HomeMy WebLinkAboutBonds $8,850,000DELAFIELD &WOOD LLP
ONE CHASE MANHATTAN PIJ~ZA
NEW YORK~ NY 10005
(212) 820-9416
$8,850,000 Public Improvement Serial Bonds-2008
(Our File Designations: 2615/31862)
Mr. John Cushman
Town Comptroller
Town of Southold
53095 Main Road
Southold, New York 11971
Dear John:
May 29, 2008
The closing of the above-referenced Bond issue took place in our offices today
and I enclose herewith two (2) complete transcripts of proceedings for your records.
Please do not hesitate to contact me if you should have any questions regarding
the enclosed documents.
Thanking you and with kind personal regards, I remain
Sin~,
Gerard~Femafidez, Jr.
GFjr/gb
Enclosure
NEW YORK
WASHINGTON
NEWARK
541998.1 031862 CERT
ONE CHASE MANHATTAN
NEW YORK, NY lOOO5
W~/V~V. HAWKIN S.CO M
May 29, 2008
Financial Security Assurance, Inc.
31 West 52nd Street
New York, New York 10019
Dear Ladies & Gentlemen:
We are bond counsel to the Town of Southold, in the County of Suffolk, New
York (the "Town"), and are rendering today our final approving opinion with respect to the
Town's $8,850,000 Public Improvement Serial Bonds-2008, dated May 15, 2008. We deliver to
you herewith a copy of our approving opinion and advise you that you may rely on such opinion
as if it were addressed to you.
ONE CHASE MANHATTAN pLAZA
NEW YORK) NY 10OO5
May 29, 2008
Financial Security Assurance, Inc.
31 West 52nd Street
New York, New York 10019
Dear Ladies & Gentlemen:
We are bond counsel to the Town of Southold, in the County of Suffolk, New
York (the "Town"), and are rendering today our final approving opinion with respect to the
Town's $8,850,000 Public Improvement Serial Bonds-2008, dated May 15, 2008. We deliver to
you herewith a copy of our approving opinion and advise you that you may rely on such opinion
as if it were addressed to you.
Very truly yours,
ONE CHASE MANHATTAN pLAZ~
NEW YORK~ NY IOOO5
May 29, 2008
The Town Board of
the Town of Southold,
in the County of Suffolk, New York
Ladies and Gentlemen:
We have examined a record of proceedings relating to the authorization, sale and
issuance of $8,850,000 Public Improvement Serial Bonds-2008 (the "Bonds"), of the Town of
Southold (the "Town"), in the County of Suffolk, New York.
The Bonds are issued pursuant to the provisions of the Local Finance Law,
constituting Chapter 33-a of the Consolidated Laws of the State of New York, two bond
resolutions duly adopted by the Town Board on their respective dates, authorizing the issuance
of serial bonds of the Town to finance open space preservation and the acquisition of land and
construction of building improvements, and the Certificate of Determination executed by the
Supervisor as of May 2, 2008, determining the terms, form and details of issuance of said
$8,850,000 serial bonds and providing for their public sale.
The Bonds are dated May 15, 2008, mature on May 15 in the principal amounts in
each of the following years, and bear interest at the respective rates per annam payable
November 15, 2008 and semiannually thereafter on May 15 and November 15 in each year until
maturity, as set forth below:
Year of Principal Interest Year of Principal Interest
Maturity Amount Rate Maturity Amount Rate
2009 $325,000 4.00% 2020 $400,000 4.00%
2010 325,000 4.00 2021 425,000 4.00
2011 325,000 4.00 2022 425,000 4.00
2012 350,000 4.00 2023 425,000 4.00
2013 350,000 4.00 2024 450,000 4.00
2014 350,000 4.00 2025 450,000 4-1/8
2015 375,000 4.00 2026 450,000 4.25
2016 375,000 4.00 2027 450,000 4.25
2017 375,000 4.00 2028 475,000 4.25
2018 400,000 4.00 2029 475,000 4.25
2019 400,000 4.00 2030 475,000 4.25
The Bonds maturing on or before May 15, 2018 will not be subject to redemption
prior to maturity. The Bonds maturing on or after May 15, 2019 will be subject to redemption
prior to maturity, at the option of the Town, on May 15, 2018 and thereafter, on any date, in
whole or in part, at par, and subject to notice and other conditions as stated in the Bonds.
The Bonds are issued only in fully registered form without interest coupons, in the
name of Cede & Co., as registered owner and nominee for The Depository Trust Company, an
automated depository for securities and clearinghouse for securities transactions which will
maintain a book-entry system for recording the ownership interests in the Bonds. Only one Bond
will be initially issued for each maturity in the aggregate principal amount of such maturity.
Purchases of ownership interests in the Bonds will be made in book-entry form in denominations
of $5,000 or any integral multiple thereof.
In our opinion, said Bonds are valid and legally binding general obligations of the
Town for which the Town has validly pledged its faith and credit and, unless paid from other
sources, all the taxable real property within the Town is subject to the levy of ad valorem real
estate taxes to pay the Bonds and interest thereon without limitation of rate or amount. The
enforceability of rights or remedies with respect to such Bonds may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights or remedies heretofore or hereafter enacted.
The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain
requirements that must be met subsequent to the issuance and delivery of the Bonds in order that
interest on the Bonds be and remain excludable from gross income under Section 103 of the
Code. The Supervisor of the Town, in executing the Arbitrage and Use of Proceeds Certificate,
has certified to the effect that the Town will comply with the provisions and procedures set forth
therein and that it will do and perform 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, ~ve express no opinion regarding any other federal or state
tax consequences with respect to the Bonds. We render our opinion under existing statutes and
court decisions as of the issue date, and we assume no obligation to update our opinion after the
issue date to reflect any future action, fact or circumstance, or change in law or interpretation, or
otherwise. We express no opinion on the effect of any action hereafter taken or not taken in
reliance upon an opinion of other counsel on the exclusion from gross income for federal income
tax purposes of interest on the Bonds, or on the exemption from state and local tax law of interest
on the Bonds.
Other than such record of proceedings, we have not been requested to examine or
review and have not examined or reviewed the accuracy or sufficiency of the Official Statement,
or any additional proceedings, reports, correspondence, financial statements or other documents,
containing financial or other information relative to the Town which have been or may hereafter
be furnished or disclosed to purchasers of said Bonds, and we express no opinion with respect to
any such financial or other information or the accuracy or sufficiency thereofi
We have examined the executed first numbered Bond of said issue and, in our
opinion, the form of said Bond and its execution are regular and proper.
This opinion is issued as of the date hereof, and we assume no obligation to
update, revise or supplement this opinion to reflect any action hereafter taken or not taken, or any
facts or circumstances, or changes in law or in interpretations thereof, that may hereafter occur,
or for any other reason.
Very truly yours,
REGISTERED REGISTERED
NO. R-1 $325,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORI~G~AL NUMBER
May 15, 2009 4.00% y 15, 2008 844572 KC0
REGISTERED OWNER: I~, ~O.
PRINCIPAL SUM: THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bon.d at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
I "Fi .....
cai ed scal Agent ), or any successor thereto, and to pay interest on such pnnc~pal sum
from May 15, 2008 or from the most recent interest paym ~ I~k~to which interest has
been paid at the INTEREST RATE (stated aboveJ, ~a~ ~e'~nber 15, 2008 and
semiannually thereafter on May 15 and N.o~tl~"MOtc~year until maturity. Interest
hereon shall be payable by wire tra~e~l~house funds by the Town or its agent on
each interest payment date to the rd~d b"~ner hereof at his address as it appears on the
registration books of the Town mainT~ned by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
The faith and credit of such Town are hereby irrevocably pledged to the punctual
payment of the principal of and interest on this bond according to its terms.
It is hereby certified and recited that all conditions, acts and things required by
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 itscorporate_seal to be
impressed hereon and attested by the manual signature of its Town Clerk. ~..~
TOWN OF SO
Supervisor
Town of Southold, New York
Public Improvement Serial Bond-2008
This bond is one of an authorized combined issue, the aggregate principal
amount of which is $8,850,000, the bonds of which are of like tenor, except as to number,
denomination, interest rate and maturity, and is issued pursuant to the provisions of the
Local Finance Law, constituting Chapter 33-a of the Consolidated Laws of the State of
N w York (the Law ), two bond resolutions duly adopted by the Town Board on their
respective dates, authorizing the issuance of serial bonds of the Town to finance open
space preservation and the acquisition of land and construction of building improvements,
and the Certificate of Determination executed by the Supervisor as of May 2, 2008,
,d, etermining the terms, form and details of issuance of said $8,850,000 serial bonds (the
Bonds") and providing for the public sale thereof (the "Certificate of Determination")
The Bonds are issuable in the form of registered bonds without coupons in denominations
of $5,000, or any integral multiple thereof.
This Bond is transferable or exchangeable, as provided in the Certificate of
Determination, only upon the books of the Town kept for that purpose at the office of the
Fiscal Agent, by the registered owner hereof in person, or by his attorney duly authorized
in writing, upon the surrender of this Bond together with a written instrument of transfer or
exchange satisfactory to the Fiscal Agent duly executed by the registered owner or his
attorney duly authorized in writing, and thereupon a new Bond or Bonds, in the same
aggregate principal amount and of the same maturity, shall be issued to the transferee or
the registered owner in exchange therefor as provided in the Certificate of Determination
and upon the payment of the charges, if any, therein prescribed.
The Bonds maturing on or before May 15, 2018 will not be subject to
redemption prior to maturity. The Bonds maturing on or after May 15, 2019 will be
subject to redemption prior to maturity, at the option of the Town, on May 15, 2018 and
thereafter on any date, in whole or in part, and if in part, in any order of their maturity and
in any amount within a maturity (selected by lot within a maturity), at par, plus accrued
interest to the date of redemption.
The Bonds shall be redeemable prior to maturity upon the giving of notice
which identifies the bonds to be redeemed, by mailing such notice to the registered holders
thereof at their respective addresses as shown upon the registration books of the Fiscal
Agent at least 30 days prior to the dates set for any such redemption. If notice of
redemption shall have been given as aforesaid, the Bonds so called for redemption shall
become due and payable at the applicable redemption price on the redemption date
designated in such notice, and interest on such Bonds shall cease to accrue from and after
such redemption date.
Hawkins Delafield & Wood LLP
One Chase Manhattan Plaza
New York, New York 10005
The Town Board of
the Town of Southold,
in the County of Suffolk, New York
Ladies and Gentlemen:
We have examined a record of proceedings relating to the authorization,
sale and issuance of $8,850,000 Public Improvement Serial Bonds-2008 (the "Bonds"), of
the To~vn 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, two bond
resolutions duly adopted by the Town Board on their respective dates, authorizing the
issuance of serial bonds of the Town to finance open space preservation and the acquisition
of land and construction of building improvements, and the Certificate of Determination
executed by the Supervisor as of May 2, 2008, determining the terms, form and details of
issuance of said $8,850,000 serial bonds and providing for their public sale.
The Bonds are dated May 15, 2008, mature on May 15 in the principal
amounts in each of the following years, and bear interest at the respective rates per annum
payable November 15, 2008 and semiannually thereafter on May 15 and November 15 in
each year until ma[urity, as set forth below:
Year of Principal Interest Year of Principal
Maturity Amount Rate Maturity Amount
Rate
2009 $325,000 4.00% 2020 $400,000
2010 325,000 4.00 2021 425,000 4.00
2011 325,000 4.00 2022 425,000 4.00
2012 350,000 4.00 2023 425,000 4.00
2013 350,000 4.00 2024 450,000 4.00
2014 350,000 4.00 2025 450,000 4-1/8
2015 375,000 4.00 2026 450,000 4.25
2016 375,000 4.00 2027 450,000 4.25
2017 375,000 4.00 2028 475,000 4.25
2018 400,000 4.00 2029 475,000 4.25
2019 400,000 4.00 2030 475,000 4.25
The Bonds maturing on or before May 15, 2018 will not be subject to
redemption t~rior to maturitv. The Bonds maturing on or after May 15, 2019 will be
subject to redemption prior to maturity, at the option of the Town, on May 15, 2018 and
thereafter, on any date, in whole or in part, at par, and subject to notice and other
conditions as stated in the Bonds.
The Bonds are ~ssued only m fully registered form w~thout ~nterest 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 s, uch Bonds may be limited by
bankruptcy, insolvency or other laws affecting creditors rights or remedies heretofore or
hereafter enacted.
The Internal Revenue Code of 1986, as amended (the "Code"), establishes
certain requirements that must be met subsequent to the issuance and delivery of the Bonds
in order that interest on the Bonds be and remain excludable from gross income under
Section 103 of the Code. The Supervisor of the Town, in executing the Arbitrage and Use
of Proceeds Certificate, has certified to the effect that the Town will comply with the
provisions and procedures set forth therein and that it will do and perform all acts and
things necessary or desirable to assure that interest paid on the Bonds is excludable from
gross income under Section 103 of the Code. We have examined such Arbitrage and Use
of Proceeds Certificate of the Town delivered concurrently with the delivery of the Bonds,
and in our opinion, such certificate contains provisions and procedures under which such
requirements can be met.
In our opinion, under existing statutes and court dems~ons, 0) ~nterest 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 cimumstance, or change in law or
interpretation, or otherwise. We express no opinion on the effect of any action hereafter
taken or not taken in reliance upon an opinion of other counsel on the exclusion from gross
income for federal income tax purposes of interest on the Bonds, or on the exemption from
state and local tax law of interest on the Bonds.
Other than such record of proceedings, we have not been requested to
examine or review and have not examined or reviewed the accuracy or sufficiency of the
Official Statement, or any ~dditional proceedings, reports, correspondence, financial
statements or other documents, containing financial or other information relative to the
Town which have been or may hereafter be furnished or disclosed to purchasers of said
Bonds, and we express no opinion with respect to any such financial or other information
or the accuracy or sufficiency thereof.
We have examined the executed first numbered Bond of said issue and, in
our opinion, the form of said Bond and its execution are regular and proper.
This opinion is issued as of the date hereof, and we assume no obligation to
update, revise or supplement this opinion to reflect any action hereafter taken or not taken,
or any facts or circumstances, or changes in law or in interpretations thereof, that may
hereafter occur, or for any other reason.
Very truly yours,
/s/Hawkins Delafield & Wood LLP
STATEMENT OF INSURANCE
Financial Security Assurance, Inc. ("FSA"), New York, New York, has
delivered its municipal bond insurance policy (the "Policy") with respect to the scheduled
payments due of principal of and interest on this Bond to the Town of Southold, Suffolk
County, New York, or its successor, as paying agent (the "Paying Agent") for the
$8,850,000 Public Improvement Serial Bonds-2008. Said Policy is on file and available
for inspection at the principal office of thc Paying Agent and a copy thereof may be
obtained from FSA or the Paying Agent.
ASSIGNMENT
FOR VALUE RECEIVED, the Undersigned hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING
POSTAL ZIP CODE OF ASSIGNEE
the within Bond and does hereby irrevocably constitute and appoint
Attorney
to transfer said Bond on the books kept for registration of said Bond, with full power of
substitution in the premises.
Dated:
Signature Guaranteed:
Notice: Signature(s) must be
acknowledged or proved, or in the
alternative, certified as to its
genuineness by an officer of a bank
or trust company located and authorized
to do business in New York State.
Notice: The signature to
this assignment must cor-
respond with the name as
it appears upon the face
of the within bond in
every particular, without
alteration or enlargement or
any change whatever
REGISTERED REGI
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2010 4.00% May 15, 2008 844572 KD8
REGISTERED OWNER: CEDE & CO. '
THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS
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
rec.eived promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the ToWn Clerk, Town of
Southo,!d, Town Hal!: 53095 Main Road, Southold, New York, as fiscal agent (herein
called Fiscal Agent ), or any successor thereto, and topay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town mmntmned by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of pub ic and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
REGISTERED REGISTERED
NO. R-3 $325,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2011 4.00% May 15, 2008 844572 KE6
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS -
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
' UNITED STATES OF AMERICA $350,000
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2012 4.00% May 15, 2008 844572 KF3
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: THREE HUNDRED FIFTY THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation o£ the State o£New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse gunds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be gurnished in writing by such registered owner to the Fiscal Agent as o£the close of
business on the last day o£the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency o£the United States of
America which> at the date of payment, is legal tender for the payment o£public and
private debts; provided, however, that interest on this gully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED
NO. R-5
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF
DATE RATE ORIGINAL
ISSUE
May 15, 2013 4.00%
REGISTERED OWNER: CEDE & CO.
May 15, 2008
REGISTERED
$350,000
CUSIP
NUMBER
844572 KGI
PRINCIPAL SUM: THREE HUNDRED FIFTY THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to xvhich interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO TIlE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
REGISTERED REGISTERED
NO. R-6 $350,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
DATE OF CUSIP
MATURITY
INTEREST
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2014 4.00% May 15, 2008 844572 KH9
REGISTERED OWNER: CEDE & CO.
PRINCIPAL~SUM: THREE HUNDRED FIFTY THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southo~Id, Town Hat!: 53095 Main Road, Southold, New York, as fiscal agent (herein
called Fiscal Agent ), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the 1NTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration
books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
REGISTERED
NO. R-7
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2015
4.00% May 15, 2008 844572 KJ5
REGISTERED OWNER: CEDE & CO.
REGISTERED
$375,000
PRINCIPAL SUM: THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLA'RS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually therea~2er on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
-may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
REGISTERED REGISTERED
NO. R-8 $375,000
UNITED STATES OF AME~CA
COUNTY
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SE~L BOND-2008
MATU~TY INTEREST DATE OF CUSIP
O ¢ NAL
May 15- 2016 4 00% Mav 15- 2008 844572 ~Z
~GiSTERED OWNER: CEDE & CO.
P*NCIPAL SUM THeE HUND*D SEVENTY-F*E THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
co~oration of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the ~GISTE~D O~R named above, or registered
assigns, on the MAT~TY DATE (stated above), the P~CIP~ S~ (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold Town Hall 53095 Main Road Southo d New York as fiscal agent (herren
called F~scal Agent ), or any successor thereto, ~d to pay tnterest on such pnnc~pal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the ~ST ~TE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity Interest
hereon shall be payable by wire transfer or clearinghouse ~nds by the Town or its agent on
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2017 4.00% May 15, 2008 844572 KL0
REGISTERED OWNER: CEDE&CO.
PRINCIPAL SUM: THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the 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
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the F'scal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which at the date of payment is legal tender for the payment of public and
private debts; provided, however, that tnterest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED REGISTERED
NO. R-10 $400,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2018 4.00% May 15, 2008 844572 KM8
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: FOUR HUNDRED THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for Value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay inte. rest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereat'ret on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED
NO. R-Il
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2019
4.00% May 15, 2008 844572 KN6
REGISTERED OWNER: CEDE & CO.
REGISTERED
$400,000
PRINCIPAL SUM: FOUR HUNDRED THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to_pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to Which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereaRer on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
NO. R-12 $400,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2020 4.00% May 15, 2008 844572 KPI
REGISTERED OWNER: CEDE & CO.
PRINC}PAL SUM: FOUR HUNDRED THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor theret9, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED REGISTERED
NO. R-13 5;425,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2021 4 00% May 15, 2008 844572 KQ9
REGISTERED OWNER: CEDE & CO.
FOUR HUNDRED TWENTY-FIVE THOUSAND DOLLARS
PRINCIPAL
SUM:
The TOWN OF SOUTHOLD, in the County of i~qnff~2~,teadn2~i~2rPavl, e
corporation of the State of New York, hereby acknowledges itsel ' a u
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 successqr thereto, and to pay interest on such principal sum
from May 15, 2008 or from the mOst recent interest payment date to which interest has
been paid at the 1NTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
' business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States o
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED REGISTERED
NO. R-14 $425,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2022 4.00% May 15, 2008 844572 KR7
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: FOUR HUNDRED TWENTY-FIVE THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from th~ most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered Owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date, The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
REGISTERED
NO. R-15
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2023
4.00% May 15, 2008 844572 KS5
REGISTERED OWNER: CEDE & CO.
REGISTERED
$425,000
PRINCIPAL SUM: FOUR HUNDRED TWENTY-FIVE THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State o£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 PKINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse Funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be Furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment o£public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire trans£er or clearinghouse Funds as set forth above
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
May 15, 2024 4.00 '/o May 15, 2008 844572 KT3
REGISTERED REGISTERED
ND.R-,6 4 0,000
UNITED STATES OF AMEmCA
STATE OF NEW YO~
suvvoL
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SE~L BOND-2008
INTEREST . TZ
OmGINAL NUMBER
ISSUE
~GISTERED OWNER: CEDE & CO.
PmNCIPAL SUM: FOUR HUNDRED FIFTY THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the ~GIS~D O~R named above, or registered
assigns, on the MAT~ITY DATE (stated above), the P~CIP~ S~ (stated above)
upon presentation and surrender of this bond at the o~ce of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, ~008 or from the most recent interest payment date to which interest has
been paid at the ~TE~ST ~TE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse ~nds by the Town or its agent on
each nterest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be ~rnished in writing by such registered o~er to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this ~lly registered bond shall be paid by
wire transfer or cle~inghouse ~nds as set fo~h above.
~FE~NCE IS M~E TO T~ F~T~R PROVISIONS OF THIS
BO~ SET FORTH ~.
REGISTERED
NO. R-17
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF
DATE RATE ORIGINAL
ISSUE
May 15, 2025 4-1/8%
REGISTERED OWNER: CEDE & CO.
May 15, 2008
REGISTERED
$450,000
CUSIP
NUMBER
844572 KU0
PRINCIPAL SUM: FOUR HUNDRED FIFTY THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the iNTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE lS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREiN.
REGISTERED REGISTERED
NO. R-18 $450,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2026 4.25% May 15, 2008 844572 KV8
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM. FOUR HUNDRED FIFTY THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
' from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the iNTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15. in each year until maturity Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
' America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
REGISTERED
NO. R-19
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF
DATE RATE ORIGINAL
ISSUE
May 15, 2027
REGISTERED
$450,000
CUSIP
NUMBER
4.25% May 15, 2008 844572 KW6
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: FOUR HUNDRED FIFTY THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above..
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
REGISTERED REGISTERED
NO. R-20 $475,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2028 4.25% May 15, 2008 844572 KX4
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: FOUR HUNDRED SEVENTY-FIVE THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN.
REGISTERED REGISTERED
NO. R-21 $475,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2029 4.25% May 15, 2008 844572 KY2
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: FOUR HUNDRED SEVENTY-FIVE THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the REGISTERED OWNER named above, or registered
assigns, on the MATURITY DATE (stated above), the PRINCIPAL SUM (stated above)
upon presentation and surrender of this bond at the office of the Town Clerk, Town of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the INTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity. Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
REGISTERED REGISTERED
NO. R-22 $475,000
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OF SOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY INTEREST DATE OF CUSIP
DATE RATE ORIGINAL NUMBER
ISSUE
May 15, 2030 4.25% May 15, 2008 844572 KZ9
REGISTERED OWNER: CEDE & CO.
'PRINCIPAL SUM: FOUR HUNDRED SEVENTY-FIVE THOUSAND DOLLARS
The TOWN OF SOUTHOLD, in the County of Suffolk, a municipal
corporation of the State of New York, hereby acknowledges itself indebted and for value
received promises to pay to the 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, To~vn of
Southold, Town Hall, 53095 Main Road, Southold, New York, as fiscal agent (herein
called "Fiscal Agent"), or any successor thereto, and to pay interest on such principal sum
from May 15, 2008 or from the most recent interest payment date to which interest has
been paid at the 1NTEREST RATE (stated above), payable November 15, 2008 and
semiannually thereafter on May 15 and November 15 in each year until maturity~ Interest
hereon shall be payable by wire transfer or clearinghouse funds by the Town or its agent on
each interest payment date to the registered owner hereof at his address as it appears on the
registration books of the Town maintained by the Fiscal Agent or at such other address as
may be furnished in writing by such registered owner to the Fiscal Agent as of the close of
business on the last day of the month preceding each interest payment date. The principal
of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond shall be paid by
wire transfer or clearinghouse funds as set forth above
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH HEREIN
T~E DEPOSITORY TRUST COMPANY
5.5 Wator Street
New York, New York 10041
Attention:
Phone:
Telecopy:
Under~vriting 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 securities)
Town of Southold, in the Comity of Suffolk, New York
$8,850,000 Public Improvement Serial Bonds - 2008, dated May 15, 2008, maturing May 15, 2009 - 2030
CUSIP # 844572 KC0 - KZ9 (TWENTY-TWO CERTIFICATES) $ VALUE $8,850,000
The Depository Trust Company (DTC) acknowledges receipt from Hawkins Delafield & Wood LLP (the trustee, transfer agent, underwriter
or other agent of the issuer, hereafter referred to as the "Agent") of possession, custody and conh-ol 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
OcPresentatives of the Agent either to: (1) deliver the securities by book-entry to the DTC account of the lead underwriter (or to the DTC
count of its clearing agent) or (2) return the said securities to the Agent
In the event DTC is instructed to return said secnrities, DTC shall retum the securities to the Agent as soon as practicable,
but, in m~y event, no later than tbe DTC business day following the day such instruction is received.
DTC shall hold the Agent, its officers and employees, harmless from any liability, loss, damage, and reasonable expense of
any kind in connection with any loss, damage, theft or destmction of any kind of said securities while they are in the possession, custody or
control of DTC, its officers or employees or in the event securities are released from the control UfDTC without the sp~fic approval of the
Agent pursuant to this Safekeeping Agreement. ~
TFI~ AGENT
By:
Authorized Representative of Trustee/Agent
PRINT N PdvlE
PRINT NAME ORGANIZATION (
PRINT NAM]~ ORGANIZATION (
DTC accepts authorization of closings on the phone number listed below:
(212) 855-3752 (212) 855-3753
(212) 855-3755 (212) 855-3754
The Depository Tru om ny
By:
Title:
Date
ORGANIZATION ( )
'[ELEPHONE NO
)
TELEPHONE NO
TELEPHONE NO
543520.1 031862 MSC
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PROCESS DATE 2008/1~0
SUPERV1SOR'S CERTIFICATE OF AWARD
I, SCOTT A. RUSSELL, Supervisor of the Town of Southold, in the County of
Suffolk, New York (the "Town"), HEREBY CERTIFY AND REPORT AS FOLLOWS:
1. On May 13, 2008, at ll:00 o'clock A.M. (Prevailing Time), bids were
received at the offices of Munistat Services, Inc., 12 Roosevelt Avenue, Port Jefferson Station,
New York.
2 At that time and place, seven (7) sealed bids were received for the purchase of
$8,850,000 Public Improvement Serial Bonds-2008 of the Town (the "Bonds") pursuant to the
Notice of Sale of said Bonds heretofore duly published in conformity with the requirements of
the Certificate of Determination executed by the Supervisor as of May 2, 2008, and said bids
were thereupon opened and publicly read.
3 The sealed bids so opened and publicly read were each in legally acceptable
form and were each accompanied by the check required by said Notice of Sale and constituted
signed proposals to purchase all of the Bonds
4 Forthwith upon receiving, opening, reading and considering said sealed bids, I
caused to be publicly announced that Roosevelt & Cross, Inc., and Associates, New York,
New York was the successful bidder to whom the bonds are to be awarded, at the purchase price
of $8,850,049 75 together with interest at the rates to be borne by the Bonds from the date of the
Bonds to the date of payment of the purchase price, said bid of said successful bidder being the
best bid received under the terms of the Notice of Sale therefor and providing the lowest net
interest cost over the life of the Bonds, computed as follows:
541998 I 031862 CERT
Gross Interest ...................................
Less Premium Bid Over Par
Net Interest Cost
Net Interest Rate
$4,473,00000
4975
$4,472,95075
41158%
5 As designated by the aforementioned successful bidder, said Bonds shall bear
interest from their date in each year until maturity at the respective rates per annum stated in the
following table:
Bonds maturing in each of the years 2009 to 2024, inclusve, at 400%;
Bond maturing in the year 2015, at 4-1/8%; and
Bonds maturing in each of the years 2026 to 2030, inclusive, at 4.25%,
such rates of interest being the rates necessary for the Town to sell said Bonds.
6 I thereupon returned to said other bidders the Good Faith Check (as defined in
the Notice of Sale of the Town dated May 2, 2008) received, if any, with their aforesaid sealed
bids.
7 Said Bonds will be delivered to the said successful bidder hereinabove referred
to upon receipt of payment in accordance with the provisions of the Notice of Sale.
IN WITNESS WHEREOF, I have hereunto set my hand as of the 13th day of
Supervisor
541998 1O31862 CERT
TOWN CLERK'S CERTIFICATE
(SEAL)
I, ELIZABETH A NEVILLE, Town Clerk of the Town of Southold, in the
County of Suffolk, New York, HEREBY CERTIFY that I have compared the foregoing
Certificate of Award of the Supervisor and the same is a true and complete copy of said
Certificate filed with the Town Board on or before May 29, 2008.
I FURTHER CERTIFY that no resolution electing to reassume any of the powers
or duties delegated to the Supervisor by the resolutions cited in the Certificate of Determination
referred to in said Certificate of Award, has been adopted by said Town Board
1N WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal of said Town, this/~ day of
May, 2008
~)-- - 'fown Clerk
541998 I 031862 CERT
UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE
Section 1. Definitions
"Annual Information" shall mean the information specified in Section 3 hereof.
"GAAP" shall mean generally accepted accounting principles as in effect from
time to time in the United States.
"Holder" shall mean any registered owner of the Securities and any beneficial
owner of Securities within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934.
"Issuer" shall mean the Town of Southold, in the County of Suffolk, a municipal
corporation of the State of New York.
"MSRB' shall mean the Municipal Securities Rulemaking Board established in
accordance with the provisions of Section 15B(b)(1) of the Securities Exchange Act of 1934.
"NRMSIR" shall mean each nationally recognized municipal securities
information repository within the meaning of Rule 15c2-12.
"Rule 15c2-12" shall mean Rule 15c2-12 under the Securities Exchange Act of
1934, as amended through the date of this Undertaking, including any official interpretations
thereof.
"Securities" shall mean the Issuer's $8,850,000 Public Improvement Serial
Bonds-2008, dated May 15, 2008, maturing in various principal amounts on May 15 in each of
the years 2009 to 2030, inclusive, and delivered on the date hereof.'
"State Information Depository" shall mean the New York State Information
Depository, if and when created.
Section 2. Obligation to Provide Continuing Disclosure. (a) The Issuer hereby
undertakes, 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, howeven that if audited financial statements are not then
available, unaudited financial statements shall be provided with the Annual Information, and
audited financial statements, if any, shall be delivered to each NRMSIR and to the State
Information Depository within thirty (30) days after they become available and in no event later
than 360 days after the end of each fiscal year; and
541998.1 031862 CERT
(ii) to (a) each NRMSIR, or to the MSRB, and to (b) the State Information
Depository, in a timely manner, notice of any of the following events with respect to the
Securities, if material:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3)
unscheduled draws on debt service reserves reflecting financial
difficulties;
(4)
unscheduled draws on credit enhancements reflecting financial
difficulties;
(5)
substitution of credit or liquidity providers, or their failure to
perform;
(6)
adverse tax opinions or events affecting the tax-exempt status of the
Securities;
(7) modifications to rights of Securities holders;
(8) bond calls;
(9) defeasances;
(10) release, substitution, or sale of property securing repayment of the
Securities; and
(11 ) rating changes.
(iii) to (a) each NRMSIR, or to the MSRB, and to (b) the State Information
Depository, in a timely manner, notice of a failure to provide by the date set forth in Section
2(a)(i) hereof any Annual Information required by Section 3 hereof.
(b) Nothing herein shall be deemed to prevent the Issuer from disseminating any
other information in addition to that required hereby in the manner set forth herein or in any
other manner. If the Issuer disseminates any such additional information, the Issuer shall have
no obligation to update such information or include it in any future materials disseminated
hereunder.
(c) Nothing herein shall be deemed to prevent the Issuer from providing notice of
the occurrence of certain other events, in addition to those listed above, if the Issuer determines
that any such other event is material with respect to the Securities; but the Issuer does not
undertake to commit to provide any such notice of the occurrence of any material event except
those events listed above.
541998.1 031862 CERT
Section 3. Annual Information. (a) The required Annual Information shall consist
of the financial information and operating data for the preceding fiscal year, in a form generally
consistent with the information contained or cross-referenced in the Issuer's final official
statement relating to the Securities under the headings: "The Town," "Economic and
Demographic Information," "Indebtedness of the Town,"" Finances of the Town," "Real
Property Tax Information," and "Litigation ," and in Appendix A.
(b) All or any portion of the Annual Information may be incorporated in the
Annual Information by cross reference to any other documents which have been filed with (i) the
NRMSIRs and the State Information Depository, or (ii) the Securities and Exchange
Commission. If such a document is a final official statement, it also must be available from the
MSRB.
(c) Annual Information for any fiscal year containing any modified operating
data or financial information (as contemplated by Section 7(e) hereof) for such fiscal year shall
explain, in narrative form, the reasons for such modification and the effect of such modification
on the Annual Information being provided for such fiscal year. 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
Undertaking, then any Holder of Securities may enforce, for the equal benefit and protection of
all Holders similarly situated, by mandamus or other suit or proceeding at law or in equity, this
Undertaking against the Issuer and any of the officers, agents and employees of the Issuer, and
may compel the Issuer or any such officers, agents or employees to perform and carry out their
duties under this Undertaking; provided that the sole and exclusive remedy for breach of this
Undertaking shall be an action to compel specific performance of the obligations of the Issuer
hereunder and no person or entity shall be entitled to recover monetary damages hereunder under
any circumstances. Failure to comply with any provision of this Undertaking shall not constitute
an event of default on the Securities.
Section 6. Parties in Interest. This Undertaking is executed and delivered solely
for the benefit of the Holders. No other person shall have any right to enforce the provisions
hereof or any other rights hereunder.
Section7. Amendments. WithouttheconsentofanyholdersofSecurities, the
Issuer at any time and from time to time may enter into any amendments or changes to this
Undertaking for any of the following purposes:
(a) to comply with or conform to any changes in Rule 15c2-12 (whether required
or optional);
541998.1 031862 CERT
(b) to add a dissemination agent for the information required to be provided
hereby and to make any necessary or desirable provisions with respect thereto;
(c) to evidence the succession of another person to the Issuer and the assumption
of any such successor of the duties of the Issuer hereunder;
(d) to add to the duties of the Issuer for the benefit of the Holders, or to surrender
any right or power herein conferred upon the Issuer;
(e) to modify the contents, presentation and format of the Annual Information
from time to time to conform to changes in accounting or disclosure principles or practices and
legal requirements followed by or applicable to the Issuer or to reflect changes in the identity,
nature or status of the Issuer or in the business, structure or operations of the Issuer or any
mergers, consolidations, acquisitions or dispositions made by or affecting any such person;
provided that any such modifications shall comply with the requirements of Rule 15c2-12 or
Rule 15c2-12 as in effect at the time of such modification; or
(f) to cure any ambiguity, to correct or supplement any provision hereof which
may be inconsistent with any other provision hereof, or to make any other provisions with
respect to matters or questions arising under this Undertaking which, in each case, comply with
Rule 15c2-12 or Rule 15c2-12 as in effect at the time of such amendment or change; provided
that no such action pursuant to this Section 7 shall adversely affect the interests of the Holders in
any material respect. In making such determination, the Issuer shall rely upon an opinion of
nationally recognized bond counsel.
Section 8. Termination. This Undertaking shall remain in full force and effect
until such time as all principal, redemption premiums, if any, and interest on the Securities shall
have been paid in full or the Securities shall have otherwise been paid or legally defeased
pursuant to the their terms. Upon any such legal defeasance, the Issuer shall provide notice of
such defeasance to each NRMSIR or the MSRB, and the State Information Depository. Such
notice shall state whether the Securities have been defeased to maturity or to redemption and the
timing of such maturity or redemption.
Section 9. Undertaking to Constitute Written A~reement or Contract. This
Undertaking shall constitute the written agreement or contract for the benefit of Holders of
Securities, as contemplated under Rule 15c2-12.
Section 10. Governing Law. This Undertaking shall be governed by the laws of
the State of New York determined without regard to principles of conflict of law.
IN WITNESS WHEREOF, the undersigned has duly authorized, executed and
delivered this Undertaking as of May 29, 2008.
TOWN OF SOUTHOLD
By__~
Supervisor
541998.1 031862 CERT
CLOSING CERTIFICATES
RELATING TO THE BONDS OF THE
TOWN OF SOUTHOLD, IN
THE COUNTY OF SUFFOLK, NEW YORK
OFFICERS' 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 $8,850,000 Public
Improvement Serial Bonds-2008 (the "Bonds"), dated May 15, 2008, and more fully described in
Schedule X attached hereto and hereby made a part hereof, 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 respective signatures, and the
impressing thereon of the official seal of the issuer, and that on the date hereof, we are the duly
chosen, qualified and acting officers of the Issuer holding the respective offices indicated by the
official titles set opposite our several signatures hereto, for terms expiring on the respective dates
set opposite such titles.
WE FURTHER CERTIFY that the seal which is impressed upon this certificate
has been impressed upon each of the Bonds and is the legally adopted, proper and only official
corporate seal of the Issuer
WE FURTHER CERTIFY that no litigation of any nature is 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
541998 I 031862 CERT
of said taxes, or relating to said Bonds or affecting the validity thereof or the levy or collection of
said taxes, that neither the corporate existence or boundaries of the Issuer nor the title of any of
the present officers thereof to their respective offices is being contested, that no authority or
proceedings for the issuance of said Bonds has or have been repealed, revoked or rescinded, and
that no Bonds of the Issuer have been heretofore issued under or pursuant to such proceedings.
IN WITNESS WHEREOF, we have hereunto set our hands and said corporate
seal has hereunto been affixed as of the 29th day of
May, 2008.
OFFICIAL TITLE
Supervisor
Town Clerk
TERM OF OFFICE
EXPIRES
December 31,2011
December 31, 2009
(SEAL)
I HEREBY CERTIFY that the signatures of the officers of the above-named Village,
which appear above, are tree and genuine and that I know said officers and know them to hold thc
respective offices set opposite their signatures
Signature
Title Name and Address of Bank
5419981 031862 CERT
ATTORNEY' S CERTIFICATE
I, Patricia A. Finnegan, Esq., HEREBY CERTIFY that I am a licensed attorney at
law of the State of New York, having offices at 53095 Main Road, Southold, New York, and am
the duly chosen, qualified and acting Town Attorney of the Issuer hereinafter named, that I am
familiar with the acts and proceedings heretofore had and or taken by said Issuer or by its
officers relative to the authorization, sale and issuance of $8,850,000 Public Improvement Serial
Bonds-2008, of the Town of Southold, in the County of Suffolk, a municipal corporation of the
State of New York, and herein referred to as the "Issuer", all as described and set forth in
Schedule X annexed hereto and by this reference made a part hereof; that no litigation of any
nature is now pending or threatened restraining or enjoining the issuance or delivery of said
Bonds or the levy or collection of any taxes to pay the interest on or principal of said Bonds, or
in any manner questioning the authority or proceedings for the issuance of said Bonds or for the
levy or collection of said taxes, or relating to said Bonds or affecting the validity thereof or the
levy or collection of said taxes; that neither the corporate existence or boundaries of the Issuer
nor the title of any of the present officers thereof to their respective offices is being contested;
and that.no authority or proceedings for the issuance of said Bonds has or have been repealed,
revoked or rescinded.
I HEREBY FURTHER CERTIFY that there is no controversy or litigation of any
nature now pending or threatened by or against the Issuer, wherein an adverse judgment or ruling
could have a material adverse impact on the financial condition of the Issuer or adversely affect
the power of the Issuer to levy, collect or enforce the collection of taxes or other revenues for the
payment of the Bonds, which has not been disclosed in the Official Statement relating to the
Bonds
1N WITNESS WHEREOF,
I have hereunto set my hand as of the 29th day of
To¥~At~y ~
5419981 031862 CERT
CERTIFICATE OF DELIVERY AND PAYMENT
I, SCOTT A. RUSSELL, the duly elected, qualified and acting Supervisor of the
Issuer hereinafter named, HEREBY CERTIFY that on the 29th day of May, 2008, I delivered or
caused to be delivered to Roosevelt & Cross, Inc., and Associates, New York, New York, the
purchaser thereof, $8,850,000 aggregate principal amount of Public Improvement Serial Bonds-
2008 (the "Bonds") of the Town of Southold, in the County of Suffolk, a municipal corporation
of the State of New York and herein referred to as the "Issuer", each duly and completely
executed by or on behalf of the Issuer and all as described and set forth in Schedule X annexed
hereto and by this reference made a part hereof, and that at or before the time of such delivery of
said Bonds, I received from said purchaser the following amounts:
Received prior to such delivery ..................................................... $ 177,000.00
Received at time of such delivery ...................................................... $8,687,064.32
Total amount received ........................................................................ $8,864,064.32
being full payment for said Bonds in accordance with the contract of sale thereof, computed as
follows:
Contract Price ..................................................................................... $8,850,049.75
Interest on said Bonds accrued to the date of delivery ..................... 14,014.57
Total .................................................................................................. $8,864,064.32
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 the validity of said Bonds, said opinion (except as to omission of the date of
such delivery) having been primed on each of said Bonds.
1N WITNESS WHEREOF, I have hereunto set my hand as of the 29th day of
May, 2008.
541998.1 031862 CERT
SCHEDULE X
Bonds of the TOWN OF SOUTHOLD, NEW YORK, substantially in form, and
offered for sale and sold, as provided by the Certificate of Determination executed by the
Supervisor as of May 2, 2008 and to be delivered thereunder in the aggregate principal amount
of $8,850,000.
Number of Issues:
Amount and Title:
Dated:
Denominations,
Numbers and Letters:
Place of Payment of
Principal and Interest:
Maturities, Interest
Rates and Payment Dates:
1
$8,850,000 Public Improvement Serial Bonds-2008
May 15, 2008
In the form of registered Bonds without coupons in
denominations of $5,000 or integral multiples
thereof, registered in the name of Cede & Co., as
nominee of The Depository Trust Company, New
York, New York, numbered separately and
consecutively upward with the letter "R' prefixed
thereto.
The office of the Town Clerk, Town of Southold,
Town Hall, 53095 Main Road, Southold, New York
(the "Fiscal Agent"). Interest payable by wire
transfer or in clearinghouse funds by the Town or
its agent on each interest payment date to the person
in whose name the bond is registered at the address
shown on the registration book maintained by the
Fiscal Agent as of the close of business on the last
day of the month preceding each such interest
payment date.
Mature on May 15 in the principal amounts in each
of the following years and bear interest at the
respective rates per annum, payable November 15,
2008 and semiannually thereafter on May 15 and
November 15 in each year until maturity, as set
forth below:
541998 I 031862 CERT
Year of Principal Interest Year of Principal Interest
Maturity Amount Rate Maturity Amount Rate
2009 $325,000 400% 2020 $400
2010 325,000 400 2021 425
2011 325,000 4.00 2022 425
2012 350,000 4.00 2023 425
2013 350,000 400 2024 450
2014 350,000 400 2025 450
2015 375,000 400 2026 450
2016 375,000 4.00 2027 450
2017 375,000 4.00 2028 475
2018 400,000 4.00 2029 475
2019 400,000 4.00 2030 475
000 4.00%
000 4.00
000 4.00
000 4.00
000 4.00
000 4-1/8
000 4.25
000 4.25
000 4.25
000 4.25
000 4.25
The Bonds maturing on or before May 15, 2018 will not be subject to redemption
prior to maturity. The Bonds maturing on or after May 15, 2019 will be subject to redemption
prior to maturity, at the option of the Town, on May 15, 2018 and thereafter on any date, in
whole or in part, and if in part, in any order of their maturity and in any amount within a maturity
(selected by lot within a maturity), at par, plus accrued interest to the date of redemption.
The Bonds shall be redeemable prior to maturity upon the giving of notice which
identifies the bonds to be redeemed, by mailing such notice to the registered holders thereof at
their respective addresses as shown upon the registration books of the Fiscal Agent at least 30
days prior to the dates set for any such redemption. If notice of redemption shall have been
given as aforesaid, the Bonds so called for redemption shall become due and payable at the
applicable redemption price on the redemption date designated in such notice, and interest, on
such Bonds shall cease to accrue from and after such redemption date
541998 I 031862 CERT
ARBITRAGE AND USE OF PROCEEDS CERTIFICATE
I, SCOTT A RUSSELL, Supervisor of the Town of Southold (the "Issuer"), in
the County of Suffolk, New York, HEREBY CERTIFY with respect to the Issuer's $8,850,000
aggregate principal amount Public Improvement Serial Bonds-2008 (the "Bonds"), dated May
15, 2008 and issued on May 29, 2008, as follows:
Unless the context clearly requires otherwise, all capitalized terms not otherwise
defined herein shall have the meanings set forth in Exhibit A attached hereto or in the
Resolutions, the Code or the Regulations (each as defined in Exhibit A):
ARTICLE I
General
I 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 am acting for and on
behalf of the Issuer in signing this Arbitrage and Use of Proceeds Certificate (the "Certificate").
1 2 Description of Bonds. The Issuer represents that the Bonds are sold at the
aggregate Issue Price and are further described as set forth on the cover of the Official Statement.
1.3 Purpose of Certificate This Certificate is made for the purpose of
establishing evidence of the expectations of the Issuer as of the date hereof as to future events
regarding the amount and use of proceeds of the Bonds. It is intended and may be relied upon
for purposes of Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as
amended (the "Code"), and as a certification described in Section 1.148-2(b)(2) of the Treasury
Regulations. This Certificate is executed and delivered as part of the record of proceedings in
connection with the issuance of the Bonds. The provisions of this Certificate constitute a
contractual obligation of the Issuer in consideration for the purchase of and payment for the
Bonds by the purchaser(s) thereof
14 No Hedge Bonds. The Issuer reasonably expects that 85% of the
Spendable Proceeds of the Bonds will be expended for governmental purposes within 3 years of
the date hereof In addition, not more than 50% of the proceeds of the Bonds are being invested
in investments not acquired to carry out the governmental purposes of the issue at a guaranteed
yield for 4 years or more.
1.5 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 141 of the
Code To the best of my knowledge and belief, such expectation is reasonable and there are no
other facts, estimates or circumstances that would materially change that expectation
5419981 031862 CER~I
1.6 No Composite Issue. No other tax-exempt governmental obligations have
been sold fewer than 15 days prior to, or will be sold fewer than 15 days after, the sale date of
the Bonds, pursuant to the same plan of financing which are expected to be paid from
substantially the same source of funds as the Bonds.
1.7 Registration. The Bonds will be issued in registered form.
1.8 No Federal Guarantee. The Issuer represents and covenants that, except
for the gross proceeds of the Bonds which are: (a) invested during the temporary period referred
to in Article III, (b) held in any refunding escrow or (c) invested in obligations of the United
States Treasury or in obligations issued pursuant to Section 21B(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 2In(d)(3) of the Federal Home
Loan Bank Act, as amended:
(i)
No portion of the payment of principal or interest with respect to the
Bonds is or will be guaranteed directly or indirectly by the United States
or any agency or instrumentality thereof (herein "federally guaranteed");
and
(ii)
No portion of the gross proceeds of the Bonds in excess of five percent of
such gross proceeds is or will be (A) used in making loans the payment of
principal or interest with respect to which is to be federally guaranteed, or
(B) invested directly or indirectly in federally insured deposits or
accounts.
1.9 Tax Representation. The Issuer expects to be able to and will comply 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
110 Noncompliance. The Issuer shall perform each of the obligations
undertaken by it in this Certificate unless, in the written opinion of Bond Counsel,
noncompliance therewith will not cause interest on the Bonds to be included in gross income for
purposes of Federal income taxation.
1.11 Reliance bv Bond Counsel. The representations of the Issuer expressed in
this Certificate may be relied upon by Bond Counsel in connection with the rendering of any
opinion with respect to the Bonds.
1.12 IRS Form 8038-G. The Issuer shall file 1RS Form 8038-G, set forth as
part of the record of proceedings for the Bonds, by the 15th day of the second month after the
calendar quarter in which the Bonds are issued.
541998 1 031862 CERT
ARTICLE II
Use of Project and Proceeds
2.1 Authorization. The Bonds are authorized to be issued pursuant to
applicable provisions of the laws of the State of New York and two bond resolutions duly
adopted by the Town Board on their respective dates, (the "Resolutions" or "Resolution"), as
referred to in the Certificate of Determination relating to the Bonds, executed by the Supervisor
as of May 2, 2008 (the "Certificate").
2.2 Purpose of Issue. The proceeds from the sale of the Bonds will be used to
provide financing for various projects in and for the Town (the "Projects"), as further described
in the Resolutions. For purposes of this Article II the term "proceeds" means the net amount
(after payment of all costs and expenses associated with issuing the Bonds) received by the
Issuer from the sale of the Bonds excluding accrued interest.
2.3 Use of Proceeds. The proceeds of sale of the Bonds will be used to
provide original funds for the Projects. For purposes of the Code, the Bonds shall constitute
Construction Bonds as defined herein.
2.4 Ownership/Lease/Sale. The Projects will be owned by the Issuer and will
not be leased to any person who is not a state or local governmental unit. It will not be sold or
otherwise disposed of, in whole or in part, except for incidental sales of surplus items the
proceeds of which will not constitute net operating profits or net capital profits to the Issuer,
prior to the maturity date of the Bonds.
2.5 Private Loans. Not more than the lesser of 5 percent or $5,000,000 of the
proceeds of the Bonds will be used directly or indirectly to make loans to persons other than a
governmental unit.
26 Private Use. The aggregate amount of proceeds of the Bonds used directly
or indirectly in a trade or business carried on by a person other than a state or local
governmental unit ("Private Use"), will not exceed 10% of such proceeds in the event that more
than 10% of the principal or 10% of the interest due on the Bonds during the term thereof is,
under the terms of the Bonds or any underlying arrangement, directly or indirectly, secured by
any interest in property used or to be used for a Private Use or in payments in respect of property
used or to be used for a Private Use or is to be derived from payments, whether or not to the
Issuer, in respect of property or borrowed money used or to be used for a Private Use
2.7 Unrelated/Related Disproportionate Use None of the proceeds of the
Bonds will be used directly or indirectly in the trade or business of a person other than a
governmental unit that is unrelated or related and disproportionate to the governmental use of the
property being financed, including any private loan financing described in Section 2.5 which
meets this test For purposes of this Certificate, proceeds of the Bonds are allocable to an
unrelated Private Use if such use is neither directly nor operationally related to a governmental
use and proceeds of the Bonds are allocable to a disproportionate related Private Use to the
extent that the proceeds of the Bonds which are to be used to finance property used by a
5419981 031862 CERT
nongovernmental person in a trade or business which is related to the governmental use of the
property referred to in Section 2.6 above, exceeds the proceeds of the Bonds which are to be
used for the governmental use to which such Private Use relates
2.8 Private Use Defined. For purposes of Section 2.6 and 27, unless
otherwise provided in this Certificate, a Private Use consists of any contract or other
arrangement including, without limitation, leases, management contracts, guarantee contracts,
take or pay contracts, or put or pay contracts, which provides for a use of the Project by a person
or persons who are not State or local governments on a basis different than the general public.
However, the Issuer may enter into a safe-harbor management contract which meets the
requirements of Rev Proc. 97-13
(i)
If the Issuer leases any portion of the facilities to an organization that is
qualified under Code section 501(c)(3) or to any other entity which is not
a State or a local governmental unit, it will abide by the limitations set
forth in this Article II. If the Issuer enters into management contracts with
respect to any areas included in the facilities to be financed or refinanced
with the proceeds of the Bonds, including, without limitation, service
areas, if any, it will follow the guidelines set forth in this Article II
29 Reimbursement. Gross proceeds used to reimburse the Issuer for amounts
expended in anticipation of the issuance of the Bonds are considered expended on the date of the
reimbursement allocation made in accordance with Treas. Reg. § 1 150-2, if prior to or within 60
days after the date of such expenditure (except for certain preliminary expenditures described in
Treas. Reg §1 150-2(f)(2)), a declaration of intent to reimburse such expenditure is made and the
reimbursement allocation is made within 18 months of the later of the placed in service date of
the Projects or the date of the expenditure (but in no event more than three years after the
original expenditure was paid) The expenditures to be reimbursed are capital expenditures as
defined in Treas. Reg Section 1.150-l(b). No reimbursement proceeds will be used for purposes
that would prevent the allocation from being treated as an expenditure pursuant to Treas. Reg
Section 1.150-2 or prior law as applicable.
ARTICLE III
Arbitrage/Rebate
3 1 Issue Price The initial offering price to the public of the Bonds is the
Issue Price of the Bonds and at which price a substantial amount of each maturity of the Bonds
was sold, as evidenced by the certificate of the representative of the underwriters, included as
part of the record of proceedings for the Bonds
3.2 Temporary Period. With respect to the Bonds:
(a) The Issuer has entered into or will enter into within six months from the
date of this Certificate, binding commitment(s) for the acquisition, construction or
accomplishment of the Projects, and the amount of such commitment(s) with respect to such
541998 I 031862 CERT
Projects will or do exceed the amount equal to 5% of $8,850,000, being the aggregate amount of
obligations to be issued for such Projects.
(b) In the event the Projects have not been completed, work on the
acquisition, construction or accomplishment of such Projects will proceed or is proceeding ~vith
due diligence to completion and the final sales proceeds will be allocated to expenditures with
due diligence.
(c) It is reasonably expected that at least 85 percent of the net sale proceeds of
such Bonds will be expended within three years from the date of this Certificate. Accordingly,
the sale proceeds and investment proceeds of the Bonds may be invested without restriction as to
yield for a temporary period of 3 years from the date hereof, subject to the rebate requirements
set forth in Article IV of this Certificate.
3.3 No Excess Proceeds. The total proceeds of sale of do not exceed the total
cost of the Projects.
3 4 Source of Repayment Funds. The Bonds will be paid from taxes and other
revenues of the Issuer.
3.5 Debt Service Fund. The taxes used to pay principal and interest on the
Bonds, whether or not deposited in a debt service fund, will be expended within 13 months of the
date of deposit in such fund, or the date of their accumulation, in the payment of debt service on
the Bonds. Any amounts received from the investment of such deposit or accumulation will be
expended within one year of receipt. The debt service fund, if any, will be used to achieve a
proper matching of revenues and debt service and will be depleted at least annually except for a
reasonable carryover amount which will not exceed the greater of the earnings on such fund for
the immediately preceding bond year or one-twelfth of the debt service on the Bonds for the
immediately preceding bond year.
3.6 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
3.7 Universal Cap On each Valuation Date, the Issuer shall value the
Universal Cap and the Nonpurpose Investments allocable to the Bonds thereunder Nonpurpose
Investments in a bona fide debt service fund such as the Bona Fide Debt Service Fund do not
reduce the aggregate value of Nonpurpose Investments that may be allocated to the Bonds under
the Universal Cap. Nonpurpose Investments cease to be allocated to the Bonds to the extent
such Nonpurpose Investments have been expended for the governmental purpose of the issue, or
to the extent the value thereof exceeds the value permitted to be allocated to the issue under the
Universal Cap To the extent Nonpurpose Investments cease to be allocated to an issue and the
value of the Universal Cap exceeds the value of the remaining Nonpurpose Investment allocated
to such issue, other Nonpurpose Investments may become allocated to the issue, provided that
such Nonpurpose Investments are not already properly allocated to another issue and provided
5419981 031862 CERT
that such allocation does not cause the value of Nonpurpose Investments allocated to the Bonds
to exceed the Universal Cap
Generally, if Gross Proceeds of the Bonds invested in Nonpurpose Investments
exceed the Universal Cap on a Valuation Date, such Nonpurpose Investments cease to be
allocated to the Bonds in the following order:
(i) amounts allocable to Replacement Proceeds,
(ii) amounts allocable to Transferred Proceeds,
(iii) amounts allocable to Sale Proceeds and Investment Proceeds of the Bonds.
Where a Nonpurpose Investment ceases to be allocated to the Bonds, such
Nonpurpose Investment is susceptible of re-allocation under the Universal Cap calculated with
respect to another bond issue A Nonpurpose Investment which is reallocated to another bond
issue 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.
Notwithstanding anything herein to the contrary, the failure to perform the
determination of Nonpurpose Investments allocable to the Bonds as ora Valuation Date shall not
be considered a violation of this provision if the value of Nonpurpose Investments allocated to
the Bonds did not exceed the value of the Bonds outstanding on such date.
38 Yield. When used in this Certificate, the term Yield is computed as
described in Exhibit A and in connection with the Bonds, refers to the yield computed by the
actuarial or present ~vorth method using a 360-day year and semiannual compounding, and
means that discount rate which, when used in computing the present worth of ali payments of
principal and interest to be paid on an obligation, produces an amount equal to the Issue Price
thereo£ The Yield on the Bonds is as shown in Form 8038-G.
3.9 Yield Reduction Payments The Issuer may make yield reduction
payments, as such term is defined in the Regulations, to reduce the yield on investments under
certain circumstances. The Issuer will consult with Bond Counsel prior to making any such
payments.
3 10 No Replacement Proceeds The weighted average maturity of the Bonds,
as set forth in the Form 8038-G, does not exceed 120 percent of the average reasonably expected
useful life of the Projects
3 11 No Prohibited Payments The Issuer has not entered into and will not
enter into any transaction to reduce the yield on the investment of the proceeds of the Bonds in
such a manner that the amount to be rebated to the federal government is less than it would have
been had the transaction been at arm's length and the yield on the issue not been relevant to
either party
3.12 Rebate Options With respect to the investment of the proceeds of the
Bonds, the Issuer will:
5419981 031862 CERT
(a) invest all gross proceeds at all times from the date hereof 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,
(b) invest all gross proceeds in obligations having a yield that does not exceed
the yield on the Bonds, or
(c) comply with the provisions regarding rebate described in Article IV
below.
ARTICLE IV
Rebate
4.1 Rebate Compliance The Issuer understands that the continued non-
inclusion of interest on the Bonds for purposes of federal income taxation depends, in part, upon
compliance with the arbitrage limitations imposed by Section 148 of the Code, including the
rebate requirements described in Section 4.2 hereof with respect to the Bonds.
4.2 Rebate Requirement for the Bonds. Section 148(0 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 Yield on the Bonds, together with any
income attributable to such excess. Except as provided below, all Gross Proceeds of the Bonds
are subject to this requirement. In order to meet the rebate requirement of the Code the Issuer
must take the following actions:
(a) Record of Investments The Issuer will record the date of receipt, amount
and source of any Gross Proceeds, e.g., proceeds from the sale of the Bonds, loan
repayments, investment earnings. For each Nonpurpose Investment acquired with or
allocated to Gross Proceeds of the Issue, the Issuer will record the purchase date or
allocation date of such investment, its purchase price (excluding any broker or dealer's
commission or discount), or, if not acquired directly with Gross Proceeds, its Value on
the date the Nonpurpose Investment is allocated to Gross Proceeds, accrued interest due
on its purchase date or allocation date, its face amount, its coupon rate, its Yield, the
frequency of its interest payment, its disposition price (excluding any broker or dealer's
commission or discount), the accrued interest due on its disposition date and its
disposition date In addition, the Issuer will record the date and amount of all
expenditures of Bond proceeds, including expenditures for rebate, other than
expenditures to acquire investments
(b) Computation of Rebate Amount. Subject to the special rules set forth in
paragraphs (c), (d), (e) and (f) of this Section, the Issuer will determine the Rebate
Amount on each Computation Date The Rebate Amount as of any Computation Date is
541998 1 031862 CERT
the excess of the Future Value of all receipts with respect to Nonpurpose Investments
over the Future Value of all payments with respect to the purchase of Nonpurpose
Investments or the allocation of such investments to the proceeds of the Bonds,
determined as of each Computation Date. To the extent amounts received from
investments are reinvested, these amounts may be netted against each other and not taken
into account in the Computation of Rebate Amount. The Issuer shall determine the
nonpurpose receipts and nonpurpose payments as described below.
(i) Receipts Receipts with respect to Nonpurpose Investments
include (i) actual receipts, amounts actually or constructively received with
respect to an investment, reduced by Qualified Administrative Expenses (ii)
disposition receipts, the Fair Market Value of investments deemed to be sold on
the date the investment ceases to be allocated to the issue, (except that Present
Value may be substituted for Fair Market Value with respect to fixed yield
investments, investments required to be yield restricted, and investments
transferring by virtue of the universal cap or transferred proceeds rules) and (iii)
Computation Date receipts, the Market Value (Present Value, in the case of
guaranteed investment contracts and fixed rate investments) of all Nonpurpose
Investments allocated to the issue at the close of business on a Computation Date;
and (iv) rebate receipts, any recovery of an overpayment of rebate.
(ii) Payments. Payments with respect to Nonpurpose Investments
include (i) direct payments, the amount of Gross Proceeds of the issue directly
used to purchase the investment, including Qualified Administrative Costs;
(ii) constructive payments, the Value of an investment allocated to (but not
directly purchased with) Gross Proceeds on the date so allocated; (iii) Nonpurpose
Investments allocated to an issue at the end of the preceding Computation Period,
at the value of the investments at the beginning of the computation period;
(iv) rebate payments, payments of rebate amounts when due and yield reduction
payments on Nonpurpose Investments and (v) the Computation Date Credit.
(c) Exception for Gross Proceeds Entirely Spent Within Six Months
Notwithstanding anything in this Section 4.2 to the contrary, if all of the Gross Proceeds
of the Bonds (other than amounts on deposit in the Debt Service Fund or a reserve fund),
including investment earnings received with respect to all Funds and Accounts
coTnprising such issue except the Debt Service Fund, have been expended for the
governmental purpose of the issue within six months after the date of issue, then the only
Nonpurpose Investments to be taken into account in the calculation of the Rebate
Amount with respect to the Non-Construction Bonds are Nonpurpose Investments
acquired with or allocated to Gross Proceeds held in the Reserve Fund, and to any gross
proceeds arising after such six months which were not reasonably anticipated as of the
date of issuance. The existence of sinking fund or pledged fund proceeds or the
expectation that such proceeds xviIl arise within six months of the issue date will make
the six-month expenditure exception to rebate inapplicable For purposes of this
exception, Gross Proceeds used to pay principal of bonds are not treated as expended on
the governmental purpose of the issue
5419981 031862 CER]'
(d) Exception for Gross Proceeds Entirely Spent Within Eighteen Months.
Notwithstanding anything in this Section 4.2 to the contrary, if all of the Gross Proceeds
of the Bonds (other than amounts on deposit in the Debt Service Fund or a reserve fund),
including investment earnings received with respect to all Funds and Accounts
comprising such issue except the Debt Service Fund, have been expended for the
governmental purpose of the issue in accordance with the following schedule after the
date of issue: 15% within 6 months, 60% within 12 months and 100% within 18 months,
then the only Nonpurpose Investments to be taken into account in the calculation of the
Rebate Amount with respect to the Non-Construction Bonds are Nonpurpose Investments
acquired with or allocated to Gross Proceeds held in the Reserve Fund, and to any gross
proceeds arising after such eighteen months which were not reasonably anticipated as of
the date of issuance. The existence of sinking fund or pledged fund proceeds or the
expectation that such proceeds will arise within eighteen months of the issue date will
make the eighteen-month expenditure exception to rebate inapplicable. For purposes of
this exception, Gross Proceeds used to pay principal of bonds are not treated as expended
on the governmental purpose of the issue However, an issue does not fail to satisfy the
spending requirement for the third spending period referenced above in this paragraph as
a result of a reasonable retainage, as defined in Treas. Reg. 1.148-7(d)(2), if the
reasonable retainage is allocated to expenditures within 30 months of the date of issue.
(e) Exception for Gross Proceeds Entirely Spent Within Twenty-Four
Months Notwithstanding anything in this Section 4.2 to the contrary, for Construction
Bonds, if all of the Gross Proceeds of the Bonds (other than amounts on deposit in the
Debt Service Fund or a reserve fund), including investment earnings received with
respect to all funds and accounts comprising such issue except the Debt Service Fund,
have been expended for the governmental purpose of the issue in accordance with the
following schedule after the date of issue: 10% within 6 months, 45% within 12 months,
75% within 18 months and 100% within 24 months, then the only Nonpurpose
Investments to be taken into account in the calculation of the Rebate Amount with respect
to the Non-Construction Bonds are Nonpurpose Investments acquired with or allocated to
Gross Proceeds held in the Reserve Fund, and to any gross proceeds arising after such
twenty-four months which were not reasonably anticipated as of the date of issuance.
The existence of sinking fund or pledged fund proceeds or the expectation that such
proceeds xvill arise within twenty-four months of the issue date will make the twenty-four
expenditure exception to rebate inapplicable For purposes of this exception, Gross
Proceeds used to pay principal of bonds are not treated as expended on the governmental
purpose of the issue. However, an issue does not fail to satisfy the spending requirement
for the third spending period referenced above in this paragraph as a result of a
reasonable retainage, as defined in Treas Reg. 1 148-7(d)(2), if the reasonable retainage
is allocated to expenditures within 30 months of the date of issue.
(f) $100,000 Debt Service Fund Gross Earnings Exception. Notwithstanding
anything in this Section 4.2 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), are Iess than $100,000 then any amount earned on such debt service fund shall not be
taken into account in determining the Rebate Amount In this regard, the $100,000
5419981 031862 CERT
earnings limitation is deemed satisfied if the annual debt service on the issue does not
exceed $2,500,000~ For purposes of this paragraph (f), the term "gross earnings" means
the aggregate amount earned on the Nonpurpose Investment in which the Gross Proceeds
deposited to the debt service fund are invested, including amounts earned on such
amounts if allocated to the debt service fund.
(g) Debt Service Fund Exception. If the average maturity of the Bonds is at
least 5 years and the rates of interest do not vary during the term of the issue, then any
amount earned on a debt service fund (other than amounts representing accrued interest
or capitalized interest) shall not be taken into account in determining the Rebate Amount.
43 Payment to United States.
(a) Unless the Bonds are redeemed prior to such time, the Issuer will pay to
the United States, not later than 60 days after each Installment Computation Date, an
amount which, when added to previous rebate payments made with respect to the Bonds,
is equal to not less than 90 percent of the Rebate Amount, less the Computation Date
Credit. The Issuer will pay to the United States, not later than 60 days after the Bonds are
fully paid or redeemed, 100 percent of the Rebate Amount, less the Computation Date
Credit. If the final rebate payment is made within 60 days after the Final Computation
Date, interest on the Rebate Amount will be deemed to accrue at the underpayment rate
under Section 6201 of the Code, beginning on the date the Rebate Amount is due and
ending on the date 10 days before it is paid.
(b) The Issuer will mail each payment to the Internal Revenue Service Center,
Philadelphia, Pennsylvania 19255. Each payment shall be accompanied by the copy of
the Form 8038-T and the Form 8038-G or 8038-GC filed with respect to the Bond issue
and a statement identifying the issuer and the issue, including the CUSIP number for the
Bond with the latest maturity for which there is a CUSIP number.
4.4 Recordkeeping. In connection with rebate requirement the Issuer will
maintain the following records:
(a) The Issuer will retain records of the determinations made pursuant to
Section 42 untiI six years after the retirement of the last obligation of the issue.
(b) The Issuer will record all amounts paid to the United States pursuant to
Section 43.
541998 I 031862 CERT
45 Fair Market Value. The Issuer will not acquire Nonpurpose Investments
at other than an arm's length, Fair Market Value price unless regulations addressing imputed
receipts have been promulgated by the Treasury.
(SEAL)
IN WITNESS WHEREOF,
I have hereunto set ~ny hand and affixed the
corporate seal of Town of Southold, as of the 29th
day ~~ of May, 2008
Supervisor
541998 I 031862 CERT
Exhibit A
Definitions
(This exhibit includes definitions of certain terms which may not be used in the Issuer's
Arbitrage and Use of Proceeds Certificate)
"Available Construction Proceeds" means the Issue Price of the Construction
Bonds (i) plus earnings on the Issue Price and on amounts in any reserve fund not funded from
bond proceeds, and earnings on such earnings and (ii) less the amount of the Issue Price
representing a reasonably required reserve or replacement fund and costs of issuance funded with
proceeds received from the sale of the Bonds For purposes of this definition earnings include
earnings on any tax-exempt bond If only a portion of the Bonds constitute Construction Bonds,
a pro-rata portion of the above-described amount will constitute available construction proceeds
Pre-issuance accrued interest and earnings thereon may be disregarded.
"Bona Fide Debt Service Fund" means a fund, which may include proceeds of
an issue, that is used primarily to achieve a proper matching of revenues with principal and
interest payments within each Bond Year and is depleted at least once each Bond Year except for
a reasonable carry over amount (not in excess of the earnings on the fund for the immediately
preceding Bond Year or one-twelfth of the principal and interest payments on the issue for the
immediately preceding Bond Year).
"Bond Counsel" means any nationally recognized attorney or firm of attorneys,
knowledgeable in the requirements of the Code, and the Regulations, and retained by the Issuer.
"Bond Year" means each one-year period (or shorter period) from the date of
issue that ends at the close of business on the day in the calendar year selected by the Issuer
which day is no later than the last day within one year of the issue date of the Bonds
"Bonds" means the $8,850,000 Public Improvement Serial Bonds-2008
"Capital Project" means all capital expenditures, plus related working capital
expenditures to which the de minimis rule under Treas. Reg. Section I 148-6(d)(3)(ii)(A)
applies, that carry out the governmental purposes of an issue
"Code" means the Internal Revenue Code of 1986, as amended.
"Computation Date" means any Installment Computation Date or the Final
Computation Date
"Computation Date Credit" means, for any issue of obligations, an amount
equal to the Future Value of $1,000 for each Bond Year during which there are gross proceeds of
the Bonds on a Computation Date other than the Final Computation Date, and $I,000 on the
Final Computation Date
541998 I 031862 CER'['
"Computation Period" means the period beginning on the day following a
Computation Date (or in the case of the first period, the date of issuance of the Bonds) and
ending on the next succeeding Computation Date.
"Construction Bonds" means an issue in which all of the bonds are either (i)
Governmental Bonds; (ii) Qualified 501(c)(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
available construction proceeds of the issue are to be used, or are expected to be used for
expenditures for construction, reconstruction and rehabilitation of property which is owned by a
governmental entity or a 501 (c)(3) organization.
"Construction Expenditures" means capital expenditures (as defined in Treas.
Reg. §1. 150-1) (i.e., amounts used for construction, reconstruction or rehabilitation of buildings
or other inherently permanent structures, including items that are structural components of such
buildings or structures, and architectural and engineering fees, site survey fees, legal expenses,
insurance premiums and development fees to the extent such fees and expenses directly relate to
other construction costs)
"Controlled Group" means a group of entities controlled directly or indirectly
by the same entity or group of entities. In general, "direct control" exists while a controlling
entity possesses either of the following rights or powers and such rights or powers are
discretionary and non-ministerial: The right or power (i) both to approve and to remove without
cause a controlling portion of the governing body of the controlled entity, or (ii) to require the
use of funds or assets of the controlled entity for any purpose of the controlling entity. If one
entity (the "Controlling Entity") directly controls another (the "Controlled Entity"), then the
Controlling Entity indirectly controls any entity controlled directly or indirectly by such
Controlled Entity. However, an entity is not a Controlled Entity if it possesses substantial taxing,
eminent domain and police powers
"Extraordinary Working Capital Item" means expenditurfis for extraordinary,
nonrecurring items that are not customarily payable from current revenues, such as casualty
losses or extraordinary legal judgments in amounts in excess of reasonable insurance coverage
"Fair Market Value" of an Investment shall have the following meanings:
(a) In General Except as elsewhere specifically stated below, the Fair Market
Value of an Investment is the price at which a willing buyer would purchase the Investment from
a willing seller in a bona fide, arm's -length transaction
(b) United States Treasury Obligation The Fair Market Value ora United States
Treasury Obligation that is purchased directly from the United States Treasury is its purchase
price.
(c) Certificate of Deposit. The Fair Market Value of a certificate of
deposit with a fixed interest rate, a fixed payment schedule, and a substantial penalty for
early withdrawal is its purchase price provided, the yield on the certificate of deposit is
not less than (i) the yield on reasonably comparable direct obligations of the United
5419981 031862 CERT
States and (ii) the highest yield published by the provider and currently available from the
provider on reasonably comparable certificates of deposit offered to the public.
(d) Guaranteed Investment Contracts. The Fair Market Value of a
guaranteed investment contract is its purchase price, provided (i) the Issuer makes a bona
fide solicitation for such contract and receives at least three bona fide bids from providers
with no material interest in the issue; (ii) the Issuer purchases the highest-yielding
guaranteed investment contract for which a qualifying bid is made (determined net of
broker's fees); (iii) the yield on such contract (determined net of broker's fees) is not less
than the yield then available from the provider on reasonably comparable investment
contracts, if any, offered to other persons from a source of funds other than gross
proceeds of tax-exempt bonds; (iv) the determination of the terms of a guaranteed
investment contract takes into account as a significant factor the Issuer's reasonably
expected drawdown schedule for amounts to be invested, exclusive of float and reserves,
(v) the terms of the contract, including collateral security requirements are reasonable,
and (vi) the obligor certifies the administrative costs it is paying to third parties in
connection with the contract To the extent that a broker's commission does not exceed
the lesser of reasonable amount based on what would be charged for the same or
comparable investment acquired with a source of funds other than gross proceeds of tax-
exempt bonds to the present value of annual payments equal to 05 percent of the amount
expected to be invested per year, it may be taken into account in determining yield, with
the effect that it will increase the payments for, or decrease the receipts from,
Investments.
"Final Computation Date" means the day the last Bond that is part of the Bonds
is discharged
"Future Value" or "FV" of a payment or receipt means the amount, determined
by using the economic accrual method (the method of compt~ting yield based on the
compounding of interest at the end of each compounding period), equal to the value of such
payment or receipt at the time it is paid or received (or treated as paid or received), plus interest
assumed to be earned and compounded over the period at a rate equal to the yield on the issue,
using the same compounding interval and financial conventions used to compute yield.
"Governmental Bonds" means bonds which are not Private Activity Bonds
"Gross Proceeds" means Sale Proceeds, Transferred Proceeds, Investment
Proceeds and Replacement Proceeds.
"Issue Price" when used in connection with an issue of publicly offered
obligations (determined separately for obligations included in the issue that are not substantially
identical) is the first price at which at least ten percent of each maturity of each series of the
obligations are sold to the public Bond house, brokers, or similar persons or organizations
acting in the capacity of under~vriters or wholesalers are not included in the definition of
"public" for purposes of the preceding sentence lfthe obligations are privately placed, the Issue
Price is the price paid for them by the first buyer. The Issue Price of obligations that are publicly
541998 1 031862 CERT
offered in a bona fide public offering is determined on the basis of actual facts and reasonable
circumstances existing on the sale date unadjusted for subsequent occurrences.
"Installment Computation Date" means the last day of the fifth Bond Year and
the last day of each succeeding fifth Bond Year (until and excluding the Final Computation
Date) and, if the Issuer so elects, the last day of any Bond Year.
"Investment" means (i) any security (within the meaning of Section 165(g)(2)(A)
or (B), (ii) any obligation (other than tax-exempt obligations which are not "specified private
activity bonds" within the meaning of Section 57(a)(5)(C) of the Code), (iii) any annuity contract
within the meaning of Section 72 of the Code, (iv) any residential real property for family units
not located within the jurisdiction of the Issuer and which is not required to implement a court-
ordered or approved housing desegregation plan or (v) any investment-type property that is held
as a passive vehicle for the production of income, including any prepayment for property or
services 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.
"Issuer" means the Town of Southold, New York.
"Multipurpose Issue" means an issue the proceeds of which are used for two or
more separate purposes determined in accordance with Section 1.148-9(h) of the Regulations.
"Net Sale Proceeds" means sale proceeds less the portion of those sale proceeds
invested in a reasonably required reserve or replacement fund or as part 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 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 2 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
541998 1 031862 CERT
"Plain Par Investment" means an investment that is an obligation that (i)is
issued with original issue discount (or if acquired on a date other than the issue date, acquired
with market discount or premium) equal to not more than 2 percent of the stated redemption
price at maturity, (ii) is issued for a price that does not include Pre-Issuance Accrued Interest,
(iii) bears interest from the issue date at a single stated fixed rate or is a variable rate obligation
under Section 1275 of the Code that pays interest unconditionally payable at least annually, and
(iv) has a lowest stated redemption price not less than its outstanding stated principal amount.
"Present Value" or "PV" means the amount determined by using the following
formula:
PV= FV
i'1
(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 he 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
"Project" means the project referred to in the Resolutions, which is being
financed by the Bonds.
"Qualified 501(c)(3) Bonds" means bonds which meet the definition contained
in Section 145 of the Code.
"Qualified Administrative Costs" mean:
(a) In General. All reasonable, direct administrative costs, other than carrying
costs, such as separately stated brokerage or selling commissions, but not legal and
accounting fees, record keeping, custody, and similar costs General overhead costs and
similar indirect costs of the 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
(b) Regulated Investment Companies and External Commingled Funds. For
publicly offered regulated investment companies (as defined in section 67(c) (2) (B)) and
541998 1 031862 CERT
commingled funds in which the Issuer and any Controlled Entity do not own more than
10 percent of the beneficial interest in the fund, Qualified Administrative Costs are all
reasonable administrative costs, without regard to the limitation on indirect costs
described in the preceding paragraph
(c) GICs. For a guaranteed investment contract, a broker's commission paid
on behalf of either an issuer or the provider is a Qualified Administrative Cost to the
extent that it does not exceed the lesser of reasonable amount based on what would be
charged for the same or comparable investment acquired with a source of funds other
than gross proceeds of tax-exempt bonds to the present value of annual payments equal to
five one-hundredths of one percent (0.05%) of the amount reasonably expected to be
invested per year.
(d) Purpose Investments Qualified Administrative Costs include costs or
expenses paid, directly or indirectly, to purchase, carry, sell, or retire the investment;
costs of issuing, carrying, or repaying the issue, and any underwriters' discount, which
are paid by the conduit borrower, even if such payments merely reimburse the Issuer, but
only to the extent the present value of those payments does not exceed the present value
of the reasonable administrative costs paid by the Issuer using the yield on the Bonds as
the discount rate.
(e) 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 paragraph.
"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 no~t 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 10 percent of proceeds of the
guaranteed portion of the bonds The guarantee fee must not exceed a reasonable arm's-length
charge solely for the transfer of the credit risk A guarantee will not be qualified unless, as of the
date the guarantee is obtained, the issuer reasonably expects that the present value of all fees for
the guarantee will be less than the present value of the expected interest savings on the issue as a
result of the guarantee For this purpose, present value is computed using the yield on the issue,
determined with regard to the guarantee fees, as the discount rate.
"Qualified Hedge" means, with respect to the Bonds, a contract between the Issuer,
and any unrelated party which is entered into primarily to reduce the Issuer's risk of interest rate
changes with respect to the Bonds that meets the requirements of Regulation Section 1.148-4(h).
The contract may be an interest rate swap, an interest rate cap, a futures contract, a forward
541998.1 031862 CER'I
contract, an option or may take another form. A contract will no~t be a Qualified Hedge if it
contains any significant investment element (i e~, an expected return)
"Rebate Amount" means with respect to the Bonds, the amount computed as
described in Section 4.2(c).
"Regulations" means the Income Tax Regulations promulgated under Section
148 of the Code by the Department of the Treasury from time to time including the Regulations
published on June 18, 1993 in the Federal Register, as they may be amended from time to time.
"Replacement Proceeds" means amounts with a sufficiently direct nexus to the
Bonds or Project to conclude that such amounts would have been used for the Project if the
proceeds of the Bonds were not so used to the extent held by or derived from the Issuer or a
controlled entity of the Issuer, including: sinking funds, pledged funds (including negative
pledges), certain other amounts if the term of the issue is longer than necessary for the
governmental purposes of the issue, and a bond-funded working capital reserve unless the issue
qualifies for the TRAN deemed 6-month expenditure exception or the under $5,000,000 small
issuer exception.
"Resolutions" means the bond resolutions of the .Issuer, as referred to in
paragraph 2.1 hereof
"Restricted Working Capital Expenditures" means working capital
expenditures subject to the Gross-Proceeds-spent-last rule in Treas. Reg. Section 1.148-6(d)(3)(i)
that ar~ ineligible for any exception to that rule.
"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 Treas. Reg. Section 1.148-4(b)(4).
Series.
"SLG" means a U.S. Treasury Book Entry Security, State and Local Government
"Spendable Proceeds" means sale proceeds, less the portion of those sale
proceeds invested in a reasonably required reserve or replacement fund under section 148(d) of
the Code and as part ora minor portion under section 148(e) 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
5419981031862 CERT
Bonds of the issue 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 ora Bond, the Value ora Bond and in 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
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 ora variable rate bond, the initial
interest rate on the bond established by the index or other rate setting mechanism is used to
determine the interest payments on that bond
"Value of an Investment" means, as of any date, unless the Investment is
required invested as a restricted yield, for any Investment, Fair Market Value as of that date; for
any fixed rate investment, Present Value on that date; and for any Plain Par Investment, the
outstanding stated principal amount, plus accrued unpaid interest, as of that date. Yield
restricted investments must be valued at Present Value, amounts allocated or that cease to be
allocated to an issue must be allocated at Fair Market Value, except in cases in which such
Nonpurpose Investments are allocated as a result of the Universal Cap or Transferred Proceeds
rules in which case they may be valued at Present Value, and amounts allocated to Transferred
Proceeds may not be valued in excess of the value used for arbitrage restrictions applicable to the
Refunded Issue
"Working Capital Expenditure" means any cost of a type that does not
constitute a Capital Expenditure.
"Yield" means, as of any Computation Date, that discount rate that, when used in
computing the Present Value of(i) all unconditionally payable payments of principal and interest
of or on the bonds included in such fixed yield issue, (ii) all unconditionally payable fees for
Qualified Guarantees and Qualified Hedges on such bonds and (iii) all fees expected to be paid
for Qualified Guarantees and Qualified Hedges, produces an amount equal to the sum of the
Present Value of the aggregate issue Prices of the bonds comprising the issue (determined using
the same discount rate used to determine the Present Value of payments for principal, interest
and Qualified Hedges and Qualified Guarantees) The Yield is computed as of the issue date of
541998 ] 031862 CERT
the fixed yield issue by treating each bond included in the issue that is either subject to
mandatory or contingent early redemption or to certain optional redemption provisions as being
redeemed on its expected early redemption date for an amount equal to its Value on that date. If
a fixed yield bond (i) is subject to optional redemptions within 5 years of its issue date and the
Yield not taking into account the optional redemption is more than 1/8 of 1% above its Yield
assuming the early redemption, (ii) is issued at an Issue Price that exceeds the stated redemption
price at maturity by more than 1/4 of 1% multiplied by the product of the stated redemption price
to maturity and the number of complete years to the first 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
541998 1 031862 CERI'
CERTIFICATE OF TH~ SUPERVISOR WITH RESPECT TO
TIlE OFFICIAL STATEMENT OF THE TOWN OF
SOUTHOLD, NEW YORK, DATED MAY 2, 2008,
DISTRIBUTED 1N CONNECTION WiTH THE SALE OF THE
$8,850,000 PUBLIC IMPROVEMENT SERIAL BONDS-2008
I, SCOTT A. RUSSELL, Supervisor of the Town of Southold, in the County of
Suffolk, New York (the "Town"), HEREBY CERTIFY that as of May 2, 2008, the date of the
Official Statement of the Town prepared and distributed in connection with the sale of the
$8,850,000 Public Improvement Serial Bonds-200g (the "Bonds"), and at all times subsequent
thereto, up to and including the date of the delivery of the Bonds on May 29, 2008, the attached
Official Statement did not and does not contain any untrue statement 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 29, 2008
(SEAL)
IN WITNESS WHEREOF,
I have hereunto set my hand and affixed the
corporate seal of the Town as of the 29th day of
May, 2008
Supervisor
5419981 031862 CERT
ACCOUNTING & FINANCE DEPT.
John A. Cushman, Town Comptroller
Telephone (631) 765-4333
Fax (631 ) 765-1366
E-mail: accounting @ town.southold.ny.us
TOWN HALL ANNEX
54375 Main Road
P.O. Box 1179
$outhold, NY 11971-0959
http://southoldtown.norlhfork.neff
TOWN OF SOUTHOLD
OFFICE OF THE SUPERVISOR
May 6, 2008
Gerard Fernandez, Jr.
Hawkins, Delafield & Wood
One Chase Manhattan Plaza
New York, NY 10005
Re: Town of Southold, NY
$8,850,000 Public Improvement Serial Bonds -- 2008
Your file designations: 2615/31862
DearJerry:
Pursuant to your letter of May 2, 2008 regarding the above referenced serial
bonds, enclosed please find the executed Certificate of Determination executed
by Supervisor Scott Russell and sealed and certified by Town Clerk Elizabeth A.
Neville.
Your assistance regarding this matter is appreciated. Please contact me should
you require any additional information.
CC:
Very truly yours,
Elizabeth A. Neville, Town Clerk./
Robert Sikora, Munistat Services, Inc.
CERTIFICATE OF DETERMiNATION BY THE SUPERVISOR
RELATIVE TO THE TERMS, FORM AND DETAILS OF SALE
AND ISSUANCE OF $8,850,000 PUBLIC IMPROVEMENT
SERIAL BONDS-2008 OF THE TOWN OF SOUTHOLD, NEW
YORK, AND PROVIDiNG FOR THE PUBLIC SALE
THEREOF
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, by the Town Board of the Town,
pursuant to the bond resolutions duly adopted and as referred to herein and subject to the
limitations prescribed in said bond resolutions, I have made the following determinations:
1. Authorization, Principal Amount, Maturity Schedule and Designation.
(a)
resolution entitled:
Of the $22,500,000 serial bonds of the Town authorized pursuant to the
"Bond Resolution of the Town of Southold, New York, adopted
February 27, 2007, authorizing the acquisition of interests or rights
in real property, including, but not limited to, development rights
in open agricultural lands, within said Town, for the preservation
of open spaces and areas and to maintain and enhance the
conservation of natural resources, provided, however, that no such
interests or rights in real property shall be acquired until all
relevant provisions of the State Environmental Quality Review Act
have been complied with and a final declaration as to
environmental impact has been duly declared, stating the estimated
maximum cost thereof is $22,500,000, appropriating said amount
therefor, authorizing the issuance of $22,500,000 serial bonds of
said Town to finance said appropriation and stating that land
installment purchase obligations are authorized to be issued
pursuant to this Bond Resolution,"
duly adopted by the Town Board on the date therein referred to, $7,500,000 serial bonds shall be
issued (no bond anticipation notes having been heretofore issued), and shall mature on May 15 in
the principal amounts of $275,400 in each of the years 2009 to 2011, inclusive; $296,600 in each
541998.1 031862 CERT
of the years 2012 to 2014, inclusive; $317,800 in each of the years 2015 to 2017, inclusive;
$339,000 in each of the years 2018 to 2020, inclusive; $360,200 in each of the years 2021 to
2023, inclusive; $381,300 in each of the years 2024 to 2027, inclusive; and $402,600 in each of
the years 2028 to 2030, inclusive.
(b) The $1,350,000 serial bonds of the Town authorized pursuant to the
resolution entitled:
"Bond Resolution of the Town of Southold, New York ("Town"), adopted
February 26, 2008, authorizing the Town to (a) acquire from the Southold
Union Free School District, for use as a Town Recreation Center and for
other Town purposes, the certain parcel of land in the Town, containing
4.3 aces more or less, known as the "Peconic School Property," located at
1170 Peconic Lane, and designated on t, he Suffolk County Land and Tax
Map as 1000-075.00-01.00-013.000, including the Peconic School
Building and all other buildings and improvements thereon, at the
estimated maximum cost of $1,100,000, and (b) construct improvements
to such Peconic School Building and all other buildings, at the estimated
maximum cost of $250,000; stating the estimated total cost thereof is
$1,350,000; appropriating said amount therefor and authorizing the
issuance of $1,350,000 serial bonds of said Town to finance said
appropriation.,"
duly adopted by the Town Board on the date therein referred to, shall be issued (no bond
anticipation notes having been heretofore issued), and shall mature on May 15 in the principal
amounts of $49,600 in each of the years 2009 to 2011, inclusive; $53,400 in each of the years
2012 to 2014, inclusive; $57,200 in each of the years 2015 to 2017, inclusive; $61,000 in each of
the years 2018 to 2020, inclusive; $64,800 in each of the years 2021 to 2023, inclusive; $68,700
in each of the years 2024 to 2027, inclusive; and $72,400 in each of the years 2028 to 2030,
inlusive.
(c) Said $7,500,000 bond and said $1,350,000 bond shall be combined for the
purposes of sale and issuance into a single bond issue in the aggregate principal amount of
541998.1031862CERT
$8,850,000 (the "Bonds"), and each of said bonds shall be designated "PUBLIC
IMPROVEMENT SERIAL BOND-2008." Said Bonds shall mature on May 15 in the aggregate
principal amounts of $325,000 in each of the years 2009 through 2011, inclusive; $350,000 in
each of the years 2012 through 2014, inclusive; $375,000 in each of the years 2015 through
2017, inclusive; $400,000 in each of the years 2018 through 2020, inclusive; $425,000 in each of
the years 2021 through 2023, inclusive; $450,000 in each of the years 2024 through 2027,
inclusive; and $475,000 in each of the years 2028 through 2030, inclusive.
2. Issue Date. The Bonds shall be dated May 15, 2008. The date of each Bond
shall appear on the face thereof under the caption "Date of Original Issue," and each Bond shall
bear interest from such date.
3. Interest Rate, and Dates and Medium of Payment. The Bonds shall bear
interest from their date at a rate or rates per annum necessary for the Town to sell said Bonds, the
bidder to name a rate or rates of interest in multiples of one-hundredth of 1% or multiples of one-
eighth of 1% which the Bonds are to bear, and said bidder may state different rates of interest for
Bonds maturing in different calendar years; provided, however, that (i) only one rate of interest
may be bid for all Bonds maturing in any one calendar year, and (ii) variations in rates of interest
so bid shall be in ascending progression in order of maturity so that the rate of interest on Bonds
maturing in any particular calendar year shall not be less than the rate of interest applicable to
Bonds maturing in any prior calendar year. The exact rate or rates shall be determined by the
undersigned Supervisor upon the receipt of bids therefor, as hereinafter set forth, payable on
November 15, 2008 and semiannually thereafter on May 15 and November 15 in each year until
maturity, payable in any coin or currency of the United States of America which at the time of
payment is legal tender for the payment of public and private debts. Interest shall be paid by
541998.1 031862 CERT
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 shown upon the books of the Town kept for
that purpose at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road,
Southold, New York (the "Fiscal Agent"), as of the close of business on the last day of the month
preceding each such interest payment date.
4. Bonds Subiect to Prior Redemption. The Bonds maturing on or before May
15, 2018 will not be subject to redemption prior to maturity. The Bonds maturing on or after
May 15, 2019 will be subject to redemption prior to maturity, at the option of the Town, on May
15, 2018 and thereafter on any date, in whole or in part, and if in part, in any order of their
maturity and in any amount within a maturity (selected by lot within a maturity), at par, plus
accrued interest to the date of redemption.
The Bonds shall be redeemable prior to maturity upon the giving of notice which
identifies the bonds to be redeemed, by mailing such notice to the registered holders thereof at
their respective addresses as shown upon the registration books of the Fiscal Agent at least 30
days prior to the dates set for any such redemption. If notice of redemption shall have been
given as aforesaid, the Bonds so called for redemption shall become due and payable at the
applicable redemption price on the redemption date designated in such notice, and interest on
such Bonds shall cease to accrue from and after such redemption date.
5. 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 numbered separately and consecutively upward with the letter "R" prefixed
thereto, and shall be transferable and exchangeable as provided herein.
541998.1 031862 CERT
6. Book-Entry System. The Bonds when issued shall be (i) registered in the
name of Cede & Co., as nominee of The Depository Trust Company, 55 Water Street, 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 of
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 interest 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 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.
541998.1 031862 CERT
7. Discontinuance of Book-Entry System. In the event that (a) DTC determines
to discontinue providing its service ~vith 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 certificates shall be delivered to the beneficial owners upon registration of
the Bonds held in the beneficial owners' names. After such 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 Determination which will set forth the terms, form
and details of issuance of such bond certificates.
8. 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 6 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.
9. Execution of Bonds. The Bonds shall be executed in the name of the To~vn by
the manual signature of the Supervisor, and shall have the corporate seal of the Town, or a
facsimile thereof, affixed, imprinted, impressed or otherwise reproduced thereon and attested by
the manual signature of the Town Clerk.
10. Transfer of Bonds. Each Bond shall be transferable only upon the books of
the Town, which shall be kept for such purposes at the office of the Fiscal Agent, by the
registered owner thereof in person or by his attorney duly authorized in writing, upon surrender
541998.1 031862 CERT
thereof together with a written instrument of transfer 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 the name of the transferee a new Bond or Bonds of the same
aggregate principal amount and maturity as the surrendered Bond. The Town and 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 purposes of receiving payment of, or on account of, the principal of and interest on
such Bond and for all other purposes, and all such payments so made to any such registered
owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon
such Bond to the extent of the sum or sums so paid, and neither the Town nor the Fiscal Agent
shall be affected by any notice to the contrary.
11. 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 the
Fiscal Agent shall deliver Bonds in accordance with the provisions hereofi 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 Town or the Fiscal Agent may make a charge
sufficient to reimburse it 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 last day of the month preceding an interest
payment date and such interest payment date.
541998.1 031862 CERT
12. Sale of Bonds. The Bonds shall be sold upon sealed proposals to be received
by the undersigned Supervisor on May 13, 2008, at 11:00 o'clock A.M. (Prevailing Time), at the
offices of Munistat Services, Inc., 12 Roosevelt Avenue, Port Jefferson Station, New York,
pursuant to the Notice of Sale, in substantially the form as provided in Appendix A, which shall
be published at least once in (a) "THE BOND BUYER," published in the City of New York, 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 Suffolk County, or, if only one bank is located in such
County, then to such bank and to at 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 Bonds shall be delivered to the purchaser thereof on
or about May 29, 2008, upon receipt by the Town of the purchase price therefor in Federal
Funds, and deposit of the Bonds with DTC to be held in trust until maturity.
13. Form of Bonds. Said Bonds shall be in substantially the form set forth in
Appendix B hereto.
14. SEC Rule 15c2-12. In order to assist bidders in complying with Rule 15c2-
12 promulgated by the Securities and Exchange Commission and as part of the Town's
contractual obligation arising from its acceptance of the successful bidder's proposal, at the time
of the delivery of the Bonds the Town will provide an executed copy of its "Undertaking to
Provide Continuing Disclosure" in substantially the form set forth in Appendix C hereto. 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 to (i) each nationally
541998.1 031862 CERT
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.
1N WITNESS WHEREOF, I have hereunto set my hand as of the ~.4~ day of
May, 2008.
Supervisor
541998.1 031862 CERT
CLERK'S CERTIFICATE
I, ELIZABETH A. NEVILLE, Town Clerk of the Town of Southold, in the
County of Suffolk, New York, HEREBY CERTIFY that I have compared the foregoing copy of
the Certificate of Determination executed by the Supervisor and the same is a tree and complete
copy of the Certificate filed with said Town in the office of the Town Clerk; 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 resolutions cited in
said Certificate has been adopted by said Town Board.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal of said Town this 2nd day of May,
2008.
(SEAL)
Town'Clerk
APPENDIX A
TOWN OF SOUTHOLD,
IN THE COUNTY OF SUFFOLK
NEW YORK
NOTICE OF $8,850,000 BOND SALE
SEALED PROPOSALS will be received by the Supervisor, Town of Southold,
New York, at the offices of Munistat Services, Inc., 12 Roosevelt Avenue, Port Jefferson Station,
New York (Telephone No. 631-331-8888, Fax No. 631-331-8834) on Tuesday, May 13, 2008,
until 11:00 o'clock A.M. (Prevailing Time) at which time they will be publicly opened and
announced, for the purchase of $8,850,000 PUBLIC IMPROVEMENT SERIAL BONDS-
2008 (the "Bonds") due on May 15, as follows:
$325,000 in the year 2009;
$325,000 in the year 2010;
$325,000 in the year 2011;
$350,000 in the year 2012;
$350,000 in the year 2013;
$350,000 in the year 2014;
$375,000 in the year 2015;
$375,000 in the year 2016;
$375,000 in the year 2017;
$400,000 in the year 2018;
$400,000 in the year 2019;
$400,000 in the year 2020;
$425,000 in the year 2021;
$425,000 in the year 2022;
$425,000 in the year 2023;
$450,000 in the year 2024;
$450,000 in the year 2025;
$450,000 in the year 2026;
$450,000 in the year 2027;
$475,000 in the year 2028;
$475,000 in the year 2029; and
$475,000 in the year 2030.
The Town reserves the right to change the time and/or date for the opening of
sealed proposals. Notice of any such change shall be provided not less than 24 hours prior to the
time set forth above for the opening of sealed proposals by means of a supplemental notice of
sale to be transmitted over the Thomson Municipal News wire.
The Bonds wilt be dated May 15, 2008, and will bear interest at the rate or rates
per annum specified by the successful bidder therefor in accordance herewith, payable
November 15, 2008 and semiannually thereafter on May 15 and November 15 in each year until
maturity.
The Bonds maturing on or before May 15, 2018 will not be subject to redemption
prior to maturity. The Bonds maturing on or after May 15, 2019 will be subject to redemption
prior to maturity, at the option of the Town, on May 15, 2018 and thereafter on any date, in
~vhole or in part, and if in part, in any order of their maturity and in any amount within a maturity
(selected by lot within a maturity), at par, plus accrued interest to the date of redemption.
The Bonds shall be redeemable prior to maturity upon the giving of notice which
identifies the bonds to be redeemed, by mailing such notice to the registered holders thereof at
541998.1 031862 CERT
their respective addresses as shown upon the registration books of the Fiscal Agent at least 30
days prior to the dates set for any such redemption. If notice of redemption shall have been
given as aforesaid, the Bonds so called for redemption shall become due and payable at the
applicable redemption price on the redemption date designated in such notice, and interest on
such Bonds shall cease to accrue from and after such redemption date.
The Bonds will be issued in the form of fully registered Bonds, in denominations
corresponding to the aggregate principal amounts due in each year of maturity. As a condition to
delivery of the Bonds, the successful bidder will be required to cause such Bond certificates to be
(i) registered in the name of Cede & Co., as nominee of The Depository Trust Company, 55
Water Street, New York, New York ("DTC"), and (ii) deposited with DTC to be held in trust
until 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 pumhasers in the Bonds. Individual purchases of
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.
Principal of and interest on the Bonds will be payable by the Town or its agent by wire transfer
or in clearinghouse funds to 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.
Each proposal must be a bid of not less than $8,850,000 for all of the Bonds and
must state in a multiple of one-hundredth of 1% or a multiple of one-eighth of 1%, the rate or
rates of interest per annum which the Bonds are to bear and may state different rates of interest
for Bonds maturing in different calendar years; provided, however, that (i) only one rate of
interest may be bid for all Bonds maturing in any one calendar year, and (ii) variations in rates of
interest so bid shall be in ascending progression in order of maturity so that the rate of interest on
Bonds maturing in any particular calendar year shall not be less than the rate of interest
applicable to Bonds maturing in any prior calendar year. Each proposal must be enclosed in a
sealed envelope and should be marked on the outside "Proposal for Bonds" and be addressed as
follows to the Sale Officer, viz.: Hon. Scott A. Russell, Supervisor, Town of Southold, New
York, c/o Munistat Services, Inc., 12 Roosevelt Avenue, Port Jefferson Station, New York.
As a condition precedent to the consideration of his proposal, a good faith deposit
(the "Deposit") in the form of a certified or cashier's check or a financial surety bond in the
amount of $177,000.00 payable to the order of the Town of Southold is required for each bid to
be considered. If a check is used, it must be drawn upon an incorporated bank or trust company
to the order of"Town of Southold, New York" and must accompany the bid. Ifa surety bond is
used, it must be from an insurance company licensed to issue such a bond in the State of New
541998.1 031862 CERT
York, the claims paying ability of which is rated in the highest rating category by at least two
nationally recognized statistical rating organizations, and such bond must be submitted to the
Town or its Financial Advisor prior to the opening of the bids. The financial surety bond must
identify each bidder whose deposit is guaranteed by such financial surety bond. If the bonds are
to be awarded to a bidder utilizing a financial surety bond, then the purchaser is required to
submit its Deposit to the Town in the form of a certified or cashier's check, or a wire transfer in
such amount, as instructed by the Town or its Financial Advisor, not later than 3:00 o'clock P.M.
(Prevailing Time) on the next business day following the award. If such deposit is not received
by that time, the financial surety bond may be drawn by the Town to satisfy the Deposit
requirement. No interest on the Deposit will accrue to the Purchaser. The Deposit will be
applied to the purchase price of the Bonds.
.The Bonds will be awarded and sold to the bidder complying with the terms of
sale and offering to purchase the Bonds at the lowest net interest cost, and if two or more such
bidders offer the same lowest net interest cost, then to one of said bidders selected by the Sale
Officer by lot from among all said bidders. The successful bidder must also pay an amount equal
to the interest on the Bonds, if any, accrued to the date of payment of the purchase price. No
interest will be allowed on the good faith deposit.
When the successful bidder has been ascertained, the Sale Officer will promptly
return all deposits made to the persons making the same, except the deposit made by such bidder.
Award of the Bonds to the successful bidder, or rejection of all bids, is expected to be made
promptly after opening of the bids, hut the successful bidder may not withdraw his proposal until
after 1:30 o'clock P.M. (Prevailing Time) of the day of such bid-opening and then only if such
award has not been made prior to the withdrawal. The successful bidder will be promptly
notified of the award to him, and if he refuses or neglects to pay the agreed price for the Bonds
less the amount deposited by him, the amount deposited by him shall be forfeited to and retained
by the Town as liquidated damages for such neglect or refusal.
The right is reserved to reject all bids and any bid not complying with the terms of
this notice will-be rejected.
If the Bonds qualify for issuance of any policy of municipal bond insurance or
commitment therefor at the option of a bidder, the purchase of any such insurance policy or the
issuance of any such commitment therefor shall be at the sole option and expense of such bidder
and any increased costs of issuance of the Bonds resulting by reason of the same, unless
otherwise paid, shall be paid by such bidder. Any failure of the Bonds to be so insured or of any
such policy of insurance to be issued, shall not constitute cause for a failure or refusal by the
purchaser of the Bonds to accept delivery of and pay for said Bonds in accordance with the terms
hereof.
The proceeds of the Bonds will be used to provide original funds for open space
preservation and the acquisition of land and building improvements.
The Bonds are general obligations of the Town. There is no limitation, either as
to rate or amount, upon ad valorem taxes upon taxable real property in the Town which may be
required to pay the Bonds and the interest thereon. The State Constitution requires the Town to
541998.1 031862 CER]'
pledge its faith and credit for the payment of the principal of the Bonds and the interest thereon
and to make annual appropriations for the mounts required for the payment of such interest and
the redemption of the Bonds. The State Constitution also provides that if at any time the
appropriating authorities fail to make the required appropriations for the annual debt service on
the Bonds and certain other obligations of the Town, a sufficient sum shall be set apart from the
first revenues thereafter received and shall be applied for such purposes, and also that the fiscal
officer of the Town may be required to set apart and apply such revenues as aforesaid at the suit
of any holder of such obligations.
The population of the Town is estimated to be 22,852. The debt statement to be
' filed pursuant to Section 109.00 of the Local Finance Law in connection with the sale of the
Bonds, prepared as of May 2, 2008, shows the average full valuation of real property subject to
taxation by the Town to be $9,238,966,836, its debt limit to be $646,727,678, and its total net
indebtedness (inclusive of the Bonds) to be $37,499,300. The indebtedness to be evidenced by
the sale of the Bonds will increase the total net indebtedness of the Town by $8,850,000.
The Bonds will be delivered to DTC and shall be paid for in Federal Funds on or
about May 29, 2008, at such place in New York City, and on such business day and at such hour,
as the Sale Officer shall fix on three business days' notice to the successful bidder, or at such
other place and time as may be agreed upon with the successful bidder. The deposit of the
Bonds with DTC under a book-entry system requires the assignment of CUSIP numbers prior to
delivery. It shall be the responsibility of the successful bidder to obtain CUSIP numbers for the
Bonds prior to delivery and the Town will not be responsible for any delay occasioned by the
inability to deposit the Bonds with DTC due to the failure of the successful bidder to obtain such
numbers and to supply them to the Town in a timely manner. All expenses in relation to the
printing of CUSIP numbers on the Bonds shall be paid for by the Town; provided, however, that
the CUSIP Service Bureau charge for the assignment of said numbers shall be the responsibility
of and shall be paid for by the successful bidder.
The successful bidder will be furnished without cost with the approving opinion
of the law firm of Hawkins Delafield & Wood LLP, New York, New York, to the effect that the
Bonds are valid and legally binding general obligations of the Town for which the Town has
validly pledged its faith and credit and, unless paid from other sources, all the taxable real
property within the Town is subject to the levy of ad valorem real estate taxes to pay the Bonds
and interest thereon without limitation of rate or amount. Said opinion shall also contain further
statements to the effect that (a) the enforceability 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, and (b) said law firm has not been requested to
examine or review and has not examined or reviewed the accuracy or sufficiency of the Official
Statement, or any additional proceedings, reports, correspondence, financial statements or other
documents, containing financial or other information relative to the Town which have been or
may be furnished or disclosed to purchasers of the Bonds, and expresses no opinion with respect
to such financial statements or other information or the accuracy or sufficiency thereof.
The successful bidder may at his option refuse to accept the Bonds if prior to their
delivery the certificate referred to in the following paragraph in form and tenor satisfactory to
Bond Counsel is not delivered or if any income tax law of the United States of America is
541998.1031862CERT
hereafter enacted which shall provide that the interest thereon is taxable, or shall be taxable at a
future date, for federal income tax purposes, and in such case the deposit made by him will be
returned and he will be relieved of his contractual obligations arising from the acceptance of his
proposal.
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. As part of the Town's contractual obligation arising from its acceptance of the successful
bidder's proposal, the Town will furnish the successful bidder concurrently with the delivery of
the Bonds with its Arbitrage and Use of Proceeds Certificate, which will contain provisions and
procedures relating to compliance with the requirements of the Code and a certification 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.
Under the Code, interest on the Bonds is to be taken into account in the
computation of certain taxes that may be imposed with respect to corporations, including without
limitation, the alternative minimum tax and the foreign branch profits tax. In addition, under the
Code, an individual who owns the Bonds may be required to include in gross income a portion of
his or her Social Security or railroad retirement payments and interest on the Bonds will be
included as disqualified income when computing the earned income credit. Bondholders should
consult their tax advisors with respect to the computation of alternative minimum tax or foreign
branch profits tax liability, the earned income credit, or the inclusion of Social Security or other
retirement payments in gross income.
The opinion of Bond Counsel shall also contain further statements to the effect
that, under existing statutes and court decisions and assuming continuing compliance with the
Arbitrage and Use of Proceeds Certificate, (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 its opinion, Bond Counsel shall rely
on certain representations, certifications of fact, and statements of reasonable expectations made
by the Town in connection with the Bonds, and shall assume compliance by the Town with
certain ongoing certifications in the Arbitrage and Use of Proceeds Certificate to comply 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, such opinion shall state that, under existing
statutes, interest on the Bonds is exempt from New York State and New York City personal
income taxes.
Each successful bidder also must submit to the Town a certificate (the
"Reoffering Price Certificate"), satisfactory to Bond Counsel, prior to the delivery of the Bonds,
which states that:
(a)(i) on the date of award, such successful bidder made a bona fide public
offering of all Bonds of all maturities at initial offering prices corresponding to the prices
541998.1 031862 CERT
or yields indicated in the information furnished in connection with the successful bid, and
(ii) as of such date, 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 indicated in the information furnished with the successful bid (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
(b) such successful bidder has purchased the Bonds for its own account and not
with a view to distribution or resale and not in 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 Reoffering 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 offering
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.
The Bonds will not be designated by the Town as "qualified tax-exempt
obligations" pursuant to the provisions of Section 265 of the Code.
The Official Statement is in a form "deemed final" by the Town for the purposes
of Securities and Exchange Commission Rule 15c2-12 but may be modified or supplemented as
noted below. In order to assist bidders in complying with Rule 15c2-12 and as part of the Town's
contractual obligation arising from its acceptance of the successful bidder's proposal, at the time
of the delivery of the Bonds the Town will provide an executed copy of its "Undertaking to
Provide Continuing Disclosure." 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 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.
The Town will provide a reasonable number of Official Statements to the
successful bidder within five (5) business days following receipt of a written request therefor
made to the Town and its financial advisor. Such request may specify the applicable (a) offering
price(s), (b) selling compensation, (c) rating(s), (d) credit enhancement and (e) identity and
complete name of such bidder and any participating underwriters, and if so, the Official
Statement will be modified or supplemented by the information so specified. Neither the Town
nor its financial advisor shall be liable in any manner for any delay, inaccuracy, or omission on
the part of the successful bidder with respect to such request, nor shall the Town's failure, as a
result thereof, to provide the Official Statement (whether or not modified or supplemented)
within the above time period, constitute cause for a failure or refusal by such bidder to accept
. delivery of and pay for the Bonds in accordance with the terms hereof.
The obligations hereunder to deliver or accept the Bonds pursuant hereto shall be
conditioned on the availability to the successful bidder and delivery at the time of delivery of the
Bonds of said approving opinion; of cerfificates in form and tenor satisfactory to said law firm
evidencing the proper execution and delivery of the Bonds and receipt of payment therefor and
541998.1 031862 CERT
including a statement, dated as of the date of such delivery, to the effect that there is no litigation
pending or (to the knowledge of the signer or signers thereof) threatened relating to the Bonds;
and of the several certificates as described in the Official Statement under the heading
"Documents Accompanying Delivery of the Bonds." A copy of said approving opinion will
appear on the Bonds.
Copies of the Notice of Sale and the Official Statement may be obtained upon
request from the offices of Munistat Services, Inc., 12 Roosevelt Avenue, Port Jefferson Station,
New York I 1776, telephone number (631) 331-8888.
Dated: May 2, 2008
SCOTT A. RUSSELL
Supervisor
and Chief Fiscal Officer
541998.1 031862 CERT
PROPOSAL FOR BONDS
May 13, 2008
Hon. Scott A. Russell
Supervisor
Town of Southold, New York
c/o Munistat Services, Inc.
12 Roosevelt Avenue
Port Jefferson Station, New York
Dear Mr. Russell:
Subject to the provisions and in accordance with the terms of the annexed Notice of Sale dated May 2, 2008, which is
hereby made a part of this Proposal, we offer to purchase all of the $8,850,000 Public Improvement Serial Bonds-2008 of the
Town of Southold, New York, described in said Notice of Sale, and to pay therefor the price of $8,850,000 plus
$ , plus interest, if any, accrued on said Bonds from their date to the date of
their delivery, provided that the Bonds maturing in the several years set forth below shall bear interest from their date until
maturity at the respective rates per annum stated in the following table:
Bonds maturing in the year 2009, at
Bonds maturing in the year 2010, at
Bonds maturing in the year 2011, at
Bonds maturing in the year 2012, at
Bonds maturing in the year 2013, at
Bonds maturing in the year 2014, at
Bonds maturing in the year 2015, at
Bonds maturing in the year 2016, at
Bonds maturing in thc year 2017, at
Bonds maturing in the year 2018, at
Bonds maturing in the year 2019, at
% Bonds maturing in the year 2020, at %
% Bonds maturing in the year 2021, at %
% Bonds maturing in the year 2022, at %
% Bonds maturing in the year 2023, at %
% Bonds maturing in the year 2024, at %
% Bonds maturing in the year 2025, at %
% Bonds maturing in the year 2026, at %
% Bonds maturing in the year 2027, at %
% Bonds maturing in the year 2028, at %
% Bonds maturing in the year 2029, at %
% Bonds maturing in the year 2030, at %
Check one of the following:
We enclose herewith a certified or cashier's check in the sum of $177,000, made payable to the order of the Town of
Southold, New York, which check is to be returned to the undersigned if the bid is not accepted; otherwise to be applied as part
payment for the Bonds, or to be retained by the Town as and for liquidated damages in case we should not take up and pay for the
Bonds in accordance with the terms of this Proposal.
We are an authorized principal of a Financial Surety Bond with respect to this bid as described in the Notice of Sale.
The following is our computation of the net interest cost, made as provided in the above-mentioned Notice of Sale, but not
constituting any part of the foregoing Proposal for the purchase of $8,850,000 bonds under the foregoing Proposal:
Gross Interest ............................................................................................... $
Less Premium Bid Over Par ......................................................................... $
Net Interest Cost ...........................................................................................
Net Interest Rate .......................................................................................... %
(four decimals)
By:
Telephone ( )
Return of the good faith check on May 13, 2008, in the amount of
$177,000 from the Town of Southold, New York, is hereby
acknowledged:
541998.1 031862 CERT
APPENDIX B
REGISTERED REGISTERED
NO. R- $
UNITED STATES OF AMERICA
STATE OF NEW YORK
COUNTY OF SUFFOLK
TOWN OFSOUTHOLD
PUBLIC IMPROVEMENT SERIAL BOND-2008
MATURITY DATE
May 15,
INTEREST DATE OF ORIGINAL CUSIP
RATE ISSUE NUMBER
May 15, 2008
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 OXVNER named above, or registered assigns, on the MATURITY
DATE (stated above), the PRiNCIPAL SUM (stated above) upon presentation and surrender of
this bond at the office of the Town Clerk, Town of Southold, Town Hall, 53095 Main Road,
Southold, New York, as fiscal agent (herein called "Fiscal Agent"), or any successor thereto, and
to pay interest on such principal sum from May 15, 2008 or from the most recent interest
payment date to which interest has been paid at the iNTEREST RATE (stated above), payable
November 15, 2008 and semiannually thereafter on May 15 and November 15 in each year until
maturity. Interest hereon shall be payable by wire transfer or clearinghouse funds by the Town
or its agent on each interest payment date to the registered owner hereof at his address as it
appears on the registration books of the Town maintained by the Fiscal Agent or at such other
address as may be furnished in writing by such registered owner to the Fiscal Agent as of the
close of business on the last day of the month preceding each interest payment date. The
principal of and interest on this bond are payable in any coin or currency of the United States of
America which, at the date of payment, is legal tender for the payment of public and private
debts; provided, however, that interest on this fully registered bond shall be paid by wire transfer
or clearinghouse funds as set forth above.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH HEREiN.
541998.1 031862 CERT
The faith and credit of such Town are hereby irrevocably pledged to the punctual
payment of the principal of and interest on this bond according to its terms.
It is hereby certified and recited that all conditions, acts and things required by 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 WItEREOF, 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 to be
impressed hereon and attested by the manual signature of its Town Clerk.
TOWN OFSOUTHOLD
(SEAL)
ATTEST:
Town Clerk
SPECIMEN
By.
Supervisor
541998.1 031862 CERT
Town of Southold, New York
Public Improvement Serial Bond-2008
This bond is one of an authorized combined issue, the aggregate principal amount
of which is $8,850,000, the bonds of which are of like tenor, except as to number, denomination,
interest rate and maturity, and is issued pursuant to the provisions of the Local Finance Law,
constituting Chapter 33-a of the Consolidated Laws of the State of New York (the "Law"), two
bond resolutions duly adopted by the Town Board on their respective dates, authorizing the
issuance of serial bonds of the Town to finance open space preservation and the acquisition of
land and construction of building improvements, and the Certificate of Determination executed
by the Supervisor as of May 2, 2008, determining the terms, form and details of issuance of said
$8,850,000 serial bonds (the "Bonds") and providing for the public sale thereof (the "Certificate
of Determination").
The Bonds are issuable in the form of registered bonds without coupons in
denominations of $5,000, or any integral multiple thereof.
This Bond is transferable or exchangeable, as provided in the Certificate of
Determination, only upon the books of the Town kept for that purpose at the office of the Fiscal
Agent, by the registered owner hereof in person, or by his attorney duly authorized in writing,
upon the surrender of this Bond together with a written instrument of transfer or exchange
satisfactory to the Fiscal Agent duly executed by the registered owner or his attorney duly
authorized in writing, and thereupon a new Bond or Bonds, in the same aggregate principal
amount and of the same maturity, shall be issued to the transferee or the registered owner in
exchange therefor as provided in the Certificate of Determination and upon the payment of the
charges, if any, therein prescribed.
The Bonds maturing on or before May 15, 2018 will not be subject to redemption
prior to maturity. The Bonds maturing on or after May 15, 2019 will be subject to redemption
prior to maturity, at the option of the Town, on May 15, 2018 and thereafter on any date, in
whole or in part, and if in part, in any order of their maturity and in any amount within a maturity
(selected by lot within a maturity), at par, plus accrued interest to the date of redemption.
The Bonds shall be redeemable prior to maturity upon the giving of notice which
identifies the bonds to be redeemed, by mailing such notice to the registered holders thereof at
their respective addresses as shown upon the registration books of the Fiscal Agent at least 30
days prior to the dates set for any such redemption. If notice of redemption shall have been
given as aforesaid, the Bonds so called for redemption shall become due and payable at the
applicable redemption price on the redemption date designated in such notice, and interest on
such Bonds shall cease to accrue from and after such redemption date.
541998.1031862CERT
Hawkins Delafield & Wood LLP
One Chase Manhattan Plaza
New York, New York 10005
The Town Board of
the Town of Southold,
in the County of Suffolk, New York
Ladies and Gentlemen:
We have examined a record of proceedings relating to the authorization, sale and
issuance of $8,850,000 Public Improvement Serial Bonds-2008 (the "Bonds"), of the Town of
Southold (the "Town"), in the County of Suffolk, New York.
The Bonds are issued pursuant to the provisions of the Local Finance Law,
constituting Chapter 33-a of the Consolidated Laws of the State of New York, two bond
resolutions duly adopted by the Town Board on their respective dates, authorizing the issuance
of serial bonds of the Town to finance open space preservation and the acquisition of land and
construction of building improvements, and the Certificate of Determination executed by the
Supervisor as of May 2, 2008, determining the terms, form and details of issuance of said
$8,850,000 serial bonds and providing for their public sale.
The Bonds are dated May 15, 2008, mature on May 15 in the principal amounts in
each of the following years, and bear interest at the respective rates per annum payable
November 15, 2008 and semiannually thereafter on May 15 and November 15 in each year until
maturity, as set forth below:
Year of Principal Interest Year of Principal Interest
Maturity Amount Rate Maturity Amount Rate
2009 $325,000 % 2020 $400,000
2010 325,000 2021 425,000
2011 325,000 2022 425,000
2012 350,000 2023 425,000
2013 350,000 2024 450,000
2014 350,000 2025 450,000
2015 375,000 2026 450,000
2016 375,000 2027 450,000
2017 375,000 2028 475,000
2018 400,000 2029 475,000
2019 400,000 2030 475,000
541998.1 031862 CERT
The Bonds maturing on or before May 15, 2018 will not be subject to redemption
prior to maturity. The Bonds maturing on or after May 15, 2019 will be subject to redemption
prior to maturity, at the option of the Town, on May 15, 2018 and thereafter, on any date, in
~vhole or in part, at par, and subject to notice and other conditions as stated in the Bonds.
The Bonds are issued only in fully registered form without interest coupons, in the
name of Cede & Co., as registered owner and nominee for The Depository Trust Company, an
automated depository for securities and clearinghouse for securities transactions which will
maintain a book-entry system for recording the ownership interests in the Bonds. Only one Bond
will be initially issued for each maturity in the aggregate principal amount of such maturity.
Purchases of ownership interests in the Bonds will be made in book-entry form in denominations
of $5,000 or any integral multiple thereof.
In our opinion, said Bonds are valid and legally binding general obligations of the
Town for which the Town has validly pledged its faith and credit and, unless paid from other
sources, all the taxable real property within the Town is subject to the levy of ad valorem real
estate taxes to pay the Bonds and interest thereon without limitation of rate or amount. The
enforceability of rights or remedies with respect to such Bonds may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights or remedies heretofore or hereafter enacted.
The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain
requirements that must be met subsequent to the issuance and delivery of the Bonds in order that
interest on the Bonds be and remain excludable from gross income under Section 103 of the
Code. The Supervisor of the Town, in executing the Arbitrage and Use of Proceeds Certificate,
has certified to the effect that the Town will comply with the provisions and procedures set forth
therein and that it will do and perform 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.
541998.1 031862 CERT
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.
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 humbered Bond of said issue and, in our
opinion, the form of said Bond and its execution are regular and proper.
This opinion is issued as of the date hereof, and we assume no obligation to
update, revise or supplement this opinion to reflect any action hereafter taken or not taken, or any
facts or circumstances, or changes in law or in interpretations thereof, that may hereafter occur,
or for any other reason.
Very truly yours,
541998.1 031862 CERT
STATEMENT OF iNSURANCE
541998.1 031862 CERT
ASSIGNMENT
FOR VALUE RECEIVED, the Undersigned hereby sells,
assigns and transfers unto
PLEASE iNSERT SOCIAL SECURITY OR OTHER
IDENTIFYiNG NUMBER OF ASSIGNEE
PLEASE PRiNT OR TYPEWRITE NAME AND ADDRESS iNCLUDiNG
POSTAL ZIP CODE OF ASSIGNEE
the within Bond and does hereby irrevocably constitute and appoint
Attorney
to transfer said Bond on the books kept for registration of said Bond, with full power of
substitution in the premises.
Dated:
Signature Guaranteed:
Notice: Signature(s) must be
acknowledged or proved, or in the
alternative, certified as to its
genuineness by an officer of a bank
or trust company located and authorized
to do business in New York State.
Notice: The signature to
this assignment must cor-
respond with the name as
it appears upon the face
of the within bond in
every particular, without
alteration or enlargement or any
change whatever
541998.l 031862 CERT
Appendix C
UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE
Section 1. Definitions
"Annual Information" shall mean the information specified in Section 3 hereofi
"GAAP" shall mean generally accepted accounting principles as in effect from
time to time in the United States.
"Holder" shall mean any registered owner of the Securities and any beneficial
owner of Securities within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934.
"Issuer" shall mean the Town of Southold, in the County of Suffolk, a municipal
corporation of the State of New York.
"MSRB" shall mean the Municipal Securities Rulemaking Board established in
accordance with the provisions of Section 15B(b)(1) of the Securities Exchange Act of 1934.
"NRMSIR" shall mean each nationally recognized municipal securities
information repository within the meaning of Rule 15c2-12.
"Rule 15c2-12" shall mean Rule 15c2-12 under the Securities Exchange Act of
1934, as amended through the date of this Undertaking, including any official interpretations
thereof.
"Securities" shall mean the Issuer's $8,850,000 Public Improvement Serial
Bonds-2008, dated May 15, 2008, maturing in various principal amounts on May 15 in each of
the years 2009 to 2030, inclusive, and delivered on the date hereof.
"State Information Depository" shall mean the New York State Information
Depository, if and when created.
Section 2. Obligation to Provide Continuing Disclosure. (a) The Issuer hereby
undertakes, 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 thirty (30) days after they become available and in no event later
than 360 days after the end of each fiscal year; and
541998.1 031862 CERT
(ii) to (a) each NRMSIR, or to the MSRB, and to (b) the State Information
Depository, in a timely manner, notice of any of the following events with respect to the
Securities, if material:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) unscheduled draws on credit enhancements reflecting financial
difficulties;
(5) substitution of credit or liquidity providers, or their failure to
perform;
(6) adverse tax opinions or events affecting the tax-exempt status of the
Securities;
(7) modifications to rights of Securities holders;
(8) bond calls;
(9) defeasances;
(10) release, substitution, or sale of property securing repayment of the
Securities; and
(11) rating changes.
(iii) to (a) each NRMSIR, or to the MSRB, and to (b) the State Information
Depository, in a timely manner, notice of a failure to provide by the date set forth in Section
2(a)(i) hereof any Annual Information required by Section 3 hereof.
(b) Nothing herein shall be deemed to prevent the Issuer from disseminating any
other information in addition to that required hereby in the manner set forth herein or in any
other manner. If the Issuer disseminates any such additional information, the Issuer shall have
no obligation to update such information or include it in any future materials disseminated
hereunder.
(c) Nothing herein shall be deemed to prevent the Issuer from providing notice of
the occurrence of certain other events, in addition to those listed above, if the Issuer determines
that any such other event is material with respect to the Securities; but the Issuer does not
undertake to commit to provide any such notice of the occurrence of any material event except
those events listed above.
541998.1 031862 CERT
Section 3. Annual Information. (a) The required Annual Information shall consist
of the financial information and operating data for the preceding fiscal year, in a form generally
consistent with the information contained or cross-referenced in the Issuer's final official
statement relating to the Securities under the headings: "The Town," "Economic and
Demographic Information," "Indebtedness of the Town,"" Finances of the Town," "Real
Property Tax Information," and "Litigation ," and in Appendix A.
(b) All or any portion of the Annual Information may be incorporated in the
Annual Information by cross reference to any other documents which have been filed with (i) the
NRMSIRs and the State Information Depository, or (ii) the Securities and Exchange
Commission. If such a document is a final official statement, it also must be available from the
MSRB.
(c) Annual Information for any fiscal year containing any modified operating
data or financial information (as contemplated by Section 7(e) hereof) for such fiscal year shall
explain, in narrative form, the reasons for such modification and the effect of such modification
on the Annual Information being provided for such fiscal year. 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
Undertaking, then any Holder of Securities may enforce, for the equal benefit and protection of
all Holders similarly situated, by mandamus or other suit or proceeding at law or in equity, this
Undertaking against the Issuer and any of the officers, agents and employees of the Issuer, and
may compel the Issuer or any such officers, agents or employees to perform and carry out their
duties under this Undertaking; provided that the sole and exclusive remedy for broach of this
Undertaking shall be an action to compel specific performance of the obligations of the Issuer
hereunder and no person or entity shall be entitled to recover monetary damages hereunder under
any circumstances. Failure to comply with any provision of this Undertaking shall not constitute
an event of default on the Securities.
Section 6. Parties in Interest. This Undertaking is executed and delivered solely
for the benefit of the Holders. No other person shall have any right to enforce the provisions
hereof or any other rights hereunder.
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
Undertaking for any of the following purposes:
(a) to comply with or conform to any changes in Rule 15c2-12 (whether required
or optional);
541998.1 031862 CERT
(b) to add a'dissemination agent for the information required to be provided
hereby and to make any necessary or desirable provisions with respect thereto;
(c) to evidence the succession of another person to the Issuer and the assumption
of any such successor of the duties of the Issuer hereunder;
(d) to add to the duties of the Issuer for the benefit of the Holders, or to surrender
any right or power herein conferred upon the Issuer;
(e) to modify the contents, presentation and format of the Annual Information
from time to time to conform to changes in accounting or disclosure principles or practices and
legal requirements followed by or applicable to the Issuer or to reflect changes in the identity,
nature or status of the Issuer or in the business, structure or operations of the Issuer or any
mergers, consolidations, acquisitions or dispositions made by or affecting any such person;
provided that any such modifications shall comply with the requirements of Rule 15c2-12 or
Rule 15c2-12 as in effect at the time of such modification; or
(f) to cure any ambiguity, to correct or supplement any provision hereof which
may be inconsistent with any other provision hereof, or to make any other provisions with
respect to matters or questions arising under this Undertaking which, in each case, comply with
Rule 15c2-12 or Rule 15c2-12 as in effect at the time of such amendment or change; provided
that no such action pursuant to this Section 7 shall adversely affect the interests of the Holders in
any material respect. In making such determination, the Issuer shall rely upon an opinion of
nationally recognized bond counsel.
Section 8. Termination. This Undertaking shall remain in full force and effect
until such time as all principal, redemption premiums, if any, and interest on the Securities shall
have been paid in full or the Securities shall have otherwise been paid or legally defeased
pursuant to the their terms. Upon any such legal defeasance, the Issuer shall provide ~otice of
such defeasance to each NRMSIR or the MSRB, and the State Information Depository. Such
notice shall state whether the Securities have been defeased to maturity or to redemption and the
timing of such maturity or redemption.
Section 9. Undertaking to Constitute Written Agreement or Contract. This
Undertaking shall constitute the written agreement or contract for the benefit of Holders of
Securities, as contemplated under Rule 15c2-12.
Section 10. Governing Law. This Undertaking shall be governed by the laws of
the State of New York determined without regard to principles of conflict of law.
1N WITNESS WHEREOF, the undersigned has duly authorized, executed and
delivered this Undertaking as of May 29, 2008.
B~
Supervisor and Chief Fiscal Officer
541998.1 031862 CERT
ELIZABETH A. NEVILLE
TOWN CLERK
REGISTRAR OF VITAL STATISTICS
MARHIAGE OFFICER
RECORDS MANAGEMENT OFFICER
FREEDOM OF INFORMATION OFFICER
Town Hall, 53095 Ma/n Road
P.O. Box 1179
Southold, New York 11971
Fax (631) 765-6145
Telephone (631) 765-1800
southoldtown.northfork.net
OFFICE OF THE TOWN CLERK
TOWN OF SOUTHOLD
Robed P. Smith, Esq.
Hawkins, Delafield & Wood LLP
One Chase Manhattan Plaza
New York, NY 10005
May 2, 2008
Re;
Town of Southold, New York -
$8,850,000 Public Improvement Serial Bonds - 2008
Dear Mr. Smith:
I hereby certify that on this date I have caused to be filed in my office the Debt
Statement prepared as of May 2, 2008 in connection with the above referenced
bond issue.
Li~l~r,' De~ Town Clerk
(Seal)
cc: John Cushman
Robert Sikora
AC 973 (Rev. 7/85)
Cities under 125,000 population
Counties
Towns
Villages
STATE OF NEW YORK
OFFICE OF THE STATE COMPTROLLER
ALBANY, NEW YORK 12236
DEBT STATEMENT
OF
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
PREPARED AS OF
MAY 2, 2008
THE FOLLOWING IS A STATEMENT OF THE TOWN OF SOUTHOLD IN THE COUNTY OF
SUFFOLK, NEW YORK, TO CONTRACT INDEBTEDNESS, AND IS PREPARED AS OF MAY 2, 2008
PURSUANT TO TITLE 8, ARTICLE II OF THE LOCAL FINANCE LAW.
DEBT LIMIT
Counties (except Nassau), cities, towns and villages ................................... $ 646~727,678
Multiply "Average Full Valuation" (page 5), Line 7 by .07
(Nassau County. 10)
TOTAL NET INDEBTEDNESS
Total Inclusions (page 5) ........................................................ $29,519,300
Less: Total Exclusions (Page 6) ................................................... 870,000
Total Net Indebtedness .......................................................... $ 28,649,300
NET DEBT-CONTRACTING MARGIN
Debt Limit (Above) ............................................................ $646,727,678
Less: Total Net Indebtedness (Above) .............................................. 28,649~300
Net Debt-Contracting Margin .................................................... $ 618,078,378
PERCENTAGE OF DEBT-CONTRACTING POWER EXHAUSTED
Divide "Total Net Indebtedness" by "Debt Limit" and enter
result here ....................................................................
4.43 %
PROPOSED BOND ISSUE
The amount of bonds proposed to be sold at public sale on May 13, 2008 in connection
with which this statement is made and filed is ...................................... $ 8,850~000
The amount of bond anticipation notes heretofore issued in anticipation of the sale and
issuance of such bonds and included at "Borrowings" at Item 1 of Inclusions at page 5 is . $. -0-
-1-
STATEMENT OF TOTAL DEBT
AVERAGE FULL VALUATION OF TAXABLE REAL ESTATE
Computation of Average Full Valuation Based on Last Five Completed Assessment Roils
(1) (2) (3)
Taxable Assessed Full Valuation of
Line For Fiscal Valuation of Final State Taxable Real Estate
No. Year Ending Real Estate Equalization Rate (Column 1 - Column 2)
1. 12-31-04 101,872,561 1.49 6,837,084,630
2. 12-31-05 104,228,885 1.25 8,338,310,800
3. 12-31-06 105,502,965 1.13 9,336,545,575
4. 12-31-07 106,950,027 1.04 10,283,656,442
5. 12-31-08 108,292,749 0.95 11,399,236,736
6. Total of Lines 1 to 5 Inclusive ................................... $46,194,834,183
7. Average Full Valuation (1/5 of Total of Column 3 ................. 9,238,966,836
INCLUSIONS
1. Borrowings. Sec. 135.00(a)(1) ...................................
2. Real Property Liabilities. Sec. 135.00(a)(2) .........................
3. Contract Liabilities. Sec. 135.00(a)(3) .............................
4. Cities, Towns and Villages:
Contract Liabilities: Housing Guarantees; Subsidies.
Sec. 135.00(a)(4),(a)(4-a),(a)(4-b) ...............................
5. Cities, Towns, Villages:
State Loans to Certain Housing Authorities and
Municipalities. Sec. 135.00(a)(5) ................................
6. Judgments, Claims, Awards and Determinations. Sec. 135.00(a)(6) .............................................
7. Cities, Towns, Villages:
Indebtedness Contracted by Certain District Corporations.
Sec. 135.00(a) (7) ............................................
8. Indebtedness Contracted or incurred Pursuant to Article II,
Title 1-A of the Local Finance Law in relation to a Joint
Service of Joint Water, Sewage, or Drainage Project:
(See Instruction 5, Page 2.)
(a) Borrowings: Several Indebtedness ..............................
(b) Borrowings: Allocated or Apportioned Joint
Indebtedness ..........................................
/!} Real Property Liabilities ......................................
Contract Liabilities ..........................................
Judgments, Claims, Awards and Determinations ...................
TOTAL INCLUSIONS ...........................
$ 29,519,300
$29,519,300
-2-
GROSS JOINT INDEBTEDNESS
The aggregate gross amount of all joint indebtedness before
apportionment of allocation is ......................................... $
(See Instruction 6, page 3.)
EXCLUSIONS
1. Tax and Revenue Obligations. Sec. 136.00(1) .............................. $.
2. Obligations Issued for other than Capital Improvements.
Sec. 136.00(1-a) ......................................................
3. Water Indebtedness. Sec. 136.00(2) ......................................
4. Indebtedness Contracted for Self-Liquidating Projects.
Sec. 136.00(3) .......................................................
5. Sewer Indebtedness Contracted on or after January 1, 1962,
and prior to January 1, 1994. Sec. 136.00(4-a) ...............................
6. Bonds for Pensions. Sec. 136.00(4) ......................................
7. Cities and Villages with Population of 5,000 or More:
Indebtedness for Housing and Urban Renewal Purposes.
Sec. 136.00(8) .......................................................
(See also, if applicable, indebtedness for housing or urban
renewal purposes (Sec. 136.00(8-a)).
8. Towns and Villages with Population of Less than 5,000:
Subsidies or Guarantees for Housing Purposes. Sec 136.00(9)
9. Assets of Sinking Funds. Sec. 136.00(10) .................................
10. Refunded and Refunding bonds. Sec. 136.00 ( 10-a)(10-b)
11. Cash on Hand for Debts. Sec. 136.00(11) .................................
12. Appropriations. Sec. 136.00(12) ........................................
13. Cities Only:
School Indebtedness. Sec. 136.00(13) .....................................
14. (a) Several Indebtedness Contracted in relation to a Joint
Water Project. Sec. 15.50 .............................................
(b) Joint Indebtedness Contracted for such Purpose .......................... (~)i
15. (a) Several Indebtedness Contracted for a Joint Service and
Excluded Pursuant to Local Finance Law, Sec. 15.20 and
123.00 ............................................................ (a).
(b) The Apportioned or Allocated Amount of any such Joint .
Indebtedness so Excluded ............................................ (b).
16. (a) Several Indebtedness Contracted for a Joint Sewage
and/or Drainage Project and Excluded Pursuant to
Local Finance Law, Sec. 123.00 and 124.10 .............................. (a).
(b) The Apportioned or Allocated Amount of any such Joint
Indebtedness so Excluded ............................................ (b).
870,000
TOTAL EXCLUSIONS ..................................... $ 870,000
SCHEDULE A
PART 1. The following obligations will be sold at the sale in connection with which this debt statement is filed:
Date Type Amount Object or Purpose
of of to be for which
Authorization Obligation Sold Authorized
02-27-07 SB 7,500,000
02-26-08 SB 1,350,000
Open Space Preservation
Land Acquis. & Bldg. Improvements
Total ............... $8,850,000
PART 2. The following bond anticipation notes have been issued in anticipation of the bonds listed in PART 1
above, and are now outstanding.
Date
of
Note Amount Obiect or Purpose for which Authorized
Total $ -0-
The following symbols may be used: Serial Bond-SB; Statutory Installment Bond-SIB; Bond Anticipation Note
BAN; Capital Note-CN; Tax Anticipation Note-TAN; Revenue Anticipation Note-RAN; Budget Note-BN;
Certificate of indebtedness-CI; Sinking Fund Bonds-SFB.
-4-
SCHEDULE B
PART 1.
Date
of
Authorization
The following obligations are authorized, unissued and will be sold prior to the sale
of the obligations listed in Schedule A, PART 1.
ToYFe Amount Object or Purpose
to be for which
Obligation Issued Authorized
Total .................. $. -0-
PART 2. The following obligations are authorized, unissued and will not be sold prior to the sale of the obligations
listed in Schedule A, PART 1.
Date ToY~e Amount
of for which
Authorization Obligation Authorized
02-25-03 SB 82,750
02-27-07 SB 22,500,000
08-28-07 SB 4,000,000
02-26-08 SB 1,350,000
04-22-08 SB 75,000
Object or Purpose
for which
Authorized
Mattituck Inlet Shore Erosion Study
Open Space Preservation*
Open Space Preservation - Agric. Lands
Acquis of Land and Bldg Impvts*
Tax Collection Software
Total $ 28,007,750
*To be funded in whole or inpart by the issuance of the Bonds in connection with which this
Debt Statement is being filed.
-5-
VERIFICATION BY CHIEF FISCAL OFFICER
State of New York
SS:
County of Suffolk
Scott A. Russell, being duly swom, deposes and says: That he is the duly qualified, and acting chief fiscal officer
of the Town of Southold, in the County of Suffolk, New York; that he prepared and has readthe foregoing debt
state .ment and knows the contents thereof; that the same is tree to his own knowledge except as to the matters therein
stated to be alleged upon information and belief, and that as to those matters he believes it to be true.
"SIGNATURE
Supervisor
TITLE
Town Hall - 53095 Main Road
Southold, N.Y. 11971
MAIL ADDRESS
SUBSCRIBED AND SWORN TO BEFORE ME
THIS 2 "/~ DAY OF /2~/~j ,2008
NOTARY PUBLIC
JOHN A CUSHHAN
Notary Public, State of New York
No, 01CU6174322
Qualified in Suffolk County
Commission Expires September 17, 20//
NEW ISSUE - SERIAL BONDS MOODY'S INVESTORS SERVICE - "Aaa"*
See "Bond Ratings", herein
In the oplnton of Hawkin~ Delafield & Wood LLP. Bond Counsel to the Town. under e.~isting statutes and court decisions and assummg continuing
co?j~liance with certain tax certifications described herein, (i) interest on the Bonds is excluded from gross income for Federal income tar purposes pursuant
to 3ection 103 of the Internal Revenue Code of 1986. as amended (the "Code '3, and 6i) interest on the Bonds is not treated as a prefere,n,,ce item in calculating
the alternative mtnimum tax imposed on individuals and corporations under the Code. such interest, however, is included in the adjusted current earnings dj'
certain corporations for purposes of calculatm.~ the alternattve minim,urn tax imposed on such corporations In addition, in the opimon of Bond Counsel to the
Town. ,under ertstin.~ statutes, imerest on the t~onds ts' exempt jbom personal income taxes of New York State and its pohttcal subdivisions includmg The CIO,'
oj'Ne~ York See '"Fax )dotters" herein
The Bonds will NOT be designated by lhe Town as "qualified tax-exempt obltgations" pursuam to the provision of Section 265 of the Code
$8,850,000
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
(the "Town")
Dated: May 15, 2008
PUBLIC IMPROVEMENT SERIAL BONDS - 2008
· ]BOOK-ENTRY-ONLY BONDS]
Principal Due:
Interest Due:
BOND MATURITY SCHEDULE
May 15, 2009-2030, inclusive
November 15, 2008 and semi-annually thereafter
in each year until maturity.
Maturity Rate Yield Amount Maturity Rate Yield Amount Maturity Rate Yield
$325,000 2009 4.00% 1.85% $375,000 2017 4.00% 3.45% $450,000 2024 4.00% 4. t0%
325,000 2010 4.00 2.25 400,000 2018 4.00 3.60 450,000 2025 4-% 4.15
325,000 2011 4.00 2.55 400,000 2019 4.00 3.70 450,000 2026 4.25 4.20
350,000 2012 4.00 2.75 400,000 2020 4.00 3.80 450,000 2027 4.25 4.25
350,000 2013 4.00 2.90 425,000 2021 4.00 3.90 475,000 2028 4.25 4.30
350,000 2014 4.00 3.00 425,000 2022 4.00 4.00 475,000 2029 4.25 4.35
375,000 2015 4.00 3.15 425,000 2023 4.00 4.05 475,000 2030 4.25 4-%
375,000 2016 4.00 3.30
*The ,B, onds matur, in~ in the years 2009 through 2018 inclusive are NOT insured by Financial Security Assurance (defined below) and
are rated "Aa3 by Moody s (n, vestors Service,? Inc. T~ie scheduled payment of principal of and interest on the Bonds maturing in the years 2019
through 2030 inclusive (the Insured Bonds ) when due WILL BE guaranteed under an insurance policy ~to be issued concurrently with th,,e
delivery of the Bonds by FINANCIAL SECURiTY ASSURANCE INC. (See Appendix C "Bond Insurance', herein. Also see "Boni] Rating ,
hereinO
P FSA_
Security andSources of Payment: The Bonds will constitute general obligations of the Town and will contain a pledge of its faith and
credit for the punctual payment of the.principal of and interest on the Bonds, and all the taxabIe real property within the Town will be subject to
the levy of affvalorem taxes, without l~mitatton as to rate or amount, for such purpose.
Prior Redemption: The Bonds maturing on or after May 15, 2019 will be subject to redemption prior to maturity at the opt,!on of the
own, on May 15, 21J18 on any ,d, ate and thereafter, in whole or ~n part, at par, in accordance with me terms described herein. See Optional
Redemption" under "The Bonds, herein.
Form andDenomination: The Bonds wi!l be issued as registered bonds, and, when issued, will be registered in the name of Cede & Co.
as nominee of The Del>ositorv Trust Coml~any ('DTC") New York New York which will act as the Securities Depository for the Bonds.
Individual purchases of the Bo'nds may be ~had~ only in book-entry form in denom}nations of $5,000 or integral multiples thereof. Bondholder,s,
will not receive certificates representing their ownership interests m the Bonds purchased. See "Book-Entry-Only System" under "The Bonds, '
herein.
Payment: Payment of the principal of and interest on the Bonds will be made by the Town to DTC which will in turn remit such payment
to its Participants for subsequent distribution to the Beneficial Owners of the Bonds ~n accordance with standing ins.t~.ctions and,,customary
practices, as is now the case with municipal securities held for the accounts of customers in bearer form or registered in street name. Payment
to the Beneficial Owners will be the responsibility of the DTC Participant or Indirect Participant and not o]'DTC or the Town, ,,subject to any
statutory and regulatory requirements as may be in effect from time to time. See "Book-Entry-Only System" under "The Bonds, herein.
Hawkins Delafield & Wood LLP has not participated in the preparation of this Official Statement nor verified the accuracy, completeness
or fairness of the information contained here n, and, accordingly, expresses no op n on w th respect thereto.
The Bonds are offered subject to the final ?flproving opinion of Hawkins Delafield & Wood LLP, New York, New York, Bond Counsel,
and certain other conditions. It is expected that dehvery of the Bonds in book-entry form will be made through the facilities of DTC on or about
May 29, 2008 in New York, New York.
This revised cover dated May 13, 2008, supp ements the Official Statement of the Town, May 2, 2008, relating to the obligations
described therein and herein including certain information omitted fr~m such Official Statement i9 9ccordance 5vith Securities and Exchange
Commission Rule 15c2-12 (the "Rule"), and shall constitute the ?own s final Official ~tat,,ement w~th~p. [he m~e,a, mng of,[he.,Ru~le. O, t. her than ,as
set forth on th s revised cover page the table of contents, the section ent t ed "Bond Rating an,d the addition ot Appenmx t~ - ~ono tnsurance,
there have been no other rev sons to the Official Statement· For a description of the Town s agreement to prowde continuing disclosure as
described in the Rule, see "Disclosure Undertaking" herein.
ROOSEVELT & CROSS, INC. AND ASSOCIATES
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
Town Hall
53095 Main Road
Southold, NY 11971
Telephone: (631) 765-4333
Fax: (631) 765-1366
TOWN BOARD
Scott A. Russell, Supervisor
Louisa P. Evans
Albert J. Krupski Jr.
V ncent 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
Patricia A. Finnegan, Esq. Town Attorney
George Su van, Receiver of Taxes
BOND COUNSEL
Hawkins Delafield & Wood LLP
New York, New York
FINANCIAL ADVISOR
MUNISTAT SERVICES, INC.
Municipal Finance Advisory Service
12 Roosevelt Avenue
Port Jefferson Station, N.Y. 11776
(631) 331-8888
E-mail: info@munistat.com
Website: http://www.munistat.com
No dealer broker, salesman or other person has been authorized by the Town to give any information or to make any
representations other than those conta ned m th s Official Statemelt and if given or made, such other information or
re~presenta,[ions, must.ngt be relied upon as having been author zed by the Town Th s Official Statement does not constitute an
orrer to seu or tt~e sohc nation of an offer to bay nor shal there be any sale of the Bonds by any person in anyiur sdiction in which
it is unlawful for such person to make such ol~f'er~ solicitation or sa e. The information set f6rt~ herein has been obta led by the
Town f~om sources which are believed to be rehable but it is not guaranteed as to accuracy or completeness. T ~e nformation
and expressions of opinion herein are subject to change w thout not~ce and ne ther the de very of th s Official Statement nor any
sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Town
since the date hereof.
TABLE OF CONTENTS
Page
THE BONDS
Descripti~rib?;tfi~gt~6ds'iiiiiiiiiiiiiiiiiiill i ' ' iiiiiiiiiiiiiiiiiiiiiiiiiiii11
Optional Redemption .................................................... I
Book-entry-only System ...................................................
Certificated Bonds ................................................................. 3
Authorization and Purpose .................................................................
Secari.ty and Source of Payment .................................................
Remedies Upon Default ..................................................... ii i... ii iiiiii 3
THE TOWN
Government ............................................................................ 4
Employees ............................................................................. 5
ECONOMIC AND DEMOGRAPHIC INFORMATION ........................................... 5
Population Characteristics ................................................................. 5
Median Income of Families ................................................................ 5
Unemployment Rate Statistics .................................................... 6
Selected Listing of Larger Employers ........................................................ 6
INDEBTEDNESS OF THE TOWN ............................................................ 6
Constitutional Requirements ............................................................... 6
Statutory Procedure ...................................................................... 7
Computation of Debt Limit and Calculation of Net Debt Contractthg Margin ......................... 8
Tren~t of Town Indebtedness ................... 8
Details of Short-Term Indebtedness Outstandin~ ........................... i .......... i i i i i ii i i 9
Debt Service Requirements - Outstanding Bond~ ......................... 9
Calculation of Estimated Overlapping and Underlying Indebtedness ................
Authorized But Un ssued Items ............................................................ 10
Capital Program ....................................................................... 10
Landfi C osure and Postclosure Care Costs .................................................. 11
FINANCES OF THE TOWN ................................................................ 11
Financial Statements and Accounting Procedures .............................................. 11
Fund Structure and Accounts ......................................................... l 1
Basis of Accounting ................................................................ 11
Investment Policy ...................................................................... 1 I
Budgetary Procedures ....................................................... 12
F nanc a Operations .................................................................... 12
Revenues ............................................................................. 13
Real Prgpeny Taxes ................................................................ 13
State Aia ....... 13
Expenditures ........................................................... 13
Pension Systems .... ' .................................................................. 13
Con~' buttons to the Retirement Systems ..................................................... 14
Other Post Employment Benefits ........................................................... 14
REAL PROPERTY TAX INFORM[ATION .................................................... 15
Real Property Taxes .................................................................... 15
Tax Levy and Collection Record ........................................................... 15
Tax Collection Procedure ................................................................ 15
Tax Rates ............................................................................. 15
Large Taxable Properties ................................................................. 15
LITIGATION ............................................................................. 16
BONDHOLDER RISKS AND MARKET FACTORS AFFECTING FINANCINGS
OF THE STATE AND MUNICIPALITIES OF THE STATE ..................................... 16
TABLE OF CONTENTS
(Continued)
Page
TAX MATTERS ........................................................................... 17
Opinion of Bond Counset ................................................................ 17
Certain Ongoing Federal Tax Requirements and Certifications ................................... 17
Certain Collateral Federal Tax Consequences ................................................. 17
Original Issue Discount .................................................................. 17
Bond Premium ......................................................................... 18
Information Reporting and Backup Withholding ............................................... 18
Miscellaneous ......................................................................... 18
DOCUMENTS ACCOMPANYING DELIVERY OF THE BONDS ................................. 19
Absence of Litigation .................................................................... 19
Legal Matters .......................................................................... 19
Closing Certificates ..................................................................... 19
DISCLOSURE UNDERTAKING ............................................................. 20
BOND RATING ........................................................................... 20
FINANCIAL ADVISOR .................................................................... 21
ADDITIONAL INFORMATION ........................................... : ................. 21
APPENDIX A: FINANCIAL INFORMATION
APPENDIX B: FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
APPENDIX C: BOND INSURANCE
ii
OFFICIAL STATEMENT
$8,850,000
TOWN OF SOUTHOLD
SUFFOLK COUNTY, NEW YORK
PUBLIC IMPROVEMENT SERIAL BONDS - 2008
[BOOK-ENTRY-ONLY BONDS]
S _ ,Th. is .Official Statement and the appendices hereto prese,n,t.s certa,!,n, nform,a, tion relating to the Town of
outi~otg, tn the County of Suffolk, in the State of New York (the Town, Count~ and "State," resnectivelv~ in
connection w~th the sale of $8,850,000 Public Improvement Serial Bonds - 2008 (tile "Bonds") of the'Town. ~J
Allguotations from and summaries and explanations of provisions of the Constitution and Laws of the State
and acts anaproceedings of the Town contained]~ere n do not purport to be complete and are qualified in their
entirety by reference to the official compilation thereof and a 1 references to the Bonds and the proceedings of the
Town relating thereto are qualified in their entirety by reference to the definitive form of the Bonds and such
proceedings.
THE BONDS
Description of the Bonds
The Bonds will be dated May 15, 2008, and will mature on May 15, in each of the years 2009 to 2030,
inclusive, in the principal amounts as set forth on the cover page hereof.
Th¢~ Bonds will be 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 wilt act as Securities
Depository for the Bonds. Individual purchases of the Bonds may be made in book-entry form only, in denominat ons
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 15, 2008 and semi-annually thereafter on May 15 and
November 15, in each year until maturity. Principal and interest will be pa d by the Town to the Securities
Depositor, which will in turn remit such principal and interest to its Participants, for subsequent distr bution 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 last business day of the month preceding each interest payment
date.
Optional Redemption
The Bonds maturing on or before May 15, 2018 will not be subject to redemption prior to maturity. The
Bonds maturing on or after May 15, 2019 will be sul~ject to redemption prior to maturity, at the option of the Town,
on May 15,2018 and thereafter on any date, in whole or in part, and if ~n part, in any order of their maturity and in
any amount within a maturity (selected by lot within a maturity), at par, plus accrued interest to the date of
redemption.
The Bonds shall be redeemable prior to maturity upon thegiving of notice which ident ties the Bonds to be
redeemed, by mailing such notice to the registered holders thereof at their respect ve addresses as shown upon the
registration books otthe Fiscal Agent at least 30 days prior to the date set for any such redempt on. If not ce of
reoemption shall have been given as aforesaid, the Bonds so called for redemption shall become due and payable at
the applicable redemption price on the redemption date designated in such notice, and interest on the Bonds shall
cease to accrue from and after such redemption date.
Book-entry-only System
DTC will act as securities depositor), for the Bond,s (the "Bonds"). The Bonds w be ssued as fully-
registered Bonds registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be
requested by au aathorized representative of DTC. One fldly-registered Bond certificate will be iss ed for each
maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, th, e world's largest dep,o, sitory, is a limited-purpose trust company organized under the New York
Banking Law, a 'banking organization ~ithinthemeaningoftheNewYorkBankingLaw, amemberoftheFederal
Reserve System a "clearing corporation' within the meaning of the New York Umform Commercial Code and a
"clearing agency" registere~[ pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC
holds anal prow'des asset servicing for over 2 million issues of U.S. and non-U.S, etluity is'~ues corporate and
municipal d,,ebt issues, and money market instruments from over 85 countries that DTC's participants ("Direct
Particilsants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales
and otfier 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
certit%ates. Direct Participants,include both U.S. and non-U.S, securities brokers and itealers, banks trust companies,
clearing corporations andcerta!n~,other organizations. DTC is a wholly-owned subsidiary of The Depository Trust
& Clearing Corporation ("DTCC"). DTC-C in turn is owned by a number of Direct Participants of DTC and
Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS
Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also
subsidiaries of DTCC) as well as by the New York.Stock Exchange, Inc. the American Stock Exchange LLC and
the National Association of Securities Dealers, lnc. Access to the DTC system is also available to others such as both
U.S. andnon-U.S, securitiesbrokersanddealers banks~tmstcompanies andclearingcorp%,a, tionsthatclearthrough
or maintain a custodial rel,ationship with a Direct Partmipant either directly or inthrect[.y ( 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. Mbre information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will
receive a credit for the Bonds on DTC's records. The ownership interest of each, actual purchaser of each Bond
("Beneficial Owner")is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will
not receive written confirmation from DTC of their purchase. Beneficial Owners are, howeveh 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 ot'ownership
interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests
in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subse§uent 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 oCDTC. 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
respons b e for keep ng 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 t~me to time.
Redemption notices shall be sent to DTC. if less than all of the Bonds within an issue are being redeemed,
DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be
redeemed.
Payments on the Bonds will be made to Cede & Co. or such other nominee as may be requested by an
authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of
funds and correspondin~ detail information from the Town, on the payable date in accordance with their respective
holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing
instructions a, nd customary practices as is the case with bonds held for the accounts of customers in bearer form or
registered in 'street name?' and will ~e 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 responsibili.t7 of DTC~ and itisbursement
of such payments to the Benefic alOwners will be the responsibility of Direct and Inthrect 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 w~ll be printed and delivered.
The information in this section concernin~ DTC and DTC's book-entry s/stem has been obtained from
sources that the Town believes to be reliable, but tl% Town takes no responsibility for the accuracy thereofi
THE TOWN WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO PARTICIPANTS, TO
INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITH RESPECT TO(I)THE ACCURACY
OF ANY RECORDS MAiNTAINED BY DTC, ANY PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (II)
THE PAYMENTS BY DTC OR ANY PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH
RESPECT TO THE PRINCIPAL OF, OR PREMiUM, IF ANY, OR INTEREST ON THE BONDS; (III) ANY
2
NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO BONDHOLDERS; (1V) ~HE SELECTION
BY DTC OR ANY PARTICIPANT OR INDIRECT PARTICIPANT OF ANY PERSON TORECEIVE PAYMENT
IN THE EVENT OF A PARTIAL REDEMPTION OF THE BONDS; OR (V) ANY CONSENT GIVEN OR OTHER
ACTION TAKEN BY DTC AS BONDOWNER.
Certificated Bonds
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 appli.c~ble law or the Town may terminate its
participation in the system ofbook-ent?y-only transfers through DTC at an3 time. Iu the event that such book-entry-
only system is discontinued the following, provisions will apply: Ttie Bonds will be in registered form m
denominations of $5,000 or integral multiples thereof. Principal of and interest on the Bonds when due will be
Eayable 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 time prior to
maturity at the corporate trust office of the fiscal agent for Bonds of the same or anyother authorizer]denomination
or denominations in the same aggregate principalamount upon the terms set forth in the certificate of the Town
Supervisor authorizing the sale o]VtheBonds andfixing 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 York, including
among others, the Town Law GeneralMunicipal Law and the Local Finance Law and various bond resolutions duly
adopted by the Town Board on their respective dates, authorizing the issuance of serial bonds for two capital projects
in and for the Town.
Such projects, and the respective principal amounts of Bonds to be issued for each, are as follows:
Date Amount to
Authorized Purpose be issued
02-27-07 Open Space Preservation ...................................... $ 7,500,000
02-26-08 Land Acquisition and Building Improvements ...................... 1,350,000
Total ................................. .$ 8,850,000
The proceeds of the Bonds will provide original funds for the above referenced projects.
For further information regardingbond authorizations of the Town for capital purposes and other matters
relating thereto see "Indebtedness of the Town".
Security and Source of Payment
Each Bond when duly issued and paid for will constitute a contract belween 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 Constitut on, 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 ~s specifically precluded from restricting the power of the Town to levy taxes on taxable real estate
thereof.
Remedies Upon Default
Under current law, provision is made for contract creditors (including the Bondholders) of the Town to
enforce 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 duc to the date of payment. As
"a general rule, property and funds of a~ municipal corporation serving the public welfare and interest have not been
judicially subjected to execution or attachment to satisfy a judgment, altheugh judicial mandates to officials to
appropriate and pay judgments out of current funds or thc 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 I~ermanant repeal by statute or constitutional amendment ora Bondholder's remedial
right to judicial enforcement otthe contract should, n thc opinion of Bond Counsel, be held unconstitutional.
The State has consented that any municipality in thc State may file a petition with any United States district
court or court of bankruptcy under anyprovision of the laws of thc United States, now or hereafter in effect, for thc
composition or adjustment ofmunicipa~indebtedncss. Subject to such consent, under the United States Constitution,
Congress has jurisdiction over such mat~ers and has enacted amendments to the existing federal bankruptcy statute,
generally to the effect and with the purpose of affording municipal corporatiens, under certain circumstances, with
easier access to judicially approved adjustment of debts, includingj udicial control over identifiable and unidentifiable
creditors.
In recent times, certain events and legislation affecting remedies on defau t have resulted in litigation. While
courts of final jurisdiction have upheld and sustained the rights of bondho ders, 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 ofessentia 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 w th certain nformation
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
Longlsland. Settlement took place in 1640. The Village ofGreenport is located who yw thin the Town. TheTown
also includes the area of Fishers Island which is located app.roximately twelve miles east of the mainland. Fishers
lsland is accessible only by water or air with feny service operating between the Island and New London,
Connecticut.
The Town isprimaril~y a rural resort area with substantial shopping facilities availab e at Greenport, at various
shopping centers within the ~ own, 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
g~radually evolved from basic production to nursery crops including shrubs, sod, potted plants and other ornamentals.
~x substantial portion of these products are shipped by ferry across Long Island Sound for distribution throughout
New England. A number of vineyards have been established and wine-making is an important industry. Fishing and
fish processing are now growing industries due to improved transportation facilities. The Town s a so a major
summer resort area, ut I zing 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 Ra 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 isprovided by Keyspan Energy
Corporation. Fire protection is the responsibihty of volunteer fire and fire protection distr ets T-he 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 provislons of the State Constitution, the Town operates pursuant to the Town Law, the General
MunicipalLaw, the Local Finance Law otherlawsgenerallyapplicabletotheTown, and any spec a awsspec ficay
a~pplicable to the Town. Under such laws, there is no authority for the Town to have a charter, but pursuant to the
~ own Law and other Iaws generally applicable to home role 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 two
years; effective with the term commencing January 1, 2008, the term of office of the Supervisor will be four years.
Such terms are staggered such that two or three councilmen are elected every two years. All the Town Board
members are elected at large and there is no limitation to the number of terms each may serve.
Six independently governed school districts are located wholly or partially within the To.,wn, which rely on
their own taxing powers granted by the State to raise revenues. The schooldistricts use the Town s assessment roll
as their basis for taxation of properly located within the Town.
4
Employees
The Town provides services through approximately 216 full-time and 69 part-time employees, some of whom
are represented by organized labor.
The following table presents the number of employees' represented by organized labor, name of union and
contract expiration dates.
Name of Union
Civil Service Employees Assoc ........................
Police Benevolent Assoc ............................
I~4[ePrOximate Date Contract
mbership Expires
168 12-31-10
47 12-31-09
ECONOMIC AND DEMOGRAPHIC INFORMATION
Population Characteristics
The Town has had a population trend, as compared to the County and the State, as indicated below:
Town of Suffolk New York
Year Southold County State
1970 ..................................... 16,804 1,127,030
1980 ..................................... 19,172 1,284,231
1990 ..................................... 19,836 1,321,977
2000 ..................................... 20,599 1,419,369
2007 ..................................... 22,852 1,504,947
Source: U.S. Bureau of the Census, Long Island Power Authority, New York State Department of Labor.
Median Income of Families
1980 1990 2000
Town $21,013 $43,082 $61,108
County 24,194 53,247 72,112
State 20,180 39,741 51,691
18,241,391
17,557,288
17,990,455
18,976,457
19,297,729
Source: U.S. Department of Commerce, Bureau of the Census.
Per Capita Money Income
1980 1990 2000
Town $8,258 $19,037 $ 27,619
County 7,576 18,481 26,577
State 7,496 16,501 23,389
Source: U.S. Department of Commerce, Bureau of the Census.
Unemployment Rate Statistics
Unemployment statistics are not available for the Town as such. The smallest area for which such statistics
are available (which includes the Town) is the County of Suffolk. The information set forth below with respect to
such County is included for information purposes only. It should not be implied from the inclusion of such data in
this Statement that the Town is necessarily representative of the County or vice versa.
Annual Averages:
2003 ............................
2004 .............................
2005 .............................
2006 .............................
2007 .............................
2008(2 months) ....................
Suffolk New York
County State
4.3% 6.2%
4.5 5.9
4.2 5.0
3.9 4.5
3.8 4.5
4.8 5.3
Source: Department of Labor, State of New York
Selected Listing of Larger Employers
Name
Mattituck-Cutchogue UFSD .......................
Eastern Long Island Hospital .......................
Plum Island ADC ................................
Town of Southold ...............................
Peconic Landing .................................
Southold UFSD .................................
San Simeon by the Sound .........................
Greenport UFSD ................................
Type
Public School
Hospital
U.S. Govt. Facility
Local Government
Life Care Community
Public School
Nursing Home
Public School
Approx. No.
of Employees
385
35O
300
285
2O4
175
154
108
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 an~/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.'
The Town may contract indebtedness only for a Town purpose and shall pledge its faith and credit for the
payment of principal of and interest thereon.
Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes or
to be paid within three fiscal year periods, indebtedness shall be paid in annual installments commencing no later than
two years after the date such indebtedness shall have been contracted and ending no later than the expiration of the
period of probable usefulness of the object or purpose determined by statute 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 centam 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 re~luired
to provide an annual appropriation for the payment of interest due duringthe year on its indebtedness and Ior 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
Townpurpose 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 taxal01e real estate located in the Town and
subject to certain enumerated exclusions and deductions such as debt contracted to provide water, self-liquidating
facdities 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 snch 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 La, w subject of course to the constitutional provisions set fi)rth
above. The power to spend money, however, generall~ derives from other law, including the Town Law and General
Municipal Law of thc 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 Boaro. 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 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 v o]at OhS.
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 bo'nds subject to the legal
(Constitution, Local Finance Law and case aw) 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 principal reductions are made
and provided that such renewals generally do not extend five years beyond the originaIdate of borrowing. However,
notes issued in anticipation of the sale of serial bonds for assessable nnprovements are not subject to such five year
mit and mav be renewed subject to annual principal reductions for the entire period of pr.oba~ole usefulness oi~the
purpose for~which sach notes were originally ~ssued. (See "Payment and Maturity under "Constitutional
Requirements," and "Details of Short-Term Ind~:btedness Oatstanding.")
In general the Local Finance Law contains similar provisions providing the Town with power to issue
general obhgation 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 May 2, 2008)
Fiscal Year
Ending
December 31:
State
Assessed Equalization
Valuation Rate
Full
Valuation
2004 ............................... $101,872,561
2005 ............................... 104,228,885
2006 ............................... 105,502,965
2007 ............................... 106,950,027
2008 ............................... 108,292,749
1.49% $ 6,837,084,630
1.25 8,338,310,800
1.13 9,336,545,575
1.04 10,283,656,442
0.95 11,399,236,736
Total Five Year Full Valuation ................................................ $46,194,834,183
Average Five Year Full Valuation ............................................. 9,238,966,836
Debt Eimit - 7% of Average Full Valuation ...................................... 646,727,678
Inclusions:
Outstanding Bonds:
GeneralnPurposes .....................................................
Other ...........................................................
23,540,000
Sub-Total ........................................................... 23,540,000
Bond Anticipation Notes .................................................... 5,979,300
Total Inclusions ........................................................ 29,519,300
Exclusions:
Appropriations ......................................................... 870,000
Ottier nxclusions ........................................................ -0-
Total Exclusions ........................................................ 870,000
Total Net Indebtedness Before Issuing the Bonds ................................. 28,649,300
The Bonds 8,850,000
Less: BANs to be paid from bond proceeds ...................................... -0-
Net Effect of Issuing Bonds .................................................. ~
Total Net Indebtedness After Issuing the Bonds .................................. 37,499,300
Net Debt Contracting Margin After Issuing the Bonds ............................. $609,228,378
Percent of Debt Limit Exhausted ...............................................
5.80%
Trend of Town Indebtedness
The following table represents the outstanding indebtedness of the Town at the end of the last five preceding
fiscal years.
Fiscal Year Ending December 31:
2003 2004 2005 2006 2007
Debt Outstanding End of Year:
Bonds .................. $6,950,000
Bond Anticipation Notes ... 14,768,302
Total Outstanding Debt ........ $21,718,302
$6,515,000 $12,299,098 $11,349,098 $25,020,000
12,625,600 11,720,000 8,244,000 6,224,000
$19,140,600 $24,019,098 $19,593,098 $31,244,000
Bond Anticipation Notes
MaturiW
06-06-08
09-05-08
04-1%09
Details of Short-Term Indebtedness Outstanding
Purpose Amounta
Fishers Island Ferry District .................................. $I,500,000
Various Capital Projects ................................ 3,680,000
Var ous Capita Projects ..................................... 799,300
Total ................................................
a. To be funded from the proceeds of renewal notes and from available funds.
Debt Service Requirements - Outstanding BondsI
Fiscal Year
Ending ~
December .~ 1: Principal
2008 ....................... $1,695,000
2009 ....................... 1,750,000
2010 ....................... 1,575,000
2011 ....................... 1,600,000
2012 ....................... 1,540,000
2013 ....................... 1,425,000
2014 ....................... 1,440,000
2015 ....................... 1,435,000
2016 ....................... 1,360,000
2017 ....................... 1,420,000
2018 ....................... 1,435,000
2019 ....................... 995,000
2020 ....................... 875,000
2021 ....................... 875,000
2022 ....................... 675,000
2023 ....................... 725,000
2024 ....................... 725,000
2025 ....................... 725,000
2026 ....................... 550,000
2027 ....................... 550,000
2028 ....................... 550,000
2029 ....................... 550,000
2030 ....................... 550,000
Totals ................... $25,020,000
$ 5,979,300
Interest Total
$ 950 559
888 645
827 441
769 388
709 851
654 788
600 927
545 816
492 883
439 412
384,118
335,739
296,631
260,344
223,656
193,906
163,094
132,281
105,188
81,813
58,438
35,063
11,688
a. Exclusive of the Bonds.
$9,161,669
$2,645,559
2,638,645
2,402,441
2,369,388
2,249,851
2,079,788
2,040,927
1,980,816
1,852,883
1,859,412
1,819,118
1,330,739
1,171,631
1,135,344
898,656
918,906
888,094
857,281
655,188
631,813
608,438
585,063
561,688
$34,181,669
9
Calculation of Estimated Overlapping
and Underlying Indebtedness
Overlapping Date of Percentage ATolta/ble~pica
Units Report Applicable Indebtedness
Count)' of Suffolk ..................... 10-23-07 3.71% $34,381,249
Village of Greenport ................... 05-31-07 100.00 12,132,000
School Districts:
Fishers Island ............. 06-30-07 100.00 405,000
Greenport ................. 06-30-07 100.00 135,000
Mattituck-Cutchogue ....... 12-27-07 98.49 43,424,241
New Suffolk Common ...... 06-30-07 100.00
Oyster Ponds .............. 06-30-07 100.00 150,000
Southold ................. 11-30-07 100.00 10,090,681
Fire Districts (Est.) ..................... Various 100.00 2,750,000
Applicable
Net
Indebtedness
$29,783,231
11,398,000
405,00O
122,000
39,973,151
150,000
10,090,681
2,750,000
$ 90,627,490 $ 81,831,382
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
02-27-07
08-28-07
02-26-08
04-22-08
Mattituck Inlet Shore Erosion Study ................................. $ 82,750
Open Space Preservation: Non-Agricultural Land ...................... 22,500,000a
Open Space Preservation: Agricultural Lands ......................... 4.000,000
Acquisition of Land and Building (Peconic School Property) .............. 11350,000a
Tax Collection Software .......................................... 75,000
Total .................................
$28,007,750
a. To be funded in whole or in part by the issuance of the Bonds.
Capital Program
The Town annually adopts a Capital Budget. Projects may be funded by State and Federal aid, reserves,
proceeds of obligations, property taxes or a combination thereof. A summary of the Capital Budget for 2008 is set
forth below:
Department 2008
General Town .................................... $6,727,928
Highway Dep_t .................................... 110,000
Solid Waste District ............................... 689,000
Wastewater Disposal District ....................... 1,500,000
Total ...........................................
$ 9,026,928
Sources
Appropriations ...................................
Grants .......................................
Town Debt .................................
Total ...........................................
$ 186,100
8,840,028
$ 9,026,828
10
Landfill Closure and Postclosure Care Costs
The Town owns a landfill on a site in the unincorporated area of Cutchogne, commonly known as thc
Cutchognc 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 '~003. In addition to placement
of thc final cover on thc landfill, state and fcdaral regulations presently require the Town to perform certain
maintenance and monitoring functions at thc site for up to thirty years. The Town has and will continue to comply
with said requirements. Thc ongoing post closarc costs arc estimated to be between $25,000 and $30,000 per year
from 2008 through 2010. Thc Town paid $26,390 for such costs in 2007 and will continue to pay these costs in thc
future.
Actual costs associated with the capping totaled $7,681,720. Financing for closure activities was provided
in pan through a grant from the New York State Department of Environmental Conservation in the amount of
$2,000,000. The balance was provided through a State subsidized loan received in July., 2004 from the New York
State Environmental Facilities Corporation. Costs associated with postclosure care will be covered by charges to
future users of the collection facility and site and future tax revenue.
FINANCES OF THE TOWN
Financial Statements and Accounting Procedures
The Town maintains its financial records in accordance with the Uniform System of Accounts for Towns
prescribed by thc State Comptrollar. Thc financial records of the Town are audited by independent accountants. Thc
last such audit made ava able for public inspection covers the fiscal year ended December 31 2006. In addition,
thc financial affairs of thc Town are subject to periodic compliance review by the Office of the State Comptroller
to ascertain whether the Town has complied with thc requirements of various State and Federal statutes.
In June 1999 thc Governmental Accounting Standards Board ["GASB') issued Statcmant 34, "Basic
F nanc a Statcmants and Managemcnt's Discussions and Analysis for State and Local Governments". GASB
required thc Town to implement this standard for the fiscal year ending December 31, 2003 and the Town has
complied with such requirements. This Statcmant established new financial reporting requirements for state and local
governments throughout thc United States. It required new information and restructuring of much of the information
ihat 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 aceordancc with special
regulations, restrictions or limitations.
There arc 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 naturc;~and~, (3) fiduc!ary funds.
that account for assets held in a trustee capacity. Account groups, which do not represent tunas, arc used to recoru
fixed assets and long-term obligations that are not accounted for in a specific funo.
The Town presently maintains thc following governmental funds: General Fund, Highway Fund and Special
Districts Funds, and thc Capital Projects Fund. Fiduciary funds consist of a Trust and Agency Fund. There are no
proprietary funds. Account groups arc maintained for fixed assets and long-term debt.
Basis of Accounting
The Town's ~overnmental funds are accounted for on a modified accrual basis of accounting. Under the
modified acc,rual b ,a,s~, reven,u, es are recognized when they become susceptible to accrual - that is, whe..n 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 rule is unmatured interest on general long-term debt
which is recognized when due.
Investment Policy
Pursuant to State law, including Sect OhS 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 t me deposit accounts and certificates of deposit in excess of the amount
insured under the Federal Deposit'Insurance Act, are required to be secured in accordance with the provisions of and
subject to the limitations of Section 10 of the GML.
11
The Town may also temporarily invest moneys in: (1) obligations of the United States of America; (2)
obligations guaranteed by agencies of the United States of America where the payment of principal and interest are
guaranteed by the UnitedStates 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
I~articipation 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 ora New York public b~/nefit corporation which are
.made lawful investments for municipalities pursuant to the enabling statute of such public benefit cortmration; or (7)
?otwh~.case of moneys held in certain reserve funds established by the Town pursuant to law, in obligations of the
All of the foregoing investments are required to be payable or redeemable at the option of the owner within
such times as theproceeds will be needed to meet expenditures for purposes for which the moneys were provided
and, in the case of obligations purchased with the proceeds of bonds or notes, shall be payable or redeemable in any
event, at the option of the owner, within two years of the date of purchase. Unless registered or inscribed in the name
of the Town, such instruments and investments must be purchased through, deliveredto and held in custody ora bank
or trust company in the State pursuant to a written custodial agreement as provided by Section 10 of the GML.
SThe Town Board has adopted an investment policy and such policy conforms with applicable laws of the
tare governing tl~e cleposit anO 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 recJuired 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
15~. Estimates for each fire district situated within the Town must also [~e filed with the budget officer by this d~ate.
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 SeptemlSer. Subsequently, the Town Clerk presents the tentative
ouoget to tl~e lown t~oarfl at the regular or special hearing which must be held on or before October 5th. The Town
Board reviews the tentative budget and makes such changes as it deems necessary and that are not inconsistent with
the provisions of the law. Following this review process, the tentative budget and such modifications, if any, as
approved by the Board become the preliminary budget. A public hearing, notice of which must be duly published
in the Town's official newspaper, on the preliminary budget is generally required to be held on the 'I'hursday
immediately following the general election. At such hearing any person may express his opinion concerning the
preliminary budget; however, there is no requirement orprowsion that the preliminary budget or any portion thereof
ne ,voted on by members of the public. After the public hearing, the Town Board may furtfler change and revise the
predminary budget. The Town Board, by resolution, adopts the preliminary budget as submitted or amended no later
than November 20th, at which time, the preliminary budget becomes the annual~oudget 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 includ ng the transfer of
appropriations among line items must be approved by resolution of the Town Board.
Budget Summaries for the 2007 and 2008 fiscal years may be found in Appendix A.
Financial Operations
The Supervisor functions as the chief fiscal officer as provided in Section 2 of the Local Finance Law; in
this role, the Supervisor is responsible for the Town% accounting and financial reporting activities In addit on, the
Supervisor is also the Town'sbudget 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 ]aw, 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 authoriz ng, by
resolution, a mater a financial transactions such as operating and capital budgets andbonded debt.
Town finances are operatedprimarily through the General and Special Revenue Funds. The General Fund
receives most of its revenue from real property tax and State aid. Current operatinl~ expenditures are l~aid from these
funds subject to available appropriations. The Town also has refuse, sewer anal wastewater distr)cts, which are
accounted for within ..... separate funds. The _primary_ sources, of income for these districts comes from specia
assessments levied against district properties at the same time real estate taxes are levied. Cap ta 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 andreporting purposes.
12
The Town receives most of its revenues from a real property tax on all non-exempt property situated within
the Town and from State Aid. A summary of such revenues for the five most recently completed fiscal years may
be found in Appendix A.
Real Property Taxes
See "Real Property Tax Information", heroin.
State A id
The Town receives financial assistance from the State which comes primarily in the form of a state
appropriation for State Aid to municipalities for operating purposes. There is no assurance, however, that the State
appropriation for State Aid to municipalities will continue, either pursuant to existing formulas or in any form
whatsoever and, in any event if appropriated and apportioned to the Town, payment can be made only if such monies
are ava ab e therefore. The State is 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
· Substantially,, all ,e, mployees of the Town are members of the New York State and Local Employees'
~Ret~rement System ("ERS) or the New York State and Local Police and Fire Retirement System ("PFRS"]. (Both
Systems are referred to together hereinafter as the "Retirement Systems" where appropriate.) The Re{ir~ment
Systems are cost-sharing multiple public employer retirement systems The obligation ofemployers and employees
to contribute and the benefits to employees aregoverned by the New York State Retirement System antiSocial
Security Law (the "Retirement System Law"). The Retirement Systems offer a wide range ofp ans and benefits
which are related to years of service and final average salary vesting of retirement benefits, death and disability
benefits and optional methods of benefit paxments. All bene~ts generally vest after five years of credited service.
The Retirement System Law generally l~rowdes 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
],~articipatingemployers. Generally, all employees,except certain part-time employees,participate in the Retirement
~ystems. The Retirement Systems are non~contrit~utory with respect to mem6ers hiredprior to July 27, 1976. All
employees who became members on or after July 27, 1976 must contribute 3% of their gross annualsalary towards
the cost of their retirement program. Chapter 86 of the Laws of 2000 elim hated the 3% for T er 3 and Tier 4
members w th 10 years of service cred t~
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
~m, ofhow much ~t would have to pay to the system until after its budget was mp emented Under the new system the
~contribution for a given fiscal year will be based on the value of the pension l~und on the prior April 1 instead of the
following April 1 so that the Town will be able to more accurately include the cost of the contr bution into its budget.
Chgpter ~ 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 contribution possible.
On July 20, 2004 the New York State Legislature passed a bill amending the General Municipal Law, Local
Finance Law and the Retirement and Social Security Law. On July 30, 2004~ theGovemor s gned the new retirement
system legislation into Law as Chapter 260 of the Laws of 2004. The bill g~ves the emp oyer the opt on to move the
annual payment date for contributions from December 15t~ to February l~t effective December 15, 2004 It ncreases,
from five to ten years, the maximum amortization period of the pomon of employer contribut OhS that exceeds 7%
ofpayrolI for the 2004-2005 fiscal year of the Retirement System (April 1 - March 3 I)
For the payment due December 15, 2008, it is estimated that the contribution will be approximately 11.5%
of payroll.
The Town paid its retirement obligation in full on December 15, 2007 and has included its tota ob gat on
for the 2008 fiscal year in its current budget. The Town does not plan to amortize its retirement system obligations.
While the Town is aware of the potential negative impact on its budget and will take the appropriate steps
to budget accordingly for the increase, there can be no assurance that its financ a position will not be ncgative'iy
impacted as a resu~ of the potantial increase in such contributions.
13
Contributions to the Retirement Systems
Fiscal Year Amount
Ending of
December 31: Contribution
2003 ....................................... $ 684,617
2004 ....................................... 1,670,102
2005 ....................................... 2,085,137
2006 ...................................... 1,837,992
2007 ....................................... 1,947,914
2008 (Budget) ................................ 2,033,160
Other Post Employment Benefits
It should also be noted that the Town provides post-retirement healthcare benefits to various categories of
former employees. These costs may be expected to rise substantially in the future. There is now an accounting rule
that will require governmental entities, such as the Town, to acco,u, nt for post;retirement healthcare benefits as it
accounts for veste,,d,j~,ensi,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 fo ow ng dates, based on the s ze of government measured'oy 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 reducingretiree health benefits or increasing health care contributions
received or paid by retirees below the level ofbene¥its or contributions afforded to or rec[u, ired from active employees
since the implementation of Chapter 729 of the Laws of 1994. This protection from 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 of municipal units in the State do presently
receive such benefits.
GASB 45 and OPEB. OPEB refers to "other post-employment benefits," meaning other than pension
benefits, disability benefits and OPEB consist primarily of health care benefits and may include other benefits such
as disability benelSts 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 govemmenta financial statements.
GASB 45 will require municipalities and school districts to account for OPEB liabilities much like they
already account for pension liabilities, geoerally adopting the actuarial methodologies used for pensions, with
adjustments for the different characteristms of OPEB and the fact that most municipalities and school districts have
not set aside any funds against this liabiliVd. Unlike GASB 27 which covers accoonting for pensions, GASB 45 does
not require municipalities or school districts to report a net (~PEB 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
already earned by current and former employees but not.yet provided for)~ using an amortization period of not more
than 30 years. Ifa municipality or school district contrit~utes an amount less than the ARC, a net OPEB obligation
will result, which is required to be recorded as a liability on its financial statements.
The actuarial study is in the process of being completed and is expected to be submitted to the Town in the
~ext several months. The Town's ARC is estimated to be approximately $4.5 million and its unfunded actuarial
accrued ab tyisestimatedt~beappr~ximate~y$43mi~i~n.GASB45d~esn~trequirethattheunfunded~iabi~ity
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.
I4
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 lew, by pnrpose, with adjustmeuts and collection performance for
each of the last five fiscal years. ~
Tax Levy and Collection Record
2004
Total Tax Levy ................ $79,909,681
Amount Collected ............. 77,595,985
Returned to County
Fiscal Year Ending December31:
2005 2006 2007 2008
$89,495,573 $89,934,663 $97,216,091 $103,216,661
83,356,976 86,628,595 94,288,000 60,650,000a
Amount .................... 2,313,696 2,138,597 3,106,068 2,928,091
Percentage 2.90°¼ 2.39% 3.45% 3.01%
Uncollected a~ '~ ;~' ~r .......
of Levy ................... None None None None
a As of April 21, 2008.
Tax Collection Procedure
42,566.661a
41.24%a
NA
Property taxes for the Town are collected by the Town tax receiver. Such taxes are due andpayable in equal
installments on December 1 and May 10, but may be p.aid witho~ut penalty, by January 10 and May 31, respectively.
l~[ The penalty added to delinquent taxes is one-twelfth the rate oi- interest Oetermined 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 eacl5 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. U, ncollected amounts are not segregated by
the Town tax receiver, and any deficiency in tax collection is the County s liability.
Tax Rates
(Per $100 Assessed Valuation)
Fiscal Year Ending December 31:
2004 2005 2006 2007 2008
General - Townwide ................ $136.65 $139.73 $140.37 $151.02 $160.22
General - Outside Village ............ 4.53 5.43 4.90 3.99 7.84
Highway ...................... 31.12 38.37 40.68 39.63 41.74
Laree Taxable Pronerties
20'08 Assessment ~olla
Assessed
Name Type Valuation
Peconic Landing at Southold .......................
LILCO, LIPA .~larketspan Keyspan .................
Village of Greenport-Power Plant ....................
Fishers Island Dev. Corp ...........................
Robins lsland HoldingLLC .........................
Alan Cardinale ..................................
North Fork Bank .................................
Damianos, Herodotus ..............................
New York Telephone .............................
Levin Family Ltmited Partnership ....................
Anderson, Bradley & Francesca .....................
Norris Susan ....................................
Laure L nks & Country Cub .......................
Kimogenor Pt Co .................................
DriftvTood Cove
Commercial $ 1,707,704
Utility 1,559,020
Utility 585,000
Residential Development 363,200
Private Lands 330,500
Shopping Center 285,500
Bank Building 268,531
Vineyard 234,000
Utility 218,496
Motel& Restaurant 163,950
Farmland & Private Lands 121,400
Various Properties 111,800
Country Club 96,300
Co-Op 94,600
Co-Op 90,000
$6,230,001 b
a. Assessment Roll established in 2007 for levy and collection of taxes during 2008 Fiscal Year.
b. Represents approximately 5.75% of the total taxable assessed valuation of thc Town for 2008.
15
LITIGATION
The Town is subject to a number of lawsuits in the ordinary conduct of its affairs. For the most part, any
potential adverse decisions in such suits, either individually or in the aggregate, are 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 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 detemune 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 unknown at this point.
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 by plaintiffs, which sought substantially to
increase the zoning density of a parcel of landowned by a developer plaintiff. Plaintiffs assert claims under the [:air
Housing Act, Americans with Disabilities Act, State and To,w? Law al!,eging 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 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. Fact and expert discovery is proceeding. The Town has denied all wrongdoing and
intends vigorously to contest these claims.
Notices of Claim - One possible noteworthy Notice of Claim has been filed against the Town relating to
police m~l~ice of Claim, the plaintiffdemands $5 million in damages for physica, J emotional and c~vil
rights injuries related to an alleged incident, believed to be an arrest by Town police officers on or about February
21,2007 and prior 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.
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 th~s Official Statement, incInding 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 and employers, as well as natural catastrophes, could adversely affect the assessed valuation of ']['own
property and its ability to maintain fund balances andother statistical indices commensurate with its current credit
rating. Accordingly, a decline in the Town's credit rating could adversely affect the market value of the Bonds.
In addition, if and when a holder of any of the Bonds should elect to sell a Bond prior to its maturity, there
can be no assurance that a market shall have been established, maintained and be in existence for the purchase and
sale of any Bonds. The price orprincipal value of the Bonds is dependent on the prevailing level of interest rates.
If interest rates should increase, the price ora bond or note may dechne causing the bond or noteholder to potentially
incur a capital loss if su'ch 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 Bankruptcy Act or
otherwise, will not occur which might affect the market price of and the market for the Bonds. Ifa significant default
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 and 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 thc Bonds, for income taxation purposes could have an adverse effect on the market value of the Bonds
(see "Tax Matters" herein).
16
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, ([) interest on
thc 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 tern
in calculating the alternative minimum tax imposed on individuals and corporations under the Code; such nterest,
however, is included in the adjusted current earnings of certain corporat OhS for purposes of ca cu ating the
alter,n, ative minimum tax imposed on such corporations. The Arbitrage and Use of Proceeds Cert ficate 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 opin on, Bond
Counsel has relied on certain representations, certifications of fact, and statements o£reasonable expectat ohs made
by the Town in connection with the Bonds, and Bond Counsel has assumed comp lance by the Town w th 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.
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 includin~ The City of New
York. ~ee "Miscellaneous" below for a discussion of certain litigation that may relate to this New York State tax
exempUon.
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 ex~sting statutes and court decisions as of the issue
date, and assumes 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
of interest on the Bonds.
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 oftheBonds yield and other restrictions on investments of gross proceeds, and the
arbitrage rebate requirement that certain excess earnings on gross proceeds be rebated to tt~e Federal government.
Nonco.m. pliance with such requirements may cause interest on the Bonds to become included in gross income for
Federal income tax purposes retroactive to their issue date, irrespective ~ofthe date on which such noncompliance
occurs or is discovered. The Town in executing the Tax Certificate x~iil 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 particuIar 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 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 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 dis~count" ("OLD') is the excess of the sum of all amounts payable at dqe stated maturit,~ of a
ond (excluding certmn quahfied stated interest that ~s nncondmonally 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 al which
a substantial amomtt of the Bonds of that maturity was soId (excluding sales to bond houses, brokers, or similar
persons acting iii the capacity as underwriters, placement agents, or wholesalers). In general, the issue price for each
17
maturity of the Bonds is expected to be the initial public offering p,~ice set forth in this Official Statement. Bond
Counsel further is of the opinion that, for any Bondhaving OID (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 eeneral under Section 1288 of the Code, OID on a Discount Bond accrues under a constant yield method,
based on pe~riodic compounding of interest over prescrib, ed 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
OlD for purposes of determining gain or toss 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
receivedfor purposes of determining various other tax consequences of owning a Discount Bond even though there
will not be a corresponding cash payment.
Owners of 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 (excludingaccrued interest) or otherwise at a
tax basis that refl,e, cts apremium over th~,e, sum of all amounts payable on the Bond after the acquisition date
(excludingcertain qualifledstatedin,,terest thatisunc,,o, nditionally pa[¢ble at least annually at prescribed rates), that
oremiumconstitutes"bondoremium onthatBond(a Premium Bond' ). Ingeneral, under Section 171 oftheCode,
in owner of a Premium Boned 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~oased on constant yieldprinciples
(in certain cases involving a Premium Bond callable prior to its stated maturity date, the amortization periodand y~eld
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
al 0cable to that period. In the case of a tax-exempt Premium Bond if the bond prermum 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 though it is sold or redeemed for an amount less than or equal to the owner's original ac~luisition cost.
Owners of any Premium Bonds should consult their own tax advisors regarding the treatment of bona premium for
Federal income tax purposes, including various special rules relating thereto, and state and local tax consequences,
in connection with the acquisition, ownership, amortization of bond premium on, sale, exchange, or other disposition
of Premium Bonds.
Information Reporting and Backup Withholding
Information reporting requirements apply to interest on tax-exempt obligations, including the Bonds. In
general, such requirements are satisfied if the interest recipient co,,mpletes, and provides the payor w~th, a Form W-9,
"Request for Taxpayer Identification Number and Certification or unless the recipient is one of a limited class .o.f
exempt recipients including corporations. A recipient not otherwise exempt from ~nformation reporting who faJIs
to satisfy the information reporting requirements wdl be subject to "backup withholding," which means that the ~ayor
s required to deduct and withhold a ,t, ax from the interest payment calculated in the manner set forth in the t~ode.
For the foregoing purpose, a "payor' generally refers to theperson 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 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 anyevent,
backup withholding does not affect the excludability of the interest on the Bonds from gross income for Federal
income tax purpos, e_s. Any amounts withheld pursuant to backup withholding would be allowed as a refund or a credit
against the owner s Federal income tax once the required information is furnished to the Internal 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 marketabi ty of the Bonds.
Prospective purch,a?ers of the Bonds should be aware that the United States Supreme Court is in the process
of reviewing Davis v. Dept. t~fRevenue of the Finance and Admin. Cabinet, 197 S.W. 3d 557 (Ky. App. 2006), cert.
granted 1275.ct.2451 (2007)(mem.), a decision of a Kentucky appellate court, which held that provisions of
Kentucky tax law that provided more favorable income tax treatment for holders of bonds issued by Kentucky
municipal bond issuers than for holders of non-Kentucky municipal bonds violated the Commerce Clause of the
United States Constitution. New York statutes provide more favorable New York income tax treatment for holders
of bonds issued by the New York State and its political subdivisions, including the Bonds, than for bonds issued by
18
other states and their political subdivisions. If the United States Supreme Court were to affirm the holding of the
Kentucky appellate conrt, subsequent New York judicial decisions or legislation des gned to ensure the
constltutionality of New York tax law could, among other alternatives adversely affect the~ew York State tax
exemption of outstanding bonds, including the Bonds to the extent constitutionally permissible, or resu t n the
exemption from personal income taxes imposed by the New York State and its political subdivisions including The
Cit'/of New Yor}c, of interest on certain bonds issued by other states and their political subdivisions, either ofwh ch
actions could affect the market price or marketability of the Bonds.
Prospective purchasers of the Bonds should consult their own tax advisors regarding the foregoing matters.
DOCUMENTS ACCOMPANYI1NG DELIVERY OF THE BONDS
Absence of Litigation
Upon delivery of the Bonds, the Town shall furnish a certificate of the Town Attorney, dated the date of
delivery of the Bonds, to the effect that there is no controversy or litigation of any nature pending or threatened to
restrain or enjoin the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the
validity of the Bonds or any of the proceedings taken with respect to the issuance and sale thereof or the application
of moneys to the payment of the Bonds, and further stating that there is no controversy or litigation of any nature now
pending or threatened by or against the Town wherein an adverse judgment or ruling could have a material adverse
impact on the financial condition of the Town or adversely affect the power of the Town to levy, collect and enforce
the collection of taxes or other revenues for the payment of the Bonds, which has not been disclosed in this Official
Statement.
Legal Matters
Legal matters incident to the authorization issuance and sale of the Bonds will be subject to the final
approving opinion of Hawkins Delafield & Wood LLP, Bond Counsel. Such opinion will be available at the time
of delivery of the Bonds and will be to the effect that the Bonds are valid and legally binding general obligations of
the Town for which the Town has validly pledged its faith and credit and unless paid from other sources, all the
taxable real property within the Town is subject to the levy of ad valorem real estate taxes to pay the Bonds and
interest thereon without limitation of rate or amount. Said opinion shall also contain further statements to the effect
that(a) the enforceability ofri_g?s 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, and (b) said law firm has not been
requested to examine or review and has not examined or reviewed the accuracy or sufficiency of the Official
Statement, or any additional proceedings, reports, correspondence, financial statements or other documents,
containing financial or other information relative to the' Town which have been or may be furnished or disclosed to
purchasers of the Bonds, and expresses no opinion with respect to such financial or other information, or the accuracy
or sufficiency thereof.
Closing Certificates
Upon the delivery of the Bonds, the Purchaser will be furnished with the following items: (i) a Certificate
of the Town Supervisor to the effect that as of the date of this Official Statement and at all t~mes subsequent thereto,
up to and including the time of delivery of the Bonds, this Official Statement did not and does not contmn any untrue
statement of a material fact or omit to state a material fact necessary to make the statements herein, in the light of
the circumstances under which they were made, not misleading and further stating that there has been no adverse
material change in the financial condition of the Town since the date of this Official Statement up to and including
the time of delivery of the Bonds, and having attached thereto a cop~ of this Official Statement; (ii) a Certificate
signed by the Town Supervisor evidencing payment for the Bonds; (fii) a Signature Certificate evidencing the due
execution of the Bonds, including statements that (a) no litigation of any nature ispending or threatened, restraining
or enjoining the issuance and delivery of the Bonds or the levy and collection of taxes to pay the p,rincipal of and
interest thereon, nor in any manner questioning the proceedings and authority under which the Bonds'~ ere authorized
or affecting the validity of the Bonds thereunder, (b) neither the corporate existence or boundaries of the Town nor
the title of any of the officers thereof to their respective offices is being contested, and (c) no authority or proceedings
for the issuance of the Bonds have be~n repealed, revoked or rescinded; and (iv) an Arbitrage and Use of Procee~ts
Certificate executed by the Town Supervisor, as described under "Tax Matters~'.
19
DISCLOSURE UNDERTAKING
· T~is Official Statement is in a form "deemed final" b the Town f~ ~ · ·
CommlsslonRule 15c2-12 At the time ~,r~h~ a~; ...... c.~.'Y~o ..... ~thepu~°se~gfSecurJtiesandExchange
"Undertaking to Provide Continuing Disclosure" (t[~e~"Undertakin~.~es~a~v~jT~r~'2ode.~~ ~ec.u...t~ copy ~,f. its
agree, ment or contract of the Town for the benefit of holders of and~o~vners of ber~h-~i3d;2_'~?fi..s_n.t~ute~a wr?te.n
(I) during any succeeding fiscal year of the Town in which the Bonds are outstanding, to a each nationall
recognizedmunicipalsecuritiesinfonnationrel~ositorv("NRMSiR,~ancl(h~th x~ ,, l~ . ~ · Y
p. ry,. eated~ ( SID ), (0 certain annual financial information, in a form generally consistent with
~e information contained or cross-referenced in th s Offica Statement nnrl~r f!a,~ ~ a' -- , ~-- ~ ,
Economic and Demogranhlc Information , 'Indebtedness of the Town' Fi ....
Property Tax Informatmn~ and "Lift at' "' ' ' z nances of ~e Town , Real
end of each fiscal year in~udin"rii~g~h~e~.a.*n~d~n~A~p-ge~n~d}x~`A~n.~r.`pr'~rt~the.~8~thday.f~I~wingthe
the end of each fiscal year; Y s available and in no event later than 360 days after
(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 reflect ng financa difficu t es; (iv) unscheduled draws on credit enhancements
reflecting financial difficulties; (v) subst tution of credit or hquiditv providers, or their failure to perform;
(vi) adverse tax opinions or events affecting the tax-exempt status oi~the Bonds; (vii) modifications to rights
of Bondholders; (viii) bond calls (ix) def~asances; (x) release, substitution, or sale of provertv securing
repayment oftheBonds; and (x) rating changes. - --
The Town may provide notice of the occurrence of certain other events, in addition to those listed above, if
it determines that any such other event 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 NRMSIRz 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 sha I remain in full force and effect until such time as the princioal o£ redemption
pre~mifim,~, if,any: an.dfin, tere,st, on .the BonOs shall have been paid in full. The sole and exclusive i'eme~v for
.o[ a_.e~.a?~t unue.r.t, the. un, ae,.rta~cm, g ~,s, an a~ction to compel specific performance of the undertakings of th~v~.-~'~i
n, pv,~on or entity, lncluulng a no net otthe Bonds shall be entitled to teen-ear mcmo*~--. -~--- '~ -~ - '
' , . -- --. ............ ta~y uamages mereunaer unuer
any circumstances. Any fadure by the Town to comply with the Undertaking will not constitute a default with respect
to the Bonds.
The Town reserves the r ght 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.
BOND RATING
The Bonds maturing n the years 2009 through 2018, inclusive, are rated "Aa3" by Moody's Investors
Service. The Bonds maturing in the years 2009 through 2018, inclusive, are NOT insured by Financial Security
Assurance Inc.
v ....on,noo,~y s I~nv~e,,st, o~rs.Se,rvl~e Inc:,.wdl assign its m..unicipal bond rating of "Aaa", the Bonds maturin~ in the
2~-* ~y~finro, ugn z~u, lpCl~Slve w~tl~ the understanding that upon delivery of the Bonds a nolic~ insulin- th°
~v,m~n.t wne~n?u~e.orme, p,r?cIpa, l of and interest on the Bonds maturing in the years 2019 th'fourth 2~30 incl~'siv~
wm ue Issuea Dy i~lnanclal becurlty Assurance Inc. ~ '
Such ratings reflect on y the views of such rat ng agency, and any desired explanation of the significance of
such ratings shoul-d be obta ned from such rat ng agency. (36nerally, a rating agency bases its ratings on the
information and materials furnished it and on nvestigation, studies and-assumptions by the rating agency. There is
no assurance that a particular rat n~: w 1 apply for any ~iven period of time or that it will not be lowered or withdrawn
entirely if, in the judgment of the agency originaf[y establishing the rating, circumstances so warrant. The
underwriter has undertaken no responsibi/ity to br ng to the attention of the holders of the Bonds any proposed
revisions or withdrawals. Any downward revisions or withdrawals of such ratings, could have an adverse effect on
the market price of the Bonds. Such ratings should not be taken as a recommendation to buy or hold the Bonds.
20
FINANCIAL ADVISOR
Manistat Services, Inc. has assisted the Town as financial advisor in certain matters with respect to the sale
and issuance of the Bonds.
ADDITIONAL INFORMATION
Additional information may be obtained upon request from the office of thc Town Comptroller, Town of
Southold, Town Hall, P.O. Box 1179, Southold, New York 11971, telephone number 631/765-4333, or from the
office of Munistat Services, Inc. 12 Roosevelt Avenue, Port Jefferson Station, New York 11776, telephone number
631/33 -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 thc
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
May 13, 2008
By: s/s SCOTT A. RUSSELL
Town Supervisor and Chief Fiscal Officer
21
APPENDIX A
FINANCIAL INFORMATION
ASSETS
Cash and Investments
Cash - Restricted
Taxes Receivable
Accounts Receivable
Due From Other Funds
Due From Trust Funds
State and Federal Aid Receivables
Due From Other Governments
Supply Inventory
Prepaid Expenses
Deposit
Balance Sheet
General Fund
Fiscal Year Ending December 31:
2005 2006 2007
$ 9,292,437 $ 8,339,472
0 0
0 0
24,533 22,346
176,390 190,208
68 0
81,849 110,153
1,867,136 2,075,955
1,204 2,099
498,344 426,200
0 0
Total Assets $ 11,941,961 $ 11,166,433
$ 21,437,689
0
0
17,263
74,500
0
62,377
826,834
1,275
460,951
0
LIABILITIES AND FUND EQUITY
Accounts Payable
Due to Other Funds
Due to Other Governments
Due to Trust Funds
Due to Compnent Units
Deferred Revenues
627,049 $ 701,018
1,888,241 1,205,516
393,570 243,292
7,044 12,601
0 0
3,018,595 3,619,307
830,531
2,974,237
8,925,786
0
0
5,066,541
Total Liabilities 5,934,499 5,781,734 17,797,095
Fund Balances - Reserved:
Encumbrances 4,009 13,284
Insurance claims 1,105,879 513,329
Supply Inventory 1,204 2,099
Prepaid Expenses 498,344 426,200
Fund Balances - Unreserved:
Designated - Ensuing Year's Budget 2,657,200 2,185,000
Undesignated 1,740,826 2,244,787
Total Fund Equity
Total Liabilities and Fund Equity $
6,007,462 5,384,699
11,941,961 $ 11,166,433
Sources: Audited Financial Reports of the Town (2005 and 2006) and Annual Financial Report (2007) unaudited.
Table itself NOT audited.
193,04~
588,614
0
0
1,816,000
2,486,139
5,083,794
22,880~889
A-1
Statement of Revenues, Expenditures and Changes in Fund Balance
General Fund Town Wide
Revenues:
Real Property Taxes
Other Real Property Tax Items
Non-Property Tax Items
Departmental Income
Intergovernmental Charges
Use of Money & Property
Licenses & Permits
Fines & Forfeitures
Sale of Property & Comp. for Loss
Miscellaneous Local Sources
State Aid
Federal Aid
Fiscal Year Ending December 31:
2003 2004 2005 20Q6 2007
$ 13,247,572 $ 13,962,268 $ 14,608,674 $ 14,872,736 $ 16,205,9II
51,311 65,720 68,807 85,808 92,606
401,035 415,071 415,071 616,670 683,873
315,289 344,217 345,956 477,849 411,790
202,917 296,050 252,558 316,049 329,202
201,702 254,142 489,796 684,166 764,912
188,480 214,461 249,178 258,794 253,494
107,084 107,315 140,192 171,763 155,477
56,893 405,077 93,290 95,057 148,283
133,346 128,027 432,269 146,260 185,945
2,225,401 2,974,027 2,637,870 2,725,177 2,412,869
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 Gox. ernment 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, I72,279
1,007,318 2,104,202 1,560,055 1,313,234 1,192,497
~'otal Expenditures
15,220,97I 19,634,809 21,288,076 22,024,158 22,830,345
2,056,633 (308,0971 (1,380,0671 (1,345,3381 (1,040,4151
1,392,850 2,932,574 2,642,859 2,253,944 2,738,349
(1,910,7811 (1,304,1951 (I,895,0231 (1,531,3691 (1,998,8411
(517,9311 1,628,379 747,836 722,575 739,508
1,538,702 1,320,282 (632,2311 (622,763) (300,907)
Excess (Deticiency) of Revenues Over
Expenditures
Operating Transfers In
Operating Transfers Out
Total Other Financing Sources (Uses)
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses
Fund Balance Beginning of Year
3,780,709 ~5;3_~19,411 _6,_6~39,693 6,007,462_ 5,384,_69~9
Fund Balance End of Year
$ _.¢,~1~9_,4~11 $ 6,639,693 $ 6,007,462 $ 5,384,699 $ 5,083,792
Sources: Audited Financial Reports of the Town (2003-20(161 and Annual Financial Report (2007) unaudited.
'laNe itself NO f auditc&
A-2
Revenues:
Real Property Taxes
Other Real Property Tax ltems
Non-Property Tax items
Intergovernmental Charges
Use of Money & Property
Licenses & Permits
Sale of Property & Comp. for Loss
Miscellaneous Local Sources
lnterfund Revenues
State Aid
Federal Aid
Statement of Revenues, Expenditures and Fund Balance
Highway Fund
Fiscal Year Ended December 31:
2003 2004 2005 2006 2007
3,513,902 $ 3,520,332 $ 3,805,032 $ 4,095,347 $ 4,027,695
6,428 3,679 9,046 12,689 12,722
0 0 0 0
15,573 0 0 0 0
18,520 23,884 77,817 140,578 142,501
8,231 4,937 11,126 9,484 10,362
4,033 2,960 2,796 7,521 29,213
0 16 155,054 0 0
0 0 0 0 0
458,686 228,337 188,147 276,337 296,263
67,699 0 0 0 0
4,093,072 3,784,145 4,249,018 4,541,956 4,5 l 8,756
Expenditures:
Transportation
Employee Benefits
Debt Service
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures
Residual Equity Transfer
Operating Transfers In
Operating Transfers Out
Total Other Financing Sources (Uses)
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses
Fund Balance Beginning of Year
Fund Balance End of Year
2,733,518 2,638,121 2,913,768 3,028,076 3,437,1'86
976,406 415,102 500,343 515,106 510,185
15,128 22,219 178,371 283,652 250,001
3,725,052 3,075,442 3,592,482 3,826,834 4,197,372
368,020 708,703 656,536 715,122 321,384
0 0 0 0 212
(690,390) (520,085) (452,648) (561,690~1~
(60,000)
(60,000) (690,390) (520,085) (452,648) (561,484)
308,020 18,313 136,451 262,474 (240,100)
594,064 902,084 920,397 1,056,848 1,319,322
902,084 $ 920,397$ 1,056,848$ 1,319,322$ 1,079,222
Sources: Audited Financial Reports of the Town (2003-2006) and Annual Financial Report (2007) unaudited.
Table itself NOT audited.
A-3
Statement of Revenues, Expenditures and Changes in Fund Balance
Non-Major Governmental Funds (1)
Real Property Taxes
Other Real Property Tax Items
Non-Property Tax Items
Departmental lncome
Intergovernmental Charges
Use of Money & Property
Licenses & Permits
Fines and Forfeitures
Sale of Property & Comp. for Loss
Miscellaneous Local Sources
State Aid
Federal Aid
Fiscal Year Ending December 31:
2003 2004 2005 2006 2007
$ 2,197,525 $ 2,506,945 $ 2,381,335 $ 2,741,362 $ 3,345,811
874 3,105 2,516 4,489 5,278
117,449 336,139 213,786 229,346 234,091
2,339,227 2,517,584 2,504,880 2,275,935 2,197,288
1,614 1,013 1,013 1,809 905
18,147 21,365 64,092 95,272 130,926
139,620 199,849 165,965 163,780 169,338
49,000 0 0 0 0
44,450 76,069 109,137 135,662 247,014
230 5,025 153,591 6,652 73,265
161,393 72,651 75,374 127,278 93,135
111,299 166,368 224,136 41,163 210,175
~xpenditures:
General Government Support
Public Safety
Public Health
Home & Community Services
Employee Benefits
Debt Service
5,180,828 5,906,113 5,895,825 5,822,748 6,707,226
134,969 92,514 99,895 103,654 87,969
749,904 739,198 807,474 869,154 948,267
6,408 6,664 6,864 7,104 7,370
3,230,201 3,225,586 3,102,639 3,363,781 3,797,322
874,049 371,038 444,858 470,377 468,988
117,562 88,803 671,720 822,590 1,089,449
Total Expenditures
5,113,093 4,523,803 5,133,450 5,636,660 6,399,365
Excess (Deficiency) of Revenues Over
Expenditures
67,735 1,382,310 762,375 I86,088 307,861
Operating Transfers In
Transfers Out
0 0 0 0 0
(483,500) (1,081,441) (504,720) (429,145) (534,804)
Total Other Financing Sources (Uses)
(483,500) (1,081,441) (504,720) (429,145) (534,804)
(415,765) 300,869 257,655 (243,057) (226,943)
1,261,339 845,574 1,146,444 1,446,849 (2) 1,807,810
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses
Fund Balance Beginning of Year
Fund Balance End of Year
$ 845,574 $ 1,146,443 $ 1,404,099 $ 1,203,792 $ 1,580,867
(1) Includes the following funds: General Fund Part Town, Special Grant Fund, East-West Fire Protection Fund, Southold Wastewater
District, Fishers Island Sewer District and Solid Waste Management District.
(2) Difference due to Prior Year Accounting Adjustment
Sources: Audited Financial Reports of the Town (2003-2006) and Annual Financial Report (2007) unaudited.
Table itself NOT audited.
A-4
Fund
BUDGET SUMMARY
Fiscal Year Ending December 31, 2007
Appropriations Less: Less:
and Provisions Estimated Unexpended
for Other Uses Revenues Balance
General $ 22,951,102
General-Outside Village 1,869,139
Highway-Townwide 0
Highway-Outside Village 4,938,330
Community Development 136,000
Risk Retention Fund 1,015,000
Community Preservation Fund 10,697,328
Employees Health Plan 2,662,000
Total-Town
$ 44,268,899
East-West Fire Protection District 509,828
Fishers Island Ferry District 3,038,000
Solid Waste Management District 4,058,562
Southold Wastewater District 128,316
Fishers Island Sewer District 20,000
F.I. Refuse & Garbage District 512,300
Orient Mosquito District 82,235
Subtotal-Special Districts $ 8,349,241
Orient-East Marion Park District 30,695
Southold Park District 315,000
Cutchogue-New Suffolk Park Dist. 145,000
Mattituck Park District 540,027
Subtotal-Park Districts $ 1,030,722
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
Amount to be
Raised by
Ta._.~x
$ 4,810,191 $ 1,935,000 $ 16,205,911
1,002,600 459,000 407,539
600 16,900 (17,500)
406,635 486,500 4,045,195
136,000 0 0
1,015,000 0 0
5,350,000 5,347,328 - 0
2,412,000 250,000 0
$ 15,133,026 $ 8,494,728
4,600 6,228
2,448,000 0
2,151,500 0
10,020 100,000
17,700 2,300
0 0
0 0
$ 4,631,820 $ 108,528
$ 20,641,145
499,000
590,000
1,907,062
512,300
82,235
$ 3,608,893
0 0 30,695
0 0 315,000
0 0 145,000
22,500 50,000 467,527
$ 50,000
$ 22,500
357,300 3,300 0
401,040 2,000 0
490,600 12,200 0
1,512,875 33,540 0
1,412,500 1,400 0
1,857,967 0 0
$ 6,032,282
$ 958,222
354,000
399,040
478,400
1,479,335
1,411,I~
1,857,9~Y,
$ 0 $ 5,979,842
15,412,245
$ ~59,681,144
$ 52,440
4,706,760
$ 19,839,786
158,528
$ 8,653,256
10,546,957
$ 31,188,102
Source: Adopted Budget of the Town.
A-5
BUDGET SUMMARY
Fund
Fiscal Year Ending December 3 I, 2008
Appropriations Less: Less:
and Provisions Estimated Unexpended
for Other Uses Revenues Balance
Amount to be
Raised by
Tax
General $ 24,413,069
General-Outside Village 2,246,677
Highway Fund 5,198,627
Community Development 136,000
Risk Retention Fund 765,000
Community Preservation Fund 5,200,000
Employees Health Plan 2,892,500
Total-Town
$ 40,851,873
$ 5,205,781 $ 1,816,000 $ 17,391,288
1,119,700 317,000 809,977
396,032 491,000 4,311,595
136,000 0 0
765,000 0 0
5,200,000 0 0
2,692,500 200,000 0
$ 15,515,013 $ 2,824,000
$ 22,512,860
Orient Road Improvement District 4,500
East-West Fire Protection District 552,863
Fishers Island Ferry District 3,220,775
Solid Waste Management District 4,224,695
Outhold Wastewater District 102,265
-Fishers Island Sewer District 30,950
F.I. Refuse & Garbage District 563,800
Orient Mosquito District 86,900
Subtotal-Special Districts $ 8,786,748
0 0
5,000 6,400 541,463
2,630,775 0 590,000
2,640,350 77,400 1,506,945
9,020 90,000 3,245
30,700 250 0
0 0 563,800
0 0 86,900
$ 5,315,845 $ 174,050
$ 3,292,353
Orient-East Marion Park District 34,780
Southold Park District 315,000
Cutchogue-New Suflblk Park Dist. 145,000
Mattituck Park District 560,229
Subtotal-Park Districts $ 1,055,009
0 0 34,780
0 0 315,000
0 0 145,000
29,000 50,000 481,229
$ 29,000 $ 50,000
$ 976,009
Fishers Island Fire District
Orient Fire District
East Marion Fire District
Southold Fire District
atChogue Fire District
ttituck Fire District
Subtotal-Fire Districts
359,700
483,940
536,380
1,631,025
1,412,000
1,978,770
$ 6,401,815
3,300
45,272
13,200
33,000
20,000
0
$ 114,772
0 356,400
0 438,668
0 523,180
0 1,598,025
0 1,392,000
0 1,978,770
0 $ 6,287,043
10,555,405
Total-All Districts
16,243,572
5,459,617
224,050
Grand Total
$ _57,095,445
$ 20,974,~0_
$__3,04~050
$ 33,.0_~;8~265
Source: Adopted Budget of the Town.
A-6
TOWN OF SOUTHOLD
APPENDIX B
FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
NOTE: SUCH FINANCIAL REPORT AND OPINIONS WERE PREPARED AS OF THE
DATE THEREOF AND 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
IREQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis ................................................................................... 3-11
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Assets .........................................................................................................................
12
Statement of Activities ............................................................................................................................. 13
Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet and Reconciliation of the Governmental Funds Balance Sheet to
The Statement of Net Assets .......................................................................................... 14-15
Statement of Revenues, Expenditures, and Changes in Fund Balances and
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures,
And Changes in Fund Balances to the Statement of Activities ................................................ 16-17
Fiduciary Fund Financial Statements
Statement of Fiduciary Net Assets ............................................................................................ 18
Notes to Financial Statements ................................................................................................................... 19-34
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANGEMENT DISCUSSION AND ANALYSIS
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
General Fund .............................................................................................................. 35
Highway Fund .............................................................................................................. 36
OTHER SUPPLEMENTARY INFORMATION
COMBINING FUND STATEMENTS:
Non-major Governmental Funds Combining Balance Sheet .............................................................................................
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ....................
DISCRETLY PRESENTED COMPONENT UNITS I
I
Discretely Presented Component Units:
Combining Statement of Net Assets .......................................................................................................
Combining Statement of Activities ........................................................................................................
37
38
39
40
CERTIFIED PUBLIC ACCOUNTANTS, BUSINESS ADVISORS AND CONSULTANTS
25 $~l'Olk Court, ]-]auppaug¢. N~ York ]] 755
631.434.9500 · Far 631.434.9518
INDEPENDENT AUDITORS' REPORT
Honorable Supervisor and Town Board
Town of Southold
Southold, New York
We have audited the accompanying financial statements of the governmental activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information of
the Town of Southold, New York, as of December 31, 2006, and for the year then ended, which
collecfively comprise the Town's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the Town's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with auditing
standards generally accepted in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We betieve that our audit provides a reasonable basis for our opinion.
The financial statements supporting the financial activities of the Town of Southold's discretely presented
component units with the exception of one, the Fishers Island Ferry District, were not audited as of the
report date, nor were we able to satisfy ourselves as to those financial activities by other auditing
procedures. Those financial activities represent approximately 34% of the net assets of the discretely
presented component units. The financial statements of the Fishers Island Ferry Distdct 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 faidy, in all material
respects, the financial position of the Town of Southold, New York, as of December 31, 2006, and the
results of its operations for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
The Management's Discussion and Analysis and the budgetary information are not a required part of the
basic financial statements but are supplementary information required by accounting principles generally
accepted in the United States of America. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation of the
supplementary information. However, we did not audit the information and express no opinion on it.
-I-
AL.BRECHT~ VI{3OIANO, ZURE:CK ~, COMF'ANY, P.C.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the Town of Southold, New York's basic financial statements. The combining and
individual fund financial statements are presented for purposes of additional analysis and are not a
required part of the basic financial statements. The combining and individual fund financial statements
has been subjected to the auditing procedures applied in the audit of the basic financial statements of the
Town of Southold, New York, and, in our opinion, is fairly presented in all material respects in relation to
the basic financial statements taken as a whole.
Hauppauge, New York
September 11,2007
-2-
REQUIRED SUPPLEMENTARY INFORMATION
Management's Discussion and Analysis
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
The following is a discussion and analysis of the Town of Southold's financial performance, providing an overview
of the Town's financial activities for the year ended December 31, 2006. Use this section in conjunction with the
Town's basic financial statements.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Assets and the
Statement of Activities provide information about the activities of the Town as a whole and present a longer-
term view of the Town's finances. For governmental activities, these statements tell how these services were
financed in the short term as well as what remains for future spending. Fund financial statements also report
the Town's operations in more detail than the government-wide statements by providing information about the
Town's most significant funds. The remaining statements provide financial information about activities for
which the Town acts solely as a trustee agent for the benefit of those outside of the government.
Reportinf~ 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). Arthough legally separate, these
"component units" are important because the Town is financially accountable for them. Complete
financial statements of the individual component units can be obtained from their respective
administrative offices (Note A).
-3-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2006
Reportin.q the Town's Most Si.qnificant 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 those funds and the balances left at year-end that are available for spending. These funds are reported
using an accounting method called modified accrual accounting, which measures cash and all other financial
assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term
view of the Town's general government operations and the basic services it provides. Governmental fund
information helps you determine whether there are more or fewer financial resources that dan be spent in the
near future to finance the Town's programs. We describe the relationship (or differences) between
governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and
governmental funds in a reconciliation that follows these fund financial statements.
The Town as Trustee
Reportinq the Town's Fiduciary Responsibilities
All of the Town's fiduciary activities are reported in a separate Statement of Fiduciaw Net Assets. We exclude
these activities from the Town's other financial statements because the Town cannot use these assets to
finance its operations. The Town is responsible for ensuring that the assets reported in these funds are used
for their intended purposes.
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE
Our analysis below focuses on the net assets and changes in net assets of the Town's governmental activities.
Condensed Statement of Net Assets
Governmental Activities
as of December 31, 2006 and 2005
Assets
Current and other assets
Capital assets
Total assets
Liabilities
Current and other liabilities
Long-term liabilities
Total liabilities
Net assets
Invested in capital assets,
net of related debt
Unrestricted
Total net assets $
2006 2005
$ 23,769,534 $ 26,265,665
100,557,312 90,294,079
124,326,846 116,559,744
15,552,211 16,289,370
14,773,434 14,916,051
30,325,645 31,205,421
92,063,214 81,044,981
1,937,987 4,309,342
94,001,201 $ 85,354,323
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
Total assets in the Town as of December 31, 2006 were $I24.3 million, an increase of 7.8 million. Total
liabilities as of December 31, 2006 were $30.3 million, which represents a decrease of $800,000 from
December 31, 2005. This results in a net asset balance of $94 million, an increase of $8.6 million. Of the
Town's net asset balance $92 million were invested in capital assets, net of related debt; while $1.9 million was
unrestricted.
Changes in Net Assets
Governmental Activities
for the years ended December 31, 2006 and 2005
Program Revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General Revenues Real property taxes
Other 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 $
2006 2005
$ 9,231,396 $ 10,723,686
713,597 859,484
4,834,716 3,502,247
14,779,709 15,085,417
21,709,445 20,795,041
102,986 80,369
846,016 628,857
1,233,122 766,413
2,610,189 2,527,110
463,671 709,352
26,965,429 25,507,142
41,745,138 40,592,559
6,843,661 6,621,408
11,421,283 11,342,991
43,499 43,559
7,298,698 6,627,876
1,354,610 1,208,467
713,164 356,167
4,912,384 4,961,051
553,713 501,452
33,141,012 31,662,971
8,604,126 $ 8,929,588
-5-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
FINANCIAL ANALYSIS OF THE TOWN AS A WHOI F (continued)
Net Cost of Services
Governmental Activities
for the year ended December 31, 2006
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Cost
of Services
$ 6,843,661
11,421,283
43,499
7,298,698
1,354,610
713,164
4,912,384
553,713
$ 33,141,012
Net Cost of Services
Governmental Activities
for the year ended December 31,2006
General government support
Public safety
Public health
Transportation
Economic assistance and opportunity
Culture and recreation
Home and community services
Interest on debt
Total Cost Program Net Cost
of Services Revenues of Services
$ 6,843,661 $ 319,565 $ 6,524,096
11,421,283 674,617 10,746,666
43,499 10,185 33,314
7,298,698 340,659 6,958,039
1,354,610 415,263 939,347
713,164 208,376 504,788
4,912,384 12,811,044 (7,898,660)
553,713 553,713
$ 33,141,012 $ 14,779,709 $18,361,303
The cost of all governmental activities this year was $33.1 million. The net cost of these services, however,
after subsidized by program revenues including charges for services and program grants, was $18.4 million.
The Town's change in net assets after general revenues of $27 million was an increase of $8.6 million.
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,O0O,OO0
$-
Expenses and Program Revenues
Governmental Activities
· Expenses
· Program Revenues
Charges for
State aid -
unrestricted
6%
Real
~taxes
Revenue by Source
Governmental Activities
For the year ended December 31,2006
Real property taxes $ 21,709,445
State aid - unrestricted 2,610,189
Charges for services 9,231,396
Other general revenues 2,645,795
Operating grants and contributions 713,597
Capital grants and contributions 4,834,716
$ 41,745,138_
-7-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2006
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE (continued)
THE TOWN'S FUNDS
The general fund balance has decreased by approximately $600,000 due primarily to actual expenditures in
excess of revenues.
The following schedule presents a summary of the governmental funds - (general, special revenue, and
capital projects) revenues and expenditures for the year ended December 31, 2006, and the amo,Jnt of
change and percentage of total in relation to the prior year.
2006 2005
Increase %
(Decrease) Change
REVENUES
Real property taxes
Other real property tax items
Non-property tax items
Departmental income
Intergovernmental charges
Use of money and properly
Licenses and permits
Fines and forfeitures
Sale of property and compensation for loss
Miscellaneous local sources
State aid
Federal aid
Total Governmental Fund Revenues
EXPENDITURES
General government support
Public safety
Public heatth
Transpodation
Economic assistance and opportunity
Culture and recreation
Home and community services
Employee benefits
Capital
Debt service principal and interest
Total Governmental Fund Expenditures
$ 21,709,445 $ 20,795,041 $ 914,404 4.2%
102,986 80,369 22,617 22.0%
846,016 628,857 217,159 25.7%
2,753,784 2,850,836 (97,052) -3.5%
6,142,177 7,453,845 (1,311,668) -21.4%
1,376,729 906,664 470,065 34.1%
432,058 426,269 5,789 i .3%
171,763 140,192 31,571 18.4%
238,240 205,223 33,017 13.9%
303,912 1,292,371 (968,459) -325.2%
7,108,866 3,946,391 3,162,475 44.5%
595,604 1,909,023 (1,313,419) -220.5%
$ 41,781,580 $ 40,635,081 $ 1,146,499 2.7%
$ 5,281,399 $ 4,741,463 $ 539,936 102%
8,240,434 7,984,619 255,815 3.1%
40,092 40,152 (60) -0.1%
3,480,126 3,360,645 !19,481 3.4%
949,740 901,139 48,601 5.1%
3,748,764 3,457,407 291,357 7.8%
530,270 315,273 214,997 40.5%
6,797,351 6,803,164 (5,813) -0.1%
13,324,188 12,788,366 535,822 4.0%
2,504,007 2,439,675 64,332 2.6%
$ 44,896,371 $ 42,831,903 $ 2,064,468 4.6%
GENERAL FUND BUDGETARY HIGHLIGHTS
Over the course of the year the Town Board revises the budget as needed so that expenditures do not exceed
appropriations. In all Town funds, various transfers between appropriations were approved for this purpose.
-8-
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2006
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2006 the Town had $100.5 million in net capital assets including land, buildings,
improvements, machinery and equipment, and infrastructure. The Town's component units had $8.4 million in
net capital assets including land, buildings, improvements, machinery and equipment, and sewer mains.
Capital Assets at December 31,
Primary qovernment Land
Construction in progress
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets
Less accumulated depreciation
Primary government - Total net capital assets
Component units Land
Construction in progress
Buildings
improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets
Less accumulated depreciation
Component units - Total net capital assets
2006 2005
$ 58,341,517 $ 47,772,278
220,114 1,608,081
8,307,223 4,574,513
13,618,159 13,498,954
9,916,143 9,522,815
70,694,655 70,038,525
161,097,811 147,015,166
60,540,499 56,721,087
$ 100,557,312 $ 90,294,079
2,213,759 $ 2,213,759
12,947,081 13,174,567
3,566,885 3,540,111
3,220,732 2,575,589
3,320,899 3,200,728
2,145,280 2,138,386
27,414,636 26,843,140
6,074,572 5,639,830
$ 21,340,064 $ 21,203,310
TOWN OF SOUTHOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2006
CAPITAL ASSET AND DEBT ADMINISTRATION (continued)
Capital Assets (continued)
The capital program is a long range financing guide and not a definitive plan. Each appropriation must be
authorized by Town Board resolution before being undertaken. Each may be financed by issuance of general
obligation bonds, which, at times, are preceded by issuance of bond anticipation notes for various periods of
time depending on the probable usefulness of the purpose of expenditure. The following sets fodh a summary
of the Town's capital program.
(Dollars in thousands):
Equipment 2007
General Fund $ 540,467
Highway Fund 488,000
Special Districts 305,000
Total Equipment $ 1,333,467
improvements
General Fund $ 2,786,961
Highway Fund 300,000
Special Districts 160,000
Total Improvements $ 3,246,961
Total Program $~
Additional information on the Town's capital assets can be found in Note C.3 to the financial statements.
Debt Administration
The Town of Southold's credit rating from Moody's Investors Services was A1 as of December 31, 2006.
Subsequent to the year end the Town's credit rating was upgraded to Aa2.
Debt Limit - The Town has the power to contract indebtedness for any Town purpose so long as the principal
amount thereof, subject to 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, 2006 was 3.35%.
At December 31, 2006, the Town had approximately $8.5 million in long term general obligation bonds
outstanding, of which $8 million was for general Town purposes. Aisc outstanding at year-end were bond
anticipation notes in the amount of $7.7 million of which $6 mitlion 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 31,2006
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
Property Tax
The Town has adopted a budget for the 2006 fiscal year which factors in inflation and other adjustments to
revenues and expenditures as well as prior year positive and negative fund balances. The 2006 budget
includes an overall increase in real property tax revenues from the prior year of approximately 4.26% for the
general Town governmental activities.
State Aid and Local Assistance
The Town receives financial assistance from New York State and from Suffolk County. During 2006, financial
assistance included state aid consisting of mortgage tax of $2.6 million, consolidated highway aid of $276
thousand, and community preservation aid of approximately $2.475 million. State aid per capita was $90.4
thousand and County local government assistance was $296.4 thousand. Additionally, if the State should not
adopt its budget in a timely manner, municipalities and school districts in the State, including the Town, may
be affected by a delay in the payment of state aid. The State is not constitutionally obligated to maintain or
continue state aid to the Town. The Town's 2006 budget included similar amounts for this financial assistance.
Retirement System
In 2003 the Town of Southold adopted the New York State Eady 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, tf 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 $OUTHOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF NET ASSETS
December 31,2006
ASSETS
Current Assets:
Cash and investments
Accounts receivable, net of allowaaces
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 interest payable
Bond anticipation notes payable
Due to other governments
Due to fiduciary funds
Unearned revenue
Non-current fiabilities due within one year
General obligation bonds payable
Due to Employees Retirement System
Claims and judgments payable
Estimated liability for landfill closure
and postclosure care costs
Total Current Liabilities
Non-Current Liabilities:
General obligation bonds payable
Compensated absences
Claims and judgments payable
Estimated liability for landfill closure
and postclosure care costs
Total Non-Current Liabilities
Total Liabilities
NET ASSETS
Investment in capital assets, net of related debt
Unrestricted
Total Net Assets
Primary
Governmental Component
Activities Units
$ 19,073,290 $ 1,236,451
205,234 15,167
2,541,813
801,197
997,151
2,099
360,178
237,056
39,171
23,620,784 1,888,023
148,750
58,561,631 15,160,840
41,995,681 6,179,224
100,706,062 21,340,064
124,326,846 23,228,087
1,320,029 369,893
261,058 69,176
7,729,000 2,185,000
243,292 2,431
12,601
5,147,779 366,282
779,098 200,000
48,804
50,000
10,550
15,552,211 3,242,782
7,715,000 2,655,000
6,475,661
150,000
582,773
14,773,434 2,805,000
30,325,645 6,047,782
92,063,214 15,579,033
1,937,987 1,601,272
94,001,201 $ 17,180,305
See notes to the financial statements
-12-
TOWN OF SOUTNOLD
GOVERNMENT-WIDE FINANCIAL STATEMENT
STATEMENT OF ACTIVITIES
Year ended December 31, 2006
PRIMARY GOVERNMENT
General government support $ 6,843,661 $ 229,099 $ 90,473
Transportation 7.298,698 9,484 28,838 $ 302,337
Net Expenses (Revenues) and
Chanqe in Net Assets
$ 6,524,096
10,746,666
33,314
6,958,039
939,347
504,788
(7,898,660)
553,713
Total Pdmary Govemment $ 33,141,012 ~$ 9,931,396 $ 713 597 $
COMPONENT UNITS
General government support $ 130,910
Transportation 2,751,284 $ 2.o13,785 $
Tolal Component Units $ 4,530,190 $
4,834,716 $ 18,361.303
2,046,723 $ 0 $ 810,646
GENERAL REVENUES
Change in Ne Assets
Net Assets at Beginning of Year
Net Assets a[ End of Year
86,977
(73.147)
837,563
440,136
250,382
$ 1,672,821
102,986 1,124
846,016
463,671 42,684
26,965,429 2,148,8~
8,604,126 475,983
85,397,075 16,704,392
__$ 94,001,201 $ 17,180,305
See notes to financial statements
TOWN OF SOUTHOLD
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2006
ASSETS
Cash and Investments
Accounts Receivable
Due from Other Funds
Due from Trust Funds
State and Federal Aid Receivable
Due from Other Governments
Supply Inventory
Prepaids
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable
Retained Percentages
Bond Anticipation Notes Payable
Due to Other Funds
Due to Trust Funds
Due to Other Governments
Deferred Revenue
Total Liabilities
FUND BALANCE
Fund Balances - Reserved:
Encumbrances
Supply Inventory
Prepaids
insurance Claims
Fund Balance - Unreserved:
Designated - Ensuing Year's Budget
Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
MAJOR GOVERNMENTAL FUNDS
Non-Major
Capital Governmental
General Hi9hway Projects Funds Totals
$ 8,339,472 $ 1,574,794 $ 7,806,802 $ 1,352,222 $ 19,073,290
22,346 60 182,828 205,234
190,208 461,241 234,970 475,547 1,361,966
110,153 276,337 325,950 88,757 801,197
2,075,955 465,858 2,541,813
2,099 2,099
426,200 57,894 53,559 537,653
$ 11,166,433 $ 2,370,266 $ 8,833,640 $ 2,152,913 $ 24,523,252
$ 701,018 $ 101,474 $ 189,921 $ 320,656 $ 1,313,069
6,960 6,960
7,729,000 7,729,000
1,205,516 49,290 106,987 173 1,361,966
12,601 12,601
243,292 243,292
3,619,307 900,180 628,292 5,147,779
5,781,734 1,050,944 8,032,868 949,121 15,814,667
13,284 129,285 142,569
2,099 2,099
426,200 25,599 451,799
513,329 513,329
16,900 16,900
2,185,000 486,500 470,228 3,141,728
2,244,787 686,637 800,772 707,965 4,440,161
5,384,699 1,319,322 800,772 1,203,792 8,708,585
$ 11,166,433 $ 2,370,266 $ 8,833,640 $ 2,152,913 $ 24,523,252
See notes to the financial statements.
-14-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET ASSETS
December 31, 2006
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
Long term liabilities applicable to the Town's
governmental activities are not due and payable
in the current period and accordingly are not
reported in the funds. However these liabilities
are included in the Statement of Net Assets:
General obligation bonds payable
Due to Employees Retirement System
Compensated absences
Estimated liability for landfill closure
and postolosure 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
58,561,631
102,536,180
(60,540,499)
(8,494,098)
(48,804)
(6,475,661)
(593,323)
8,708,585
100,557,312
(15,611,886)
459,498
148,750
(261,058)
94,001,201
See notes to financial statements.
-15-
TOWN OF SOUTBOLD
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the year ended December 31, 2006
MAJOR GOVERNMENTAL FUNDS
REVENUES
Real Property Taxes $14,872,736
Other Real Property Tax Items 85,808
Non-Properly Tax Items 616,670
Departmental Income 477,849
Intergovernmental Charges 316,049
Use of Money and Properly 684,166
Licenses and Permits 258,794
Fines and Forfeitures 171,763
Sale of Property and Compensation for Loss 95,057
Miscellaneous Local Sources 146,260
State Aid 2,725,177
Federal Aid 228,491
Capital
General Highway Projec~
$4,095,347
12,689
140,578
9,484
7,521
276.337
$ 5,824,319
456,713
151,000
3,980,074
325,950
Non-Major
Governmental
Funds Totals
$2,741,362 $ 21,709,445
4,489 102,986
229,346 846,016
2,275,935 2,753,784
1,809 6,142,177
95,272 1,376,729
163,780 432,058
171,763
135,662 238,240
6,652 303,912
127,276 7,108,866
41,163 595,604
Total Revenues 20,678,820 4,541,956 10,738,056 5,822,748 41,781,580
EXPENDITURES
Current
General Government Support
Public Safety
Public Health
Transportation
Economic Assistance and Opportunity
Home and Community Services
Culture and Recreation
Employee Benefits
Capital Outlay
Principal and Interest
Total Expenditures
Excess (Deficiency) of Revenues Over
Expenditures
Other Financing Sources (Uses)
BANs Redeemed From Appropriations
Transfers In
Transfers Out
Total Qther Financing Sources (Uses)
Excess (Deficiency) of Revenues and Other
Sources Over Expenditures and Other Uses
Fund Balances at Beginning of Year
5,177,745 103,654 5,281,399
7,371,280 869,154 8,240,434
32,988 7,104 40,092
452,050 3,028,076 3,480,126
949,740 949,740
384,983 3,363,781 3,748,764
530,270 530,270
5,811,868 515,106 470,377 6,797,351
13,324,188 13,324,188
1,313,234 283,652 84,531 822,590 2,504,007
22,024,158 3,826,834 13,408,719 5,636,660 44,896,371
(1,345,338) 715,122 (2,670,663) 186,088 (3,114.791)
1,228,735 1,228,735
2,253,944 159,218 2,413,162
(1,531,369) (452,648) (429,145) (2,413,162)
722,575 (452,648) 1,387,953 (429,145) 1,228,735
(622,783) 262,474 (1,282,710) (243,057) (1,886,056)
6.007,462 1,056,848 2,083,482 1,446,849 10,594,641
Fund Balances at End of Year $ 5,384,699 $1,319,322 $ 800,772 $1,203,792 $ 8,708,585
See notes to the financial statements.
-16-
TOWN OF SOUTHOLD
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES iN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
For the year ended December 31,2006
Net Change in Fund Balance
Governmental funds repod capital outlays as expenditures. However, in
the Statement of Activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense. The amount
by which capital outlay exceeds depreciation in the current period is:
Capitat outlay
Depreciation expense
Loss on dispositions
15,722,766
(3,987,397)
(1,472,136)
Some expenses reported in the Statement of Activities do not require
the use of current financial resources and therefore, are not reported as
expenditures in governmental funds:
Prepaid charges
Deferred charges
The issuance of long-term debt and increase in obligations under capital
leases provides current financial resources to governmental funds, while the
repayment of the principal of long term debt and capital leases consumes
the current financial resources of governmental funds.
Neither transaction has any effect on net assets.
.Repayment of bond principal
Due to Employees Retirement System
Compensated absences
Claims and judgments payable
Estimated liability for landfill closure
and postdosure care costs
Accrued interest payable
Change in Net Assets of Governmental Activities
$ (1,886,056)
10,263,233
(61,786)
(21,250)
755,000
45,189
(695,835)
220,000
19,072
(33,441)
$ 8,604,126
See notes to financial statements.
-17-
TOWN OF SOUTHOLD
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2006
ASSETS
Cash and investments
Other receivables
Due from other funds
Fishers Island
Town Ferry District Totals
$ 9,262,983 $ 56,490 $ 9,319,473
59,504 59,504
12,601 12,601
Total Assets $ 9,275,584 $ 115,994 $ 9,391,578
L1mABILIT)ES
Due to other funds $ 8,152,880 $ 115,994 $ 8,268,874
Other liabilities 307 307
Deposits held 1,122,397 1,122,397
Total Liabilities $ 9,27_ 5,584 $ 115,994 $ 9,391,578__
See notes to financial statements.
-18-
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Southold (the "Town"), which was established in 1640, is governed by Town Law and other
general laws of the State of New York and various local laws. The Town Board is the legislative body
responsible for overall operations. The Town Board consists of the Supervisor who is elected for a term
of two years and five council members who are elected for terms of four years. The Town Board appoints
the Town Attorney, Comptroller and the Commissioner of Public Works whose terms are fixed by Town
Law. The Town Clerk, Receiver of Taxes, 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 conformit}, with accounting
principles generally accepted in the United States of America (GAAP) as applied to g~/ernmental 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 repot'ling 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 pdmary
government are such that exclusion would cause the reporting entity's financial :statements to be
misleading or incomplete as set fodh 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 orgaaized 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 presente~l discretely in a
separate column in the combined financial statements to emphasize that they are legally separate
from the primaw 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 reported in three parts--investments in capital assels, net of related
debt; restricted net assets; and unrestricted net assets.
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. BASIS OF PRESENTATION (continued)
The government-wide Statement of Activities reports both the 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 capitaJ grants, to produce the net cost of each program. Program revenues
include la) charges for services and lb) 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, intergovernmental revenues, interest income, etc). As a general rule the effect of
interfund activity has been eliminated in general purpose financial staterflents.
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:
Governmental Funds - Governmental funds are those through which most governmental
functions are financed. The acquisition, use and balances of expendable financial resources and
the related liabilities are accounted for through governmental funds. The measurement focus of
the 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. This fund is used to account for all
financial resources except those required to be accounted for in other funds.
Hiqhway Funds - To account for the maintenance and operation of highways.
Capital Proiects Fund - used to account for financial resources to be used for the acquisition
or construction of major capital facilities (other than those financed by special assessment
funds and trust funds).
- 20 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. BASIS OF PRESENTATION (continued)
Fund Financial Statements (continued)
Additionally, the Town repods the following non-major funds:
Special Revenue Funds - are used to account for the proceeds of specific revenue sources (other
than major capital projects) that are legally restricted to expenditures for specified purposes.
Special Revenue Funds include the following:
General Fund Part Town - To provide general services outside the Village of Greenport.
Special Grant Fund - Segregate and account for projects funded by Community
Development revenue.
Special District Funds - To provide special services to areas that encompass less than the
whole town.
Fiduciary Funds - Fiduciary Funds are used to account for assets held by the Town in a trustee
or custodial capacity.
Agency Fund - is for money (and/or properly) received and held in the capacity of trustee,
custodian or agent.
Discretely Presented Component Units
Certain special districts that have separately elected boards provide transportation, park, mosquito
control, and sanitation services to residents and businesses within these districts, and follow
government fund accounting principles. These districts, which are accounted for as discretely
presented component units, are as follows:
The Fishers Island Ferry District, established in 1947
Orient Mosquito District, established in 1916
Fishers Island Garbage and Refuse District, established in 1952
Cutchogue-New Suffolk Park District, established in 1953
Orient-East Marion Park District, established in 1969
Southold Park District, established in 1907
Mattituck Park Oistrict, established in 1941
Complete financial statements of these component units can be obtained from their respective
administrative offices:
Orient Mosquito District
145 Platt Road
Orient, NY 11957
Cutchogue-New Suffolk
Park District
P.O. Box 311
Cutchogue, NY 11935
Southotd Pa~ O(str(ct
P.O. Box 959
Southold, NY 11971
Fishers Island Ferry District
P.O. Box 1179
SouthoJd, NY 11971
Fishers Island Garbage
& Refuse District
Fishers Island, NY 06390
Orient-East Marion
Park District
P.O. Box 12
Orient, NY 11957
Maftftuck Pa~ Oistn'ct
P.O. Box 1413
Mattituck, NY 11952
-21 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. BASIS OF ACCOUNTINGIMEASUREMENT 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 prime 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 absences, such as vacation and sick leave, which vest or
accumulate, are charged as expenditures when paid.
Encumbrance accounting, under which purchase orders, contracts and other commitments are
recorded for budgetary control purposes in order to reserve that portion of the applicable
appropriation, is employed in the governmental funds. Appropdafions 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
RECE~ABLES
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.
- 22 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4, ASSETS, LIABILITIES AND FUND EQUITY (continued)
CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of $5,000 or more are reported at
historical cost or estimated historical cost. Contributed assets are reported at fair market value
as of the date received. Additions, improvements and other capital outlays that significantly
extend the useful life of an asset are capitalized. Other costs incurred for repairs and
maintenance are expensed as incurred. Depreciation on att assets is provided on the straight-
tine basis over the following estimated useful lives:
Buildings
Improvements and other
Machinery and equipment
Infrastructure
10-40 years
20 years
5-10 years
20-30 years
Infrastructure assets, consisting of certain improvements other than buildings including roads,
curbs, sidewalks, bridges, street !ighting 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/uneamed 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 venders that benefit future recording periods and are reported on the
cons.umption basis. Prepaids in the General and Special Revenue Funds represent nsurance
premiums paid for coverage that ,Mil benefit the subsequent period and for retirement benefits that
will benefit a future period.
LONG-TERM OBLIGATIONS
The liabilities for long-term obligations consisting of general obligation bonds, compensated
absences, due to employee retirement system, judgments, claims and liability for landfill closure
and post closure costs are recognized in the government-wide financial statements.
In the fund statements, long-term obligations are not reported as liabilities. The debt proceeds
are reported as other, financing sources and payment of principal and interest reported as
expenditures.
5. REVENUES AND EXPENDITURES
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES
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 1 for both school and
general taxes. The Town's assessment rolls are used for the levy of real property taxes by the
Town and the School Districts, as well as by the County and by Special Districts of the County and
the Town.
- 23 -
TOWN OF $OUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
5. REVENUES AND EXPENDITURES (continued)
REAL PROPERTY TAX ASSESSMENT AND COLLECTION PROCEDURES (continued)
The Town of Southold Receiver of Taxes collects all real property taxes for the Town, Suffolk
County, Town Special Districts and School Districts. These taxes are levied on December 1, and
are due in two installments, 50% on December 1 and 50% on May 10, payable without penalty to
January 10 and May 31, respectively. Penalties are imposed thereafter at the rate of one-twelfth of
the rate of interest determined by the State Commissioner of Taxation and Finance, after which
taxes are payable to the County Treasurer. The Town retains the total amount of Town, Highway
and Town Special Districts levies from the amount collected, and forwards the balance collected to
the County which assumes collection responsibility, The Town and Town's Special Districts
therefore realize annually the 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
Inteffund transactions have been eliminated from the government-wide financial statements. In
the funds statements inteffund transactions include:
a) Interfund Revenues
Interfund revenues, quasi-external transactions, in the general fund represent amounts
charged for services or facilities provided by the general fund. The amounts paid by the fund
receiving the benefit of the service or facilities are reflected as an expenditure of that fund.
b) Transfers
Transfers represent payments to the debt service, general fund and capital projects funds
from the other funds for their appropriate share of the debt service, genera~ 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 31,2006
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
6. EQUITY CLASSIFICATIONS (continued)
b)
c)
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.
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 carried forward from the prior year.
Budgetary controls for special revenue funds are established in accordance with the applicable
grant agreement, which may cover a period other than the Town's fiscal year. Appropriate
budgetary adjustments have been made to reflect these grant agreements during the Town's
fiscal year.
The Town follows the procedures enumerated below in establishing the budgetary data reflected
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 ali modifications of the budget. However, the Supervisor
is authorized to transfer certain budgeted amounts within departments.
In order to show the full legal level of budgetary compliance for the general and certain special
revenue funds, detailed individual statements of revenues, expenditures and changes .in fund
balances - budget and actual, are presented in a separate budget report.
- 25 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2006
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued)
2. FUND BALANCES
DESIGNATION OF FUND BALANCE
Portions of the unreserved balances at December 31, 2006 were designated for the subsequent
year's operating budgets as fellows:
Fund
Fund Balance
Unreserved and
Designated
Total for Subsequent Fund Balance
Fund Balance Year's Unreserved
Unreserved Budget Undesignated
Non-Major Funds:
Town Outside Village
Special Grant
East West Fire Protection District
Southold Wastewater District
Fishers Island Sewer District
Solid Waste Management District
$ 908,193 $ 484,599 $ 423,594
5,000 5,000
19,648 6,228 13,420
223,779 223,779
40,948 40,948
6,224 6,224
Total $ 1,203,792 $ 495,827 $ 707,965
DETAILED NOTES ON ALL FUNDS
CASH ANDINVESTMENTS
Cash consists of funds deposited in demand accounts, time deposit accounts, and certificates of
deposit with maturities of less than three months.
The Town's investments are governed by a formal investment policy. The Town's monies must
be deposited in FDIC-insured commercial banks or trust companies located within the state.
The Town is authorized to use demand accounts and certificates of deposit. Permissible
investments include obligations of the U.S. Treasury, U.S. Agencies and investments made by
the Cooperative Liquid Asset Security System (CLASS).
CLASS is a cooperative investment plan consisting of U.S. Treasury Obligations and repurchase
agreements relating to treasury obligations. Investments are stated at cost, which approximates
market value. CLASS was established as a cooperative investment arrangement organized under
the CLASS Municipal Cooperation Agreement made pursuant to New York General Municipal Law,
Article 3A and 5-G.
Collateral is required for demand deposits and time deposits accounts at 105% of all deposits not
covered by federal deposit insurance. Obligations that may be pledged as collateral include
obligations of the United States and its agencies and obligations of the State and its municipalities
and school districts. The Town's collateral agreements are based on the Town's available balance.
- 26 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
DETAILED NOTES ON ALL FUNDS (continued)
1. CASH AND INVESTMENTS (continued)
Custodial Credit Risk - Deposits/Investments - Custodial credit risk for deposits exists when, in
the event of the failure of a depository financial institution, a government may be unable to
recover deposits, or recover collateral securities that are in possession of an outside agency.
Custodial credit risk for investments exists when, in the event of the failure of the counterparty, a
government will not be able to recover the value of its investments or collateral securities that
are in possession of an outside party.
Governmental Accounting Standards Board Statement No. 40 directs that deposits be disclosed
as exposed to custodial credit dsk if they are not covered by depository insurance, and the
deposits are either:
· Uncollateralized
· 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, 2006 the Town's cash book balance was approximately $29,624,000. This
amount is inclusive of Fiduciary fund deposits of approximately $9,300,000 but exclusive of petty
cash of approximately $2,200. The available bank balance was approximately $32,500,000. Of the
bank balance, $1,100,000 was covered by Federal deposit insurance, and approximately
$40,706,000 was covered by collateral held by the Town's agent, a third-party financial institution, in
the Town's name.
2. INTERFUND RECEIVABLES AND PAYABLES
tnterfund receivables and payables for the primary government at December 31, 2006 were as
follows:
General Fund - Town wide
Highway Fund
Capital Projects Fund
Part Town
Special Grant
East-West Fire Disbrict
Southold Wastewater District
Fishers Island Sewer District
Solid Waste Management Distdct
Amount Amount
Receivable Payable
$ 190,208 $ 1,171,758
461,241 49,290
234,970 140,745
115,236
5,000
56,488
2,146 173
9,806
286,871
$ 1.36~1.966 $ 1.361.98(~
Interfund receivable and payable balances for the primary government at December 31, 2006
are expected to be paid currently.
- 27 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
DETAILED NOTES ON ALL FUNDS (continued)
3. CAPITAL ASSETS
Primary government
Capital assets not being depreciated
Land
Construction in progress
Total capital assets not being depreciated
Depreciable capital assets
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total depreciable capital assets
Less accumulated depreciation
Buildings
Improvements other than buildings
Machinery and equipment
infrastructure
Total accumuleted depreciation $ 56,721,087
Total net depreciable capital assets
Total net capital assets
Balance Balance
1/1/06 Additions Deletions 12/31/06
$ 47,772,278 $ 10,569,239 $ -0- $ 58,341,517
1,608,081 18,264 1,406,231 220,114
49,380,359 10,587,503 1,406,231 58,561,631
4,574,513 3,732,710 8,307,223
13,498,954 119,205 13,618,159
9,522,815 627,218 233,890 9,916,143
70,038,525 656,130 70,694,655
97,634,807 5,135,263 233,890 102,536,180
2,068,530 137,736 2,206,266
3,542,084 390,004 3,932,088
6,041,374 724,481 167,985 6,597,870
45,069,099 2,735,176 47,804,275
$ 3,987,397 $ 167,985 60,540,499
41,995,681
$100,557,312
Depreciation expense was charged to governmental functions as follows:
General government support
Public safety
Transpodation
Economic assistance and opportunity
Culture and recreation
Home and ccm m unity services
$ 249,268
169,011
2,949,839
37,610
62,609
519,060
$ 3,987,397
- 28 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
DETAILED NOTES ON ALL FUNDS (continued)
3. CAPITAL ASSETS (continued)
Discretely presented component units
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
Infl'estructure
Total depreciable capital assets
Less accumulated depreciation
Buildings
Improvements other than buildings
Machinery and equipment
Infraskucture
Total accumulated depreciation
Total net depreciable capital assets
Total net capital assets
Balance Balance
1/1/06 Additions Deletions 12/31/06
$ 2,213,759 $ 2,213,759
13,174,567 $ 324,711 $ 552,197 12,947,081
15,388,326 324,711 552,197 15,160,840
3,540,111 26,774 3,566,885
2,575,589 645,143 3~220,732
3,200,728 120,171 3,320,899
2,138,386 6,894 2,145,280
11,454,814 798,982 12,253,796
1,289,733 83,842 1,373,575
1,061,574 117,672 1,179,246
2,132,657 151,754 2,284,41t
1,155,866 81,474 1,237,340
$ 5,639,830 $ 434,742 6,074,572
6,179,224
$ 21,340,064
4. INDEBTEDNESS
SHORTTERM DEBT
Bond Anticipation Notes (BANs) - Bond anticipation notes (BANs) are used as a temporary
means of 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 pedod
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 3.66% to 3.76% and are due at various dates through
2007.
When BANs are not redeemed with the proceeds of bond issues, but instead paid from budgetary
appropriations, the principal amount paid is recorded as an expenditure in the operating fund and a
financing source is recorded in the capital projects fund.
- 29 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2006
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
SHORT TERM DEBT (continued)
These notes are summarized as follows:
Description
Amount
Various Purposes $ 6,619,000
Various Purposes 1,110,000
New London Wharf 1,625.000
Fishers Island Garbage 560,000
Total ~=,===~,~=~ J~
Interest
Rate
3.66%
3.73%
3,70%
3.76%
Of the $9,914,000 in bond anticipation notes, $7,729,000 relates to the primary government and the
remaining $2,185,000 relates to the component units.
LONG TERM DEBT
Summary of changes in long-term debt transactions for the year ended December 31, 2006 is as
follows:
Non-current
Balance Balance liabililJes due Non-current
1t1/06 Increases Reduc~ons 12/31/06 within one year liabilities
Prirna~J Government:
General obliga§on bonds $ 9,249,098
Due to Employees Retirement System 93,993
Compensated absences 5,779,826
Claims and judgments 220,000
Estimated liability for landfill closure
and post-closure care costs 612,395
695,835
$ 755.000 $ 8,494,098 $ 779,098 $ 7,715,000
45,t89 48,804 48.804 -0-
6,475,661 6,475,66t
220,000 -0- -0-
19,072 593,323 10,550 582,773
Component Units:
General obligafJon bond s 3,050,0~0 195,000 2,855,000 200,000 2,655,000l
Claims and judgments -0- 200,000 200,000 50,000 150,000 '~
General Obligation Bonds - The Town borrows money in order to acquire land or equipment or
construct buildings and improvements. This enables the cost of these capital assets to be borne by
the present and future taxpayers receiving the benefit of the capital assets. These long-term
liabilities, which are backed by the full faith and credit of the Town, bear interest at various rates
from 3.14% to 6.375% and have maturity dates in 2009 through 2021.
Future principal and interest payments to matudty for both the primary government and the
componentunits am as follows:
Year Endinq Principal Interest
2007 $ 979,098 $ 376.466
2008 995,000 345,307
2009 1,025,000 312,347
2010 1,000,000 277,956
2011 1,025,000 242,981
2012-2016 4,100,000 765,577
2017-2021 2,225,000 167,650
Totals ~ ~
- 30 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
DETAILED NOTES ON ALL FUNDS (continued)
4. INDEBTEDNESS (continued)
LONG TERM DEBT (continued)
Other long-term liabilities for claims and judgments, compensated absences, retirement system
and the estimated liability for landfill cJosure and post closure costs are to be paid by the fund
that gave rise to the liability.
PRIOR YEAR DEFEASANCE OF DEBT
In prior years, the Town defeased certain bonds by placing the proceeds of new bonds in an
irrevocable trust with an escrow agent to provide for all future debt service payments on the old
bonds. Accordingly, the trust account assets and liability for the defeased bonds are not including
in the Town's financial statements. At December 31, 2006, $1,950,000 of these.bonds outstanding
are considered defeased.
5. RETIREMENT SYSTEM
Plan Description
The Town of Southold participates in the New York State and Local Employees' Retirement System
(ERS) and Local Police and Fire Retirement System (PFRS). This is a cost-sharing multiple-
employer retirement system. The System provides retirement benefits as well as death and
disability benefits.
Obligation of employers and employees to contribute and benefits to employees are governed by
the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the
NYSRSSL, the Comptroller of the State of New York (Comptroller) 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 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'rrteen of the NYSRSSL, who contribute 3% of their salary. Prior to
October 1, 2000, all employees who joined the System after July 27, 1976 were required to
contribute 3% of their salary. Under the authority of the NYSRSSL, the Comptroller shall certify
annually the rates expressed as proportions of payrotl of members, which shall be used in
corn puting 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 miscellanecus
adjustments represent mod~ication made by the ERS for pdor year's contributions.
The required contributions, for the Primary government, for the current year and two preceding
ERS PFRS
years were:
2006 $ 1,096,547 $ 741,445
2005 $ 1,068,200 $ 1,016.937
2004 $ 992,023 $ 679,079
The Town's contribution to the system was 100% of the contributions required each year.
- 31 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2006
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 etigible for these benefits if they reach normal retirement age while working for the Town.
Health care benefits are provided through either a self-funded plan whose premiums are based on
the benefits paid during the year or are provided in accordance with New York State Health
Insurance Rules and Regulations (administered by the New York State Department of Civil Service)
through the New York State Empire Plan (the "Empire Plan") whose premiums are based on the
benefits paid throughout the State during the year,
The Town recognizes the cost of providing benefits by recording its share of insurance
premiums or the actual benefits paid as expenditure in the year paid. The Town's union
contracts and ordinances require that it provide its eligible enrollees with benefit coverage under
either the self-funded plan or the Empire Plan. Under the provisions of the Empire Plan,
premiums are adjusted on a prospective basis for any losses experienced by the Empire Plan.
The Town has the option to terminate its participation in the Empire Plan at any time without
liability for its respective share of any previously incurred loss. During the 2006 year,
$3,261,660 was paid on behalf of 93 retirees and 223 active employees and is recorded as an
expenditure in the General Fund.
7. COMPENSATED ABSENCES
Town employees are granted vacation and sick 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, timir~g 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 3I, 2006, the value of the accumulated vacation time and sick leave was
$6,475,661 for the primary government.
COMMITMENTS AND CONTINGENCIES
Risk Management
The Town is self-insured for both medical insurance and general liability insurance. The amount of
medical claims outstanding at-December 31, 2006 is $16'I,976. This amount has been reserved
against fund balance in the General Fund.
In common with other municipalities, the Town receives numerous notices of claims. Prior to 2005,
coverage for bodily injury and property damage was previously written on a primary non-self insured
retention ("SIR") basis. Insurance market conditions and availability precluded the Town from obtaining
coverage in 2005 without an SIR. As a result, in 2006 the Town self-insured for bodily injury anti
property damage up to a maximum of $50,000 per claim. The $50,000 limitation was the minimum
retention amount available to the Town. Claims in excess of $50,000 are covered by excess liability
policies providing coverage for $10,000,000 per occurrence and in the aggregate. Although the
eventual outcome of these 2006 claims cannot presently be determined, the Town's third party
administrator has estimated unsettled claims at December 31, 2006 to be $83,863. These amounts
have been reserved against fund balance in the General Fund. The Town is of the opinion that the
ultimate settlement of the outstanding claims will not result in a material adverse effect on the Town's
financial position.
Since 2005, there have been no significant reductions in insurance coverage as compared to the prior
year; in addition there were no settlements on excess of insurance coverage over the last three years.
The Town is also self-insured for unemployment benefits paid.
- 32 -
TOWN OF $OUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
COMMITMENTS AND CONTINGENCIES (continued)
Landfill Closure and Post-Closure Care Costs
State and federal laws and regulations require the Town to place a final cover on its landfill sites and to
perform certain maintenance and monitoring functions at the sites for thirty years after closure. The Town
ceased accepting waste at its Cutchogue landfill as of October 8, 1993. The Town entered into a
stipulation of settlement with the New York State Department of Environmental Conservation in
October of 1994 in which all charges of operational violations at the Cutchogue landfill were dropped.
Under the stipulation, the Town agreed to close and place a final cover over the landfill and to pay a
civil penalty of $650,000 over seven years. Construction of the final cover commenced in the summer
of 2001 and was completed in the fall of 2003.
In addition to placement of the final cover on the landfill, state and federal regulations presently require
the Town to perform cedain maintenance and monitoring functions at the site for up to thirty years.
Accordingly, as of December 31, 2006 the Town has recorded a liability of $593,323 which represents the
provision to be made in future budgets for post-closure 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 Peases. Total rental expenditures on such
leases for the year ended December 31,2006 were approximately $191,773. Future obligations over
the primary terms of the Town's leases as of December 31,2006 are as follows:
2007 $ 109,824
2008 109,028
2009 107,348o
2010 86,909
2011 andthereafler 563,901
Total $ 977.010
CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS
The following represents condensed financial statements for the discretely presented component units as
of and for the year ended December 31, 2006:
Condensed Statement of Net Assets:
Due from Capital Assets Other
Current Pdmary Net of Current Long-Term
Assels Government Depreclation Liabilities Liabilities
Fishers Island Ferry District $ 489,288
Fishers Island Refuse and Garbage 607,760
Cutchcgue-New Suffolk Park District 108,649
Southold Park District 43.842
Orient-East Marion Park District 5,496
Maftituck Park District 255,998
Oder~t Mosquilo District 16,812
182,783 $ 15,672,853 $ 2,367,007 $ 2,700,000
59,613 3,146,256 621,736
16,414 123,200 16,414
35,659 696,598 37,930
3,475 432,985 14,602
52,925 1,242,272 166,858 105,000
9,309 25,900 18,235
$ 1.527,845 $ 360,178 $ 21,340.064 $ 3,242,782 $ 2,805,000
Net
Assets
$ 11,277,917
231,849
738,169
427,354
1,279,337
33,786
* 33 -
TOWN OF SOUTHOLD
NOTES TO FINANCIAL STATEMENTS
December 31,2006
CONDENSED FINANCIAL STATEMENTS FOR THE DISCRETELY PRESENTED
COMPONENT UNITS (continued)
Condensed Statement of Activities:
Program aer, erar Revenue Net Assets
Net Expense Pnopedy
Expenses Revenue (Revenue) Tax Other Change 111/06 12/31/66
Fishers Island Fen}, Dist~c/ $ 3,061,265
Fishecs island Re,use and Garbage 538,458
Cutchogue-New Suffolk Park Oisldct 160,014
Southold Park Distdcl 287,960
Orient-East Marion Park District 27,063
Maffituck Park Distdd 368,453
$ 2,013,785 $ 1,047,480 $ 400,000 $ 8,54,443 $ (206,963} $ 11,070,954 $ 11,277,917
32,938 505,520 563,500 70,888 (128,868) 3,083,025 3,191,593
160,014 141,000 917 18.097 249,946 231,849
287,960 315,000 43,691 (70,731} 667,438 738,169
27,063 27,617 76 (630) 426,724 427,354
368,453 426,110 37,511 (95,168) 1J84,169 1,279,337
85,977 76,285 2,412 8,28g
4,530,190 $ 2,046,723 $ 2,483,467$ 1,949,512 $ 1,009,938 $ {475,983) $ 16,704,322 $ 17,180.305
SUBSEQUENT EVENTS
On April 15, 2007, the Town issued Serial Bonds for public improvements in the amount of
$14,650,000. These public improvements bonds are allocated as follows: $9,987,900 for open space
preservation, $1,200,000 for land acquisition, $3,000,000 for a solid waste management transfer
station, $315,000 for a settlement with New York State and $147,100 for equipment. The interest rate
on these bonds range from 4% during the initial year to 4.25% for the final 20 years. The bonds final
maturity date is 2030.
NEW PRONOUNCEMENTS
The Governmental Accounting Standards Board (GASB) approved new accounting standards
applicable to "other post-employment benefits" (OPEB's) and "termination benefits", which are non-
pension benefits provided after a person leaves employment, including retiree health care. Until now,
these benefits have 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 requ[res munic(palifies which adhere to GAAP (General(y Accepted Accounfing
Principles) to account for OPEB and termination liabilities on an accrual basis much like they already
account for pension liabilities, generally adopting the actuarial methodologies used for pensions, with
adjustments for the different characteristics of OPEB and termination benefits and the fact that most
municipalities have not set aside any funds against this liability,
Under GASB 45 and 47, based on actuarial valuation, an annual required contribution ("ARC") will be
determined for each municipality and then be periodically updated depending on the number of
members within the plan.
The Town, as well as its component units are required to implement GASB 45 and 47 for the year
ended December 31,2007.
~ 34 -
REQUIRED SUPPLEMENTARY
INFORMATION OTHER THAN
MANAGEMENT DISCUSSION AND
ANALYSIS
TOWN OF SOUTHOLD
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
Year ended December 31, 2006
Original Final
Budget Budget
REVENUES
Real Property Taxes $14,872,736
Other Real Properly Tax Items 68,500
Non-Property Tax Items 616,000
Departmental Income 342,100
Intergovernmental Charges 386,616
Use of Money and Properly 460,000
Licenses and Permits 223,100
Fines and Forfeitures 112,000
Sale of Property and Compensation for Loss 74,050
Miscellaneous Local Sources 47,420
State Aid 2,434,897
Federal Aid
Total Revenues
19,637,419
EXPENDITURES
General Government Support 6,116,403
Public Safety 7,297,533
Public HeaLth 33,300
Transportation 442,710
Economic Assistance and Opportunity 1,030,920
Culture and Recreation 395,314
Home and Community Services 362,224
Employee Benefits 6,257,400
Debt Service - Principal and Interest 1,559,500
Total Expenditures
Deficiency of Revenues
Over Expenditures
Vadance with
Final Budget
Actual Positive/(Negative)
Other Financing Sources (~Jses)
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
$14,872,736 $14,872,736
68,500 85,808 $ 17,308
616,000 616,670 670
585,100 4Z7,849 (107,251)
297,379 316,049 18,670
460,000 684,166 224,166
223,691 258,794 35,103
112,000 171,763 59,763
77,505 95,057 17,552
109,669 146,260 36,591
2,561,687 2,725,177 163,490
238,737 228,491 (10,246)
20,223,004 20,678,820 455,816
6,175,733 5,177,745 997,988
7,392,386 7,371,280 21,106
33,300 32,988 312
472,173 452,050 20,123
1,022,324 949,740 72,584
396,830 384,983 11,847
660,814 530,270 130,544
6,690,613 5,81t,868 878,745
1,434,500 1,313,234 121,266
23,495,304 24,278,673 22,024,158 2,254,515
(3,857,885) (4,055,669) (1,345,338) 2,710,331
6,038,180 6,308,189 2,253,944 (4,054,245)
(2,180,295) (2,252,520). (1,531,369) 721,151
3,857,885 4,055,669 722,575 (3,333,094)
-0- $ -0- (622,763) $ (622,763)
6,007,462
$ 5,384,699
See notes to the financial statements.
-35-
TOWN OF SOUTHOLD
HIGHWAY FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Year ended December 31, 2006
REVENUES
Variance with
Original Final Final Budget
Budget Budget Actual Positive/(Negative)
Real Property Taxes $ 4,095,347
Other Real Property Tax items 8,500
Use of Money and Property 72,100
Licenses and Permits 6,500
Sale of Property and Compensation
for Loss
State Aid
Total Revenues
$ 4,095,347 $ 4,095,347
8,500 12,689 $ 4,189
72,100 140,578 68,478
6,500 9,484 2,984
7,521 7,521
231,332 306,719 276,337 (30,382)
4,413,779 4,489,166 4,541,956 52,790
EXPENDITURES
Transportation 3,485,358 3,551,971
Employee Benefits 543,162 543,162
Debt Service - Principal and Interest 294,785 294,785
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
3,028,076 523,895
515,106 28,056
283,652 11,133
4,323,305 4,389,918 3,826,834 563,084
90,474 99,248 715,122 615,874
Other Financing Uses
Operating Transfers In 355,900 355,900
Transfers Out (446,374) (455,148)
Total Other Financing Uses (90,474) (99,248)
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
(355,900)
(452,648) 2,500
(452,648) _ (353,400)
$ -0- $ -0- 262,474 $ 262,474
1,056,848
$ 1,319,322
See notes to the financial statements.
-36-
OTHER SUPPLEMENTARY
INFORMATION
TOWN OF SOUTHOLD
COMBINING BALANCE SHEET
NON-MAJORGOVERNMENTALFUNDS
December31,2006
ASSETS
Cash and investments $ 821,446
Accounts receivabte, net of allowance 58,401
Due from other funds 115,236
Due from other governments
Prepaid expenditures
Total Assets
East-West Fire Southold Fishers Solid Waste
General Fund Special Protection Wastewater Island Sewer Management
Part Town Grant District District Distdct District
$ 86,470 $
$ 5,000 56,488
25,599
$1,020,682 $ 14,150 $ 142,958
LIABILITIEs AND FUND EQUITY
LIABILITIES
Accounts payable $ 21,800 $ 9,150 $ 12,656
Due to Other funds
Deferred revenue 90,689 110,654
Total Liabilities 112,489 9,150 123,310
FUND EQUITY
Fund balance - reserved:
Prepair~ expenses 25,599
Fund balance - unreserved:
Designated - ensuing year's budget 459.000 5,000 6,228
Undesignated 423,594 13.420
Total Fund Equity 908,193 5,000 19.648
Total Liabilities and Fund Equity $1,020,682 $ 14,150 $ 142,958
Totals
225,862 $ 29,959 $ 188,485 $ 1,352,222
1,259 123,168 182,828
2,146 9,806 286.871 475,547
79,607 68,757
27,960 53,559
$ 228,008 $ 41,024 $ 706,091 $ 2,152,913
$ 76 $ 276,974 $ 320,656
173 173
4,056 422,893 628,292
4,229 76 699,867 949.121
223,779 40,948 6,224
223,779 40,948 6,224
25,599
47O,228
707,965
1,203,792
$ 228,008 $ 41.024 $ 706,091 $ 2,152,913
-37-
TOWN OF SOUTHOLD
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES * NON-MAJOR GOVERNMENTAL FUNDS
Year ended December 31, 2006
REVENUES
Real properly taxes
Other real properly 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 ser~ice - pnncipal and interest
Total Revenues
Total Expenditures
Excess {Deficiency) of Revenues
Over Expenditures
Other Financing Uses:
Operating transfers out
Total Other Financing Uses
Net Change in Fund Balance
Fund Balances at Beginning of Year
Fund Batances at End of Year
East-West Fire Southold Fishers Solid Waste
General Fund Special Protection Wastewater Island Sewer Management
Part Town Grant District District District Distdct
$ 492,996 $ 458,043 $ 22,790 $ 1,767,533
1,523 604 30 $ 2 2.330
229,346
656,644 17,060 29,117 1,573,114
1,809
47,074 5,594 9,677 1,689 31,238
7,232 156.548
6,738 128,924
7 $ 5,000 1.645
47,671 79,607
41.163
1.489,231 46,163 464,241 49.557 30,808
103,654
409,449 459,705
7,104
523,926 41,163 22,406
214.993
2,435
1,259,126 41,163 459,705 2,435 22,406
230,105
(209,971)
(209,971)
20,134
888,059
$ 908,19~3
5,000 4,536 47,122 8,402
$ 2,741,362
4,489
229,346
2,275.935
95,272
163,780
135.662
6,652
127,278
41.163
3,742,748 5,822,748.
103,654
869,154
7,104
2,776,286 3,363,781
255,384 470.377
820,155 822,590
3,851,825 5,636,660
{109,077) 186,088
(219,174) (429,145)
(219,174) (429,145/
5,000 4,536 47,122 8.402 (328.251) (243,057)
15.112 176,657 32,546 334,475 1,446,849
5,000 $ 19,64~8 $ 223,779 $ 40,94,8 $ 6,224 $ 1,203,792
-38-
DISCRETELY PRESENTED COMPONENT UNITS
TOWN OF SOUTNOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF NET ASSETS
December 31, 2006
ASSETS
Current Assets:
Cash and investments
Accounts receivable, cai of allowance
Due from primary 9overnment
State and federal receivables
Prepaid charges
Total Current Assets
Non-Current Assets: Non-deprecJable capital assets
Degreciable o~3pital assets, net of deprecladon
Total Net Assets
Fishers Island Cutchogue- Southold Orient-East MaiEtuck Orient
· Fishers Refuse and New Suffolk Park Mar~on Park Park Mosquito
island Ferry Garbage Distdct Park Distdct DistScl District Distdct District
District _ (Unaudited) (Unaudited) ~(Unaudited! (Unaudited) (UnauditedI (Unaudited)
Totals
215,455 $ 591,364 $ 108,649 $ 43,842 $ 5,496 $ 254,833 $ 16,812 $ 1,236,451
11,646 3,371 150 15,167
182,783 59,613 16,414 35,659 3,475 52,925 9,309 360,178
237,056
237,056
25,131 13,025 1,015 39,171
672,071 667,373 125,063 __ 79,501~ _ 8,971 308,923 26,121 1,888,023
10,874,636 2,607,599 101,198 588,847 432,985 555,575 15,160,840
4,798,217 __ 538,65~77 ___ 22,002 107,751_ 686,697 25,900 6,179,224_
16,344,92~4 3,813,629 248,263 776,099 . 441,956~ -- 1,551,195 52,021 23,228,087
343,215 3,743 11,127 11,808 369,893
67,959
1,217 69,176
2,271 160 2,431
130,833 57,993 16,414 35,659 3,475 183,673 18,235 366,282
1,625,000 560,000
2,185,000
150,000
5O,O0O 5O,OOO
200,000
50,000
2,367,007 6~2J,736 __ 16,414 37,930 14,602 166,858 18,235 3,242,782
2,550,000
150,000 105,000 2,555,000
5,067,007 621,~36~ 16,414 37,930_ 14,602 271,858 18,235 6,047,782
11,347,853 2,503,025 640,883 1,087,272 15,579,033
_ (69,93_6} 688,868~ 231,849 97,286 427,354 192,065 33,786 1,601,272
$ 11,277,917 $ 3,191,893 $ 23~,849 $ 738,189 $ 427,354
$ 1,279,337 ~$ 33,786 $ 17,180,305
-39
TOWN OF SOUTHOLD
DISCRETELY PRESENTED COMPONENT UNITS
COMBINING STATEMENT OF ACTIVITIES
Year ended December 31, 2006
REVENUES
Program revenues
Real property taxes
Other real property tax items
Interest and earnings
Federal Aid
Other
EXPENSES
General government support
Public hea I',h
Transpodation
Culture and recreation
Home and community sen/ices
Interest
Total Revenues
Fishers Island Cutchogue-
Fishers Refuse and New Suffolk
Island Ferry Garbage Distnct Park District
District (Unaudited) (Unaudited)
Southold Orient-East Mattltuck Orient
Park Marion Park Park Mosquito
District District District District
_ (Unaudited) (Unaudited) (Unaudited) (Unaudited)
$ 2,013,785 $ 32,938
400,000 563,500 $ 141,000
527
21,506 70,888 917
810,646
21,764
3,268,228 667,326 141,917 358,691
130,910
2,751,284
160,014 287,960
18,602 454,472
160.469 83,986
Total Expenses 3,061,265 538,458 160,014 287,960
Totals
$ 2,046,723
$ 315,000 $ 27,617 $ 426,110 $ 76,285 1,949,512
35 562 1,124
41,591 41 18,879 1,662 155,484
810,646
2,100 18,070 750 42,684
27,693 463,621 78,697 5,006,173~
27,063 362,526
5,927
27,063 368,453
86,977
86,977
2,751,284
837,563
473,074
250,382_
86,977 4,530,190
Changes in Net Assets 206,963
Net Assets at Beginning of Year 11.070,954
Net Assets at End of Year $11,277,917
128,868 (18,097) 70,731
630 95,168 (8,280) 475,983
3,063,025 249,946 667,438 426,724 1,184,169 42,066 16,704,322
$ 3,191,893 $ 231,849 $ 738,169 $ 427,354 $ 1,279,337 $ 33,786 $17,t80,305
-40-
APPENDIX C
BOND INSURANCE
BOND I~SURANCE
Other than with respect to information concerning Financial Security Assurance Inc. ("Financial Security")
contained herein under the caption "Bond Insurance" and specimen "Municipal Bond Insurance Policy", none of the
information in this Official Statement has been supplied or verified by Financial Security and Financial Security
makes no representation or warranty, express or implied, as to (i) the accuracy or completeness of such information;
(ii) the validity of the Bonds; or (iii) the tax exempt status of the interest on the Bonds.
Bond Insurance Policy
Concurrently with the issuance of the Bonds maturing in the years 2019 through 2030, inclusive (the "Insured
Bonds"), Financial Security Assurance Inc. ("Financial Security") will issue its Municipal Bond Insurance Policy
for the Insured Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on
the Insured Bonds when due as set forth in the form of the Policy included as an'appendix to this Official Statement.
The Policy is not covered by any insurance security or guaranty fund established under New York, California,
Connecticut or Florida insurance law.
Financial Security Assurance Inc.
Financial Security is a New York domiciled financial guaranty insurance company and a wholly owned subsidiary
of Financial Security Assurance Holdings Ltd. ("Holdings"). Holdings is an indirect subsidiary ofDexia, S.A., a
publicly held Belgian corporation, and of Dexia Credit Local, a direct wholly-owned subsidiary of Dexia, S.A.
Dexia, S.A., through its bank subsidiaries, is primarily engaged in the business of public finance, banking and asset
management in France, Belgium and other European countries. No shareholder of Holdings or Financial Security
is liable for the obligations of Financial Security.
At March 31, 2008, Financial Security's consolidated policyholders' surplus and contingency reserves were
approximately $3,012,872,486 and its total net unearned premium reserve was approximately $2,419,501,630 in
accordance with statutory accounting principles. At March 31,2008, Financial Security's consolidated shareholder's
equity was approximately $3,053,752,711 and its total net unearned premium reserve was approximately
$1,882,057,335 in accordance with generally accepted accounting principles.
The consolidated financial statements of Financial Security included in, or as exhibits to, the annual and quarterly
reports filed after December 31, 2007 by Holdings with the Securities and Exchange Commission are hereby
incorporated by reference into this Official Statement. All financial statements of Financial Security included in, or
as exhibits to, documents filed by Holdings pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 after the date of this Official Statement and before the termination of the offering of the Insured Bonds
shall be deemed incorporated by reference into this Official Statement. Copies of materials incorporated by reference
will be provided upon request to Financial Security Assurance Inc.: 31 West 52~d Street, New York, New York
10019, Attention: Communications Department (telephone (212) 826-0100).
The Policy does not protect investors against changes in market value of the Insured Bonds, which market value may
be impaired as a result of changes in prevailing interest rates, changes in applicable ratings or other causes. Financial
Security makes no representation regarding the Insured Bonds or the advisability of investing in the Insured Bonds.
Financial Security makes no representation regarding the Official Statement, nor has it participated iu the preparation
thereof, except that Financial Security has provided to the Issuer the information presented under this caption for
inclusion in the Official Statement.
I !NANCIAL
SECURITY
ASSURANCE.
AND
MUNICIPAL
INSURANCE
t x.
securing;tl)e Bqpds) - for. the B~nds
~S'e~urib], dire~:tl~, to each Owne
· i~ n~or~ ~rh~nt i~bY~to);, that. portior~
, f(~r ;pa~rn.e~t I~t~all..be ..
' ; 'On: the'Jafe~-:df tfi~,day
Non
principal
mason c
election
?a ~rm i
~ t fie
p.ayq~e_.nt pf, inter
Upon {:lis
~cl~ ,a,ny app~rtena~nt;cpupor~ to
~he ~o~'d ?d ~,~b~ ral!Y
~m~ntS ~n~e~ the Bo~d,
P~nt~Sy F nanbla S~curi~y ~o ~e
~lt, t~ e~ent thereof, discha~e- the
th? foUowjng ~e~shall have
means an ~ day other ~an '(~)'~
o~th~ Insurers
I~qf exe~ve erd~ te,remaih C[0~e~; :"Due ~o[.Raymenf
Bond ma~d~ date ~ereof pr tke
~nd re~emptioh ~n~d0e~
~,~ dE~ by r~'~ ~ea~ ~ rede~pt)qn (offi~th~
. :i~ ¢~sp , Bond =the.~'failu/e gf~he
to ~he Paying Agent for
Bond. "Nonpay~&nt" s6all
~e, ~ t~; t, es~ect ,of a ~ Bond. Ahy I~a*,jrnent~- of principal or ~ nt~reSf that ~is, Due for Payment
· . -- Page2of2
· ' ' Policy No.
_ m_~?,e:t~a~ C~w~er by. o~i: on 'behalf of the Issuer which has~ bee~ ~'ecovel
tl~e Ur~ited~Stat~s'Bankruptc~' Code by'a' trustee in bankruptcy ~n
- order,~of.a ~ourt
qn~king'~he clalm,~ [b)~ the
becam~
'-' Nd;*
~. ~nqlude the Is, s~er orany pe. rs,on
"'s'e~urf~ tO~tl~e ~nds~. ' ~
end
,.
s ~f th s P6 cy: ....
ot be ,motile. ed, a, lte.red or..
n or ame~d~n~themto. ~cePt
bein g ~ed~ fqr..paymept, ~-
' THIS POLICY IS NOT"
SPE~FIEDIN ~TICLE 76 ~
F NA~CI~ CE~U~ ~ ASSURANCE INC.,
DISCLOSURE, NO DEFAULT AND TAX CERTIFICATE OF
FINANCIAL SECURITY ASSURANCE INC.
The undersigned hereby certifies on behalf of Financial Secudty Assurance Inc. 'F' ' I S *"
( nanc4a ecunty), n connecton wth he ssuance by Financ~a
Security of its Policy No. 210455-N (the "Policy") in respect of the $5,300,000 in aggregate principal amount of Town of Southold, Suffolk County,
New York Public Improvement Serial Bonds - 2008 maturing May 15 in the years 2019 through 2030, inclusive (the "Bonds") that:
(i) The information contained in Appendix C set forth under the caption "BOND INSURANCE - Financial Secudty Assurance Inc." in the officJal
statement dated May 13, 2008, relating to the Bonds is true and correct, except as set forth in (ii) below.
(ii)
At March 31, 2008, Financial Security's consolidated policyholders' surplus and contingency reserves were approximately $3,012,872,486
and its total net unearned premium reserve was approximately $2,419,501,630 in accordance with statutory accounting principles. At March
31, 2008, Financial Security's consolidated shareholder's equity was approximately $3,053,752,711 and its total net unearned premium
reserve was approximatety $1,882,057,335 in accordance with generally accepted accounting principles.
(iii) Financial Security is not currently in default nor has Financial Security ever been in default under any policy or obligation guaranteeing the
payment of prtncipal of or interest on an obligation,
(iv) the Policy is an unconditional and recourse obligation of Financial Security (enforceable by or on behalf of the holders of the Bonds) to pay
the scheduled principal of and interest on the Bonds in the event of Nonpayment by the Issuer (as set forth in the Policy),
(v) the insurance premium of $50,500.00 (the "Premium") is a charge for the transfer of credit risk and was determined in arm's length
negotiations and is required to be paid th Financial Security as a condition to the issuance of the Policy,
(vi)
no portion of such Premium represents an indirect payment of costs of issuance, including rating agency fees, other than fees paid by
Financial Secudty to maintain its ratings, which, together with all other overhead expenses of Financial Security, are taken into account in the
formulation of its rate structure, or for the provision of additional services by us, nor the direct or indirect payment for a cost, dsk or other
element that is not cusfemadly borne by insurers of tax-exempt bonds (in transactions in which the guarantor has no involvement other than
as a guarantor),
(vii)
Financial Secudty is not providing any services in connection with the Bonds other than providing the Policy, and except for the Premium,
Financial Security will not use any portion of the Bond proceeds; provided, however, that Financial Securtiy or its affiliates may independently
provide a guaranteed investment contract for the investment of all or a portion of the proceeds of the Bonds,
(viii) except for payments under the Policy in the case of Nonpayment by the issuer, there is no obligation to pay any amount of principal or
interest on the Bonds by Financial Security,
(ix) Financial Security does not expect that a claim will be made on the Policy,
(x) the Issuer is not entitled to a refund of the premium for the Policy in the event a Bond is retired before the final maturity date, and
(xi)
for Bonds which are secured by a debt service reserve, Financial Security would not have issued the Policy unless the authorizing or security
agreement for the Bonds provided for a debt service reserve account or fund funded and maintained in an amount at least equal to, as of any
particular date of computation, the reserve reqtirement as set forth in such agreement.
Financial Security makes no representation as to the nature of the interest to be paid on the Bonds or the treatment of the Policy under Section
1.148-4(f) of the Income Tax Regulations.
FINANCIAL SECURITY ASSURANCE INC.
By:
Authorized Officer
Dated:
May 29, 2008
FSA
May29,2008
Municipal Bond Insurance Policy No. 210455-N
with Respect to
$5,300,000 in Aqqreqate Princioal Amount of
Town of Southold, Suffolk County, New York
Public Improvement Serial Bonds - 2008 matudna May 15 in the years 2019 throuqh 2030, inclusive
Ladies and Gentlemen:
I am Associate Genera~ Counsel of Financial Secudty Assurance Inc., a New York stock insurance company
("Financial Security"). You have requested my opinion in such capacity as to the matters set forth below in
connection with the issuance by Financial Security of its above-referenced policy (the "Policy"). in that regard, and for
purposes of this opinion, I have examined such corporate mcerds, documents and proceedings as I have deemed
necessary and appropriate.
Based upon the foregoing, I am of the opinion that:
1. Financial Security is a stock insurance company duly organized and validly existing under
the laws of the State of New York and authorized to transact financial guaranty insurance
business therein.
2. The Policy has been duly authorized, executed and delivered by Financial Security.
3. The Policy constitutes the valid and binding obligation of Financial Security, enforceable in
accordance with its terms, subject, as to the enforcement of remedies, to bankruptcy,
insolvency, reorganization, rehabilitation, moratorium and other similar laws affecting the
enforceability of creditors' dghts generally applicable in the event of the bankruptcy or
insolvency of Financial Security and to the application of general principles of equity,
In addition, please be advised that I have reviewed the description of the Policy contained in Appendix C under
the caption "BOND INSURANCE - Bond Insurance Policy" in the official statement relating to the above-referenced
Bonds dated May 13, 2008 (the "Officia~ Statement"). There has not come to my attention any information which
would cause me to believe that the description of the Policy referred to above, as of the date of the Official Statement
or as of the date of this opinion, contains any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading. Please be advised that I express no opinion with respect to any information contained in, referred to or
omitted from under the caption "BOND iNSURANCE - Financial Secudty Assurance Inc." as set forth in Appendix C
of the Official Statement,
I am a member of the Bar of the State of New York, and do not express any opinion as to any law other than
the laws of the State of New York.
Very truly yours,
Associate General Counsel
Town of Southold,
53095 Main Road,
Southold, NewYork 11971.
Roosevelt & Cross, Inc, and Associates,
as Representative of the Underwriters,
55 Broadway, 22nd Floor,
New York, New York 10006.
N,'~ ~rk- Dallas. San [¥ant isco. I,,mtlon - Ma&'id. Paris. Singapore: · Sydm!y
NOTICE OF CLAIM AND CERTIFICATE
Financial Security Assurance Inc.
31 West 52nd Street
NewYork, NY 10019
The undersigned, a duly authorized officer of [FULL NAME OF TRUSTEE or PAYING AGENT] (the
"Trustee/Paying Agent"), hereby certifies to Financial Security Assurance Inc. ("Financial Security"), with reference to
Municipal Bond Insurance Policy No. 210455-N dated May 29, 2008 (the "Policy") issued by Financial Security in
respect of the Town of Southold, Suffolk County, New York Public Improvement Serial Bonds - 2008 maturing May 15
in the years 2019 through 2030, inclusive (the "Bonds"), that:
(i) The Trustee/Paying Agent is the Trustee/Paying Agent under the document
authorizing the issuance of the Bonds (the "Indenture") for the Holders.
(ii) The sum of all amounts on deposit (or scheduled to be on deposit) in the [RELEVANT
ACCOUNTS] and available for distribution to the Holders pursuant to the Indenture will be $
(the "Shortfall") less than the aggregate amount of principal and interest Due for Payment on
_("Scheduled Payments").
(iii) The Trustee/Paying Agent is making a claim under the Policy for the Shortfall to be
applied to the payment of Scheduled Payments.
(iv) The Trustee/Paying Agent agrees that, following receipt of funds from Financial
Security, it shall (a) hold such amounts in trust and apply the same directly to the payment of
Scheduled Payments on the Bonds when due; (b) not apply such funds for any other purpose; (c)
not commingle such funds with other funds held by the Trustee/Paying Agent and (d) maintain an
accurate record of such payments w~th respect to each Bond and the corresponding claim on the
Policy and proceeds thereof, and, if the Bond is required to be [SURRENDERED/PRESENTED] for
such payment, shall stamp on each such Bond the legend $"[insert appliceble amount] paid by
Financial Secudty and the balance hereof has been canceled and reissued" and then shall deliver
such Bond to Financial Security.
(v) The Trustee/Paying Agent, on behalf of the Holders, hereby assigns to Financial
Security the rights of the Holders with respect to the Bonds to the extent of any payments under the
Policy, including, without limitation, any amounts due to the Holders in respect of securities law
violations adsing from the offer and sale of the Bonds. The foregoing assignment is in addition to,
and not in limitation of, dghts of subrogation otherwise available to Financial Secudty in respect of
such payments. Payments to Financial Security in respect of the foregoing assignment shall in all
cases be subject to and subordinate to the rights of the Holders to receive all Scheduled Payments
in respect of the Bonds. The Trustee/Paying Agent shall take such action and deliver such
instruments as may be reasonably requested or required by Financial Secudty to effectuate the
purpose or provisions of this clause (v).
(vi) The Trustee/Paying Agent, on its behalf and on behalf of the Holders, hereby appoints
Financial Security as agent and attorney-in-fact for the Trustee/Paying Agent and each such Holder
in any legal proceeding with respect to the Bonds. The Trustee/Paying Agent hereby agrees that,
so long as Financial Secudty shall not be in default in its payment obligations under the Policy,
Financial Security may at any time during the continuation of any proceeding by or against the
Issuer under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding") direct all matters relating to
such Insolvency Proceeding, including without limitation, (A) all matters relating to any claim in
connection with an Insolvency Proceeding seeking the avoidance as a preferential transfer of any
payment made'with respect to the Bonds (a "Preference Claim"), (B) the direction of any appeal of
any order relating to any Preference Claim at the expense of Financial Secudty but subject to
reimbursement as provided in the Indenture and (C) the posting of any surety, supersedeas or
performance bond pending any such appeal. In addition, the Trustee/Paying Agent hereby agrees
that Financial Security shall be submgated to, and the Trustee/Paying Agent on its behalf and on
behalf of each Holder, hereby delegates and assigns, to the fullest extent permitted by law, the
rights of the Trustee/Paying Agent and each Holder in the conduct of any Insolvency Proceeding,
including, without limitation, all dghts of any party to an adversary proceeding or action with respect
to any court order issued in connection with any such Insolvency Proceeding.
(vii) Payment should be made by wire transfer directed to [SPECIFY INSURANCE
ACCOUNT].
Unless the context otherwise requires, capitalized terms used in this Notice of Claim and Certificate and not
defined herein shall have the meanings provided in the Policy.
IN WITNESS WHEREOF, the Trustee/Paying Agent has executed and delivered this Notice of Claim and
Cer[ificate as of the day of , __.
By
Title
For Financial Security or
Fiscal Agent Use Only
Wire transfer sent on
Confirmation Number
By
-2-
PROCEDURES FOR PREMIUM PAYMENT TO
FINANCIAL SECURITY ASSURANCE INC.
Financial Security's issuance of its municipal bond insurance policy at bond closing is
contingent upon payment and receipt of the premium. NO POLICY MAY BE RELEASED UNTIL
PAYMENT OF SUCH AMOUNT HAS BEEN CONFIRMED. Set forth below are the procedures
to be followed for confirming the amount of the premium to be paid and for paying such amount:
Confirmation of
Amount to be Paid:
Upon determination of the final debt service
schedule, fax such schedule to Financial Security
Attention: James Mann, Vice President
Phone No.: (212) 339-3467
Fax No.: (212) 857-0448
Confirm with the individual in our underwriting department that you are in agreement
with respect to par and premium on the transaction prior to the closing date.
Payment Date:
Date of Delivery of the insured bonds.
Method of Payment:
Wire transfer of Federal Funds.
Wire Transfer Instructions:
Bank:
ABA#:
Acct. Name:
Account No.:
Policy No.:
The Bank of New York
021 000 018
FinancialSecurity Assurancelnc.
8900297263
210455-N
CONFIRMATION OF PREMIUM WIRE NUMBER AT CLOSING
Financial Security will accept as confirmation of the premium payment a wire transfer number and the name of the
sending bank, to be communicated on the closing date to Lillie Santana, Assistant Vice President Documentation and
Closing Supervisor, (212) 339-3537.
rFINANCIAL
SECURITY
ASSURANCE®
MUNICIPAL BOND
INSURANCE POLICY
ISSUER: Town of Southold, Sulfolk Couety New York
BONDS:
$5,300000 in aggregate principal amount of
Public Improvement Sedal Bonds - 2008
maturing May 15 in the years 2019 through
2030, inclusive
Policy No.: 210455-N
Effective Date: May29, 2008
Premium: .$50,500.00
FINANCIAL SECURITY ASSURANCE iNC. ("Financial Security"), for consideration received,
hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee) or paying
agent (the "Paying Agent') (as set forth in the documanletion providing for the issuance of and securing
the Bonds) for the Bands, for the benefit of the Owners or, at the election of Financial Security, directly to
each Owner, subjecl only to the terms of this Policy (which includes each endorsement hereto), that
portion of the principal of and interest on the Bonds that shell become Due for Payment but shall be
unpaid by reason ct Nonpayment by the issuer,
On the later of the (Jay on which such principal and interest becomes Due for Payment or the
Business Day next IolIowhrg the Business Day on which Financial Security shall have received Notice of
Nonpayment, Financial Security will disburse to or for the benefit of each Owner of a Bond the face
amouat of principal of and interest on the Bond that is then Due for Payment but is then unpaid by reason
of Nonpayment by the issuer, but only upon receipt by Financial Security, in a form reasonably
satisfactory to it, of (a) evidence of the Owneds right to receive payment of the principal or interest then
Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the
OwneFs rights ;',~th respect to payment of such principal or interest that is Due for Payment shall
thereupon vest in Financial Security, A Notice of Nonpayment will be deemed received On a given
Business Day if it is received prior to 1:00 p.m, (New York time) on such Business Day; otherwise, it will
be deemed received on the next Business Day, Ii' any Notice of Nonpayment received by Financial
Secudty is incomplete it shall be deemed not to have been received by Financial Security for purposes of
the preceding sentence and Financial Secudty shall promptly so advise the Trustee, Paying Agent or
Owner. as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursement in
respect of a Bond, Financial Security shall become the owner of the Bond, any appurtenant coupon to the
Bond or right to receipt of payment of principal of or interest on the Bond and shall be fully subregated to
the rights of the Owner, ieciuding the Owner's dght to receive payments under the Bond, to the extent of
any payment by Financial Security hereunder. Payment by Financial Security to the Trustee or Paying
Agent for the beneftl of the Owners shall, to the extent thereof, discharge the obligation of Financial
Security under this Policy;
Except to the extent expressly modified by an endorsement hereto, the tollo,,ving terms shall
have the meanings specified for all purposes of this Policy. 'Business Day" means any day other than (a)
a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's
Fiscal Agent are authorized or required by taw or executive order to remain closed. "Due for Payment"
meena (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the
date on which the same shall have been duly called for mandatory sinking fund redemption and does not
refer to any earlier date on which payment is due by reason of call for redemption (other than by
mandatory sinking lurid redemption), acceleration or other advancement of maturity unless Financial
Security shall elect, in its sole discretion, to pay such pdncipat due upon such acceleretian together with
any accrued interest to the date of acceleration and (b) when referring lo interest on a Bond, payable on
the stated date for payment of interest. "Nonpaymant" means, in respect of a Bond, the failure of the
Issuer to have provided sulficienl funds to the Trustee or, if there is no Trustee, lo the Paying Agent for
payment ie tull of all pdecipal and interest that is Due for Payment on such Bond, "Nonpayment" shall
also include, in respect of a Bond, any payment of principal or interest that is Due for Payment made to
an Owner by or on behalf of the Issuer which has been recovered from such Owner purscant to the
Page 2 el 2
Policy No. 210455-N
United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealab~e
order of a court having competent jurisdicllen. "Notice" means telephonic or telecepied notice,
subsequently confirmed in a signed writing, or wdden not~ce by registered or certified mail, from an
Owner, the Trustee or the Paying Agent to Financial Secudty which notice shall specify (a) the pemon or
entity making the cJaim, (b) the Policy Number (c) the claimed amount and (d) the date such claimed
amount became Due for Paymenl. "Owner" means, in respect et a Bond, Ihe pemon or ent;ly who, at the
time o! Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner~
shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the
underlying security for the Bonds.
Financial Security may appoi~ a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this
Policy by giving written notice to the Trustee and the Paying Agent specifying the name and notice
address o[ the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee
and the Paying Agent, (a) copies of ali notices required to be delivered to Financial Security pursuant to
thia Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to Financial Secudty and
shall not be deemed received until received by both and (b) all payments required to be mede by
Financial Security under this Policy may be made directly by Financial Security or by the Insurer's Fiscal
Agent On behalf of FinaeciaJ Security. The Insurer's Fiscal Agent is the agent of Financial Secudty only
and the Insurer's Fiscal Agent shall in no event be liable to any Owner for any act o[ the Insurer's Fiscal
Agent or any failure of Financial Secudty to deposit or cause to be deposited sufficient hinds to make
payments duo under this Pelicy.
To the fullest exlent permitted by applicable law, Financial Security agrees not to asse~l, and
hereby waives, only tar the benefit of each Owner, all rights (whether by counterclaim, setoff or oihe~A, tse)
and defenses (including, without limitation, the defense o(fraud), whether acquired by subrogation,
assignment or otherwise, to the extent that such dghts and delenses may be available ID Financial
Security to avoid payment of its obligations under this Policy in accordance with the express provisions of
this Policy.
This Policy sets forth in full Ihe undertaking et Financial Security, and shall not be modified,
altered or affected by any other agreement or instrument, including any modification or amendment
thereto. Except to the extent expressly modified by an endorsement hereto, (a) any premium paid in
respect of this Policy is aonrefundable [or any reason whatsoever, including paymenl, or provision being
made for payment, o[ the Bonds prior to maturity and (b) this Policy may not be canceled or revoked.
TH~S POLICY IS NOT COVERED BY THE PROPERTY, CASUALTY INSURANCE SECURITY FUND
SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.
In witness whereof, FINANCIAL SECURITY ASSURANCE INC has caused this Policy to be
executed on its behalf by its Authorized Officer.
A subsidiary of Financial Secudty Assurance Holdings Ltd.
31 West 52ed Street. New York, N,Y. 10019
Form 500NY (5t90)
FINANCIAL SECURITY ASSURANCE INC.
Authorized Officer
(212) 826-0100
Moody's Investors Service'
7 World Trade Center at 250 Greenwich Street,
New York, New York 10007
May 28, 2008
Financial Security Assurance, Inc
31 West 52nd Street
New York, NY 10019
To Whom It May Concern:
Moody's Investors Service has assigned the rating of Aaa to the $$,300,000.00, Town
of Southold, Suffolk County, New York - Public Improvement Serial Bonds-2008
maturing May 15 in the years 2019 through 2030, inclusive, dated May 15, 2008
which sold on May 13, 2008, insured by Financial Security Assurance, Inc (Policy No.
210455-N). The rating is the highest of (i) the guarantor's financial strength rating, (ii)
any published underlying rating on the security, or (iii) any published enhanced rating
based on a state credit enhancement program.
Should you have any questions regarding the above, please do not hesitate to contact
Vincent Guadagno Jr. at (212) 553-2948.
Sincerely yours,
Joann Hempel
Vice President / Senior Credit Officer
JH/TM