
0Neighted Average Matudty)
NJ.C. = 2.668200
(NetlnterestCost)
5/8/2009 12:53 PM 560752_1,XLS 3 of 9
Town of Southold
Suffolk County, New York
$2,120,000 Refunding Serfal Bonds - 2009
Debt Service To Stated Maturity
Maturity
Date
Principal
Amount
Coupon Interest
Total
Debt Service
Debt Service
05/04/09
05/04/09
05101112
05/01113
05/01/14
05/01/15
05/01/16
05/01/17
05/01/18
05/01119
210,000
230,000
220,000
220,000
225,000
225,000
225,000
220,000
235,000
115,000
2.000%
2.000%
2.000%
2.250%
2.500%
2.750%
3.000%
5.000%
5.000%
3.500%
31,214.69 31,214.69
31,743.75 241,743.75
29,643.75 29,643.75
29,643.75 259,643.75
27,343.75 27,343.75
27,343.75 247,343.75
25,143.75 25,143.75
25,143.75 245,143.75
22,668.75 22,668.75
22,668.75 247,668.75
19,856.25 19,856.25
19,856.25 244,856.25
16,762.50 16,762.50
16,762.50 241,762.50
13,337.50 13,387.50
13,387.50 233,387.50
7,887.50 7,887.50
7,887.50 242,887.50
2,012.50 2,012.50
2,012.50 117,012.50
272,958.44
289,287.50
274,687,50
270,287.50
270,337.50
264,712.50
258,525.00
246,775.00
250,775.00
119,025.00
Totals
2,125.000
392.370.94 2.517.370.94 2.517.370.94
5/8/2009 12:53 PM 560752_1.XLS 4 of 9
Town of Southold
Suffolk County, New York
$2,125,000 Refunding Serial Bonds - 2009
Price/Yields, Weighted Average Maturity and Net Interest Cost
Maturity Principal
Date Amount Coupon
05/04/09
05/04/09
05/01/10 210,000 2 000%
05101111 230,000 2000%
05/01/12 220,000 2000%
05/01/13 220,000 2250%
05/01/14 225,000 2500%
05/01/15 225,000 2750%
05/01/16 225,000 3000%
05/01/17 220,000 5000%
05101118 235,000 5000%
05/01/19 115,000 3500%
Totals 2.125.000.00
Priced Years to
Yield Price to-- Issue Price Maturity
1 050% 100.934 Maturity
1.330% 101312 Matudiy
1 580% 101222 Maturity
2000% 100.954 Matunty
2400% 100467 Maturity
2600% 100827 Maturity
2870% 100818 Maturity
3 100% 113.358 Maturity
3300% 113133 Maturity
3550% 99.582 Maturity
211,96140
233,017.60
222,68840
222,098.80
226,050.75
226,860,75
226,84050
249,387.60
265,862.55
114,519.30
2.~99.287.65
099
1 99
2 99
399
499
5.99
6.99
7 99
899
999
Bond
Years
464,093
666,209
886,544
1,359,274
1,585,993
1,993,023
2,390,547
1,144,239
11.828.488.10
Yield To Call
Bond?
Totallnterest Cost
OIP/(OID)
Adjusted Total
Accruedlnterest
392,37094
74,28765
318,085129
(Weighted Average Maturity)
(Net Interest Cost)
5,3783
2689100%
5/8/2009 12:53 PM 560752_1.XLS 5 of 9
Town of Southold
Suffolk County, New York
$371,000 Bond Anticipation Note
Debt Service To Stated Maturity
Maturity Principal Total Annual
Date Amount Coupon Interest Debt Service Debt Service
04/17/09
04/17/09
04/16/10 371,000 2.000% 7,399.39 378,399.39 378,399.39
Totals 371.000 7.399.39 378.399.39 378,399.39
5/8/2009 12:53 PM 560752_1.XLS 6 of 9
Town of Southold
Suffolk County, New York
$371,000 Bond Anticipation Note
Price/Yields, Weighted Average Maturity and Net Interest Cost
Maturity
Date
04/17/09
04/17/09
04/16/10
Totals
Principal Priced Years to
Amount Coupon Yield Price to-- Issue Price Maturity/
371.000
371,000.00
2000% 2 000% 100000 Matudty
371,000.00
371,000.00
1 O0
Bond
Years
369,969
369,969.44
Yield To Call
Bond?
OIP/(O[D)T°tal Interesl Cost ~7.399.39
Accrued Interest
0Neighted Average Matudly)
(NetN'l'C'lnterest Cost)
0.9972
2.000000%
5/8/2009 12:53 PM 560752_1 XLS 7 of 9
Town of Southold
Suffolk County, New York
$2,125,000 Refunding Serial Bonds - 2009
Remaining Weighted Average Maturity
Maturity Principal
Date Amount Coupon
Yield Price
Issue Date o~ Refunded Bonds, 1998: 0511 ~98
05/04/09
05/04109
05/01/10 ~00,000 50 4 950% 4600%
05/01/11 110,00000 4650% 4700%
05101112 110,00000 4.050% 4500%
05/01/13 110.00000 4550% 4850%
05/01/14 110.000 O0 4 675% 4 900%
05/01/15 120.000 O0 4.875% 4950%
05101116 120000.00 4 875% 5 000%
05/01/17 120,000 O0 4875% 5 000%
05/01/18 120,000 O0 4675% 5 000%
Priced Years to Bond
to-- Issue Price Maturity Years
102276 Maturity 102,276.00 099 101,424
101 357 5/1/2010 111,492 70 199 222,056
100449 5/1/2010 110,492.80 299 330,558
100.000 Metudty 110.00000 399 439,003
99.722 Maturity 109,694.20 499 547,557
99.143 Maturity 118,97160 5.99 712.830
98527 Maturity 118,23240 6 99 826,642
98.477 Maturity 118,172.40 799 944,394
98.430 Maturity 118,116.00 899 1,062,060
05/04/09
05-/04/09
05/01/10 9000000 4.700% 4400%
05/01/11 lOOrO00.O0 4 700% 4.500%
05/01/12 100,00000 4.700% 4.550%
05/01/13 100,000.00 4700% 4600%
05/01/14 110,00000 4.700% 4650%
05/01/15 110,000.00 4700% 4700%
05/01/16 110,000.00 4 700% 4 750%
05101117 110,00000 4700% 4750%
05/01/18 120,00000 4.700% 4 800%
05/01/19 120,00000 4.700% 4800%
Totals 2,090,000.00
LR.W.A.M. 539951
102~583 MaturOy 92,324.70 099 91,555
101.831 Maturity 101,831 O0 1.99 202,813
101~368 51112011 101,368.00 299 303,259
100.909 511/2011 100,00900 399 402,795
100452 5/1/2011 110,49720 499 551,565
100.000 Maturity 110,000.00 5.99 659,083
99419 Maturity 109,360.90 699 764,615
99.398 Maturity 109,337.80 799 873,791
98762 Maturity 118,514.40 8~99 1,065,642
98.722 Maturity 118,466.40 9.99 1,183,677
2.090.057.50 11.285,408.25
5~8~2009 12:53 PM 560752_1 XLS 8 of 9
$0
Town of Southold
Suffolk County, New York
Form8038G Information
Value to
4-May~09
Date Principal Amount Coupon Interest Principal Redeemed Redemption Premiums Total 3.471906%
1 I1/2006 150,000 00 5.400% 4,050.00 154,050.00 172,828 75
1/1/2006 54,50000
7/1/2006 54,50000
1/1/2007 160,000.00 54,500.00
1,850,00000
CRefudnings ARefunding2,399.16311s
Cash 134 18.67
Proceeds 172,82875 2,399,144.44
172,830.10
Current Refunding Proceeds 172,828.79
54,50000 81,14357
54,500.00 60,10026
37,000.00 2,101,500.00 2,277,900.61
Advance Refunding Proceeds 2,399,144.44
Total: 2,571,973.19
ESC Cos[: 2,275,481.00
Vadance: 296,49219
5/8/2009 12:53 PM 560752_1.XLS 9 of 9
Form 8038-G Information Return for Tax-Exempt Governmental Obligations
· Under Internal Revenue Code section 149(e)
(Re~ November 2000) · See separate Instructions. OMB NO. 1545-0720
Department of the Treasu~'
Internal Re~nue Service Caution: If the issue price is under $100, O00, use Form 8038-GC.
Reporting Authority If Amended Return, check here ~'~
Issuer's name 2 Issuer's employer identification number
in of Southold 11-6001939
3 Number and street (or kO. box if mail is not delivered to street address) Room/suite 4 Report number
53095 Main Street 3
$ city, town, or post office, state, and ZIP code 6 Date of issue
Southold, New York 11971 05/04/09
8 CUSIP number
7 Name of issue
32, 125,000 Refunding Serial Bonds-2009
9 Name and title of officer or legal representative whom the IRS may call for more information
Telephone number of officer or Jegal representabve
William J. Jackson, Esq. (212) 820-9620
I Part II I Type of Issue (check applicable box(es) and enter the issue price) See instructions and attach schedule
11 [] Education ..................................................................
12 [] Health and hospital ...........................................................
13 [] Transportation ..............................................................
14 [] Public safety ................................................................
15 [] Environment (including sewage bonds) ............................................
16 [] Housing ...................................................................
17 [] Utilities ....................................................................
18 [] Other. Describe· O~v, 5,~o,~.,~_ c[~,~
19 f obhgations are TANs or RANs check box · [] If'~bligations are BANs, check box ...... · []
20 If obligations are in the form of a lease or installment sale, check box ................. · []
I Part III I Description of Obligations. (Complete for the entire issue for which this form is being filed.)
(a) Final maturity date (b) Issue price $ (c)priceStatedat redemptiOnmaturity a~rage(d) Weightedmaturity (e) Yield
211 05/01/i9 $ ~.,tqq,~-~'7.~,~- 2,i25,000.00 I,~,~/,~q years ~,,.70~Oq0 %
I Part IV Uses of Proceeds o~ Bond Issue (including underwritem' discount)
Proceeds used for accrued interest .................................................. 22 0.0 0
Issue price of entire issue (enter amount from line 21, column (b)) ..........................
23
Proceeds used for bond issuance costs (including underwriters' discount)
Proceeds used for credit enhancement ........................... 25 0.00
Proceeds allocated to reasonably required reserve or replacement fund ..
Proceeds used to currently refund prior issues .....................
Proceeds used to advance refund prior issues ..................... I 28 I ' ~.O~
Total (add nes 24 through 28) ..................................................... 29
Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) ........ I 30
Description of Refunded Bonds (Complete this part only for refunding bonds.)
22
23
24
25
26
27
28
29
3O
IPartVl
Iqq , 1' '7 6.1-
o. O0
31 Enter the remaining weighted average maturity of the bonds to be currently refunded ........... · 5'° _~c~c~
32 Enter the remaining weighted average maturity of the bonds to be advance refunded ........... ·
33 Enter the last date on which the refunded bonds will be called ............................ ·
34 Enter the date(s) the refunded bonds were issued · 5/19/98; 5/18/99
Part VI I Miscellaneous
years
years
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) ......... 3635a
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) ....
b Enter the final maturity date of the guaranteed investment contract ·
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units ........... 37a
bIf this issue is a loan made from the proceeds of another tax-exempt issue, check box · [] and enter the name of the
issuer · and the date of the issue ·
38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(lll) (small issuer exception), check box ............ · []
39 if the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box .................................. · []
40 If the issuer has identified a hedge, check box ................................................. · []
- Under penalties of perju declare that I haw examined this return and accompanying schedules and statements and to the best of my knowledge and~e~
Here ~ ./.~.,~4~.~~ 05/04/09 ~, Supervisor
· Signatureofissuer'sauthorizedrepresentative Date ~r Type or print name and tiSe
For Paperwork Reduction Act Notice, see page 2 of the Instructions. ~s^ Form 8038-(~ (Rev. 11-2000)
S~F FED6403F
CERTIFICATE OF ROOSEVELT & CROSS, INCORPORATED
May 4, 2009
Town of Southold
53095 Main Road
Southold, New York 11971
Hawkins Delafield & Wood LLP
One Chase Manhattan Plaza
New York, New York
Town of Southold, Suffolk County, New York
$2,125,000 Refunding Serial Bonds-2009 (the "Bonds")
(a) All Bonds of all maturities have been the subject of an initial offering to the
public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of
underwriters or wholesalers), at prices not higher than, or, in the case of obligations sold on a yield basis,
at yields not lower than, those shown in the Official Statement relating to the Bonds.
(b) On the date of the Bonds' sale, to the best of our knowledge based on our
records, the first price or yield at which at least ten percent of each maturity of the Bonds was sold to the
public (excluding such bond houses, brokers or similar persons or organizations acting in the capacity of
underwriters or wholesalers) was not greater than the respective price, or was not lower than the
respective yield, shown in the Official Statement. At the time we agreed to purchase the Bonds, based on
our assessment of the then prevailing market conditions, we had no reason to believe that any of the
Bonds would be initially sold to the public (excluding such bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters or wholesalers) at prices greater than the prices, or
yields lower than the yields, shown in the Official Statement, and such prices and yields, maturity-by-
maturity, represented our best judgment of the fair market value of the Bonds.
We understand that the representations contained herein may be relied upon by the issuer
of the Bonds in making certain of the representations contained in the Arbitrage and Use of Proceeds
Certificate, and we further understand that bond counsel to the issuer may rely upon this certificate,
among other things, in providing an opinion with respect to the exclusion from gross income of the
interest on the Bonds pursuant to Section 103 of the Internal Revenue Code of 1986, as amended.
Very truly yours,
Roosevelt & Cross, Incorporated
New York, New York
Name: ~(a~r~ /k/( ~F~r~,~.~
560789.1 032681 CERT
ESCROW CONTRACT
This Escrow Contract, dated as of May 4, 2009 (the "Contract") by and between
the Town of Southold, New York, a municipal corporation of the State of New York (the
"Town"), and The Bank of New York Mellon, a federally-chartered bank that is duly organized
under the laws of the United States, existing and authorized to accept trusts of the character
herein set forth in the State of New York (the "Bank"):
WITNESSETH:
WHEREAS, the Town has heretofore issued on May 19, 1998 its $2,000,000
Agricultural Land Preservation Serial Bonds-1998 (the "1998 Bonds"), currently outstanding in
the principal amount of $1,020,000; and on May 18, 1999 its $1,900,000 Open Space
Preservation Serial Bonds-1999 (the "1999 Bonds" and together with the 1998 Bonds, the "Prior
Bonds"), currently outstanding in the principal amount of $1,070,000 and such Prior Bonds
bearing interest at the rates payable on the dates and being subject to prior redemption as set
forth therein; and
WHEREAS, the 1998 Bonds were issued pursuant a single bond resolution
adopted by the Town Board on September 3, 1996, authorizing the acquisition of certain
development rights in prime agricultural lands within said Town for the preservation of open
spaces and areas (hereinafter referred to as the "1996 Refunded Bond Resolution"), and the
Certificate of Determination executed pursuant to such 1996 Refunded Bond Resolution by the
Supervisor of the Town, prescribing the terms, form and details of issuance of the 1998 Bonds;
and
560900,1 032681 AGMT
WHEREAS, the 1999 Bonds were issued pursuant a single bond resolution
adopted by the Town Board on September 2, 1997, authorizing the acquisition of interests or
rights in real property within said Town for the preservation of open spaces and areas
(hereinafter referred to as the "1997 Refunded Bond Resolution"), and the Certificate of
Determination executed pursuant to such 1997 Refunded Bond Resolution by the Supervisor of
the Town, prescribing the terms, form and details of issuance of the 1999 Bonds; and
WHEREAS, the Town Board has adopted on February 24, 2009 a refunding bond
resolution authorizing the issuance, pursuant to Section90.10 of the Local Finance Law
(constituting Chapter 33-a of the Consolidated Laws of the State of New York), of refunding
bonds of the Town for the purpose of refunding the Prior Bonds (the "Refunding Bond
Resolution"); and
WHEREAS, the Refunding Bond Resolution provides that the proceeds from the
sale of the Refunding Bonds, as hereinafter defined, together with other moneys required to
accomplish such refunding, if any, shall be placed in escrow with an escrow holder and, together
with the interest earned from the investment thereof, applied in accordance with the terms and
conditions set forth in this Contract; and
WHEREAS, the Issuer has determined to refund the 1998 Bonds maturing in the
years 2010 and 2018 (the "Refunded 1998 Bonds"), bearing interest at the rates set forth below,
payable on May 1 and November 1 in each year until maturity. The 1998 Refunded Bonds
mature on May 1 in the principal amounts as follows:
Year of Principal Interest
Maturity Amount Rate
2010 $100,000 4.85%
2011 110,000 4.85
2012 110,000 4.85
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Year of Principal Interest
Maturity Amount Rate
2013 $I10,000 4.85%
2014 110,000 4-7/8
2015 120,000 4-7/8
2016 120,000 4-7/8
2017 120,000 4-7/8
2018 120,000 4-7/8
WHEREAS, the Issuer has determined to refund the 1999 Bonds maturing in the
years 2010 to 2019, inclusive (the "Refunded 1999 Bonds"), bearing interest at the rates set forth
below, payable on May 1 and November 1 in each year until maturity. The 1999 Refunded
Bonds mature on May 1 in the principal amounts as follows:
Year of Princip~ Interest
M~urit¥ Amount Rate
2010 $ 90,000 4.70%
2011 100,000 4.70
2012 100,000 4.70
2013 100,000 4.70
2014 110,000 4.70
2015 110,000 4.70
2016 110,000 4.70
2017 110,000 4.70
2018 120,000 4.70
2019 120,000 4.70
WHEREAS, the Refunded 1998 Bonds shall be redeemed by the Town on May 4,
2009 at the redemption price of par, plus a redemption premium equal to one per centum (1%) of
the principal amount of the Refunded 1998 Bonds to be redeemed, plus accrued interest to the
date of redemption; and
WHEREAS, the Refunded 1999 Bonds shall be redeemed by the Town on May 4,
2009 at the redemption price of par, plus a redemption premium equal to two per centum (2%) of
the principal amount of the Refunded 1999 Bonds to be redeemed, plus accrued interest to the
date of redemption; and
560900.1 032681 AGMT
WHEREAS, the Supervisor has executed a certificate of determination pursuant
to the Refunding Bond Resolution, dated as of April 7, 2009 (the "Certificate") determining the
terms, form and details of sale and issuance of $2,125,000 Refunding Serial Bonds-2009
(referred to hereinafter as the "Refunding Bonds");
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. The Town hereby appoints the Bank as escrow holder under this Contract
(the "Escrow Holder") and the Bank hereby accepts the appointment as Escrow Holder.
2. Receipt is hereby acknowledged by the Escrow Holder of a copy of the
Refunding Bond Resolution. Reference herein to, or citation herein of, any provision of the
Refunding Bond Resolution or the Refunded Bonds Certificate shall be deemed to be
incorporated as a part hereof in the same manner and with the same effect as if it were fully set
forth herein.
3. There is hereby created and established with the Escrow Holder a special,
segregated and irrevocable trust fund, designated Town of Southold Escrow Deposit 2009 (the
"Escrow Deposit Fund") to be held in the custody of the Escrow Holder.
4. There is hereby created and established with the Escrow Holder a special,
segregated and irrevocable trust fund, designated Town of Southold Cost of Issuance Expense
Fund 2009 (the "Expense Fund") to be held in the custody of the Escrow Holder.
5. Concurrently with the execution of this Contract the Town shall deposit
with the Escrow Holder in the Expense Fund moneys in the amount of $53,049.62, being a part
of the proceeds from the sale of the Refunding Bonds. The moneys in the Expense Fund shall
560900.1 032681 AGMT
be applied by the Escrow Holder for the payment of the costs and expenses incidental to the
issuance of the Refunding Bonds, and the amount due the Escrow Holder pursuant to paragraph
12 hereof, provided that any such payment by the Escrow Holder shall be made only in
accordance with the written authorization of the Supervisor of the Town (the "Supervisor")
authorizing and approving the same. Upon receipt by the Bank of a certificate signed by the
Supervisor that all such costs and expenses have been paid or otherwise satisfied, or in any
event not more than sixty (60) days from the as of date of this Contract, any amount remaining
in the Expense Fund shall be returned by the Escrow Holder to the Town to be applied by the
Town to the payment of the first debt service on the Refunding Bonds.
6. Concurrently with the execution of this Contract, the Issuer shall deposit
with the Escrow Holder in Escrow Deposit Fund for the Refunding Bonds, moneys in the
amount of $2,130,238.03, consisting of the proceeds of the Refunding Bonds in the amount of
$2,125,000.00, plus a premium of $74,287.65, less the underwriter's discount of $16,000.00,
after making the deposit of $53,049.62 in Expense Fund specified in paragraph 5 hereof.
$2,130,217.00 of the amount so deposited in Escrow Deposit Fund shall immediately be
invested by the Escrow Holder as set forth on Schedule A, attached hereto and made a part
hereof, by the purchase of Government Obligations (as hereinafter defined), it being the
intention of the Issuer that the principal thereof, together with the interest to be paid thereon,
and cash remaining on deposit in Escrow Deposit Fund in the amount of $21.03, will be
sufficient to pay, as of the date of calculation, and will mature and be available to pay in a
timely manner, the principal of, interest on, and redemption premiums payable with respect to
the Refunded Bonds as the same shall become due and payable, as set forth in Schedule B
attached hereto and made a part hereof (the "Escrow Requirement").
560900.1 032681 AGMT
7. "Government Obligations" shall mean direct obligations of the United
States of America or obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America, none of which is subject to call prior to its stated
maturity.
(b) The Escrow Holder shall reinvest the amounts on deposit in the Escrow
Deposit Fund representing maturing principal of and interest on the Government Obligations or
Substituted Government Obligations (as defined in Section 9(a) below) not immediately needed
for the payment of the principal and redemption price of and interest on the Refunded Bonds in
United States of America, United States Treasury Certificates of Indebtedness -- State and Local
Government Series, bearing interest at a rate of 0% per annum (the "0% Reinvestment
Government Obligations"), in accordance with the schedule set forth in Schedule C hereto. The
Escrow Holder shall subscribe for such 0% Reinvestment Government Obligations not later than
the date provided in applicable federal regulations to ensure in all cases that such 0%
Reinvestment Government Obligations are on deposit in the Escrow Deposit Fund on each
reinvestment date in the principal amounts required. In the event that subscriptions for such 0%
Reinvestment Government Obligations are not be available at the times or amounts required, the
Escrow Holder shall immediately inform the Town and the Escrow Holder shall thereafter invest
such moneys in direct obligations of the United States of America maturing not later than the
maturity dates set forth in Schedule C hereto specified in writing by the Town to the Escrow
Holder not less than three days prior to the date that such reinvestment is to be made. The
Escrow Holder shall immediately transfer to the Town all interest earned on any reinvestment
made pursuant to this Section other than in 0% Reinvestment Government Obligations in order
560900.1 032681 AGMT
that the Town may take such action as is necessary to comply with Section 9 hereof relating to
tax-exempt compliance.
8. The Escrow Holder hereby acknowledges receipt of the deposit of the
moneys in the Escrow Deposit Fund and the Expense Fund as set forth in paragraphs 5 and 6
hereof.
9. The deposit by the Town of the moneys in the Escrow Deposit Fund shall
constitute an irrevocable deposit thereof for the uses and purposes specified in this Contract and
in the Refunding Bond Resolution, and such moneys and Government Obligations together
with all interest thereon, shall be held in trust and applied solely for such uses and purposes.
10. (a) Except as otherwise expressly provided in paragraph 6 or this
subparagraph (a), the Escrow Holder shall have no power or duty to invest any moneys held
hereunder or to make substitutions of the Government Obligations held hereunder or to sell,
transfer or otherwise dispose of the Government Obligations acquired hereunder, or to pay
interest on any such moneys not required to be invested hereunder; provided, however, that at
the written direction of the Comptroller or the Supervisor of the Town and upon compliance
with the conditions hereinafter stated, the Escrow Holder shall have the power to (i) provide for
the reinvestment of certain proceeds derived from the sale, transfer, disposition or redemption
of the Government Obligations for defined periods prior to the payment of principal of, interest
on, and redemption premiums payable with respect to the Refunded Bonds (the
"Reinvestment") as the same shall become due and payable, as set forth on Schedule B
attached hereto, and (ii) to otherwise sell, transfer, otherwise dispose of, or request the
redemption of, the Government Obligations acquired hereunder and to substitute therefor other
Government Obligations (the "Substituted Government Obligations"). The Escrow Holder
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shall purchase such Substituted Government Obligations with the proceeds derived from the
sale, transfer, disposition or redemption of the Government Obligations or other funds provided
by the Town for such purpose. The Reinvestment or the substitution of Government
Obligations for Substituted Government Obligations described above may be effected only if (i)
the moneys and Government Obligations on deposit immediately after such substitution will be
sufficient to meet or exceed the Escrow Requirement, (ii) the Escrow Holder shall receive, at
the expense of the Town, and may rely conclusively upon, a verification of an independent
certified public accountant or firm of independent certified public accountants designated by the
Town and acceptable to the Escrow Holder that the moneys and Government Obligations on
deposit immediately after such Reinvestment or substitution will be sufficient to meet or exceed
the Escrow Requirement, (iii) the Escrow Holder shall receive an unqualified opinion of
nationally recognized bond counsel to the effect that the Reinvestment or substitution will not
cause any of the Refunding Bonds to be an "arbitrage bond" as hereinafter defined, and (iv) the
Escrow Holder shall receive a schedule showing details of such Reinvestment or substitution.
(b) The liability of the Escrow Holder for the payment of the principal of, and
interest on, and redemption premiums payable with respect to the Refunded Bonds, as set forth
in Schedule B, shall be limited to the principal of and interest on the Governmem Obligations
and cash available for such purposes in the Escrow Deposit Fund.
(c) The Town hereby agrees that it will not take action or fail to take action
which would cause any part of the money or funds at any time in the Expense Fund or Escrow
Deposit Fund to be used directly or indirectly to acquire any securities or obligations, the
acquisition of which would cause any Refunding Bond to be an "arbitrage bond" as defined in
560900.1 032681 AGMT
Section 103 of the Internal Revenue Code of 1986, as amended, and the regulations of the United
States Treasury Department thereunder, as then in effect.
11. The Escrow Holder shall collect the matured principal of and payments of
interest on the Government Obligations as the same become due and payable and deposit the
same in the Escrow Deposit Fund. Not later than the date on which any payment on any of the
Refunded Bonds is required to be made, as set forth in Schedule B, or if such date is not a
business day then not later than the business day next succeeding such date, the Escrow Holder
shall wire federal funds from the Escrow Deposit Fund to The Depository Trust Company, as
registered owner and the securities depository for the Refunded Bonds, or to such other paying
agent designated in writing by the Town, an amount sufficient to pay the principal or interest, or
both as the case may be, and the redemption premium, if any, of the Refunded Bonds next
maturing. Wiring instructions for The Depository Trust Company is as follows:
JPMorgan Chase Bank, N.A.
55 Water Street, New York, NY 10041
ABA # 021-0000-21
For Credit of A/C Depository Trust Company
Redemption Account 066-027-306
12. The Issuer hereby irrevocably instructs the Escrow Holder to mail to the
registered holders of the Refunded Bonds, as the names and addresses of such holders shall
appear on the books and records of the paying agent for the Refunded Bonds, as required by
Section 53.00 of the Local Finance Law, (i) a notice substantially the form as set forth in
Exhibit A-1 attached hereto, to be mailed not less than thirty (30) days prior to June 3, 2009,
setting forth the date set for redemption of the Refunded 1998 Bonds maturing on or after May
560900.1 032681 AGMT
1, 2010. On such redemption date (June 3, 2009) there shall become due and payable with
respect to each Refunded 1998 Bond to be redeemed together with any coupons appertaining
thereto, the redemption price thereof, together with interest accrued to the redemption date, and
the redemption premium, if any, payable with respect thereto, and from and after such
redemption date interest thereon shall cease to accrue and be payable; (ii) a notice substantially
the form as set forth in Exhibit A-2 attached hereto, to be mailed not less than thirty (30) days
prior to June 3, 2009, setting forth the date set for redemption of the Refunded 1999 Bonds
maturing on or after May 1, 2010. On such redemption date (June 3, 2009) there shall become
due and payable with respect to each Refunded 1999 Bond to be redeemed together with any
coupons appertaining thereto, the redemption price thereof, together with interest accrued to the
redemption date, and the redemption premium, if any, payable with respect thereto, and from
and after such redemption date interest thereon shall cease to accrue and be payable. The
Escrow Holder shall mail such notice to The Depository Trust Company, 55 Water Street, New
York, New York 10041, or such other address as may then be applicable as provided in writing
by the Issuer.
13. The Town agrees to pay and shall pay to the Escrow Holder the sum of
$700.00, as compensation in full for all services to be rendered by the Escrow Holder under this
Contract; provided that, to the extent authorized by law, the Town hereby assumes liability for
and hereby agrees to indemnify, protect, save and keep harmless the Escrow Holder and its
respective successors, assigns, directors, officers, employees, agents and servants (the
"Indemnitees"), from and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs, expenses and disbursements (including legal fees and
disbursements) of whatsoever kind and nature (collectively "Losses") which may be imposed
560900.1 032681 AGMT
on, incurred by, or asserted against, at any time, any Indemnitee (whether or not also
indemnified against by any person under any other contract or instrument) and in any way
relating to or arising out of the execution and delivery of this Contract, the establishment of the
Expense Fund and the Escrow Deposit Fund, the acceptance of the moneys deposited in such
funds, the purchase of the Government Obligations, the retention of such moneys, Government
Obligations, Substituted Government Obligations or the proceeds thereof and any payment,
transfer or other application of moneys or securities by the Escrow Holder in accordance with
the provisions of this Contract; provided, that the Town shall not be required to indemnify,
protect, save and keep harmless the Escrow Holder against its own gross negligence or willful
misconduct. In addition to and not in limitation of the immediately preceding sentence, the
Town also agrees, to the extent permitted by law, to indemnify , protect and save and keep
harmless the Indemnitees and each of them from and against any and all Losses that may be
imposed on, incurred by, or asserted against the Indemnities or any of them for following any
instruction or other direction upon which the Escrow Holder is authorized to rely pursuant to
the terms of the Contract. Any payment to the Escrow Holder pursuant to this paragraph,
except for the payment to be made from the Expense Fund, shall be made from any moneys of
the Town lawfully available therefor, but the Escrow Holder shall have no lien whatsoever
upon any of the moneys, Government Obligations or Substituted Government Obligations in
the Escrow Deposit Fund for any such payment. In no event shall the Town be liable to any
person by reason of the transactions contemplated hereby other than to the Escrow Holder and
the other Indemnities as set forth in this paragraph. The indemnities contained in this paragraph
shall survive the termination of this Contract and the resignation or removal of the Escrow
Holder for any reason. The Escrow Holder does not have any interest in the moneys,
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Government Obligations or Substituted Govemment Obligations deposited hereunder but is
serving as escrow holder only, and has only possession thereof. The Escrow Holder makes no
representation as to the validity, value, genuineness or collectibility of any security or other
document or instrument held by or delivered to it. The Escrow Holder shall not be called upon
to advise any party as to selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder.
14. The Escrow Holder agrees to maintain books and records for the Expense
Fund and the Escrow Deposit Fund and to account separately for deposits therein, investments
thereof, earnings thereon and losses (if any) with respect thereto. The Escrow Holder
undertakes to perform such duties as are expressly set forth herein, shall only act in accordance
with the specific provisions set forth herein and shall not assume any implied duties. The
Escrow Holder shall not have any liability under, nor duty to inquire into the terms and
provisions of any agreement or instructions, other than as outlined in the Contract. The Escrow
Holder may rely and shall be protected in acting or refraining from acting upon any written
notice, instruction or request furnished to it hereunder and believed by it to be genuine and to
have been signed or presented by the proper party or parties. The Escrow Holder shall be under
no duty to inquire into or investigate the validity, accuracy or content of any such document.
The Escrow Holder in its capacity as Escrow Holder hereunder shall not have any liability for
any loss sustained as a result of any investment made pursuant to the provisions of this Contract
or the instructions of the Town. The Escrow Holder shall have no duty to solicit any payments
that may be due it hereunder. The Escrow Holder shall not be liable for any action taken or
omitted by it in good faith unless a court of competent jurisdiction determines that the Escrow
Holder's grossly negligent or willful misconduct was the primary cause of any loss to the
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Town. The Escrow Holder shall not incur any liability for following the instructions herein
contained or expressly provided for, or written instructions given by the Town. In the
administration of this Contract and the Escrow Deposit Fund and the Expense Fund hereunder,
the Escrow Holder may execute any of its powers and perform its duties hereunder directly or
through holders or attorneys and may, consult with counsel, accountants and other skilled
persons to be selected and retained by it. The Escrow Holder shall not be liable for anything
done, suffered or omitted in good faith by it in accordance with the advice or opinion of any
such counsel, accountants or other skilled persons. Anything in this Contract to the contrary
notwithstanding, in no event shall the Escrow Holder be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited to lost profits),
even if the Escrow Holder has been advised of such loss or damage and regardless of the form
of action. In the event that the Escrow Holder shall be uncertain as to its duties or rights
hereunder or shall receive instructions, claims or demands from any party hereto which, in its
opinion, conflict with any of the provisions of this Contract, it shall be entitled to refrain from
taking any action and its sole obligation shall be to keep safely all property held in escrow until
it shall be directed otherwise in writing by the Town or by a final order or judgment of a court
of competent jurisdiction. The Escrow Holder shall not be liable for the accuracy of the
calculations concerning the sufficiency of moneys and of the principal amount of the
Government Obligations, the Substituted Government Obligations and the earnings thereon to
pay the Refunded Bonds. The Escrow Holder and any of its affiliates may become owner of or
may deal in the Refunded Bonds and have other banking and financial relationships with the
Town, as fully and with the same rights as if it were not the Escrow Holder hereunder.
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15. The Escrow Holder may be removed with or without cause at any time by
the Town and the Escrow Holder may resign by giving written notice to the Town, but no such
removal or resignation shall take effect under this Contract unless a successor Escrow Holder
shall have been appointed by the Town as hereinafter provided and such successor Escrow
Holder shall have accepted such appointment, in which event such removal or resignation shall
take effect immediately upon the appointment and acceptance of a successor Escrow Holder. In
the event that no appointment of a successor Escrow Holder shall have been made by the Town
pursuant to the foregoing provisions of this paragraph within forty-five (45) days after written
notice of resignation of the Escrow Holder has been given to the Town, any retiring Escrow
Holder may apply, at the expense of the Town, to any court of competent jurisdiction for the
appointment of a successor Escrow Holder, and such court may thereupon, after such notice, if
any, as it shall deem proper, appoint a successor Escrow Holder. No successor Escrow Holder
shall be appointed unless such successor Escrow Holder shall be a corporation with trust
powers organized under the banking laws of the United States or the State of New York and
shall have at the time of appointment capital, surplus and undivided profits of not less than
$50,000,000. Every successor Escrow Holder appointed hereunder shall execute, acknowledge
and deliver to its predecessor and to the Town, an instrument in writing accepting such
appointment hereunder and thereupon such successor Escrow Holder without any further act,
deed or conveyance, shall become fully vested with all the rights, immunities, powers, trusts,
duties and obligations of its predecessor; but such predecessor shall, nevertheless, on the
written request of such successor Escrow Holder or the Town execute and deliver an instrument
transferring to such successor Escrow Holder all the estates, properties, rights, powers and
trusts of such predecessor hereunder; and every predecessor Escrow Holder shall deliver all
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cash, Government Obligations and Substituted Government Obligations held by it to its
successor. Should any transfer, assignment or instrument in writing from the Comptroller or
Supervisor of the Town be required by any successor Escrow Holder for more fully and
certainly vesting in such successor Escrow Holder the estates, rights, powers and duties hereby
vested or intended to be vested in the predecessor Escrow Holder, any such transfer, assignment
and instrument in writing shall, on request, be executed, acknowledged and delivered by the
Comptroller or Supervisor of the Town. Any corporation or association into which the Escrow
Holder, or any successor to it in the trusts created by this Escrow Contract, may be merged or
converted or with which it or any successor to it may be consolidated, or any corporation or
association resulting from any merger, conversion, consolidation or reorganization to which the
Escrow Holder or any successor to it shall be a party or any corporation or association to which
the Escrow Holder shall sell or otherwise transfer all or substantially all of its escrow agency
business shall, if approved in writing by the Comptroller or Supervisor, be the successor
Escrow Holder under this Escrow Contract without the execution or filing of any paper or any
act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
16. Except as provided in paragraph 12, this Contract shall terminate when
there shall have been paid to The Depository Trust Company, in accordance with the provisions
hereof, moneys sufficient to pay all principal of, interest on, and redemption premiums payable
with respect to all of the Refunded Bonds as set forth in Schedule B, and any remaining
moneys, Government Obligations or Substituted Government Obligations, together with any
interest thereon, in the Escrow Deposit Fund shall thereupon be transferred to the Town.
17. If any one or more of the covenants or agreements provided in this
Contract on the part of the parties hereto to be performed should be determined by a court of
560900.1 032681 AGMT
competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and
construed to be severable from the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions of this Contract.
18. This Contract may be executed in several counterparts, all or any of which
shall be regarded for all purposes as an original and shall constitute and be but one and the same
ins~ument.
York.
19. This Contract shall be governed by the applicable law of the State of New
20. All notices, demands and formal actions under this Contract shall be in
writing and mailed, telegraphed or delivered to:
The Town:
Town of Southold
Town Hall
53095 Main Road
Southold, New York 11971
Attn: Town Comptroller
The Escrow Holder:
The Bank of New York Mellon
101 Barclay Street
New York, New York 10286
Attn: Nicole Pinero
21. The Escrow Holder shall execute and deliver to the Town, at or prior to
the Closing, copies of the Escrow Holder's Certificate, substantially in the form appearing in
Exhibit B hereto.
IN WITNESS WHEREOF, the parties hereto have each caused this Contract to be
executed by their duly authorized officers and their corporate seals to be hereunto affixed as of
the date first above written.
560900.1 032681 AGMT
(SEAL)
TOWN OF SOUTHOLD, NEW YORK
SCOT~
Supervisor
THE BANK OF NEW YORK MELLON
(SEAL)
By
Authorized Officer
By.
Authorized Officer
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TOWN OF SOUTHOLD, NEW YORK
(SEAL)
By.
SCOTT A. RUSSELL
Supervisor
(SEAL)
THE BANK OF NEW Y~RI~LLON
By Authorized Officer
Auth°riz~~~ ' ' ~~
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Exhibit A-1
Form of Redemption Notice for Refunded Bonds
Town of Southold, Suffolk County, New York
NOTICE OF REDEMPTION
To the Holders of
$2,000,000 Agricultural Land Preservation Serial Bonds-1998
of the Town of Southold, Suffolk County, New York
NOTICE IS HEREBY GIVEN pursuant to a Refunding Bond Resolution duly
adopted by the Town Board of the Town of Southold, New York (the "Town") on February 24,
2009, that the Town has elected to call in and redeem on June 3, 2009 (the "Redemption Date")
the above-referenced Bonds maturing in the years 2010 and thereafter (the "Redeemed Bonds"),
at a price equal to the par amount of the Redeemed Bonds, plus a premium equal to 1% of the
principal amount of the Redeemed Bonds, plus accrued interest to the Redemption Date. The
Redeemed Bonds maturing in the principal amounts and have the CUSIP numbers as follows:
Maturity Date Principal Amount CUSIP Number
May 1, 2010 $100,000 884572 FL6
May l, 2011 110,000 884572 FM4
May 1,2012 110,000 884572 FN2
May 1,2013 110,000 884572 FP7
May 1,2014 110,000 884572 FQ5
May 1,2015 120,000 884572 FR3
May 1,2016 120,000 884572 FS1
May 1,2017 120,000 884572 FT9
May 1,2018 120,000 884572 FU6
NOTICE IS HEREBY FURTHER GIVEN that the Redeemed Bonds should be
presented and surrendered for payment as aforesaid on the Redemption Date at the Office of the
Town Clerk, the fiscal agent of the Town for the Redeemed Bonds.
NOTICE IS HEREBY FURTHER GIVEN that interest on the Redeemed Bonds
shall cease to accrue and be payable from and after the Redemption Date.
Federal law requires the payor to withhold at the current rate of withholding from
the payment if a certified taxpayer (social security) number is not provided. Please furnish a
properly completed Form W-9 or exemption certificate or equivalent when presenting your
securities.
Neither the Town nor the paying agent shall be responsible for the selection or
use of the CUSIP identification numbers printed herein or on the Redeemed Bonds nor is
any representation made as to the correctness of any CUSIP identification number shown herein
or printed on such Redeemed Bonds. Said CUSIP identification numbers are included solely for
the convenience of the holders.
560900.1 032681 AGMT
Dated: May 4, 2009
THE TOWN OF SOUTHOLD, NEW YORK
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Exhibit A-2
Form of Redemption Notice for Refunded Bonds
Town of Southold, Suffolk County, New York
NOTICE OF REDEMPTION
To the Holders of
$1,900,000 Open Space Preservation Serial Bonds-1999
of the Town of Southold, Suffolk County, New York
NOTICE IS HEREBY GIVEN pursuant to a Refunding Bond Resolution duly
adopted by the Town Board of the Town of Southold, New York (the "Town") on February 24,
2009, that the Town has elected to call in and redeem on June 3, 2009 (the "Redemption Date")
the above-referenced Bonds maturing in the year 2010 and thereafter (the "Redeemed Bonds"),
at a price equal to the par amount of the Redeemed Bonds, plus a premium equal to 2% of the
principal amount of the Redeemed Bonds, plus accrued interest to the Redemption Date. The
Redeemed Bonds maturing in the principal amounts and have the CUSIP numbers as follows:
Maturity Date Principal Amount
May I, 2010 $ 90,000
May 1,2011 100,000
May 1, 2012 100,000
May 1, 2013 100,000
May 1, 2014 110,000
May 1, 2015 110,000
May 1, 2016 110,000
May 1,2017 110,000
May 1, 2018 120,000
May 1, 2019 120,000
CUSIP Number
884572 GF8
884572 GG6
884572 GH4
884572 G J0
884572 GK7
884572 GL5
884572 GM3
884572 GN1
884572 GP6
884572 GQ6
NOTICE IS HEREBY FURTHER GIVEN that the Redeemed Bonds should be
presented and surrendered for payment as aforesaid on the Redemption Date at the Office of the
Town Clerk, the fiscal agent of the Town for the Redeemed Bonds.
NOTICE IS HEREBY FURTHER GIVEN that interest on the Redeemed Bonds
shall cease to accrue and be payable from and after the Redemption Date.
Federal law requires the payor to withhold at the current rate of withholding from
the payment if a certified taxpayer (social security) number is not provided. Please furnish a
properly completed Form W-9 or exemption certificate or equivalent when presenting your
securities.
Neither the Town nor the paying agent shall be responsible for the selection or
use of the CUSIP identification numbers primed herein or on the Redeemed Bonds nor is
any representation made as to the correctness of any CUSIP identification number shown herein
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or printed on such Redeemed Bonds. Said CUSIP identification numbers are included solely for
the convenience of the holders.
Dated: May 4, 2009
THE TOWN OF SOUTHOLD, NEW YORK
560900.1 032681 AGMT
Exhibit B
Form of Escrow Holder's Certificate
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CERTIFICATE OF THE ESCROW HOLDER
I, the undersigned officer of The Bank of New York Mellon (the "Escrow
Holder") certify to the following:
(i) the Escrow Holder is a federally-chartered bank that is duly organized
under the laws of the United States, existing and authorized to accept trusts of the
character herein set forth in the State of New York, and has corporate power and
capacity, to execute and deliver the Escrow Contract dated as of May 4, 2009 (the
"Escrow Contract") by and between the Town of Southold, Suffolk County, New York
and the Escrow Holder, and to accept and execute the trusts created under the Escrow
Contract where required;
(ii) the execution and delivery of the Escrow Contract has been duly
authorized by the Escrow Holder, the Escrow Contract has been duly executed and
delivered by the Escrow Holder and the trusts created thereunder have been accepted on
behalf of the Escrow Holder by officers of the Escrow Holder pursuant to such authority
and the Escrow Contract, upon delivery thereof by the Escrow Holder, will constitute an
enforceable obligation of the Escrow Holder subject to bankruptcy, insolvency,
reorganization, receivership and other similar laws affecting creditors' rights generally
and by general principles of equity;
(iii) there is no action, suit, proceeding, inquiry or investigation, at law or in
equity by any court, public board or body, pending or threatened, to the Escrow Holder's
knowledge, wherein an unfavorable decision, ruling or finding would adversely affect the
validity or enforceability of the Escrow Contract with respect to the duties of the Escrow
Holder thereunder to the knowledge of the Escrow Holder; and
(iv) the execution and delivery of the Escrow Contract and the performance
by the Escrow Holder of its obligations thereunder do not violate or constitute a default
under any court order or any agreement, indenture, mortgage, lease, note or other
agreement or instrument which is binding upon the Escrow Holder.
1N WITNESS WHEREOF, I have hereunto set my hand as of this 4th day of
May, 2009.
Authorized Officer
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DEPOSIT OF BOND PROCEEDS AND AS TO OTHER MATTERS
I, the undersigned officer of The Bank of New York Mellon, a banking
corporation organized and existing under the laws of the State of New York, which has agreed to
act as escrow holder (the "Escrow Holder") under the terms of the escrow contract with the
Town of Southold, New York, Suffolk County, New York (the "Issuer"), dated May 4, 2009
(the "Escrow Contract"), DO HEREBY CERTIFY that:
2. The Escrow Holder on the date hereof has received from Roosevelt &
Cross, Incorporated (the "Underwriter"), the amount of $2,183,287.65 (being the par amoum of
the Bonds, plus the original issue premium of $74,287.65 and less the Underwriter's discount of
$16,000.00).
3. Of said amount so deposited, $2,130,238.03 has been deposited in the
Escrow Deposit Fund and $53,049.62 has been deposited in the Expense Fund (as such terms are
defined in the Escrow Contract), in accordance with the terms of the Escrow Contract.
IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of May,
2009.
THE BANK OF NEW YORK MELLON,
AS ESCROW HOLDER
By
(Name)
(Title)
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Schedule A
Escrow Deposit Fund Investments
560900.1 032681 AGMT
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXHIBIT A-2
DESCRIPTION OF THE ESCROWED SECURITY
AS OF MAY 4, 2009
Settlement Maturity Par Coupon
T)'pe Date Date Amount Rate
Price Cost
SLGS 04-May-09 03-Jun-09 $2,130,217.00 0.150% 100.000000% $2,130,217.00
$2,130,217.00 $2,130,217.00
Schedule B
Refunded Bonds Debt Service
560900.1 032681 AGMT
EXHIBIT B
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
ESCROW ACCOUNT DISBURSEMENT REQUIREMENT
FOR THE REFUNDED BONDS
AS OF MAY 4, 2009
Debt Payment For
Refunded Refunded
Payment 1998 Bonds 1999 Bonds Total Debt
Date (Exhibit B-l) (Exhibit B-2) Payment
03-Jun-09 $1,034,610.44 $1,095,870.22 $2,130,480.66
$1,034,610.44 $1~095~870.22 $2,130,480.66
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXHIBIT B-1
ESCROW ACCOUNT DISBURSEMENT REQUIREMENT
FOR THE REFUNDED 1998 BONDS
AS OF MAY 4, 2009
Payment For
Payment Principal
Date Rate Redeemed Interest Premium Total
03-Jun-09 Various $1,020,000.00 $4~410.44 $10,200.00 $1,034,610.44
$1~020~000.00 $4~410.44 $10~200.00 $1,034,610.44
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXHIBIT B-2
ESCROW ACCOUNT DISBURSEMENT REQUIREMENT
FOR THE REFUNDED 1999 BONDS
AS OF MAY 4, 2009
Payment
Date
Payment For
Principal
Rate Redeemed Interest Premium Total
03-Jtm-09 4.700%
$1,070,000.00 $4,470.22 $21,400.00 $1,095,870.22
$1,070,000.00 $4~470.22 $21,400.00 $1,095,870.22
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SER/AL BONDS ~ 2009
EXHIBIT B-3
DEBT SERVICE REQUIREMENTS FOR THE REFUNDED 1998 BONDS
ASSUMING NO OPTIONAL REDEMPTIONS PRIOR TO MATURITY
AS OF MAY 4, 2009
(FOR INFORMATIONAL PURPOSES ONLY)
Payment Payment For Total Debt
Date Rate Principal Interest Payment
0 l-Nov-09 $24,808.75 $24,808.75
01-May-10 4.850% $100,000.00 24,808.75 124,808.75
01-Nov-10 22,383.75 22,383.75
01-May-11 4.850% 110,000.00 22,383.75 132,383.75
01-Nov-Il 19,716.25 19,716.25
01-May-12 4.850% 110,000.00 19,716.25 129,716.25
01-Nov-12 17,048.75 17,048.75
01-May-13 4.850% 110,000.00 17,048.75 127,048.75
0 I-Nov- 13 14,381.25 i4,381.25
01-May-14 4.875% t10,000.00 14,381.25 124,381.25
0 l-Nov- 14 11,700.00 11,700.00
01-May-15 4.875% 120,000.00 I 1,700.00 131,700.00
01~Nov-15 8,775.00 8,775.00
01-May-16 4.875% 120,000.00 8,775.00 128,775.00
01-Nov-16 5,850.00 5,850.00
01-May-17 4.875% 120,000.00 5,850.00 125,850.00
01-Nov-17 2,925.00 2,925.00
01-May-18 4.875% 120t000.00 2,925.00 122,925.00
$1,020,000.00 $255,177.50 $1,275,177.50
TOWN OF SOUTHOLD, NEW YORK
SUFFOLK COUNTY, NEW YORK
REFUNDING SERIAL BONDS - 2009
EXHIBIT 1~4
DEBT SERVICE REQUIREMENTS FOR THE REFUNDED 1999 BONDS
ASSUMING NO OPTIONAL REDEMPTIONS PRIOR TO MATURITY
AS OF MAY 4, 2009
(FOR INFORMATIONAL PURPOSES ONLY)
Payment Payment For Total Debt
Date Rate Principal Interest Payment
01-Nov-09 $25,145.00 $25,145.00
01-May-10 4.700% $90,000.00 25,145.00 115,145.00
01-Nov-10 23,030.00 23,030.00
01-May-11 4.700% 100,000.00 23,030.00 123,030.00
01-Nov-I 1 20,680.00 20,680.00
01-May-12 4.700% 100,000.00 20,680.00 120,680.00
0I-Nov-12 18,330.00 18,330.00
01-May-13 4.700% 100,000.00 18,330.00 118,330.00
01-Nov-13 15,980.00 15,980.00
01-May-14 4.700% 110,000.00 15,980.00 125,980.00
01-Nov-14 13,395.00 13,395.00
01-May-15 4.700% 110,000.00 13,395.00 123,395.00
01-Nov-15 10,810.00 10,810.00
01-May-16 4.700% 110,000.00 10,810.00 120,810.00
01 -Nov-16 8,225.00 8,225.00
01-May-17 4.700% 110,000.00 8,225.00 118,225.00
0 l-Nov-I 7 5,640~00 5,640.00
01-May-18 4.700% 120,000.00 5,640.00 125,640.00
01-Nov-18 2,820.00 2,820.00
01-May-19 4.700% 120,000.00 2,820.00 122,820.00
$1,070,000.00 $288,110.00 $1,358,110.00
Schedule C
Reinvestment Government Securities
United States Treasury Obligations -- State and Local Government Series bearing
0% interest rate.
(None)
560900.1 032681 AGMT
CERTIFICATE OF THE ESCROW HOLDER
I, the undersigned officer of The Bank of New York Mellon (the "Escrow
Holder") certify to the following:
(i) the Escrow Holder is a federally-chartered bank that is duly organized
under the laws of the United States, existing and authorized to accept trusts of the
character herein set forth in the State of New York, and has corporate power and
capacity, to execute and deliver the Escrow Contract dated as of May 4, 2009 (the
"Escrow Contract") by and between the Town of Southold, Suffolk County, New York
and the Escrow Holder, and to accept and execute the trusts created under the Escrow
Contract where required;
(ii) the execution and delivery of the Escrow Contract has been duly
authorized by the Escrow Holder, the Escrow Contract has been duly executed and
delivered by the Escrow Holder and the trusts created thereunder have been accepted on
behalf of the Escrow Holder by officers of the Escrow Holder pursuant to such authority
and the Escrow Contract, upon delivery thereof by the Escrow Holder, will constitute an
enforceable obligation of the Escrow Holder subject to bankruptcy, insolvency,
reorganization, receivership and other similar laws affecting creditors' rights generally
and by general principles of equity;
(iii) there is no action, suit, proceeding, inquiry or investigation, at law or in
equity by any court, public board or body, pending or threatened, to the Escrow Holder's
knowledge, wherein an unfavorable decision, ruling or finding would adversely affect the
validity or enforceability of the Escrow Contract with respect to the duties of the Escrow
Holder thereunder to the knowledge of the Escrow Holder; and
(iv) the execution and delivery of the Escrow Contract and the performance
by the Escrow Holder of its obligations thereunder do not violate or constitute a default
under any court order or any agreement, indenture, mortgage, lease, note or other
agreement or instrument which is binding upon the Escrow Holder.
IN WITNESS WHEREOF,
I have hereunto set my hand ~is of this 4th day of
May, 2009. ~
Authorized Offic6r
560900.1 032681 AGMT
DEPOSIT OF BOND PROCEEDS AND AS TO OTHER MATTERS
I, the undersigned officer of The Bank of New York Mellon, a banking
corporation organized and existing under the laws of the State of New York, which has agreed to
act as escrow holder (the "Escrow Holder") under the terms of the escrow contract with the
Town of Southold, New York, Suffolk County, New York (the "Issuer"), dated May 5, 2009
(the "Escrow Contract"), DO HEREBY CERTIFY that:
2. The Escrow Holder on the date hereof has received from Roosevelt &
Cross, Incorporated (the "Underwriter"), the amount of $2,183,287.65 (being the par amount of
the Bonds, plus the original issue premium of $74,287.65 and less the Underwriter's discount of
$16,000.00).
3. Of said amount so deposited, $2,130,238.03 has been deposited in the
Escrow Deposit Fund and $53,049.62 has been deposited in the Expense Fund (as such terms are
defined in the Escrow Contract), in accordance with the terms of the Escrow Contract.
IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of May,
2009.
THE BANK OF NEW YORK MELLON,
AS ESCROW HOLDER
By
I: tCHAEi. C "-
nt'~lO~.NT
(Name)
(Title)
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MOODY'S ASSIGNS Aa3 TO THE TOWN OF SOUTHOLD'S (NY) $2.1M GO BONDS, 2009
RATING APPLIES TO $36.9 MILLION IN G.O. DEBT, POST-CLOSING
Southold (Town of) NY
Municipality
New York
Moody's Rating
Issue Rating
Refunding Serial Bonds, Series 2009 Aa3
Sale Amount $2,125,000
Expected Sale Date 04/08/09
Rating Description General Obligation Unlimited Tax
NEW YORK, April 6, 2009 -- Moody's Investors Service has assigned a Aa3 rating to the Town of Southold's
(NY) $2.1 million Refunding Serial Bonds, 2009. The Aa3 rating applies to $36.9 million in parity general
obligation long-term debt, post closing. The rating reflects the town's satisfactory but deteriorating financial
position due to consecutive General Fund draw downs. The rating also incorporates the town's large tax base
marked by above average wealth levels, and a modest debt profile which is expected to remain manageable.
Bond proceeds are expected to refinance Series 1998 and 1999 bonds without extension of overall maturity for
a net present value savings of 3.9% of refunded principal.
SATISFACTORY FINANCIAL POSITION DESPITE RECENT RESERVE DRAW DOWNS
Moody's believes the town's financial position will remain satisfactory, supported by a formally adopted policy
to maintain 10% undesignated fund balance. While the town annually appropriates half of the General Fund
balance to support the budget, the town has historically replenished reserves with favorable operating variances.
Surplus mortgage tax revenues have historically performed favorably relative to budget, and have been a
significant source of replenishment. The extent of the variance has narrowed in recent years and contributed to
reserve deterioration over the last three years. Most recently, fiscal 2007 ended with the town's third consecutive
draw down of reserves, after partially replenishing $1.9 million in appropriated General Fund balance with
positive budget variances primarily in general government expenditures. As a result, the total General Fund
balance declined to $5.1 million (a still satisfactory 18.1% of revenues) from $5.4 million the previous year.
However, net of a $298,000 transfer to Capital Projects Fund, a one-time expenditure, fiscal 2007 financial
operations were essentially balanced. On a combined basis, the town's operating fund (General Fund, Town
Outside Village, and Highway funds) balances declined by $726,000 to $6.9 million, or 24.8% of combined
revenues.
Year-end fiscal 2008 General Fund balance is projected to decline by as much as $1.7 million to a still
satisfactory $3.4 million. Due to the weakening residential real estate market, management anticipates mortgage
tax revenues will underperform budget by approximately $800,000 (originally budgeted at $2.3 million, or
100% of 2007 actual receipts); this represents a 35% decline (actual to actual) from 2007. Financial operations
expected to also reflect the inability to replenish the $1.8 million appropriation from fund balance and
enditure overages related to the self-insurance program for health benefits. The board-approved fiscal 2009
in the General Fund grew by $1.3 million or 5.5% over the 2008 budget, driven primarily by increases in
public safety ($737,000) and debt service ($356,000) costs. The budget is supported by a $1.3 million
appropriation from reserves to balance operations (down from $1.8 million the prior year). In light of the
ongoing recession, management projected a decline in mortgage tax revenues (-10%) from prior year actual
receipts. The adopted budget also includes a $2.8 million or 16% increase in property tax revenue, to support
budget growth and offset anticipated revenue declines. The town has enacted modest spending reductions and
the original General Fund balance appropriation to $600,000 in order to improve structural balance in
fiscal 2009 budget. Going forward Moody's believes town operations will benefit from adherence to
10% General Fund balance policy, as well as its focus on establishment of a multiyear budgeting
plan. The primary source of revenues, property taxes (75% of revenues), is stable and guaranteed by Suffolk
County (G.O. rated Aa3/stable). State aid comprises most of the remaining revenue at 10% of total revenues,
driven primarily by economically sensitive mortgage tax revenues.
SUBSTANTIAL TAX BASE ON THE NORTH FORK OF EASTERN LONG ISLAND
Moody's expects growth in the town's primarily residential, $10.4 billion tax base to slow over the near-term
given the weakening regional real estate market and sluggish economic outlook. Over the medium term,
however, the town is expected to continue to benefit from its location on the north fork of Long Island.
Assessed valuation has grown 1.4% annually over the past five years; however, full valuation, which factors
market value appreciation, has increased at a five year average annual rate of 8.7%. Full value growth has
slowed significantly from a fiscal 2008 peak (21.5%), due to a 9% decline in 2009 reflecting the housing market
downturn. This eastern Suffolk County community is primarily rural with some commercial presence (17% of
tax base). Supported by increases in permanent residents, seasonal properties have declined to approximately
2% of the tax base. An increasing number of retirees now reside in town, reflected in the 7% increase of the 75
and older population from 1990 to 2000 and by the town's largest taxpayer, Peconic Landing at Southold, a 250-
unit age-restricted/assisted living community. Ongoing development is expected to moderate as the town's
capital plan calls for the continued purchase of land and development rights with debt service expected to be
paid from proceeds of the dedicated transfer tax. Wealth levels approximate state and national average and full
value per capita is an ample $481,767.
DEBT PROFILE TO REMAIN FAVORABLE DESPITE FUTURE BORROWING
Moody's expects the town's direct debt burden (0.4% of full valuation) to remain affordable despite future
borrowing, given a dedicated transfer tax revenues. Debt retirement is average with 52% of outstanding
principal repaid within 10 years. The town's debt burden increases to a still low 1.3% full value after accounting
for the town's pro rata share of overlapping county, village, fire districts, and school districts debt obligations.
Proceeds of the town's 2% real estate transfer tax (allocated to the Community Preservation Fund) are dedicated
for open space preservation and will be utilized to pay a portion of debt service on the current issuance. These
dedicated revenues are expected to offset approximately 61% of outstanding debt, post-sale. The town's capital
plan calls for $14 million of borrowing for capital spending in 2009, largely for open space preservation.
Officials may delay the projects given current economic conditions. The town has no exposure to variable rate
debt and is not party to any derivative agreements.
KEY STATISTICS
2007 Population estimate: 21,546
2009 Full valuation: $10.4 billion
2009 Full value per capita: $481,767
[Capita Income: $27,619 (118.1% of state and 127.9% of US)
Median Family Income: $61,108 (118.2% of state and 122.1% of US)
Direct debt burden: 0.4%
Overall debt burden: 1.3%
of principal within 10 years: 52.2%
Fiscal 2007 General Fund balance: $5.1 million (20.7% of General Fund
revenues)
Fiscal 2007 Operating Funds balance: $6.9 million (24.8% of General, Town Outside Village and Highway
Funds revenues)
Post-sale parity debt outstanding: $36.9 million
RATING METHODOLOGY USED AND LAST RATING ACTION TAKEN
The principal methodology used in rating the current issue was "Local Government General Obligation and
Related Ratings" which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in
the Index of Special Reports - U.S. Public Finance. Other methodologies and factors that may have been
considered in the process of rating this issuer can also be found in the Credit Policy & Methodologies directory.
The last rating action on the Town of Southold was on March 2, 2009 when the town's Aa3 rating was affirmed.
ANALYSTS:
Neene Owate, Analyst, Public Finance Group, Moody's Investors Service Lisa Cole, Backup Analyst, Public
Finance Group, Moody's Investors Service
Patrick Mispagel, Senior Credit Officer, Public Finance Group, Moody's Investors Service
CONTACTS:
Journalists: (212) 553-0376
Research Clients: (212) 553-1653
Untitled Document file:///C:/Documents%20and%20Settings/lairdm/Local%20Settings...
From: cusip_confirmation@standardandpoors.com
Sent: Tuesday, April 07, 2009 2:05 PM
To: Moore David W.
Subject: CUSIP Confirmation: SOUTHOLD N Y
CUSIP Service Bureau
55 Water Street - 45th Floor
New York, NY zoo41
April 07, 2009
Ms. BARBARA LARKIN
ROOSEVELT AND CROSS INC.
I EXCHANGE PLAZA
NEW YORK,NY 10006
Ms. BARBARA LARKIN,
This email confirmation is sent in response to your request for the EXPRESSassignment of a Municipal
CUSIP number for:
ISSUER: SOUTHOLD N Y
CUSIP NUMBER:
ISIN NUMBER:
ISSUE
DESCRIPTION:
RATE:
MATURITY:
DATED DATE:
844572 LZ8
US844572LZ88
REF
2.000 %
05/01/2010
05/04/2009
CUSIP NUMBER:
ISIN NUMBER:
ISSUE
DESCRIPTION:
RATE:
MATURITY:
DATED DATE:
844572 MA2
US844572MA29
REF
2.000 %
05/01/2011
05/04/2009
CUSIP NUMBER:
ISIN NUMBER:
ISSUE
DESCRIPTION:
RATE:
MATURITY:
DATED DATE:
844572 MBO
US844572MB02
REF
2.000 %
05/01/2012
05/04/2009
CUSIP NUMBER:
ISIN NUMBER:
ISSUE
DESCRIPTION:
RATE:
MATURITY:
DATED DATE:
844572 MC8
US844572MC84
REF
2.250 %
05/01/2013
05/04/2009
1 of 3 5/8/2009 11:08 AM
Untitled Document file:///C:/Documents%20and%20Settings/lairdm/Local%20Settings...
CUSIP NUMBER:
ISIN NUMBER:
ISSUE
DESCRIPTION:
RATE:
MATURITY:
DATED DATE:
844572 MD6
US844572MD67
REF
2.500 %
05/01/2014
05/04/2009
CUSIP NUMBER:
ISIN NUMBER:
ISSUE
DESCRIPTION:
RATE:
MATURITY:
DATED DATE:
844572 ME4
US844572ME41
REF
2.750 %
05/01/2015
05/04/2009
CUSIP NUMBER:
ISIN NUMBER:
ISSUE
DESCRIPTION:
RATE:
MATURITY:
DATED DATE:
844572 MF1
US844572MF16
REF
3.000 %
05/01/2016
05/04/2009
CUSIP NUMBER:
ISIN NUMBER:
ISSUE
DESCRIPTION:
RATE:
MATURITY:
DATED DATE:
844572 MG9
US844572MG98
REF
5.000 %
05/01/2017
05/04/2009
CUSIP NUMBER:
ISIN NUMBER:
ISSUE
DESCRIPTION:
RATE:
MATURITY:
DATED DATE:
844572 MH7
US844572MH71
REF
5.000 %
05/01/2018
05/04/2009
CUSIP NUMBER:
ISIN NUMBER:
ISSUE
DESCRIPTION:
RATE:
MATURITY:
DATED DATE:
844572 M J3
US844572MJ38
REF
3.500 %
05/01/2019
05/04/2009
IMPORTANT NOTICE:
THIS MESSAGE IS FROM AN AUTOMATED MAIL SERVER.
2 of 3 5/8/2009 11:08 AM
THE DEPOSITORY TRUST COMPANY
55 Water Street
New York, New York 10041
Attention:
Phone:
Underwriting Packaging Department
(212) 558-8520
(212)344-1533
SUBJECT TO COUNT
AND EXAMINATION
SAFEKEEPING AGREEMENT
Ref: (Description of issue, number of certificates, number of CUSIPs assigned to issue and $ value of securines)
Town of Southold, in the County of Suffolk, New York
$2,125,000 Refunding Serial Bonds-2009, dated May 4, 2009, maturing May 1, 2010 - 2019
CUSIP # 844572 LZ8-MJ3 (TEN CERTIFICATES) $ VALUE $2,125,000
The Depository Trust Company (DTC) acknowledges receipt from Hawkins Delafield & Wood LLP (the trustee, transfer agent, underwriter
or other agent &the issuer, hereafter referred to as the "Agent") &possession, custody and control of the above securities for safekeeping.
DTC is authorized to hold these securities in safekeeping until DTC is instructed by telephone or in writing by one of the below designated
representatives of the Agent either to: (I) deliver the securities by book-entry to the DTC account of the lead underwriter (or to the DTC
account of its clearing agent) or (2) return the said securities to the Agent.
In the event DTC is instructed to return said securities, DTC shall return the securities to the Agen'~ soon as practicable,
but, in any event, no later than the DTC business day following the day such instruction is received.
DTC shall hold the Agent, its officers and employees, harmless from any liability, loss, damage, and r~t~onable expense of
any kind in connection with any loss, damage, theft or destruction of any kind of said securities while they are in the po~ssion, custody or
control of DTC, its officers or employees or in the event securities are released from the control of DTC without the spec~f4c approval of the
Agent pursuant to this Safekeeping Agreement.
The Depository Trust Company
By:
Title:
Date:
Authorized Representative of Trustee/Agent
Title: SUPERVISOR
PRINT NAME ORGANIZATION ( )
TELEPHONE NO
PRINT NAME ORGANIZATION ( )
TELEPHONE NO
PRINT NAME ORGANIZATION ( )
TELEPHONE NO
DTC accepts authorization of closings on the phone number Listed below:
(212) 855-3752 (212) 855-3753
(212) 855-3755 (212) 855-3754
543520.1 031862MSC
REGISTERED
NO. R-1
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$210,000
REI~UNDING SERIAL BOND-2009
MATURITY DATE
INTEREST
RATE
DATE OF ORIGINAL CUSIP
ISSUE NUMBER
May 1, 2010
2.00% May 4, 2009 844572 LZ8
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: TWO HUNDRED TEN THOUSAND DOLLARS
The Town of Southold, in the County of Suffolk, a municipal corporation
of the State of New York, hereby acknowledges itself indebted and for value received
promises to pay to the REGISTERED OWNER named above, or registered assigns, on the
MATURITY DATE, (stated above) the PRiNCIPAL SUM (stated above) upon
presentation and surrender of this bond at the office of the Town Clerk, Town of Southold,
Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal
Agent"), or any successor thereto, and to pay interest on such principal sum from May 4,
2009 or from the most recent interest payment date to which interest has been paid, at the
iNTEREST RATE (stated above), payable November 1, 2009 and semiannually thereafter
on May 1 and November 1. Interest hereon shall be payable 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 at the close of business on the
fifteenth day of the month preceding each interest payment date. The principal of and
interest on this bond are payable in any coin or currency of the United States of America
which, at the date of payment, is legal tender for the payment of public and private debts.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HERE[Iq.
the punctual payment of the principal of and interest on this bond according to its terms.
This bond has been designated by the Town as a qualified tax-exempt obligation
pursuant to the provisions of Section 265 of the lnternal Revenue Code of 1986, as amended.
It is hereby certified and recited that all conditions, acts and things required by the
Constitution and statutes of the State of New York to exist, to have happened and to have been
performed precedent to and in the issuance of this bond, exist, have happened and have been
performed, and that the issue of bonds of which this is one, together with all other indebtedness
of the Town of Southold, is within every debt and other limit prescribed by the Constitution and
laws of such State.
IN WITNESS WHEREOF, the Town of Southold has caused this bond to be
executed in its name by the manual signature of its Supervisor and its corporate seal (or a
facsimile thereof) to be affixed, imprinted, engraved, or otherwise reproduced hereon and
attested by the manual signature of the Town Clerk.
(SEAL)
TOWN OF SOUTHOLD
Supervisor
ATTEST:
Town ~lerk
Town of Southold, New York
Refunding Serial Bond-2009
This bond is one of an authorized issue, the principal amount of which is
$2,125,000, and is issued pursuant to the provisions of the Local Finance Law, constituting
Chapter 33-a of the Consolidated Laws of the State of New York (the "Law"), the
refunding bond resolution duly adopted by the Town Board of the Town on February 24,
2009, authorizing the issuance of refunding bonds of the Town for the refunding of certain
outstanding bonds of the Town, and a Certificate of Determination executed by the
Supervisor as of April 7, 2009, determining the terms, form and details of issuance of said
refunding bonds (the "Bonds") and providing for their private sale (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, by the registered
owner hereof in person, or by his attorney duly authorized in writing, upon the surrender of
this bond together with a written instrument of transfer or exchange satisfactory to the
Town duly executed by the registered owner or his attorney duly authorized in writing, and
thereupon a new Bond or Bonds, in the same aggregate principal amount and of the same
maturity, shall be issued to the transferee or the registered owner in exchange therefor as
provided in the Certificate of Determination and upon the payment of the charges, if any,
therein prescribed.
The Bonds are not subject to redemption prior to maturity.
The Town Board of the
Town of Southold, in the
County of Suffolk, New York
Ladies and Gentlemen:
Hawkins Delafield & Wood LLP
One Chase Manhattan Plaza
New York, New York 10005
May 4, 2009
We have examined a record of proceedings relating to the authorization,
sale and issuance of $2,125,000 aggregate principal amount Refunding Serial Bonds-2009
("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, the refunding bond
resolution duly adopted by the Town Board on February 24, 2009, authorizing the issuance
of refunding bonds of the Town for the refunding of certain outstanding bonds of the
Town, and a Certificate of Determination executed by the Supervisor as of April 7, 2009,
determining the terms, form and details of issuance of said refunding bonds and providing
for their private sale. The Bonds are dated May 4, 2009 and mature on May 1, in the
principal amounts in each of the following years, and bear interest at the respective rates
per annum payable November 1, 2009 and semiannually thereafter on May 1 and
November 1, as set forth below:
Year of Principal Interest
M~urity Amount Rate
2010 $210,000 2.00%
2011 230,000 2.00
2012 220,000 2.00
2013 220,000 2.25
2014 225,000 2.50
2015 225,000 2.75
2016 225,000 3.00
2017 220,000 5.00
2018 235,000 5.00
2019 115,000 3.50
The Bonds are not subject to redemption prior to maturity.
The Bonds are issued only in fully registered form without interest coupons,
in the name of Cede & Co., as registered owner and nominee for The Depository Trust
Company, an automated depository for securities and clearinghouse for securities
transactions which will maintain a book-entry system for recording the ownership interests
in the Bonds. Only one Bond will be initially issued for each maturity in the aggregate
principal amount of such maturity. Purchases of ownership interests in the Bonds will be
made in book-entry form in denominations of $5,000 or any integral multiple thereof.
In our opinion, said Bonds are valid and legally binding general obligations
of the Town for which the Town has validly pledged its faith and credit and, unless paid
from other soumes, 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 Town Supervisor, 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 frmn
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 Bohds 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 for 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 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 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 afler 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
hereafler 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 hereafler 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 Bonds of said issue and, in
our opinion, the form of said Bonds 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
hereafler occur, or for any other reason.
Very truly yours,
ASSIGNMENT
FOR VALUE RECEIVED, the Undersigned hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING
POSTAL ZIP CODE OF ASSIGNEE
the within Bond and does hereby irrevocably constitute and appoint
Attorne3~
to transfer said Bond on the books kept for registration of said Bond, with full power of
substitution in the premises.
Dated:
Signature Guaranteed:
Notice: Signature(s) must be
acknowledged or proved, or in the
alternative, certified as to its
genuineness by an officer of a bank
or trust company located and authorized
to do business in New York State.
Notice: The signature to
this assignment must cor-
respond with the name as
it appears upon the face
of the within bond in
every particular, without
alteration or enlargement or
any change whatever
REGISTERED
NO. R-2
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$230,000
REFUNDING SERIAL BOND-2009
MATURITY DATE
May 1, 2011
INTEREST
RATE
2.00%
DATE OF ORIGINAL CUSIP
ISSUE NUMBER
May 4, 2009
844572 MA2
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: TWO HUNDRED THIRTY 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 4',
2009 or from the most recent interest payment date to which interest has been paid, at the
INTEREST RATE (stated above), payable November 1, 2009 and semiannually thereafter
on May 1 and November 1. Interest hereon shall be payable 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 at the close of business on the
fifteenth day of the month preceding each interest payment date. The principal of and
interest on this bond are payable in any coin or currency of the United States of America
which, at the date of payment, is legal tender for the payment of public and private debts.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED
NO. R-3
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$220,000
REFUNDING SERIAL BOND-2009
MATURITY DATE
May 1, 2012
INTEREST
RATE
DATE OF ORIGINAL CUSIP
ISSUE NUMBER
2.00% May 4, 2009 844572 MBO
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: TWO HUNDRED TWENTY THOUSAND DOLLARS
The Town of Southold, in the County of Suffolk, a municipal corporation
of the State of New York, hereby acknowledges itself indebted and for value received
promises to pay to the REGISTERED OWNER named above, or registered assigns, on the
MATURITY DATE, (stated above) the PRiNCIPAL SUM (stated above) upon
presentation and surrender of this bond at the office of the Town Clerk, Town of Southold,
Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein called "Fiscal
Agent"), or any successor thereto, and to pay interest on such principal sum fr6m May 4,
2009 or from the most recent interest payment date to which interest has been paid, at the
iNTEREST RATE (stated above), payable November 1, 2009 and semiannually thereafter
on May 1 and November 1. Interest hereon shall be payable 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 at the close of business on the
fifteenth day of the month preceding each interest payment date. The principal of and
interest on this bond are payable in any coin or currency of the United States of America
which, at the date of payment, is legal tender for the payment of public and private debts.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREiN.
REGISTERED
NO. R-4
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$220,000
REFUNDING SERIAL BOND-2009
MATURITY DATE
May 1, 2013
1NTEREST DATE OF ORIGINAL CUSIP
RATE ISSUE NUMBER
2.25% May 4, 2009 844572 MC8
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: TWO HUNDRED TWENTY THOUSAND DOLLARS
The Town of Southoid, 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 4,
2009 or from the most recent interest payment date to which interest has been paid, at the
' INTEREST RATE (stated above), payable November 1, 2009 and semiannually thereafter
on May 1 and November 1. Interest hereon shall be payable 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 at the close of business on the
fifteenth day of the month preceding each interest payment date. The principal of and
interest on this bond are payable in any coin or currency of the United States of America
which, at the date of payment, is legal tender for the payment of public and private debts.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED
NO. R-5
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$225,000
REFUNDING SERIAL BOND-2009
MATURITY DATE
May 1, 2014
INTEREST DATE OF ORIGINAL CUSIP
RATE ISSUE NUMBER
2.50% May 4, 2009 844572 MD6
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: TWO 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 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 4,
2009 or from the most recent interest payment date to which interest has been paid, at the
INTEREST RATE (stated above), payable November 1, 2009 and semiannually thereafter
on May 1 and November 1. Interest hereon shall be payable 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 at the close of business on the
fifteenth day of the month preceding each interest payment date. The principal of and
interest on this bond are payable in any coin or currency of the United States of America
which, at the date of payment, is legal tender for the payment of public and private debts.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED
NO. R-6
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$225,000
REFUNDING SERIAL BOND-2009
MATURITY DATE
May 1, 2015
INTEREST
RATE
2.75%
DATE OF ORIGINAL CUSIP
ISSUE NUMBER
May 4, 2009
844572 ME4
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: TWO 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 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 4,
2009 or from the most recent interest payment date to which interest has been paid, at the
1NTEREST RATE (stated above), payable November 1, 2009 and semiannually thereafter
on May 1 and November 1. Interest hereon shall be payable 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 at the close of business on the
fifteenth day of the month preceding each interest payment date. The principal of and
interest on this bond are payable in any coin or currency of the United States of America
which, at the date of payment, is legal tender for the payment of public and private debts.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED
NO. R-7
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$225,000
REFUNDING SERIAL BOND-2009
MATURITY DATE
May 1, 2016
INTEREST
RATE
3.00%
DATE OF ORIGINAL CUSIP
ISSUE NUMBER
May 4, 2009
844572MF1
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: TWO 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 S outhold,
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 4,
2009 or from the most recent interest payment date to which interest has been paid, at the
INTEREST RATE (stated above), payable November 1, 2009 and semiannually thereafter
on May 1 and November 1. Interest hereon shall be payable 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 at the close of business on the
fifteenth day of the month preceding each interest payment date. The principal of and
interest on this bond are payable in any coin or currency of the United States of America
which, at the date of payment, is legal tender for the payment of public and private debts.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED
NO. R-8
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$220,000
REFUNDING SERIAL BOND-2009
MATURITY DATE
INTEREST
RATE
DATE OF ORIGINAL CUSIP
ISSUE NUMBER
May 1, 2017
5.00% May 4, 2009 844572 MG9
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: TWO HUNDRED TWENTY 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 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 4,
2009 or from the most recent interest payment date to which interest has been paid, at the
1NTEREST RATE (stated above), payable November 1, 2009 and semiannually thereafter
on May 1 and November 1. Interest hereon shall be payable 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 at the close of business on the
fifteenth day of the month preceding each interest payment date. The principal of and
interest on this bond are payable in any coin or currency of the United States of America
which, at the date of payment, is legal tender for the payment of public and private debts.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREiN.
REGISTERED
NO. R-9
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$235,000
REFUNDING SERIAL BOND-2009
MATURITY DATE
INTEREST
RATE
DATE OF ORIGINAL CUSIP
ISSUE NUMBER
May 1, 2018
5.00% May 4, 2009 844572 MH7
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: TWO HUNDRED THIRTY-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 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 4,
2009 or from the most recent interest payment date to which interest has been paid, at the
INTEREST RATE (stated above), payable November 1, 2009 and semiannually thereafter
on May 1 and November 1. Interest hereon shall be payable 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 at the close of business on the
fifteenth day of the month preceding each interest payment date. The principal of and
interest on this bond are payable in any coin or currency of the United States of America
which, at the date of payment, is legal tender for the payment of public and private debts.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED
NO. R-10
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
REGISTERED
$115,000
REFUNDING SERIAL BOND-2009
MATURITY DATE
INTEREST
RATE
DATE OF ORIGINAL CUSIP
ISSUE NUMBER
May 1, 2019
3.50% May 4, 2009 844572 M J3
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: ONE HUNDRED FIFTEEN 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 4,
2009 or from the most recent interest payment date to which interest has been paid, at the
INTEREST RATE (stated above), payable November 1, 2009 and semiannually thereafter'
on May 1 and November 1. Interest hereon shall be payable 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 at the close of business on the
fifteenth day of the month preceding each interest payment date. The principal of and
interest on this bond are payable in any coin or currency of the United States of America
which, at the date of payment, is legal tender for the payment of public and private debts.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
JPMorganChase
Cash Reporting -- Wire Advioe Report
ROOSEVELT AND CROSS INCORPORATED
Current Day
Amount Range: 2,183,287.G50 to 2,t83,287,650
Includes Credits and Debits for:. BOOK, CHIP, FED, WIRE
Business Date: 05/04/2009
Informational Purposes Only **
Count~; United States
Bank: JPMORGAN CHASE NEW YORK Currency: U.S. Dollar
Account Number: 66622530
Account Name: BROKERS CLEARANCE LAST UPDATE: 07:46 NY TIME 05104/2009
Credits
NO CREDITS REPORTED FOR THE SELECTED CRITERIA.
Debits
Amount: L 2,183,287.65 ~ SAME
t
Paid To:
BK OF NYC THE BANK OF NEW YORK MELLON NEW YORK NY 10005-
290t
By Order Customer:
111-565 ROOSEVELT & CROSS, INC ONE EXCHANGE PLAZA NEW
YORK, NY 10006
By Order Bank:
Acct Par[y:
II11-565 BNY TAS ,~/678144 TOWN OF SOUTHOLD ESCROW FUND
2000 ATTN NICOLE P[NERO 212 815-7167
Ultimate Beneficiary:
Beneficiary:
Beneficiary 2 (Intermediary):
FED STRAIGHT
Value Date/Time: 0510412 07:46
Cust Reference: NONREP
Bank Reference: 0303100124.10
GFP Ref:
GFP Rcvd: 05041144
Fed Ref: 0504 BIQGC04C 000133
**VIA FED" ..~le~ime----
Fed Tin, e:
MRN Seq: 00124JO03031
Chip SoqlRef: /
Sending Bank Fed ID: 021000018
Swift ID:
SRN:
Payment Method:
Payment Detail:
Remarks/Text:
TOWN OF SOUTNOLD, NY REFUNDING SERIAL BONDS - 2009
ROOSEVELT & CROSS, INC
ROOSEVELT & CROSS
INCORPORATED
TO: Working Group
FROM: Elaine Brennan
DATE: May 12, 2009
RE: Closing Instructions
TOWN OF SOUTHOLD, NY
REFUNDING SERIAL BONDS - 2009
CLOSING (Wiring of Funds only)
Date: May 4, 2009
Place: Hawkins Delafield & Wood LLP
One Chase Manhattan Plaza, 42"d Floor
New York, NY 10005
Time: 10:00 a.m.
PAYMENT INSTRUCTIONS
Roosevelt & Cross, Inc. (the Underwriter) through its account at JPMorgan Chase will wire federal funds to
The Bank of New York (the Escrow Holder) for deposit into the Escrow Fund.
BANK:
ABA #:
GLA#
Account Name:
Attn:
The Bank of New York Mellon
021000018
l 11-565
BNY TAS # 678144
Town of Southold Escrow Fund 2009
Nicole Pinero (212)815 -7167
Nicole.pinero(~bnymellon.com
AMOUNT: $2,183,287.65
Pursuant to the final subscription for the purchase and issue of U.S. Treasury Securities - State and Local Government
Series, SLGS in the amount of $2,130,217.00 will be deposited into The Bank of New York Mellon's account for
antomatic payment. The amount of $21.03 will remain as a cash deposit in the Escrow Fund.
,41so, The Bank of New York Mellon will transfer $53,049.62 of this amount into the Cost of Issuance ,4ccount.
The Purchase Price is computed as follows:
Par Amount of the Bonds
+ Net Original Issue Premium
- Underwriter's Discount
Total Purchase Price
$ 2,125,000.00
74,287.65
(16,000.00)
$ 2,I83,287.65
SOURCES AND USES OF FUNDS:
Sources of Funds
Par Amount of the Bonds
Net Original Issue Premium
Total Sources of Funds
Uses of Funds
Deposit to Escrow Fund
Underwriter's Discount
Other Costs of Issuance and Contingency
Total Uses of Funds
$ 2,125,000.00
__ 74,287.65
$ 2,199,287.65
$ 2,130,238.03
16,000.00
53,049.62
$ 2,199,287.65
The Town Board of the
Town of Southold, in the
County of Suffolk, New York
Ladies and Gentlemen:
May 4, 2009
We have examined a record of proceedings relating to the authorization, sale and
issuance of $2,125,000 aggregate principal amount Refunding Serial Bonds-2009 ("Bonds") of the Town
of Southold (the "Town"), in the County of Suffolk, New York. The Bonds are issued pursuant to the
provisions of the Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of
New York, the refunding bon/t resolution duly adopted by the Town Board on February 24, 2009,
authorizing the issuance of refunding bonds of the Town for the refunding of certain outstanding bonds of
the Town, and a Certificate of Determination executed by the Supervisor as of April 7, 2009, determining
the terms, form and details of issuance of said refunding bonds and providing for their private sale. The
Bonds are dated May 4, 2009 and mature on May 1, in the principal amounts in each of the following
years, and bear interest at the respective rates per annum payable November 1, 2009 and semiannually
thereafter on May 1 and November 1, as set forth below:
Year of Principal Interest
M~urity Amount R~e
2010 $210,000 2.00%
201I 230,000 2.00
2012 220,000 2.00
2013 220,000 2.25
2014 225,000 2.50
2015 225,000 2.75
2016 225,000 3.00
2017 220,000 5.00
2018 235,000 5.00
2019 115,000 3.50
The Bonds are not subject to redemption prior to maturity.
The Bonds are issued only in fully registered fom~ without interest coupons, in the
name of Cede & Co., as registered owner and nominee for The Depository Trust Company, an
automated depository for securities and clearinghouse for securities transactions which will
maintain a book-entry system for recording the ownership interests in the Bonds. Only one Bond
will be initially issued for each maturity in the aggregate principal amount of such maturity.
Purchases of ownership interests in the Bonds will be made in book-entry form in denominations
of $5,000 or any integral multiple thereof.
In our opinion, said Bonds are valid and legally binding general obligations of the
Town for which the Town has validly pledged its faith and credit and, unless paid from other
sources, all the taxable real property within the Town is subject to the levy of ad valorem real
estate taxes to pay the Bonds and interest thereon without limitation of rate or amount. The
enforceability of rights or remedies with respect to such Bonds may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights or remedies heretofore or hereafter enacted.
The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain
requirements that must be met subsequent to the issuance and delivery of the Bonds in order that
interest on the Bonds be and remain excludable from gross income under Section 103 of the
Code. The Town Supervisor, 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 for 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 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 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
other, vise. 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 Bonds of said issue and, in our
opinion, the form of said Bonds 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,
ddvP
May 4, 2009
Hon. Thomas P. DiNapoli
Comptroller of the State of New York
Department of Audit and Control
Albany, New York
Roosevelt & Cross, Incorporated
One Exchange Place
55 Broadway
New York, New York 10006
We are bond counsel to the Town of Southold, in the County of Suffolk, New
York (the "Town"), and are rendering today our final approving opinion with respect to the
Town's $2,125,000 Refunding Serial Bonds-2009, dated May 4, 2009. We deliver to you
herewith a copy of our approving opinion and advise you that you are entitled to rely on the
opinion as though it were addressed to you.
Very truly yours,
5607891 032681 CER]
ONE CHASE MANHA~AN pLA~
NEW ¥ORK~ NY 10005
W~VW. HAWKINS.COM
May 4, 2009
Roosevelt & Cross, Incorporated
55 Broadway, One Exchange Plaza
New York, New York 10006
Re:
Town of Southold, Suffolk County, New York
$2,125,000 Refunding Serial Bonds-2009
Ladies and Gentlemen:
Reference is made to a Bond Purchase Agreement, dated April 7, 2009 (the "Bond
Purchase Agreement"), between the Town of Southold, Suffolk County, New York (the "Town") and the
Underwriter as defined in the Bond Purchase Agreement (the "Underwriter") relating to the sale of
$2,125,000 Refunding Serial Bonds-2009 of the Town, dated May 4, 2009 (the "Bonds"). Except as the
context otherwise requires, all capitalized terms used herein and not defined shall have the meaning
assigned to such terms in the Bond Purchase Agreement.
We are Bond Counsel to the Town and are today rendering our opinion with respect to
the validity of the Bonds and as to certain other matters relating tbereto. You are entitled to rely on such
opinion as though it were addressed to you.
In addition, we have been reqaested to render our opinion as to the matters set forth
below.
In connection with the foregoing, we have examined (i) an executed copy of the Bond
Pnrchase Agreement, (ii) a copy of the Preliminary Official Statement dated April 6, 2009 (the
"Preliminary Official Statement"), and (iii) a copy of the Final Official Statement dated April 7, 2009 and
executed by the Supervisor of the Town (the "Final Official Statement") relating to the Bonds. We have
also exainined the originals, or copies certified or otherwise identified to our satisfaction, of such other
documents, certificates, legal opinions, records or other instruments, and have made such investigations of
law, as we have deemed necessary or advisable for purposes of' this opinion. We have relied upon
certificates of public officials of the Town, npon the representations, warranties and covenants of the
Town set forth in the Bond Purchase Agreement. We have also assumed, but have not independently
verified, (i) that the signatures on all documents and certificates tbat we examined were genuine, (ii) all
docnments, certificates, records, instruments and legal opinions snbmitted to us as originals are authentic,
and (iii) documents, certificates, records, instruments and legal opinions submitted to us as copies are in
confbrmity with the originals thereof.
In onr opinion:
(a) The Bond Purchase Agreement has been duly antborized executed and
delivered by the Town and, assuming due authorization, execution and delivery by the
Underwriter, constitutes a valid and binding agreement of the Town enforceable against
the Town in accordance with its terms, except as such enforceability may be limited by
Roosevelt & Cross, Incorporated
January 27, 2009
Page 2
any I:ankruptcy, insolvency or other laws affecting creditors' rights or remedies heretofore
or hereafter enacted and by the availability of equitable remedies; and
(b) The Town has full and legal right, power and authority to carry out and
effectuate the transactions contemplated by the Bond Purchase Agreement, the Bonds,
the Resolution and the Official Statement.
(c) The Town has fidl and legal right, power and authority to call and redeem
prior to maturity the bonds of the Town that are to be refunded with proceeds of the
Bonds.
(d) The Bonds are exempt from the registration reqtfirements of the
Securities Act of 1933, as amended, and all documents relating to the issuance of the
Bonds are exempt from qualification pursuant to the Trust Indenture Act of 1939, as
amended.
(e) The statements contained in the Final Official Statement dated April 7,
2009 prepared by the Town in connection with the Bonds under the captions
"DESCRIPTION OF THE BONDS," "AUTHORIZATION AND PURPOSE," and
REFUNDING FINANCIAL PLAN" and the subcaptions "Constitutional Requirements"
and "Statutory Procedure" under the caption "INDEBTEDNESS OF THE TOWN" and
under the caption "TAX MATTERS" (except for any statistical and numerical data which
may be inclnded under such captions or subcaptions~ as to which no opinion is expressed),
are accurate and complete in all material respects and we have no reason to believe that,
as of the date hereof, said captions contain any untrne statement of a material fact or omit
to state a material fact required to ~ stated tberein or necessary to make the statements
therein, in light of the circumstances under which thcy were made, not misleading; and,
without having independently verified the inlbrmation contained in said Final Official
Statement except the statements contained in the above referenced captions and
subcaptions, to the best of our knowledge, nothing has come to our attention in our
capacity as Bond Counsel, and to the extent of our review, which would lead us to believe
that tbe Final Official Statement does not and did not contain any untrue statements of a
material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.
Very truly yours,